Daily Mail owner DMGT reports plunge in profit as coronavirus hammers publishing sector
The publisher of the Daily Mail newspaper has reported a 44 per cent plunge in operating profit for the nine months to June after growth in the first five months of the year was wiped out by the Covid-19 pandemic.
Daily Mail and General Trust (DMGT) reported adjusted operating profit of £63m for the nine months to 30 June, down from £112m in 2019.
DMGT also reported revenue of £934m, down an underlying seven per cent for the period. Revenue for the quarter plunged 23 per cent to £241m, as the nationwide lockdown hammered demand for physical newspapers, which in turn dented advertising revenue.
Circulation revenue decreased an underlying seven per cent over the nine months, including 12 per cent in the third quarter as a result of the UK lockdown.
DMGT said reductions in volume were partly offset by the cover price increases of the Saturday edition of the Daily Mail, from £1.00 to £1.10 in January 2020, and the weekend edition of the ‘i’, from £1.00 to £1.20 in September 2019.
The company, which owns the Mail titles, the Metro and the i paper, swung to a loss of £2m in adjusted operating profit for the period, down from a profit of £22m in its annual results last year.
It comes as the coronavirus crisis continues to decimate advertising revenue, as companies pull out of their usual publishing slots. Total advertising revenues for DMGT for the nine months decreased by an underlying 12 per cent, including 45 per cent in the third quarter.
The group reported a decline of almost a quarter in print advertising over the nine month period, which was partly offset by four per cent growth in digital advertising.
“Since March, the impact of Covid-19 has resulted in a pronounced reduction in advertising revenues across both print and digital formats. Growth in online traffic has helped to mitigate the impact on digital but not enough to compensate for the overall reduction in advertising spend,” the group said.
It added that Metro has been particularly affected as circulation volumes are currently approximately a quarter of their usual levels, as the free paper’s circulation ground to a halt while commuters stayed at home.
The publishing group, which has decided not to issue full-year guidance for 2020, today said its consumer media unit had returned to profitability in June, with a mid-single digit adjusted operating margin in the month.
In a sign that the demand for digital news has been accelerated by the pandemic, Mail Online delivered underlying revenue growth of three per cent in the nine months to 30 June.
DMGT shares rose 3.3 per cent to 655p at 2.30pm, on hopes that a positive trading update in the group’s digital operations would see it through the coronavirus crisis without significant damage to its balance sheet.
DMGT said: “We remain confident in the future growth opportunities at MailOnline, driven by increasing engagement with the direct audience.”
It added: “DMGT’s businesses are positioned to respond to market conditions as lockdown restrictions change and each has a plan for the different scenarios that could occur. At this stage, the outlook for the Group remains uncertain and suspension of formal guidance continues.”