DMGT profits down 23% but ahead of market expectations
LONDON - Daily Mail and General Trust has reported a 23% fall in adjusted pre-tax profits to £201m for the year ended 4 October, beating analysts' expectations after its flagship newspaper the Daily Mail recorded its second highest profit to date.
Amid the recession and a steep advertising downturn, DMGT's revenue fell 8% year on year to £2.12bn.
Associated Newspapers, the group's national newspaper division, reported an 11% fall in yearly revenues to £876m, due to a 15% fall in underlying ad revenues and to the sale of 75% of the London Evening Standard.
Circulation revenues remained stable, falling by just 2%. DMGT said that ad revenue trends are improving in the new year but are still down year on year.
Northcliffe Media was badly affected by weak advertising markets, particularly in the recruitment, motor and property categories. The division's total revenue fell 22% year on year to £328m.
Associated and Northcliffe's holding group, A&N Media, cut a total of 1,600 jobs in the year, which resulted in a £101m charge. However, these cuts contributed to cost savings of nearly £80m at Associated and £50m at Northcliffe.
DMG Radio Australia, which includes radio stations such as Nova, reported a 1% growth in revenues to £55m. DMGT said that the advertising market has recently improved, so profit growth is expected for this coming year.
The group announced today that it has sold a 50% stake in DMGRA to Illyria, the private investment vehicle of Lachlan Murdoch, for £63m. Murdoch, Rupert's son, will become chairman of DMGRA.
DMGT's B2B operations, which include Risk Management Solutions, DMG Information and Euromoney, increased their overall profit by 7%, benefiting from a 21% reduction in the average sterling to US dollar exchange rate over the year.
The group said that 73% of this year's operating profit was generated from outside the group's consumer operations, up from 60% last year.
Martin Morgan, chief executive of DMGT, said: "We have actively managed the business to defend profitability during unprecedented trading conditions with a clear focus on fundamentals.
"Revenue and cost initiatives of £150m have been delivered and we have taken action on various underperforming assets across the group.
"Our UK consumer businesses have achieved a sharp improvement in profitability in the second half of the year reflecting more stable conditions and a lower cost base.
"Our strategy of creating a diversified international portfolio of market-leading businesses in both B2B and consumer markets is proving to be effective in the current environment and leaves us well positioned for 2010 and beyond."
DMGT's share price fell 1.3% in early trading to 431.8p.
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