Ad Revenues Stabilising At DMGT, But Hit By US Attacks

In particular, the Daily Mail‘s important retail advertising has been robust, although the financial and IT sectors have remained weak, the group said in a trading statement. Classified advertising on the Mail titles has increased by an around 5% in H2, but on the Evening Standard has declined by 11% due to lower recruitment advertising revenues. The free morning title, Metro, is progressing well towards breakeven, with year-on-year growth in both display and classified revenues, says DMGT.

The group says that regional newspaper advertising revenues have remained stable. An increase of 3.5% is expected for the six months to September, with recruitment revenues up 13% but motors down 4%. However, the picture is localised with the Group’s south-west England titles recovering only slowly from the effects of the foot and mouth outbreak.

DMGT expects to report an exceptional cost of around £10 million in its financial results, resulting from the costs of the restructuring that has been set in place ‘in anticipation of or in reaction to weakening markets.’

The company says that the terrorist attacks in US have had ‘an immediate impact’ on a number of its activities. Euromoney Institutional Investor issued a statement yesterday indicating the effect, particularly on its conference and training businesses. DMG World Media has also had to cancel or postpone a small number of events due to be held in the New York area.

The Mail titles have seen a considerable short term increase in circulation, but this is more than offset in revenue terms by a reduction in advertising revenues from the expected level. As a result of this and the weak third financial quarter to June, display advertising revenues for the second half of the year are estimated to finish 8% lower than the previous year.

Shares in DMGT were up 30½p at 533½p by 1:00pm today.