DMGT, the owner of the Daily Mail, posted a drop in full year profits yesterday, after a strong performance from its events arm failed to offset falling revenues and higher costs in its newspaper divisions.
Revenues at Associated Newspapers, the division which publishes the Daily Mail and the Metro, were flat on an underlying basis at £862m, but operating profits fell by 15 per cent to £76m due to the surging price of newsprint.
Profits were also hurt by the group’s decision to cut the cover price of the Mail on Sunday to win new readers in the wake of the News of the World’s closure. Underlying circulation revenues at its newspapers were down two per cent to £343m.
DMGT said its national newspapers continued to win market share even as circulation declined.
Northcliffe Media, which publishes over 100 regional newspapers, proved to be the biggest drag on group profitability, after weak advertising sales saw revenue decline by 10 per cent. Operating profits tanked 37 per cent to £17m.
Martin Morgan, chief executive, said: “Our UK consumer businesses have been impacted by the weak advertising environment, particularly in the third quarter, and higher newsprint costs.”
Its business-to-business (b2b) division, which houses its events business, performed more favourably, with operating profits up four per cent to £226m on revenues that were eight per cent higher at £892m.
Overall group pre-tax profit in the 12 months to 2 October was £125m compared to £146m a year earlier, on revenues that rose from £1.97bn to £1.99bn.