Daily Mail boosts profits by cost-cutting

Daily Mail and General Trust delivered a 17 percent increase in operating profit to £320 million thanks to cost-cutting, although it remains cautious about future growth, the newspaper publisher said on Thursday.

Operating margin increased from 13 percent in the last financial year to 16 percent, while revenue fell 6 percent to £1.98 billion. Sales were however up by 2 percent on an underlying basis.

Martin Morgan, chief executive, said: "Trading exceeded our expectations throughout the year. Our international business-to-business companies have delivered excellent profit growth, demonstrating strength across the portfolio. Our UK consumer businesses have achieved a sharp improvement in profitability reflecting the actions taken to reduce costs and to eliminate loss-making activities, and growth in our national advertising.”

But he added that the company remains cautious about the medium term due to the prevailing economic uncertainties.

He said: "I do not think any of us really knows how British consumers are going to behave with the VAT rises."
National advertising had risen by 9 percent in the first seven weeks of the current financial year, however regional advertising fell by seven percent in the same period, the company said.

DMGT currently operates in over 40 countries and is the owner of the mid-market tabloid the Daily Mail.

Its shares have risen 35 percent this year to date and are now trading at 10.6 times forward earnings.