Northcliffe Media, publisher of the Hull Daily Mail, Leicester Mercury, and 130 other regional newspapers, has warned of a ‘gloomy economic outlook’ and ‘extremely challenging conditions’ in the annual report of parent company Daily Mail and General Trust.
The group saw its profit fall by £25m to £68m last year.
Property advertising revenue fell 22 per cent, motors advertising fell 12 per cent, and recruitment advertising fell 11 per cent.
In total, revenue fell from £447m to £420m – with a 23 per cent fall in the final quarter as the credit crunch took hold – and the operating margin was 16 per cent, down from 21 per cent last year.
The report warns: ‘The gloomy economic outlook points to extremely challenging conditions for our key advertising markets in the coming yearâ€¦ we have reviewed all areas of expenditure and are in the process of removing significant costs.”
It adds: ‘The first signs of advertising weakness appeared towards the start of the financial year when growth suddenly stopped and then went into a gentle decline.
‘The rate of decline then accelerated almost on a monthly basis. In the property category, estate agents reduced their advertising budgets in early spring in the face of an ailing property market.
‘The cutbacks have been so severe that in the month of September, property advertising was only half of that achieved in the previous year.”
Newspaper circulation revenues fell by three per cent, despite price increases, to £73m.
Bright spots for Northcliffe included a 42 per cent increase in digital revenues, to £17m, and a 15 per cent rise in profits at its Central European newspapers in Hungary, Czech Republic, and Croatia – to £8m.