Daily Mail sees no advertising rebound

Daily Mail & General Trust yesterday warned it saw no prospect of an upturn in the advertising market this year as it reported a 9 per cent slump in profits in the first half.

The media group, chaired by Viscount Rothermere, said the advertising market remained "volatile" after it witnessed a "buoyant" March followed by a "tough" April and an "encouraging" May. "We still see no reason for any substantial improvement in advertising revenues over the rest of 2002 and have planned on that basis," it said.

The gloomy prognosis came as DMGT reported pre-tax profits plunged to £65.2m in the six months to 31 March, down from £71.6m. Sales were down 1 per cent at £950m. "The [economic] downturn has been felt most by financial institutions and least in consumer markets. This has contributed to the continued fall in recruitment advertising volumes, especially in financial centres like London," it said.

That meant its retail-led businesses, such as the Daily Mail newspaper, were less affected than those publications with a higher proportion of financial or recruitment advertising such as The Mail on Sunday, the Evening Standard and several of its Euromoney titles.

Advertising revenues at its core Associated Newspapers division dropped 15 per cent, with the Standard seeing a 44 per cent drop in recruitment advertising. While the company said its Metro free daily had also been affected by the weak advertising market, the title continued to increase advertising revenues and recorded a profit for the month of March.

Average circulation of the Daily Mail rose 1.7 per cent to 2.4 million copies, while sales of the Evening Standard fell 2.4 per cent to 427,000 copies.

The picture at DMGT's local newspapers operation, Northcliffe Newspapers, however, was altogether rosier with advertising revenues growing 1.6 per cent. Operating profits at the division dropped 13 per cent to £40.2m, after investing in both editorial and marketing to boost circulation, on flat sales of £233m.

But Euromoney, a business publisher majority owned by DMGT, suffered, reporting an 11 per cent drop in first-half sales to £89m and a 5 per cent drop in operating profits to £13.3m. Its financial publishing and training businesses were hit hard by the downturn in the world's financial markets, while non-financial publishing showed "more modest" profit declines.