Daily Mail group sees profits halve

Daily Mail and General Trust (DMGT) saw its pre-tax profit for the six months to the end of March slide 47 per cent, it announced this morning. The newspaper group made £77m in the period, compared to £144m a year earlier.

A slump in advertising income was behind the fall, with DMGT chief executive Martin Morgan saying "The overall first-half result has been badly affected by the impact of the recession on our consumer media advertising revenues."

The group said that UK advertising revenues for April were 36 per cent lower than in the same month in 2008.

DMGT vowed to continue with its cost-cutting measures and said that it hoped that they would offset problems in the second half of the year.

It has already announced that it will cut up to 1,000 jobs at some of its one hundred regional titles and saw an 85 per cent drop in profits at Northcliffe Media, its regional arm.

Its national arm, Associated Newspapers, did rather better, with profits falling 59 per cent on the year.

In November the group said it hoped to save £100m in costs through cuts and restructuring, but this morning it raised the figure to £150m overall, with Morgan saying: "The decisive action taken to defend profitability, along with the continued management of our cost base, will help to offset the effect of continued weak trading conditions in the second half of the year."

WHAT THEY SAY:Lionel Laurent in Forbes: Daily Mail has an extensive array of business-to-business media assets, which accounted for nearly 80 per cent of the half-year's operating profit, and these operations actually hiked their profit by 4 per cent over the year. The company said these assets would see growth overall for the rest of the financial year, despite slowing sales in some areas.

Tamsin Garrity in Investors Chronicle: Structurally, the industry remains in transit. What were print newspaper companies have been forced to embrace a multi-media offering. Those that emerge from the recession will find that companies with exposure to cyclical revenue streams, high operational gearing, a conservative debt profile, no pension funding issues and strong management, such as DMGT and Trinity Mirror, have upside potential. ·