Operating profits in the first six months fell to pounds 20.3m from pounds 23.8m, despite a 6 per cent increase in turnover to pounds 136.3m. Pre-tax profits dropped 12 per cent to pounds 30.3m although, excluding last year's exceptional pounds 6.5m gain from the sale of shares in the publisher Trinity International, they rose 7.8 per cent.
Stephen Grabiner, managing director, blamed the decline on heavy promotional spending and the June cut in the cover price of the Telegraph from 48p to 30p. Advertising revenue had grown about 14 per cent in the first half, although it was slowing, but the single week's worth of the price cut in the figures had knocked pounds 1m from circulation revenues while promotional costs were about pounds 8m higher than they would otherwise have been.
The Telegraph's circulation has risen following the cover price cut, from 993,000 a day in June to 1,070,000 in July. About two-thirds of the gains are in the 25-45 age group.
The figures were helped by a strong performance by Fairfax, the Telegraph's Australian associate, where the group's share of profits more than doubled from pounds 4.4m to pounds 11.8m.
The tangled web, page 34