Writedowns and ad slump push Daily Mail group to £239m loss

DMGT axes 500 jobs and looks to cut costs further

The "unprecedented" fall in the advertising market and hefty impairment charges sent the Daily Mail's parent company to a first-half loss, it reported yesterday. The group responded by upping its cost-cutting targets and revealed it had axed 500 more jobs.

Daily Mail & General Trust (DMGT) announced it had swung to a £239m pre-tax loss in the six months to 29 March, from a £23m profit in the corresponding period last year.

The publisher was hit by impairment charges of £232m, as it was forced to write down the value of assets bought by its regional, business and radio arms, following the onset of the recession.

Stripping out the exceptional charges, pre-tax profits at DMGT almost halved to £77m in the first half, down from £144m the previous year. It blamed the worsening trading conditions for the performance.

Its chief executive, Martin Morgan, said yesterday: "The overall first-half result has been badly affected by the impact of the recession on our consumer media advertising revenues."

The outlook for the year was more positive. Viscount Rothermere, the group's chairman, expects growth from the business-to-business arm, and added that its national newspapers should benefit from the cost-cutting programme and the sale of the London Evening Standard. It offloaded the majority of the Standard to the Russian oligarch Alexander Lebedev in February.

DMGT was relatively confident for the rest of the year. "Although there remains little visibility on UK advertising revenue trends, we currently expect the full-year result to be in line with the market consensus," it said.

Mr Morgan, presenting his first half-year results since taking over in October, said the management had taken "decisive action" to maintain profits, adding the initiatives will help the group's bottom line during the expected weak trading conditions in the second half of its financial year.

The decisive action included expanding its cost-cutting programme. DMGT had set a target of saving £100m this year, but yesterday increased that figure to £150m. The management talked of a "narrowing" of its portfolio, analysts at Numis said, and believe potential disposals would include assets in its consumer divisions.

Associated Newspapers, the division that includes the Mail titles and London Lite, suffered "significantly lower" profits due to "unprecedented trading conditions". Operating profit at the division fell from £44m in the first half of 2008 to £18m this year, as advertising was down 16 per cent.

The group sounded a note of cautious optimism over the future of the advertising market, saying that after a 23 per cent fall in the second quarter, it was down "only" 15 per cent in April and May.

Northcliffe Media, the group's regional arm, has particularly suffered in the downturn, and it reported that profits nose-dived in the first half. The business has suffered from the collapse in classified advertising, and profits fell 91 per cent to £3.2m. The division was helped as costs were 20 per cent lower than last year.

At its update in March, DMGT announced it had cut 1,000 jobs, predominantly at Northcliffe, double the number it had targeted just four months previously. Yesterday it said the cuts had increased to 1,500, although the latest departures stretched across the DMGT group, and most had already been carried out.

DMGT's business-to-business division propped up the group in the first half of the year. It generated 79 per cent of the operating profit, up from 53 per cent last year.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable