DMGT ad revenue decline is slowing

Daily Mail and General Trust had 33 per cent year-on-year fall in ad revenue at its regional newspaper business in the three months to the end of June, the company reported today.

DMGT, which publishers the Daily Mail newspaper along with a number of regional newspapers, said revenues from its consumer media operations fell by 19 per cent year-on-year for the three-month period to £303m.

However, the company said the ad revenue decline at its national and regional papers had slowed since earlier in the year.

Northcliffe Media, DMGT’s regional arm, reported that UK ad revenues fell 33 per cent year on year in the second quarter. That decline had slowed from the previous three months where it had stood at 36 per cent.

“As we indicated in May, absolute weekly levels of advertising revenue [at Northcliffe] appear to have stabilised,” the company said.

“Retail, now the largest category, was down by 16 per cent, recruitment was down 56 per cent, property down 46 per cent and motors down by 28 per cent.

“June and the first three weeks of July have seen revenues respectively 30 per cent and 28 per cent lower than the corresponding weeks last year.”

UK circulation revenues for the quarter were eight per cent below last year, DMGT said, as Northcliffe’s total revenue for the period was down by 27 per cent year-on-year to £79m.

DMGT said underlying revenue at its Associated Newspapers subsidiary, publisher of the Mail and Mail on Sunday, fell 12 per cent to £206m with advertising revenues in the period falling by 15 per cent, a lower decline than in the proceeding three months, with the situation improving in June.

However, it said ad revenue at Associated remained volatile week-to-week.

Circulation revenue at Associated was seven per cent lower than the same period last year, but volume was improving, DMGT said, with the Daily Mail’s year-on-year performance in June down just one per cent.

The company attributed this success to a direct marketing campaign to recruit more long term purchasers.

Associated benefited from significantly reducing its costs, the company said, as did Northcliffe, which reduced publishing costs 19 per cent year on year through heavy cost cutting, with DMGT reducing headcount across its newspaper businesses by 560 (six per cent of the workforce). The closure of its presses in Leicester and Bristol further reduced costs.

Revenue from Associated Northcliffe Digital fell by 26 per cent year-on-year which contributed to overall DMGT group revenue in the three months to the end of June being down 13 per cent on the same period last year to £520m.

The company said trading remained in line with expectations despite weak trading conditions in its consumer media division.

DMGT also said it had reduced its net debt by £85m since 29 March to £1,142m.

Martin Morgan, DMGT chief executive, said overall trading conditions remained weak.

He said: “The decisive action taken to defend profitability earlier in the year, along with the continued management of our cost base, is helping to offset the impact of these conditions.

“The revenue and cost initiatives targeted to improve profitability this year by £150 million have been delivered. Our strategy of creating a diversified international portfolio of market-leading businesses in both business and consumer markets is proving to be effective in the current environment and leaves us well positioned to deliver long-term growth.”

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