DMGT beats estimates for profit slump
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.
The group, which owns the Daily Mail mid-market newspaper, said adjusted revenue fell eight per cent to £2.1bn, hit by the continuing decline in advertising sales.
DMGT’s adjusted pre-tax profit came in at £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.
“We remain focused on cash generation, debt reduction and cost efficiency,” the company said in a statement.
Net debt fell during the second half but rose slightly over the full year to £1.049bn, mainly due to the depreciation of sterling against the dollar.
All divisions except regional newspaper unit Northcliffe Media managed to maintain or increase their profit margins.
Business-to-business operations increased profits by seven per cent, thanks to the weaker sterling rate, contributing 73 per cent of group operating profit.
But this was offset by falling profits at the consumer newspaper division, despite an improvement in the second half.
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.
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.