Ad revenue slumps 12% at Northcliffe in first quarter

Northcliffe Media, the regional newspaper division of Daily Mail & General Trust, recorded a 12 per cent year-on-year slump in advertising revenue in the first three months of the year.

Publishing a trading update this morning, parent group DMGT revealed how despite a generally improving business outlook fortunes at Northcliffe worsened.

A management statement issued by DMGT earlier in the year showed that in the three months to 2 January ad revenue at Northcliffe dropped six per cent to £59m.

The company said today Northcliffe’s change in fortune could in part be attributed to recent performance being set against that of a year ago when markets went through a period of improvement.

Northcliffe Media‘s underlying revenue in the five months to the end of February was eight per cent down for the period, including circulation revenue, which was three per cent lower and advertising revenue that was eight per cent lower, DMGT said.

Year-on-year advertising revenue performance in this five-month period was affected by lower recruitment (down 27 per cent) and notices (down 12 per cent) in particular, other categories being down a more modest three per cent in total.

Earlier this month, DMGT revealed that Northcliffe managing director Michael Pelosi and his deputy Alex Leys were both set to retire, with Steve Auckland, currently managing director of national free daily Metro, replacing Pelosi later in the year.

At that time Auckland seemed to row back on an earlier suggestion from DMGT chief executive Martin Morgan that the company was open to offers for its regional newspaper business, by saying that the company was likely to prune its existing regional portfolio with some closures and changes in production frequency of other titles.

Overall, DMGT today reported a two per cent year-on-year rise in revenue over the five months with trading for the period remaining satisfactory as a result of underlying growth in its B2B operations and overall growth in advertising at its national newspapers, The Daily Mail and the Mail on Sunday.

Underlying revenue from A&N Media for the five-month period was one per cent higher than for the corresponding period last year. Reported revenues were down one per cent.

At Associated Newspapers, DMGT’s national newspaper wing, total revenue was up two per cent on last year, an underlying increase of three per cent. Though underlying circulation revenue was two per cent lower, both the Daily Mail and The Mail on Sunday continued to improve market share, the company said.

Total underlying advertising revenue was up five per cent at Associated Newspapers. However, the company said the more positive trend of October and November weakened in December and this weakening continued into the new calendar year.

Associated’s newspaper operations grew advertising revenue by four per cent with digital advertising revenues supplementing the more subdued and volatile print advertising.

By major category, retail, financial and telecoms performed strongly. Digital only businesses grew revenues by nine per cent due to the continued strength of the recruitment and property companies, offset by lower revenues from the travel and motors companies, DMGT said.

For the quarter to March, total underlying advertising revenue is two per cent higher than last year at Associated, with newspaper operations up one per cent and digital only businesses up four per cent up.

Headcount in DMGT’s consumer media businesses fell by 520 (seven per cent) over the period, with 317 jobs going at Northcliffe Media.

Revenue from the group’s B2B operations for the period were 11 per cent higher than during the corresponding period last year, with an underlying increase of ten per cent.

Despite some growth, DMGT said there was continued uncertainty over the medium term outlook, particularly for B2C businesses, given the external economic environment and fragile consumer confidence in the UK.

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