Ad slump hits DMGT shares

 
Steve Dinneen
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Daily Mail & General Trust (DMGT) did nothing to dispel the gloomy mood in the UK advertising market yesterday when it announced its ad sales for the last two months have dropped below levels seen last year.

The news sent the firm’s shares tumbling as much as nine per cent before settling 7.5 per cent lower at 448.6p. The media group’s Northcliffe regional newspaper division was hardest hit, with revenues falling nine per cent and operating profit plummeting 35 per cent, despite an 11 per cent headcount reduction. Ad revenues were also down nine per cent to £85m.

Revenues from national newspapers, which include the best-selling mid-market tabloid the Daily Mail, fell three per cent but operating profit rose five per cent.

Despite the slowdown in the advertising market, the group saw its revenues increase three per cent to £991m in the first six months, with profits rising eight per cent to £144m.

It was buoyed by a strong performance by its business-to-business operations, which include financial information, risk-management services and events. Chief financial officer Stephen Daintith said he expects full-year revenue and profit growth to broadly reflect the first half.