September 27, 2011

Ad revenue down 10 per cent at Northcliffe Media

Advertising revenue at Northcliffe Media has fallen 10 per cent since last October – the period in which four of its daily titles were converted to weeklies.

A trading update today by parent company Daily Mail General Trust (DMGT) also revelaed that headcount at Northcliffe was slashed by 17 per cent in the same period from 3,130 to 2,600.

Two weeks ago the Lincolnshire Echo become the fourth Northcliffe daily to make the switch, following the Exeter Express & Echo, Scunthorpe Telegraph and Torquay Herald Express.

In the 11 months to August 2011 recruitment advertising nosedived 30 per cent year on year and circulation revenue fell 7 per cent.

Meanwhile, DMGT’s national newspaper division Associated Newspapers saw a 1 per cent drop in underlying revenue (which is adjusted for acquisitions, disposals and closures) and a 2 per cent drop in reported revenue. Underlying circulation income fell 3 per cent on last year.

While DMGT claimed that both the Daily Mail and the Mail on Sunday had improved their market share in recent months, revenue from Associated’s newspaper operations fell 2 per cent, with print down 4 per cent but digital up 54 per cent.

Its two biggest advertising categories, retail and travel, were both down 5 per cent. Revenue from Associated’s digital-only businesses grew by 5 per cent

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The 4 per cent fall in circulation revenue was attributed to price discounting at The Mail on Sunday following the closure of the News of the World in July, which was partly offset by the Daily Mail’s price increase of 5p to 55p.

Revenue from the group’s B2B operations was up 9 per cent on last year but income from its business consumer division A&N Media was down 3 per cent.

Overall group DMGT revenue was up 1 per cent on last year and up 2 per cent on an underlying basis. Group operating profit is expected to be down on last year.

Chief executive Martin Morgan said: ‘DMGT has delivered a solid revenue performance over the year to date, driven by continued strength in our B2B operations offset by difficult market conditions for our consumer businesses.

‘Despite our continued focus on operational efficiency, the weak consumer advertising environment means that full year group operating profit will be lower than last year.

‘We expect some growth in earnings per share compared to last year, given lower finance and tax costs, but at the lower end of market expectations.

“Going forward our focus will remain on driving organic growth, operational and financial efficiency and pursuing an active portfolio management approach.”