DMGT Profits Dip 9% In First Half

DMGT says that weaknesses in the world’s principal economies have had an negative impact on most advertisers. “The downturn has been felt most by financial institutions and least in consumer markets. This has contributed to the continued fall in recruitment advertising volumes, especially in financial centres like London,” said the statement.

Accordingly, retail led businesses such as the Daily Mail and DMG World Media were less affected than those with a higher gearing toward financial advertising, such as the Mail On Sunday and many of Euromoney’s publications. Publications with a heavy dependence on recruitment advertising, including the Evening Standard and some of Northcliffe Newspapers’ regional titles, were also negatively affected by the conditions.

Associated Newspapers DMGT’s Associated Newspapers division publishes its national newspapers, including the flagship Daily Mail title. Turnover fell by 2% with the effect of cover price increases partly compensating for lower advertising revenues.

Advertising revenues for the half year fell by 15% in total, but the impact was mixed across Associated’s publications. Display advertising was down nearly 13% at the Daily Mail, largely due to lower financial and IT volumes.

The Daily Mail‘s principal category, retail, has held up reasonably well. Over the six months, the gap between revenues in the current and corresponding period has closed from 17% to 13%, according to the results.

Northcliffe Newspapers Northcliffe is the company’s regional newspaper division. Adjusted operating profit fell by 13% to £40.2 million on turnover unchanged at £233.0 million. Modest increases in advertising and circulation revenues were offset by a planned investment in editorial and marketing and by a reduced level of contract printing revenue.

Aggregate advertising revenues were up 1.6%, with the motors and property categories performing strongly. However, recruitment advertising declined by 4.4%.

Broadcasting Teletext’s revenues were 9% lower than last year, although operating profit fell by only £1 million.

DMG Radio Australia continues to operate at a slight loss largely due to the launch costs of its metropolitan Nova FM stations in Sydney and Melbourne.

Outlook The UK consumer businesses saw surprisingly buoyant advertising revenues in March, but this has not continued, according to DMGT. It says that April proved to be a tough market for advertising, although May looks more encouraging.

“Generally the advertising market remains volatile and consistent improvement is still awaited. Resilience in non-advertising driven businesses has justified the Group’s strategy of acquiring businesses outside the UK advertising sector. We still see no reason for any substantial improvement in advertising revenues over the rest of 2002 and have planned on that basis.”

Shares in DMGT were down 35½p at 740p by mid-morning today.