DMGT reports 26% fall in newspaper profits

Daily Mail & General Trust sees revenues fall at print divisions while digital revenues rise significantly

Daily Mail & General Trust has reported a 26% fall in operating profits at its national newspaper division in the half year to 1 April, as ailing regional division Northcliffe revealed its first growth in profits since the recession.

Overall, A&N Media – the parent of the national and regional newspaper operations – reported a 3% fall in revenue to £542m and a 24% fall in operating profits to £33m.

The company, which cut staff numbers by 593 to 6,280 in the six-month period, said that operating profits fell due to lower print advertising revenue and additional promotional activity within the digital businesses.

Associated, the national newspaper division that is home to the Daily Mail and Mail on Sunday, reported a 26% fall in operating profit to £34m and a 1% decline in revenues to £435m.

The company said resilience in the revenues was due to cover price rises at the Daily Mail and strong growth at Metro, Mail Online and DMGT’s recruitment and digital property businesses.

Digital revenues rose 55% at Associated, with total revenues at Mail Online up 75% year-on-year.

Profits at the division fell because of factors including a tough ad market – advertising revenues fell 7% to £171m with print ads down 10% – and investment in digital businesses including daily deal service Wowcher and the Digital Property Group.

Regional newspaper division Northcliffe has reported a 10% decline in revenues to £107m but a 34% increase in operating profit to £11m. It is thought to be the first growth at the division since the recession.

Ad revenues at Northcliffe fell 11% to £75m – print ads fell 9% and digital rose 2% – with circulation revenue down 5$ to £29m. Staff numbers were cut from 2,530 to 2,366, a 6% fall, between October and April.

Northcliffe has seen revenues fall 6% in April and the first three weeks of May, with ad revenues down 9% and circulation revenues up 3%.

Overall DMGT said that its newspaper operations were hit by a restructuring which has led to an exceptional charge of £32m, of which about £4m is in cash, in reorganisation costs and accelerated depreciation of property, plant and equipment mostly relating to the move of printing facilities to Thurrock and the closure of the Derby print facility in January.

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