The owner of the Daily Mail and Mail on Sunday delivered a 10% rise in annual profits today, but said advertising revenues had slipped back into the red at its national newspaper titles.
Daily Mail and General Trust (DMGT) – which yesterday announced a deal to sell its Northcliffe Media regional division – said robust trading at its business-focused and digital operations helped boost underlying profits to £255m (€317m) in the year to September 30.
Moves to slash costs – which saw more than 800 jobs axed across its consumer business over the year – also offset further declines in advertising revenues.
DMGT cautioned over slow trading since the year end at its consumer arm as it revealed that advertising revenues at its national division, Associated Newspapers, had gone back into reverse after a bounce back at the end of its financial year.
It had seen newspaper advertising revenues rise 2% in the final six months, but said they had slipped back to stand 5% lower in the first seven weeks of the new year.
The Northcliffe Media business has also seen advertising revenues remain under pressure in the new financial year, down 7% on a like-for-like basis.
DMGT said: “First quarter consumer trading to date has been a little slow and we remain cautious.”
The group yesterday announced the sale of Northcliffe for £52.5m (€65.3m) to Local World, a new company led by former Mirror Group Newspapers boss David Montgomery, which will also own the newspaper assets of Iliffe News & Media, including titles such as Cambridge News.
DMGT will take a 39% stake in Local World, while Daily Mirror publisher Trinity Mirror is also buying a 20% shareholding.
Shares jumped around 10% after today’s full-year figures, with analysts praising the strength of DMGT’s business-to-business division, which is expected to help weather ongoing newspaper advertising difficulties.
DMGT reported an 8% rise in underlying operating profits at its business-to-business arm, to £237m (€294.8m) over the year.
Investec said the business-focused operation will contribute around 80% of group profits after the Northcliffe sale.
Another record performance from its Metro titles and a 74% surge in revenues at MailOnline also helped Associated Newspaper’s performance, with underlying earnings up 3% to £78m (€97m).
Cost cutting at Northcliffe saw the division’s earnings leap 54% to £26m (€32.4m).