DMGT remains cautious about outlook for 2011
Shares in the Daily Mail & General Trust fell by 9% after the publishing group released its half-yearly financial report.
DMGT said advertising sales in April and first three weeks of May were “below last year”, adding that is has a cautious outlook for the rest of 2011.
DMGT also warned that its regional newspaper division Northcliffe is in for a tough 2011, with operating profits down 35% in the six months to 3 April.
Interim results at Northcliffe, which publishes more than 100 regional titles, were down 9% to £120 million.
In a bid to cut costs, DMGT cut 532 staff at its A&N Media newspaper operation, as well as 336 employees from Northcliffe (11% of its headcount)
Northcliffe’s digital revenues for the period were down 2% to £9 million, while recruitment advertising turnover fell 21% – though this was partially offset by growth in property, motors and services sales.
Underlying circulation revenues declined 2% to £171 million (the Daily Mail was down 1.9% and The Mail on Sunday 3.7%). However, advertising revenues were up 2% to £183 million, driven by the morning freebie Metro and the MailOnline website. Underlying print display advertising remained static at £148 million.
For the six month period, total group revenues were up 3% to £991 million, while pre-tax profit doubled from £36 million to £73 million.
“DMGT has enjoyed a resilient first half,” Martin Morgan, DMGT chief executive, said. “Trading was satisfactory overall, reflecting the benefits of DMGT’s diversified international portfolio of market-leading businesses in both B2B and consumer markets, together with our focus on efficiencies. Our UK consumer businesses have increased operating margin, mainly through operating efficiencies and both the Daily Mail and The Mail on Sunday have again improved their market share of circulation.”
“Despite continuing momentum within our B2B operations, we remain cautious about the outlook for the full year due to the volatile and uncertain market conditions faced by our UK consumer businesses, where advertising revenues for April and the first three weeks of May have been below last year.
“We are therefore remaining focused on driving sustainable organic growth through new product development and investments, while continuing to seek operational efficiency and to reduce debt. Overall, we still expect to achieve growth for the full financial year compared to last year.”
Shares in DMGT fell 43.9p (9%) to 440.9p in early trading.