Daily Mail publisher delivers rise in profits
The publisher of the Daily Mail and the Mail on Sunday today revealed a return to profits growth in the half year and predicted key divisions would continue to improve.
A recovery in hard-hit advertising markets and previous cost cutting helped Daily Mail & General Trust (DMGT) deliver a 42% leap in underlying pre-tax profits to £110m (€130.2m) in the six months to April 4.
The group – whose portfolio includes the Mail titles and around 100 regional papers – said underlying advertising revenues rose 1% to £181m (€214.26m) in its Associated Newspaper nationals division, driven by a strong performance from the Metro free-sheet.
A quarter-by-quarter breakdown highlighted the improvement in the advertising market, with the operation’s ad revenues up 11% in the last three months, against a 7% fall in the first – a trend that has continued into May, it said.
Swingeing cost cuts offset a fall in circulation revenues within Associated Newspapers, with overall revenues down 6%.
DMGT took a £28m (€33.13m) restructuring charge after axing another 680 staff within its A&N Media consumer-facing business during the half-year – 8% of the national and regional newspaper workforce.
Action included the closure of the London Lite afternoon freesheet and most of the television activities of Teletext, while it also closed another regional printing plant at Plymouth in February.
These actions helped underlying earnings in the consumer business, including regional papers, soar 127% to £58m (€68.6m) in the half-year.
Martin Morgan, chief executive of DMGT, said: “Our UK consumer businesses have achieved a sharp improvement in profitability reflecting the actions taken to reduce costs and to eliminate loss-making activities, but also thanks to an improved advertising market.”
The group added it was expecting to drive national newspaper profits up further over the remainder of the year, although it remains “cautious” on the outlook for advertising.
DMGT is also expecting more improvements in the business-to-business operation, which saw interim profits rise 11% to £103m (€122m).
Today’s results were described as “robust” by analysts at UBS, while Jonathan Barrett at Singer Capital Markets said the figures gave “modest” comfort for rivals such as Trinity Mirror and Johnston Press.
