THE Newsagency Network

The Newsagency Network is the largest network of independent retailers in Australia; the signifies that these businesses are specialist retailers of newspapers and magazines.

 

In Queensland there are over 700 family owned newsagencies, one or more in almost every community, with the capacity to deliver to most homes and businesses in the State each day.

Types of Newsagencies

There are three elements to a newsagency business; each element is underpinned with a publisher contract. These are
a)    Retail sales through a shop
b)    Home delivery of newspapers and magazines to homes and businesses
c)    Distribution of newspapers and magazines to other retails outlets within a contracted area.

There are some newsagencies that are retail only, and some that are delivery only businesses.

The Newsagency Business

The Australian newsagency is a national institution that enjoys wide community support.  Each business has a mix of core product which include newspapers and magazines, cards and wrap, stationery and lottery product.  These core products are usually supported with a wide range of services including dry cleaning, photo development, bus tickets and phone cards.

 

Newsagents are magazine specialists and the newsagency channel accounts for approximately 80% of the total sales of newspapers and magazines  in Australia.  Australians are avid magazine readers and are amongst the highest consumers of magazines in the world.

 

With an historical low failure rate and continuing support of publishers, newsagencies as specialist distributors of retail products continue to meet the three principals of small business investments; that is:

a)    They provide a good and stable return on investment and offer a comfortable lifestyle
b)    They provide a capital appreciation over the period of ownership
c)    They are readily saleable

 

Newsagency Values

The Goodwill of a newsagency is traditionally high and is underpinned by supply contracts from each of the major newspaper, magazine publishers and lottery product supplier.  Prices range from approximately $100,000 through to several million dollars. The open market dictates the purchase price of a business.  This purchase price is currently a multiple of the net profit, plus stock at value.  This net profit is defined as the amount of earnings available to two working proprietors:

a)    Pre-tax
b)    Prior to owners wages or drawings
c)    Excluding any borrowing costs

Factors such as geographic location and the types of publisher contract held by a particular newsagency will determine the appropriate multiple for individual newsagencies.

 

The Future

The newsagency market is a mature mass market with stable long-term customer demand for newsagents core product.  The substantial traffic flows generated by newsagencies are projected to continue with the ever increasing life-style driven demand by consumers for news and entertainment, information, education and personal services.