The Daily Mail and Metro newspapers gave a boost to the fortunes of their parent company by delivering their highest ever operating profits in the year to October, the company said today.
Despite adjusted revenue falling six per cent to £1.98bn, Daily Mail & General Trust‘s adjusted operating profit jumped 17 per cent year on year to £320m thanks to a strong return from its consumer media business.
Higher national advertising revenues, together with a focus on cost control, led to a 46 per cent increase (£39m) in adjusted operating profit of £125m in the 12 months to 3 October across A&N Media – DMGT‘s consumer media business.
Associated Newspapers – the division of A&N which publishes its national newspapers – recorded a 54 per cent year-on-year increase in operating profits to £95m despite revenue falling by three per cent to £850m.
Both the Daily Mail and the Mail on Sunday increased market share despite underlying circulation revenue falling twp per cent to £351m, DMGT said, as it published full year financial results.
Underlying advertising revenue rose seven per cent to £347m in the period, driven by a strong performance from Metro in particular, DMGT said.
Daily Mail & Metro delivered record operating profits during the period, DMGT said, however it did not break out those figures from Associated’s overall results.
“Underlying” digital revenue from the national newspaper websites increased by 54 per cent to £12m due to the growing success of Mail Online, where traffic increased year on year by more than 70 per cent to 47 million unique users in September, the company said.
DMGT said it expected growth to continue as national advertising revenue rose nine per cent in the first seven weeks of the current financial year.
The continued weak regional advertising market in the UK led Northcliffe Media – DMGT’s regional and Central European newspaper business – to record a ten per cent year-on-year fall in revenue to £294M.
Advertising revenue at Northcliffe was down by seven per cent to £186m with recruitment revenue hardest hit as it fell 19 per cent.
Despite the revenue fall, Northcliffe increased its adjusted UK operating profits by 24 per cent over the period to £30m – mainly through a cost reduction programme which yielded underlying cost savings of £26m.
As part of the overall cost reduction, staffing costs at Northcliffe fell by an underlying £14m as headcount was reduced by 242 (seven per cent) since September 2009.
The Central European business – A&N International – recorded adjusted operating profits of £3.3m in the period on revenues down 24 per cent to £33m.
DMGT said Northcliffe faced another tough year as UK advertising revenue in the first seven weeks of its new financial year was down seven per cent year on year.
DMGT draws most of its revenue from B2B activities including risk management and financial information businesses.
DMGT said 66 per cent of this year’s operating profit was generated from the group’s B2B operations and 34 per cent from consumer, compared to 71 per cent and 29 per cent respectively last year.
Martin Morgan, DMGT chief executive, said: ‘Trading exceeded our expectations throughout the year.
‘Our international business-to-business companies have delivered excellent profit growth, demonstrating strength across the portfolio.
‘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.”