Key shift for newspapers
Mailonline marks key milestone in digital advertising
Revenues for the combined Mail newspaper and website businesses (Daily Mail, The Mail on Sunday and MailOnline) decreased by an underlying 5% to £546m, including £122m from MailOnline.
Total advertising revenues across the Mail businesses decreased by an underlying 3% to £239m, including a 9% decline in print advertising revenues, “reflecting the continued structural and competitive challenges facing the UK national newspaper advertising market.”
MailOnline‘s advertising revenues grew by an underlying 5% and accounted for 51% of total advertising across the combined Mail businesses. This was more than offset by a 5% decrease in circulation revenues and a 5% decline in print advertising revenues.
The decrease in circulation revenues to £291m resulted from a continued decline in circulation volumes being partly offset by the benefit of the cover price increase of The Mail on Sunday from £1.70 to £1.80 in October 2017.
Indirect traffic to Mailonline, notably via social media and search platforms, has reduced and resulted in total average daily global unique browsers during the year decreasing by 13% to 12.9m.
MailOnline continues to increase the engagement with its direct audience in the US and this has been supported by the success of DailyMailTV, which is currently in its second season. In October 2018, DailyMailTV became a wholly-owned subsidiary having previously been a joint venture and will therefore be included within Consumer Media’s results in FY 2019.
The company said the Mail brand remains strong, which is reflected in the growing UK retail market shares held by the Daily Mail and The Mail on Sunday of 24.8% and 21.9% respectively. In September 2018, the cover price of the Monday to Friday editions of the Daily Mail increased from 65p to 70p.
Metro delivered a robust revenue performance in the context of a declining print advertising market, growing revenues by an underlying 4% to £71m, including the benefit of taking on four franchises from Trinity Mirror (now Reach plc) in January 2017, a further two in January 2018 and one in July 2018.
Metro has the largest circulation of any weekday newspaper in the UK, read by an average of 2.8m people each day, and has the largest Monday to Friday advertising market share by volume.
DMGT reported a 16% fall in adjusted pre-tax profits from £226m to £182m as overall revenues from its media businesses decreased by an underlying 4% to £654m.
Adjusted operating profit for the year decreased by 17% to £64m, including the benefit from disposing of the loss-making Elite Daily in April 2017.
The cost base of the newspaper businesses continues to be further reduced, albeit in a measured approach that ensures the quality of the content is not compromised, consistent with DMGT’s strategy of supporting the longevity of the newspapers’ strong cash generation.
Paul Zwillenberg, CEO, said: “We have made good progress against our three strategic priorities of increasing portfolio focus, improving operational execution and enhancing our financial flexibility.
“The focus of our portfolio was significantly increased by the disposals of EDR and our stake in ZPG Plc, clearly demonstrating DMGT’s long-term approach to value creation.
“As a result, our balance sheet has strengthened considerably, to a net cash position, enhancing our financial flexibility for balanced capital allocation. We have also continued to implement a series of operational initiatives across the Group that is starting to gain traction.
“DMGT’s performance during the year was in line with our expectations despite some challenging trading conditions. Our B2B businesses delivered broad-based underlying growth and Consumer Media continued to outperform its markets.
“MailOnline continues to perform well and has reached an important milestone with digital advertising revenue now exceeding the Mail’s print advertising revenues.
“As we move into FY 2019, our vision for DMGT’s future remains unchanged; we seek to deliver profitable growth across a diversified portfolio, driven by our long-term approach to investment and increased focus on innovative technologies.
“The board remains confident that the group’s strategy, supported by our strong balance sheet, will over the medium term, deliver consistent earnings growth to underpin DMGT’s long-standing commitment to sustainable annual real dividend growth.”
The full year dividend is increased by 3% to 23.3p.