DMGT sees newspaper profits rise and says future is digital

Daily Mail & General Trust (DMGT), owner of Associated Newspapers, Northcliffe and Euromoney, reports a “sharp rebound in profits” thanks to national advertising growth and cost management.

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The group says consumer media profit, including Associated Newspaper operations, jumped 46% to £125m for the year ending 3 October.

Associated, publisher of the Daily Mail, Mail on Sunday and Metro, saw operating profit rise by £33m to £95m and, alongside higher ad revenues, the publisher cited further operating efficiencies and the closing of loss-making operations, such as free newspaper London Lite, as contributors. Both the Daily Mail and Metro recorded their highest ever operating profit.

DMGT says that it sees future revenue growth as “largely digital, whether it be in the consumer or the B2B markets”. Mail Online is currently the biggest newspaper website by visitor numbers.

Revenue for the company’s digital only businesses rose by 1% to £95m with profit coming in at £6m, up from £5m.

The group’s B2B companies increased overall profit by 12%.

Chief executive Martin Morgan says: “Trading exceeded our expectations throughout the year. Our UK consumer businesses have achieved a sharp improvement in profitability reflecting the actions taken to reduce costs and to eliminate loss-making activities and growth in our national advertising.”

Andy Viner, head of media at BDO LLP, says that the results ” demonstrate a strong performance exceeding expectations”.

He adds: “The group’s clear, coherent strategy and bold actions taken pre-recession together with a well diversified international portfolio of business, have combined to produce a strong result.

“In particular UK consumer businesses have rebounded well defying trends; benefiting from higher revenues, improving operating profits and tight cost control. The approach to digital continues to reap rewards with on line revenues up 54% and a strong increase in traffic of 70%.”

Overall, company pre-tax profit rose 23% to £247m while revenue dropped by 6% to £1,984m.

DMGT’s board says that it sees continuing economic uncertainty in the medium term and says its focus remains on cash generation and debt reduction, alongside a drive for organic growth “through new product development and investments.”

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