Operating profit up 34 per cent at Northcliffe

The Daily Mail & General Trust has reported a 24 per cent slump in operating profits at its newspaper publishing arm – despite a surge in profits at its regional newspaper operations.

Profits at A&N Media – parent company of Associated Newspapers and Northcliffe Media – fell from £43m in the first half of 2011 to £33m in the six months to April 2012.

Revenue fell 3 per cent from £558m to £542m over the same period, while headcount was slashed by 593 to 6,280.

DMGT blamed the profit slump on lower print advertising revenues and ‘additional promotional activity within the digital businesses”.

Revenues were said to up 75 per cent on the previous half at Mail Online, with underlying revenues across the digital side of Associated up up 15 per cent overall to £41m.

Operating profit at Associated Newspapers – publisher of the Daily Mail, Mail on Sunday and Metro – was down 26 per cent to £34m and revenue fell 1 per cent to £435m.

Within that figure, circulation revenue increased by 4 per cent to £183m following cover price rises at the Daily Mail.

In today’s report the company said the early indications were that the launch of The Sun’s Sunday edition had ‘little’impact on the performance of the Mail on Sunday.

Operating profit at Northcliffe Media was up 34 per cent from £8m to £11m, despite revenue falling 10 per cent to £107m.

Over the last year the company has cut staff numbers from 2,530 at the beginning of October 2011 to 2,366 – a reduction of six per cent.

During that time it converted four of its daily titles, including the Exeter Express & Echo and the Torquay Herald Express, into weeklies, contributing to a 13 per cent reduction in publishing costs.

Advertising revenues were down by 11 per cent to £75 million and circulation revenues fell by 5 per cent to £29 million.

Northcliffe said this was ‘driven entirely by the move of four titles from daily to weekly frequency and the transfer to wholesale distribution last year”.

DMGT group revenue fell from £991m to £973m and operating profit fell from £98m to £73m.

DMGT chief executive Martin Morgan said: ‘We have delivered a solid underlying performance in the first half reflecting the strength of our B2B companies and the resilience of our national consumer titles.

‘As expected, disposals and certain one-off factors have led to lower reported half year results. Our international B2B companies have increased their underlying revenues and profits* by 9 per cent and 14 per cent respectively. Their reported results were lower due to the impact of disposals and a low biennial half year for the events business.

‘Our UK consumer businesses have experienced more challenging conditions, although underlying revenues were only slightly down. Within Associated, circulation and digital revenue growth largely offset print advertising weakness.

‘Consumer first half profits were also affected by increased digital promotional activity which we expect to be less pronounced in the second half.

“We have continued actively to manage our portfolio of businesses and have made several acquisitions and disposals during the period and into the second half, to improve the overall quality and growth prospects of the Group.

“The continued growth of our B2B companies and more positive momentum expected within our consumer operations in the second half of the year means that we expect to achieve growth in earnings* for the full financial year, compared to the equivalent figure last year.”

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