Daily Mail group suffers sharp drop in advertising revenues

The Daily Mail and General Trust, publisher of three national tabloids, yesterday revealed a 16 per cent drop in advertising revenues over the last two months but it claimed to be weathering the downturn better than competitors.

The three national titles, the Daily Mail, the Mail on Sunday and the Evening Standard, were seeing a recovery in advertising sales over the summer but this was brought to an abrupt halt on 11 September. October and November were down 16 per cent overall, but the revenues at the Standard fell much more steeply – including a 40 per cent drop in recruitment advertisements.

Earlier this week, Trinity Mirror, which also publishes three tabloid titles including The Mirror, reported a 21 per cent fall in ads in recent week. Analysts said the news from DMGT – which accompanied full-year figures – should be regarded as relatively positive.

"Our nationals are just stronger titles," said Peter Williams, finance director at DMGT. "They are the market leaders."

Mr Williams said he expected a similar advertising situation in the first quarter of next year. However, he said the company's comparatively robust performance was partly based on retail advertising, which had held up well. If this was to take a serious knock next year, he said, a drop of more than 16 per cent in advertising revenues was possible in 2002.

Lorna Tilbian, an analyst at Numis, said: "We think they [DMGT] will have a good recession. The likes of Dixons advertise electronic goods in The Mirror and we all know what's happened there. The Mail is full of fashion and make-up ads and this sector is still going strong."

For the year ended 30 September, DMGT reported pre-tax profits had slipped 7 per cent to £177.5m, before one-off items. Operating profits at the national newspaper division rose 13 per cent, while Northcliffe, its regional newspaper business, saw operating profit grow 5 per cent.

Mr Williams said DMGT would defend the position of Metro, a London free newspaper launched by the company two years ago. It is thought that Rupert Murdoch's News International is planning a rival publication.

"We put out Metro as a defensive move, because we saw that someone else could do this. But it took off.... We take potential new competition from an operator like Rupert Murdoch very seriously."