DC Thomson's Friends Reunited continues fall in value

Friends Reunited, the social networking site, is reckoned to have an asset value of only a fifth of the sum paid for it two years ago by Dundee publishing company DC Thomson.

That value is less than 3% of the price paid for the school, student and family reuniting website by broadcaster ITV, when it bought it six years ago for £175m.

Having agreed to buy it from ITV in 2009 for £25.6m, DC Thomson - publisher of the Beano and Dandy comics as well as newspapers - has restated its previous accounts, to show the Friends Reunited intangible asset is worth only £5.2m.

With assets of more than £1.2bn, the family-controlled Dundee group is now accounting more than £20m of the price it paid as 'goodwill' - the market value of an asset over and above its productive value.

It said this restatement was due to "further evidence of the value of the customer databases acquired".

Beano annual

Despite that setback to its online division, DC Thomson has pushed up the share of its online business from 4% to 10% of turnover, according to its latest accounts, filed this week.

Covering the year to March, the company reported pre-tax profits of £28.6m, up by nearly 5%.

While often private about its business, the annual figures show group publishing income rose from £249m to £260m.

Some 40% of revenue was generated by book publishing. That includes Parragon publishers and the children's annuals, including the Beano, the Dandy, Oor Wullie and the Broons, with sales of £103m, down by £1m from 2009-10.

That division has operations in the UK, USA, Germany, Netherlands, India, Hong Kong, Singapore and China, while it is market leader in Australia, under the Funtastic brand. Exports accounted for 28% of revenue.

Magazines, including the Puzzler titles, gave the company 23% of its income, and newspapers including the Sunday Post, The Courier and the Press and Journal, represent 24% of company revenue.

'Closures painful'

The figures were helped by closure of a print plant in Dundee, with plans to close another in Glasgow in 2012-13, and the company said it was keeping "a tight review" on staff costs.

Company secretary Irene Douglas said the closures "are painful for the whole business, but are necessary so that our businesses have the best opportunity to prosper".

She said continuing operational changes gave the company "guarded optimism about the future of newspaper, magazine and book publishing, which remain susceptible to economic conditions and the influence of the internet and its related media".

"We look forward to further developing our digital business," she added.

The accounts show that DC Thomson has "significant financial assets and other business interests which are there to support the main trading business and are very much part of it".

The group balance sheet showed that the company had total assets at the end of March of £1.2bn, of which £537m was in financial assets, largely built up through investing retained profits.