In common with thousands of companies up and down the country, The Spectator magazine group availed itself of government funds to furlough some of its staff during the Covid crisis. We feared the impact of Covid on our finances, especially on our cash flow, as parts of our business slowed or ground to a halt, leaving some staff without work to do. We were grateful for government help, which allowed us to conserve cash and still see our people paid 80 per cent of their salaries.
Though some parts of our business – especially the revenue lines from events, newsstand sales and advertising – have been hit badly by the crisis and ongoing economic downturn, overall our magazines have weathered the Covid crisis better than we expected. The bulk of our revenues now comes from subscriptions. They were rising strongly before the crisis and they have continued to rise strongly during it, thanks to superb editorial content and magnificent marketing.
We have taken a financial hit but nothing as bad as I feared. We remain a profitable and growing company, now with strengthening cash flow. For that reason, we will return to the taxpayer the funds we took from government to finance our furlough scheme and withdraw from that scheme forthwith.
We do this not to set an example for other companies to follow but because we can afford to do so. It transpired that, contrary to our earlier fears, we did not need the furlough money to survive. So it seems only fair we return what, in the end, we did not need. Many other companies will not be in the same fortunate position.
Instead of depending on furlough money from taxpayers, I have tasked the editorial and management teams to grow sales of The Spectator to 100,000 as quickly as possible. I have every confidence that they will meet this target. Our paid-for circulation is already higher than at any point in the magazine’s 192 years of publishing. We closed last year with sales at 83,000. I can reveal that we passed 87,000 in the first quarter of this year, with growth accelerating since then. So 100,000 is within our grasp.
Our US and Australian editions have been given new targets too.
For those of us in a position to do so, growing our business out of the crisis seems preferable to depending on government subvention. We will begin the process of withdrawing from the furlough scheme and returning all the funds we’ve received in a phased manner over the next two months.