DMGT results: Mail Online's 18 per cent revenue growth fails to offset newspapers' turnover slump

Mail Online revenue growth of 18 per cent failed to offset a 7 per cent turnover dip experienced by the Daily Mail and Mail on Sunday in the year to 30 September.

According to Daily Mail and General Trust’s preliminary results, the three Mail titles' combined revenue dropped 4 per cent from £598m to £572m.

But the operating profit of the Mail businesses was up 12 per cent to £79m, according to DMGT.

The Daily Mail and Mail on Sunday saw their combined revenue fall from £536m in 2014 to £499m.

The DMGT results noted that the newspapers were “outperforming in a difficult market environment” but that circulation revenue had declined by 4 per cent.

Their advertising revenue, meanwhile, was down by 11 per cent – £21m – year on year. The decline in the second half of the financial year was 12 per cent, compared with 5 per cent in the first half.

DMGT said “increased investment in Mail Online was more than offset by lower costs, notably distribution, marketing, newsprint and central support services at the Daily Mail and The Mail on Sunday”.

Across the newspapers and website, advertising revenue was £242m, down 4 per cent and £10m from 2014. Mail Online recorded an 18 per cent, £11m, increase in advertising revenue to £73m.

Mail Online now attracts 208m monthly unique browsers globally, up 24 per cent year on year, according to ABC. The DMGT results showed that 67m of these came from the United States, up 22 per cent, where underlying revenue grew by 38 per cent to £18m.

DMGT said: “Mail Online continues to focus on increasing the size and engagement level of its global audience and, in particular, its US audience alongside gaining traction with its US advertiser base.”

Revenue at free daily Metro, also part of DMG Media, was £75m, up 1 per cent. DMGT said this was “a particularly strong performance in the context of a weak UK print advertising market”. The publisher said Metro has a readership of 3.3m.

And operating profit across Metro, deals and discounts business Wowcher and Elite Daily, a US news website acquired in January, increased by 12 per cent £16m. This reflected “Wowcher's transition to profitability and improved profits from Metro”.

On DMG Media's forecast for 2016, DMGT said it "is expected to deliver stable underlying revenues, in the -2% to +2% range, with digital advertising growth helping to offset circulation and print advertising declines". 

The report said: "The operating margin is expected to remain broadly in line with the 13 per cent achieved in FY 2015.  

"DMG media's first quarter trading to date has been satisfactory, although we remain cautious about the medium term outlook given continuing external uncertainties, particularly for UK print advertising." 

DMGT’s reported group revenue was down 1 per cent to £1.845bn, but underlying revenue, it said, was up 1 per cent. Operating profit was £288m, down 7 per cent, or 4 per cent on an underlying basis.

The DMG Media area of the business – which includes the Mail titles and Metro – reported revenue down 8 per cent, or 3 per cent on an underlying basis, to £731m. Operating profit was £96m, up from £95m in 2014. DMGT said DMG Media’s margin growth was “driven by cost efficiencies”.

DMGT’s business-to-business area saw reported revenue increase by 4 per cent, or 3 per cent underlying, to £1,115m, but operating profit was down 12 per cent to £206m.

Euromoney Institutional Investor, meanwhile, saw its reported revenue fall 1 per cent to £403m, or 2 per cent on an underlying basis. Its operating profit was down 9 per cent on a reported basis, or 15 per cent underlying, to £107m.

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