'Unprecedented conditions' see Northcliffe profit fall 91%

The Daily Mail and General Trust has reported a 91 per cent drop in operating profit at its UK regional newspaper division, Northcliffe Media.

Announcing its half-year results this morning, DMGT said “unprecedented trading conditions” meant its national and regional newspaper businesses now only made up 21 per cent of the group’s total profit.

Northcliffe’s UK operating profit fell by £33m to £3.2m in the six months to the end of March on revenue down 27 per cent year on year to £142m.

Regional advertising revenue dropped 31 per cent to £103m and DMGT said it had seen a 36 per cent year-on-year ad decline at Northcliffe in April.

About 11 per cent of Northcliffe’s workforce, some 500 staff, have left the company in the last six months.

Operating costs were said to now be running 20 per cent lower than last year and DMGT said “further significant reductions” would occur in the second half of the year.

National newspaper division Associated, which publishes the Mail titles, Metro and London Lite, saw half-year profit fall 59 per cent to £18m on revenue down 10 per cent at £455m.

National circulation revenues were said to be stable, up 0.6 per cent to £181m, but this failed to offset a 15 per cent decline in advertising revenue at £184m.

Display revenue at London Lite increased by 11 per cent and revenue from Mail Onlne climbed 15 per cent year on year to £5m in the six months to the end of March.

Unique visitor levels to Northcliffe’s network of ‘thisis’ websites in March totalled 4.2m – which DMGT said was up 42 per cent on the same month last year.

DMGT chief executive Martin Morgan said: “The overall first-half result has been badly affected by the impact of the recession on our consumer media advertising revenues.

“However, the decisive action taken to defend profitability, along with the continued management of our cost base, will help to offset the effect of continued weaktrading conditions in the second half of the year.”

He added:”Our results have come in ahead of our and the City’s expectations, which is pleasing. We recognise this has been a very tough trading period.”

Total DMGT group revenue in the six months to the end of March fell seven per cent to £1.1bn

Like-for-like pre-tax profit in the same period was down 47 per cent to £77m

The company reported a statutory pre-tax loss of £239m as a result of impairment charges – including a writedown on the value of Northcliffe – and £38m in exceptional reorganisation costs within Associated and Northcliffe.

The results include the losses made by the London Evening Standard for the first five months of the year prior to its sale to Russian billionaire Alexander Lebedev, which was completed in March.

Teletext’s operating loss remained unchanged at £3m following a like-for-like revenue decline of 17 per cent.

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