Daily Mail owner signals lower half-year profit

The owner of the Daily Mail today warned that lower advertising revenues at its national newspapers arm had squeezed profits in the first half of its financial year.

Daily Mail and General Trust (DMGT) posted a 3 per cent decline in like-for-like advertising revenues at Associated Newspapers – publisher of the Daily Mail, Mail on Sunday, Mail Online and Metro – in the six months to 31 March.

DMGT shares fell 4 per cent as it warned that lower profits from Associated – due in part to reduced advertising revenues and higher print and promotion costs – would weigh on the group’s half-year performance, although it reassured that the whole-year outlook was unchanged.

The group’s business-to-business division, which includes publications such as Euromoney Institutional Investor and makes up the bulk of the group, recorded 8 per cent like-for-like sales growth.

Associated saw circulation revenues grow 4 per cent on a like-for-like basis as it benefited from the effect of increased cover prices at the Daily Mail and continued market-share improvement.

The decline in advertising sales at Associated was driven by print publications, which fell 10 per cent, while the Mail Online saw advertising revenues surge 69 per cent. The publisher also reported an improvement in March with ad revenues increasing 1 per cent.

Regional arm Northcliffe Media – which publishes 120 titles – saw like-for-like advertising revenues drop 7 per cent, while underlying circulation revenues increased 2 per cent as it also benefited from cover price increases.

DMGT said the number of staff across Associated and Northcliffe declined by 593 or 9 per cent to 6,280 in the period.

The group expects to report exceptional costs for the half year of around £40 million, mainly in Associated and Northcliffe, which will include reorganisation costs relating to the move of printing facilities to Thurrock, in Essex.