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DMGT reports profits surge at Northcliffe Media DMGT reports profits surge at Northcliffe Media
(about 2 hours later)
Daily Mail & General Trust has reported a remarkable profit surge of more than 50% to £26m at ailing Northcliffe Media in the year to 30 September, thanks in part to more than 320 staff being axed. Mail Online also capped a strong year with a 74% revenue surge to £28m.Daily Mail & General Trust has reported a remarkable profit surge of more than 50% to £26m at ailing Northcliffe Media in the year to 30 September, thanks in part to more than 320 staff being axed. Mail Online also capped a strong year with a 74% revenue surge to £28m.
DMGT's results show the fruits of a major restructuring programme at Northcliffe Media, which is being hived off to David Montgomery's Local World venture, after the ailing regional newspaper division had reported a 37% profits plunge in 2011. DMGT's results show the fruits of a major restructuring programme at Northcliffe Media, which is being hived off to David Montgomery's Local World venture, after the ailing regional newspaper division had reported a 37% fall in profits in 2011.
Overall DMGT, which makes almost three quarters of operating profits from its non-newspaper assets, said total pre-tax profits rose 64% to £206.3m. This includes more than £100m in charges and £150m in profits from disposals. Total revenues dipped by 1% to £1.96bn. Overall DMGT, which makes almost three-quarters of its operating profits from its non-newspaper assets, said total pre-tax profits rose 64% to £206.3m. This included more than £100m in charges and £150m in profits from disposals. Total revenues dipped by 1% to £1.96bn.
DMGT's share price briefly leaped almost 13% to 534.5p in early trading on Thursday, its highest point since the beginning of March last year, as investors were buoyed by the strong trading and positive outlook for its business-to-business assets and warmed to Northcliffe's disposal, leaving the group less exposed to newspapers. The company's share price was still up more than 9%, or 44p, at 518p at about 9.15am on Thursday.DMGT's share price briefly leaped almost 13% to 534.5p in early trading on Thursday, its highest point since the beginning of March last year, as investors were buoyed by the strong trading and positive outlook for its business-to-business assets and warmed to Northcliffe's disposal, leaving the group less exposed to newspapers. The company's share price was still up more than 9%, or 44p, at 518p at about 9.15am on Thursday.
The company said by offloading Northcliffe it has achieved a long-term strategic aim of more than 70% of profits coming from businesses outside the UK.The company said by offloading Northcliffe it has achieved a long-term strategic aim of more than 70% of profits coming from businesses outside the UK.
DMGT increased its full-year dividend up 6% to 18p per share and said it intended to buy back up to £100m in a share buyback programme over the coming year.DMGT increased its full-year dividend up 6% to 18p per share and said it intended to buy back up to £100m in a share buyback programme over the coming year.
Net debt reduced £106m to £613m for the year, reducing DMGT's debt to earnings before, interest, tax, depreciation and amortisation to a healthy 1.6 times.Net debt reduced £106m to £613m for the year, reducing DMGT's debt to earnings before, interest, tax, depreciation and amortisation to a healthy 1.6 times.
Martin Morgan, the chief executive of DMGT, said this means that the company will "continue to look for attractive acquisitions".Martin Morgan, the chief executive of DMGT, said this means that the company will "continue to look for attractive acquisitions".
However he said the hiving off Northcliffe Media represented the end of major deals. However he said hiving off Northcliffe Media represented the end of major deals.
"The formation of Local World I would say completes the major planks of re-organisation of DMGT's portfolio," he said. "We will from time to time make disposals or acquisitions, normal business. Northcliffe is the last part of a programme of major reshaping at DMGT." "The formation of Local World ... completes the major planks of re-organisation of DMGT's portfolio," he said. "We will from time to time make disposals or acquisitions, normal business. Northcliffe is the last part of a programme of major reshaping at DMGT."
The slashing of 13% of staff, 324 employees by Northcliffe, and the closure or alteration of frequency at some of its almost 80 titles helped fuel a 53% surge in operating profits from £17m to £26m. The loss of 13% of staff, 324 employees by Northcliffe, and closure or alteration of frequency at some of its almost 80 titles helped produce a 53% surge in operating profits from £17m to £26m.
This was despite a 10% fall in revenues to £213m, with profits boosted thanks to a significant margin increase from 7% in 2011 to 12% this year. The restructuring made £33m in cost savings.This was despite a 10% fall in revenues to £213m, with profits boosted thanks to a significant margin increase from 7% in 2011 to 12% this year. The restructuring made £33m in cost savings.
DMGT said it booked an exceptional operating charge of £71m, £45m of which is non-cash, at its newspaper operations in relation to restructuring and closure costs. DMGT said it booked an exceptional operating charge of £71m, £45m of which is non-cash, at its newspapers in relation to restructuring and closure costs.
Northcliffe Media saw total ad revenues fall 8% for the year, with print advertising down 13% and digital ads up 2%. Newspaper sales income fell 5% to £57m. Northcliffe Media saw total ad revenues fall 8% for the year, with print advertising down 13% and digital ads up 2%. Newspaper sales' income fell 5% to £57m.
As part of the deal to offload Northcliffe to Local World, in which it retains a 38% stake, DMGT has taken on the existing pension liabilities for its regional newspaper business. Stephen Daintith, DMGT finance director, estimates this to be approximately half of the £325m pension deficit the company reported. As part of the deal to offload Northcliffe to Local World, in which it retains a 38% stake, DMGT has taken on the pension liabilities for its regional newspaper business. Stephen Daintith, DMGT finance director, estimates this to be approximately half of the £325m pension deficit the company reported.
DMGT said in the first seven weeks of the new financial year ad revenues at Northcliffe declined 11%.DMGT said in the first seven weeks of the new financial year ad revenues at Northcliffe declined 11%.
Associated Newspapers – home to the Daily Mail, Mail on Sunday as well as freesheet Metro and Mail Online – had a resilient year with revenues down just 2% to £848m and operating profit up 2% to £78m. Associated Newspapers – home to the Daily Mail and Mail on Sunday as well as freesheet Metro and Mail Online – had a resilient year with revenues down just 2% to £848m and operating profit up 2% to £78m.
As expected Metro performed well with revenues up 8%, about £6m, to £89m thanks in large part due to an advertising boom during the London 2012 Olympics. Profits hit a record £20m.As expected Metro performed well with revenues up 8%, about £6m, to £89m thanks in large part due to an advertising boom during the London 2012 Olympics. Profits hit a record £20m.
Mail Online grew strongly with revenue up 74% to £28m. It also notched up its first month where the website broke even. Mail Online grew strongly with revenue up 74% to £28m. It also celebrated its first month in which the website broke even.
DMGT said Mail Online has expanded to India and in the coming year there will be increased investment in expanding its editorial bureaux in New York and Los Angeles, increasing UK and US video editors, and "significant" investment in technology. DMGT said Mail Online has expanded to India and in the coming year there will be increased investment in expanding its editorial bureaux in New York and Los Angeles, increasing the number of UK and US video editors and "significant" investment in technology.
DMGT's UK newspaper websites increased digital revenue by 72% year-on-year to £31m – £28m from Mail Online and £3m from Metro's digital operation.DMGT's UK newspaper websites increased digital revenue by 72% year-on-year to £31m – £28m from Mail Online and £3m from Metro's digital operation.
DMGT said at its UK newspapers circulation revenues increased £10m, 3%, to £353m in the year to 30 September. The Daily Mail increased 4.4% while the Mail on Sunday fell 0.8%. DMGT said its UK newspapers' circulation revenues increased £10m, or 3%, to £353m in the year to 30 September. The Daily Mail's increased 4.4% while the Mail on Sunday's fell 0.8%.
Ad revenues fell 2% to £332m, with the resilience due to Mail Online and Metro, with print ad revenues down 6%. Ad revenues actually rose 2% in the second half of the year. Ad revenues fell 2% to £332m, with the resilience due to Mail Online and Metro, and print ad revenues down 6%. Ad revenues actually rose 2% in the second half of the year.
DMGT said ad revenues at Associated declined 5% in the first seven weeks of its new financial year.DMGT said ad revenues at Associated declined 5% in the first seven weeks of its new financial year.
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