DMGT: Nationals ad rise set to bring big profit increase

Daily Mail & General Trust said today it expects to report a significant increase in its newspaper profits next month as a result of cost cutting on its regional titles and advertising revenue from its national newspapers returning to strong growth.

DMGT said an increase of around £60m in anticipated when it releases its full year financial results – helped by gains from business sales and an exceptional tax credit, which was announced earlier in the year.

However, this increase will be offset partly by operating costs approaching £40m, arising mainly from reorganisation and closure costs from its newspaper business, the company said.

Currently, the City expects DMGT’s profit before tax for 2010 to be around £238m.

DGMT said the three months to September had so far brought an underlying ad revenue increase across its consumer titles of 13 per cent year on year, with its national newspapers – the Daily Mail and the Mail on Sunday – increasing ad revenue ten per cent over the period.

For the eleven months to the end of August, Associated Newspapers – the division of DMGT which publishes its national titles – recorded an increase in underlying revenue of three per cent year on year – but four per cent lower on a reported basis.

Underlying circulation revenue was two per cent lower year on year in the period, DMGT said in a trading update, but both the Daily Mail and The Mail on Sunday had improved their market share in recent months.

Total underlying advertising revenues was up six per cent over the eleven months year on year, the company said.

DMGT‘s regional newspaper division, Northcliffe Media, recorded a drop in total revenue for the eleven months to August of six per cent year on year, with ad revenue down seven per cent and circulation revenue down seven per cent year on year.

For the three months to September so far, advertising revenue is down five per cent due principally to weakness in Northcliffe’s East Midland titles and the widely anticipated effects of reduced public sector advertising spend, the company said.

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