DMGT beats estimates for profit slump

City A.M. Reporter
NEWSPAPER group Daily Mail and General Trust (DMGT) yesterday beat forecasts with a 23 per cent drop in pre-tax profits, adding that profitability at its UK consumer businesses showed a sharp improvement in the latter half of the year.<br /><br />The group, which owns the Daily Mail mid-market newspaper, said adjusted revenue fell eight per cent to &pound;2.1bn, hit by the continuing decline in advertising sales.<br /><br />DMGT&rsquo;s adjusted pre-tax profit came in at &pound;201m for the year to end of September, while earnings per share fell 22 per cent to 37.2p. However, both figures were better than previous company estimates, thanks to a cost-cutting drive and the stabilising economic environment.<br /><br />&ldquo;We remain focused on cash generation, debt reduction and cost efficiency,&rdquo; the company said in a statement.<br /><br />Net debt fell during the second half but rose slightly over the full year to &pound;1.049bn, mainly due to the depreciation of sterling against the dollar.<br /><br />All divisions except regional newspaper unit Northcliffe Media managed to maintain or increase their profit margins.<br /><br />Business-to-business operations increased profits by seven per cent, thanks to the weaker sterling rate, contributing 73 per cent of group operating profit. <br /><br />But this was offset by falling profits at the consumer newspaper division, despite an improvement in the second half.<br /><br />Newspapers globally have suffered from sharp cuts in advertising budgets during the recession, especially regional papers, which are more vulnerable to weaker property and recruitment advertising.<br /><br />Business-to-business media, typically paid for by subscription, have held up far better so far, although there are fears that the effects of the recession will be felt later.