Mail publisher operating at a loss in lockdown as advertising downturn hits revenues

The Mail, Metro and i publisher is operating at a loss under lockdown as it battles the advertising downturn brought on by the coronavirus crisis.

Print advertising revenues have fallen by 70% and digital advertising by as much as 17% at DMG Media since the start of April, with total advertising revenues down by up to 46% at the publisher under lockdown.

Circulation revenues were down by 17% in April and 9% in the first four weeks of May. Across consumer media, revenues have fallen by up to a third since April, new figures reveal.

The UK officially went into lockdown on 23 March as people were told to “stay at home” to slow the spread of the Covid-19 virus.

DMG Media, which also publishes the Mail Online website, said since March it has seen a “pronounced reduction in advertising revenues” across print and digital, partly offset by increased traffic online.

The lockdown has resulted in fewer print copies being bought from shops, although home deliveries have partly offset this, it said.

But it has seen higher demand for digital versions of the Mail newspapers.

The Mail Plus online briefing service, which launched in October last year, is now attracting more than 270,000 unique visitors a week.

Its premium subscription offering, which includes a digital version of the newspaper, has more than doubled to over 80,000, DMG Media said.

The Metro continues to publish at a loss, with distribution cut dramatically during the crisis. The latest ABC figures show it is putting out 398,787 copies a day compared with the usual 1.3m.

DMG Media, the consumer media arm of DMGT, reported that it operated at a loss in April, which is expected to improve to a “small loss” for May.

Looking ahead, the publisher said: “The advertising market is expected to remain difficult and the duration of the impact of lockdown measures on circulation volumes is uncertain.

“The Board remains confident, however, that high levels of reader engagement will help to support revenue recovery in time.”

It said it was too early “to assess the extent to which readership habits may permanently change once lockdown measures are lifted completely”.

Figures for the first half of the year, covering the six months to the end of March 2020, show revenues at DMG Media were up slightly on the year before to £345m, with an operating profit of £44m.

At group level, DMGT made £690m in turnover for the half-year, down from £724m over the same period last year. Profit before tax for the period was down 44% on last year to £56m.

DMGT chief executive Paul Zwillenberg said: “DMGT delivered a solid performance in the first half of the year, reflecting a strong first five months of trading followed by one month of weakness due to the Covid-19 pandemic.

“Since February, we have moved quickly to protect our stakeholders and actively support our portfolio of businesses.”

He added: “I am immensely proud of the initiatives our businesses have introduced to support our communities and stakeholders, in particular the Mail Force charity which is supplying personal protective equipment to the NHS and has raised over £8m to date.

“Our businesses are providing free environmental information for NHS Nightingale hospitals, education tools to US students and advertising space for small businesses. Also, DMGT has not taken any government support.”

DMGT’s events business, DMG Events, has cancelled all events scheduled between April and August. It said it is also “increasingly likely” that events still scheduled for September will be postponed or cancelled.

Zwillenberg said: “The severity and duration of the Covid-19 crisis remains unclear but DMGT has a robust balance sheet, access to significant funding and a diversified portfolio.

“This gives me, and the Board, confidence that we will weather the current storm and withstand a sustained period of global economic uncertainty.”

DMGT bought the i paper from JPI Media for £49.6m in November last year. The deal was given the go ahead by the UK competition watchdog in March.