Earnings: DMGT Eyes £100 Million Savings, Digital Income Still Proportionally Small

With the dead-tree ad decline in full swing, Daily Mail (LSE: DMGT) publisher DMGT took pains to stress 62 percent of its profit in the year to September came from outside printed newspapers. But that didn’t stop pre-tax profit slipping nine percent to £262 million despite a three percent revenue jump, and the group says it’s planning group-wide cost cuts worth almost £100 million to offset the advertising slump and rising newsprint costs. It points especially to job losses in the regions: DMGT “expects to remove significant further costs from Northcliffe in the coming year”.
Northcliffe Media: The local publisher’s profit fell 26 percent to £68 million on six percent worse revenue. Property classifieds are down 22 percent to half their September 2007 volume, job ads down 11 percent, car ads down 12 percent; all accelerating. Digital income was up 42 percent to £17 million and now makes up six percent of regional ad sales – something Northcliffe will want to increase further if it’s to offset those print losses; Northcliffe called local advertising “exceptionally challenging”. Though it publishes UK local papers, its central European assets are performing even better, pulling in £8 million profit thanks to web units like Slovakian jobs site Profesia and Croatian counterpart MojPosao.
Associated Newspapers: The national wing almost trebled digital sales to £9 million on 33 percent better traffic – but that’s still not a particularly large amount for what, in Mail Online, is one of the UK’s most-read news sites at home and abroad. Print ads fell two percent (display up one percent, classifieds down 12 percent). Overall Associated profit slumped 13 percent, though revenue was flat at £988 million.
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Associated Northcliffe Digital: The web classifieds unit business grew only a modest three percent to £88 million, while profit fell from £6 million to £5 million after money was spent marketing its range of property and cars sites. Elsewhere in digital, Teletext is getting back on track – slimming losses by £1 million to £3 million and turning a profit on Teletext.co.uk despite profit from the old TV service falling 13 percent.
DMG Information The B2B unit, which offers businesses information on topics like the environment and geography, grew profit six percent to £75 million, though its property companies didn’t fare well, profit slumping 22 percent on the housing crisis.