Home > Factoring helps meet publishing deadlines

Factoring helps meet publishing deadlines

Supplier News

DURING a period of exceptional growth, a Sydney-based publisher looked to factoring to solve cashflow problems and maintain growth momentum.

iMedia Asia Pacific is Australia's leading arts and entertainment publisher, in print and online.

IMedia’s October launch of a new magazine entitled arts+medicine, which targets 30,000 doctors in Australia, follows the successful launch in July last year of the monthly arts and entertainment magazine Limelight.

Limelight has been an Australian publishing success story since its July 2003 makeover. The rebranded 25 year old monthly arts and entertainment publication, formerly known as 24 Hours, was last year named the fastest growing magazine in readership in Australia.

According to Roy Morgan, readership increased by an impressive 63% in twelve months, from 35,000 in March 2003 to 57,000 in March 2004.

This trend continued with the July Roy Morgan survey, which revealed that in its first year, the subscription base of Limelight increased from approximately 3,000 to 8,500 subscribers with a further 10,000 copies distributed to newsstands each month.

It is a precedent arts+medicine looks set to match - the launch issue involved a print run of 30,000 and a host of pharmaceutical, corporate and arts advertisers have already taken sponsorship and advertising targets per issue to in excess of $200,000.

Such growth, however, brings enormous pressure to bear on available resources and the ability to align cashflow with the production costs of increased print runs. The fact that most advertising agencies operate on a 45 day invoice payment cycle simply serves to exacerbate cashflow problems.

Margret Meagher, Managing Director of iMedia Asia Pacific, recognised the company required greater liquidity in order to leverage the growth opportunities for both publications. Internet research on debtor finance led the company to the website of Bibby Financial Services .

Margret was impressed with the company's site, finding it easy to navigate. The company's 200 year foundations and the fact that Bibby is the largest source of non-bank finance in the UK sealed her interest.

"From our initial meeting, Bibby showed an understanding of the nuances of our business and most importantly, demonstrated a strong service ethic," Margret said.

"The way in which we use Bibby's factoring process is simple. On the day the magazines are distributed, we fax our invoices to Bibby. Within 24 hours, 85% of the advertising value in the magazine is in our bank account.

"We can then draw down on this fund pool at a competitive interest rate and once our advertisers pay the invoice to Bibby, the remainder, less a fee, is returned."

iMedia Asia Pacific chose to maintain administration of a handful of longstanding advertising accounts, but the bulk was outsourced to Bibby.

The publishing sector is an ideal candidate for factoring, as the steady cashflow provided by factoring is a boon for publishers of growing titles and for their creditors.

"Our ability to plan and coordinate production has an extremely positive effect on our relationships with suppliers, which is vital to our success and continued growth - especially in the magazine's [arts+medicine] critical first year of operation," Margret said.

Planning is further enhanced by Bibby's supportive IT and administrative facilities. Account details can be viewed securely at any time over the Internet, while the debt-recovery services offered by Bibby free up valuable management time, which can be put to better use in moving the business forward.

"Bibby Financial Services offers more flexibility than the banks and our dealings with them have been efficient and easy since day one,” Margret said.

“We are now looking at pursuing other activities around the magazines and we are talking to Bibby about how best to bring these options about.

"Bibby understands our business and their flexibility makes them ideal business partners."

Newsletter sign-up

The latest products and news delivered to your inbox