Northcliffe “revitalised” despite reduced profits - Pelosi tells City

Northcliffe Media Group managing director Michael Pelosi today told the City it was ‘a revitalised business’but announced reduced profits for 2007.

Pelosi said the company was: ‘Clearly focused, more efficient, operating on a much reduced cost base, and has a renewed sense of purpose. We are aware of our key challenges. We must deliver local audiences (i.e. our customers’ customers) if we are to achieve profitable revenue growth. Digital publishing has a key role to play here.”

The regional newspaper publisher, owned by the Daily Mail and General Trust, told City analysts and senior financial institution officers that it was reacting to the changing media landscape.

NMG’s revenues for 2007 have risen slightly from £442 million in 2006 to £448 million and operating profits have gone up from £83.3 million in 2006 to £92.5 million. Costs have been cut by nearly £10 million to £290.8 million

The figures are unaudited and will be subject to deductions.

NMG is the second largest part of DMGT and makes up 29 per cent; Associated Newspapers, who publish the Daily Mail, makes up 31 per cent.

The company’s headcount has dipped below the 5,000 mark in the last month – down from just under 7,000 in September 2004. NMG’s cost-cutting scheme Aim Higher the company saved £45 million – £9.5m in editorial alone. Pelosi said: ‘We do not believe Northcliffe suffered any setback from [Aim Higher] or, indeed, from the proposed sale of the business.”

The company made £132 from the sale of the Aberdeen Journal to DC Thomson and £8 million from the sale of Northcliffe Retail but paid out £64 million from the purchase of 25 newspapers and a magazine group from Trinity Mirror.

NMG publishes 18 daily paper s including the Hull Daily Mail and the Nottingham Evening Post, as well as 29 paid-for weeklies and 62 free weeklies.

Pelsosi highlighted the launch this year launched of free newspaper Total Essex targeting at 57,000 households which has generated revenues of £180,000 in four months. Free titles were also launched in Leicestershire, Staffordshire and elsewhere with other glossy magazine launches on the cards.

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