DMGT’s consumer media business, which oversees Associated Newspapers’ national dailies, digital assets and, until recently, Northcliffe’s 70 regional titles, saw its operating profit shoot up 12% from 2011’s £93m to £104m for the year ending 30 September 2012, despite revenues falling by £38m to £1.06bn.
The declining advertising and circulation revenues of 2012 were counterbalanced by a 5% reduction in costs, aided by the cull of 855 staff, 12% of A&N Media's overall workforce.
DMGT expects to make further cost and waste savings in 2013 by moving the printing of its Mail newspapers from its Harmsworth Quays, south London site to a new site in Thurrock, Essex in summer 2013. All presses will be transferred to the new site, giving it the capacity to print full-colour 128-page Daily Mail and 160-page Mail on Sunday newspapers.
DMGT's pre-tax profit reached £206.3m, surpassing last year’s figures by 63% thanks to the £113m profit on the disposal of The Digital Property Group and Evanta. The parent company made a total operating profit £145.2m on revenues of £1.7bn. Total operating profit was down by £23.2m on 2011 as exceptional costs relating to equipment and property hit £73.1m, a 74% increase on 2011's £41.9m.
An exceptional charge for accelerated depreciation of property, plant and equipment principally related to the move knocked £39m off DMGT’s adjusted operating profit of £300m. The depreciation is expected to increase by a further £12.4m in 2013.
The Daily Mail and Mail on Sunday titles remained Associated Newspaper’s most profitable assets, but suffered a 3% decline in circulation revenues to £590m contrary to its online counterpart, MailOnline, growing by 74% to £27m.
The Daily Mail's circulation revenue grew by 4% to £257m and it took a record 21.6% share of the national daily newspaper market, an increase of 0.6% compared to 2011’s stake. DMGT attributed this to the full-year impact of July 2011’s 5p cover price increase and the Saturday newspaper’s 10p price inflation as of October 2011.
The Metro, whose print contract was recently awarded to News International’s Newsprinters, boosted Associated Newspaper’s revenues by £89m, an 8% growth from 2011.
Circulation revenues accounted for 46% of Associated Newspapers' overall income, contributing £362m to the total £802m revenues. Digital revenues grew by 72% on 2011, bringing in £31m to supply 4% of the income.
DMGT expects to release a paid-for tablet version of the Mail titles, MailPlus, in Q1 of 2013.
Overall, newspaper operations continued to bring in a significant amount of operating profit for A&N Media at £101m, while its digital-only business contributed a combined £3m despite discount website Wowcher making an £8m loss for 2012.
A&N Media accounted for 54% of DMGT’s group revenue for the financial year, which totalled £1.96bn, down from £1.99bn in 2011.
DMGT’s 2012 accounts revealed that circulation revenues across Northcliffe Media, which was recently sold to new publishing body Local World for £52.5m, had decreased by £3.4m, with print advertising revenue down 13% on 2011.
Revenues for the local media arm of the national publisher dropped to £213m from £236m in 2011 and circulation of the daily newspapers was down 8.8%, in line with the average decline across the UK’s top four publishers.
But Northcliffe Media’s operating profit grew by 54% to £26m and the profit margin leaped to 12% compared to 2011’s 7% due to a 15% reduction in costs for the year.
Northcliffe Media’s digital audience continued to grow, with unique users reaching across the thisis.co.uk and localpeople.co.uk networks reaching 7m in September, a 30% increase on 2011. Mobile visits accounted for 30% of traffic.
Local World chairman David Montgomery said that the new controllers of Northcliffe Media would "stop the trend of cost cutting for the sake of cost cutting" and added that print would always have a place in the new business despite claiming to be "leaving the industrial baggage of print behind".
