Daily Mail owner Associated Newspapers advertising revenues dropped by 8% in the three months to 31st December, compared to last year, with classified revenue plummeting to 17%.
Associated recently sold a 75.1% stake in its London evening paper the Evening Standard to Russian billionaire Alexander Lebedev, but financial effects will not yet show on the balance sheet.
Associated is a division of Daily Mail and General Trust, the trade to regional to national newspaper and specialist magazine group. It reported this morning its 100 regional newspaper division, Northcliffe, shed advertising revenues of 40%.
The group reported it was planning more stringent cuts than previously announced at Northcliffe to counter falling revenues. It had already announced 400 job cuts last year, and total headcount fell by 6% in 2006.
However, it reported its London Lite evening freesheet bucked the trend with a 21% upswing in display revenues in the period, helping it to boost revenues by 2% overall for the quarter, compared to last year.
Andy Viner, Head of Media, at BDO Stoy Hayward says: “DMGT has had a solid start to its financial year with a positive set of results which have seen revenue increase by two per cent.”
“Considering the current market, today’s results are particularly encouraging, and DMGT has stated that it believes it will meet this year’s cost cutting and revenue targets,” continues Viner.
“The company is evidently benefiting from having a clear long-term strategy which includes international expansion and a diversified portfolio which is less reliant on UK newspaper titles in the consumer market towards the more resilient and subscription based B2B market,” points out Viner.
“DMGT will be disappointed with the fall in both national and regional advertising revenues, which are below the industry benchmark. In addition, the single digit growth in digital advertising suggests that it has been slow in shifting from classified to online advertising quickly enough.”
“On a more positive note, the media giant looks set to benefit from the continued strengthening of the US dollar in the second quarter of the year,” concludes Viner.