Associated's profits lift 18% following cost-cutting

Daily Mail & General Trust's (DMGT's) move away from promotional DVD and CD giveaways with the Daily Mail and its other national titles helped lift operating profits by nearly 18% across its national newspaper division, Associated Newspapers.

Daily Mail: owner Associated News profits increase
Daily Mail: owner Associated News profits increase

But the company has warned it will "seek cost" and "operational efficiencies" to offset pressure on its bottom line, across the company.

DMGT has already axed 532 jobs, 7% of its national and regional newspaper division’s headcount, in the six month period to April this year.

Executives across the Daily Mail and Mail on Sunday are making a conscious effort to reign in promotional giveaways, such as DVDs and CDs, with their titles. But they will not axe covermounts entirely, as they help left circulations.

Instead, they are looking to lock in longer-term readers with loyalty and subscription schemes.

DMGT today (26 May) revealed six-monthly financials figures. Group revenues nudged up from £958m to £991m in the six months to April 3 this year.

Pre-tax profits, on an adjusted basis, rose from £102m to £121m across the DMGT business, which includes national and regional newspaper titles, and business-to-business operations.

DMGT publishes the national newspaper titles, the Daily Mail, The Mail on Sunday, and Metro.

Revenues across the national newspaper unit in the six month dropped from £446 to £438m while profits were up from £39m to £46m, 17.9%.

The group said its nationals division benefited from job cuts and pulling back in promotional spend in the period.

Total advertising across the nationals rose by 2%.

But the positive trend in October and November 2010 has not been maintained in 2011, due to a more volatile market and tougher comparatives, the group said.

By category, financial advertising increased the most and was up 27%, while retail, the biggest category, increased by 2%.

DMGT's regional arm, Northcliffe Media, is currently undergoing a major review by Steve Auckland, the executive who previously headed up Metro.

Northcliffe Media reported revenues down from £132m to £120m in the period while operating profits were down from £12m to £8m.

The group said the division was hit by problems across advertising sectors, such as recruitment.

It said that recent trading had reflected the weak economic environment and reduction in public sector spending.

Martin Morgan, chief executive, said: "DMGT has enjoyed a resilient first half. Trading was satisfactory overall, reflecting the benefits of DMGT's diversified international portfolio of market-leading business in both B2B and consumer markets, together with our focus on efficiencies."

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