Daily Mail optimistic despite ad revenue falls

UK publisher Daily Mail & General Trusts results show adjusted profit before tax and exceptional items fell 23% to £201m for the year ending 4 October.

Although the steep advertising downturn had an impact, there were optimistic tones for the future with advertising revenue trends “improving in the New Year”.

DMGT, which owns the Mail and about 100 regional titles, said that revenues at its national arm, Associated Newspapers, fell 11% year on year to £876m. At Northcliffe Media, the company’s regional arm, revenue fell 22% to £328m with operating profit down 65% to £24m.

UK operating profits fell by £40m to £20m.

Underlying advertising revenues fell 30% to £201m in “unprecedented trading conditions for local newspapers”.

Recruitment advertising revenues were worst hit (down 49%), followed by property (down 46%) and motors (down 24%). There was better news for classifieds, with revenue falling only 12%.

However, reports suggest that post 4 October the national newspaper division was reporting revenues down “mid single digits” year on year so far, with more positive trends in sectors such as retail advertising.

The circulation of both the Daily Mail and Mail on Sunday fell marginally more than the market, reflecting the decision to direct promotional activity away from CD and DVD giveaways towards a sustained direct-marketing campaign to recruit more long-term, loyal buyers.

A loss of print circulation was, in part, offset by the rise in digital audience, however the company admits that the shift away from print and towards online affected the results “both positively and negatively”.

Digital revenues from the newspaper titles’ websites rose 11% thanks to the success of the MailOnline brand.

The company expects its far-reaching cost-cutting strategy will reap more rewards in the coming year.

Martin Morgan, chief executive, says: “We have actively managed the business to defend profitability during unprecedented trading conditions with a clear focus on fundamentals.

“Revenue and cost initiatives of £150 million have been delivered and we have taken action on various underperforming assets across the Group. We remain focused on cash generation, debt reduction and cost efficiency.

“Our UK consumer businesses have achieved a sharp improvement in profitability in the second half of the year reflecting more stable conditions and a lower cost base.”

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