John Menzies, the newspaper and magazine distribution business, has been hit by a sharp drop in sales of monthly titles and partworks, as consumers turn to the internet instead.
The rush to the internet in the media sector was further underlined with separate figures yesterday from Aegis, which advises clients on advertising expenditure, that showed revenues in its digital business had rocketed 30 per cent in the first half of the year.
Robert Lerwill, the chief executive of Aegis, said that advertisers were taking money out of ad campaigns that would have run in "old media", such as television and newspapers, and spending it on internet advertising. He said that cash from broader marketing budgets was also been diverted online. Aegis reported a 9 per cent increase in underlying interim pre-tax profits to £38.0m.
At Menzies, sales of monthly magazines fell 9 per cent in the first six months of 2006, while partwork sales plunged 35 per cent. Patrick Macdonald, the chief executive of Menzies, said: "We saw a big change at the start of this year and that has accelerated over the summer... People are spending less time on magazines and newspapers, in particular the young. We do believe this is a structural affect."
In Menzies' main distribution business profits were down 15 per cent in the first half. The other Menzies business, which provides ground handling services to the aviation industry, is performing well, with half-year profits up 11 per cent. The underlying group result was a 7 per cent drop in underlying pre-tax profits to £15.6m.Reuse content