The Daily Mail and General Trust has enjoyed “another record year” – with activities other than newspaper publishing now accounting for more than half of its profits.
But profits at its national newspaper division, Associated, fell 16 per cent, due to the ongoing London free newspaper war and investments in digital.
Announcing its end-of-year results this morning, covering the 12 months from October 2006 to September this year, DMGT cited “strong growth” in its business-to-business operations – and “excellent results” from DMG Information in particular – for another year of record profits.
Overall group revenues rose three per cent this year to £2.235bn, with like-for-like pre-tax profits up 11 per cent to £288m.
DMGT’s newspapers, the company said, continued to outperform the market in terms of both advertising and circulation revenues.
Revenues at Associated – publisher of the Mail titles, the Evening Standard and London Lite – were up three per cent to £986m.
The Daily Mail was said to have achieved a record operating profit, buoyed by an eight per cent rise in advertising revenue, but this was offset elsewhere in the division by London Lite’s ongoing freesheet war with News International’s thelondonpaper and continued investment at Associated Northcliffe Digital.
As a result, profits at Associated Newspapers were down 16 per cent year on year to £83m.
Associated Northcliffe Digital showed “strong growth” with revenues up 46 per cent to £86m across its core classified web portals in jobs, property and motors. Digital profits fell by £2m, however, due to continued investment in this area.
DMGT’s regional newspaper arm, Northcliffe, was described as “an integrated provider of local media services”.
Revenues at Northcliffe fell two per cent this year to £447m, but operating profits rose four per cent to £93m, due to a slightly improved profit margin of 21 per cent compared with 20 last year.
In a City briefing last month, Northcliffe managing director Michael Pelosi told analysts the company was “a revitalised businessâ€¦ clearly focused, more efficient, operating on a much reduced cost base, and [with] a renewed sense of purpose”.
Teletext made a “disappointing” operating loss of £4m, with revenues falling 20 per cent to £41m – but the company said progress was being made in adaptingTeletext for digital television, internet and mobile.
DMGT chairman Lord Rothermere said the outlook for the new financial year was a positive one.
“Over the past decade our strategy has been to sustain and invest in our core UK newspaper businesses and to use the surplus cash flow and leverage of the group to acquire or develop high growth media businesses unaffected by the UK’s advertising market and regulatory regimes,” he said.
“This strategy of investing for the long term growth of the business has resulted in another record year, generating a premium return for shareholders. It demonstrates the benefit of our diversified portfolio of market-leading business and consumer products.”
One of the biggest growth areas was DMGT’s business-to-business division, DMG Information, which posted a four per cent rise in profits to £71m. Revenues fell due to the weak dollar, but on a like-for-like basis were up 17 per cent.
DMGT also confirmed this morning that its chief executive, Charles Sinclair, has decided to retire next September.
He will be replaced by Martin Morgan, who is currently managing director of DMG Information.
Morgan, who joined DMGT in 1989, is credited by Lord Rothermere as being the “driving force” behind the setting up of its business information division.
He will step down from DMG Information in the middle of next year to relocate from Connecticut to London.
“Charles has made an enormous contribution to the group and I am sad that he has decided to stand down next year as chief executive after what will be 21 years in the role,” Rothermere said.
“I would like to thank him for his leadership of the group and, on a personal note, for the trusted advice he has given me and my father over many years.”
DMGT’s share price fell 6.5 per cent this morning, down 38 points to 539p at 8:30am.