British newspaper group Daily Mail & General Trust doubled the number of jobs it plans to cut at its regional newspapers to 1,000 as it expects a 37 per cent drop in regional advertising sales this quarter.
The group said today it also expected a 24 per cent fall in ad sales at its national newspaper division, Associated, for the quarter to end-March but was seeing signs that classified ad sales were stabilising, apart from recruitment.
It forecast full-year results in line with market consensus, which it said was about £198 million for pre-tax profit before exceptionals, and earnings per share of 33.3 pence.
Daily Mail shares rose 1.9 per cent to 238.25 pence by 0832 GMT, outperforming a 0.7 per cent improvement in the European media index.
For the first five months of its fiscal year, Daily Mail reported a 12 per cent decrease in consumer media revenues but a 15 per cent increase in business-to-business (B2B) revenues.
Apart from newspapers, Daily Mail group sells business information, owns B2B media group Euromoney, and runs international exhibitions and an Australian radio group.
Together, these other businesses accounted for 61 per cent of sales last year and should bring in 70 per cent of operating profit this year, up from 62 per cent last year.
The news underlines the grim outlook for British newspaper publishers this year. Daily Mail said last month a downturn in advertising had accelerated sharply in January, with national ad sales down 23 per cent and regional down 40 per cent.
Trinity Mirror said last month advertising markets crashed 30 per cent in January and February, while regional newspaper group Johnston Press said two weeks ago its advertising revenues in 2009 to date were down 36 per cent.
Daily Mail said it would exceed its target revenue and cost initiatives of £100 million pounds but would book exceptional operating costs of £20 million in its half-year results.
Cost cuts at the newspaper units alone will now total about 100 million pounds, Finance director Peter Williams said, more than the £75 million originally projected, with additional benefits coming from cover-price increases and other savings.
At regional newspaper division Northcliffe Media, the number of employees will fall to about 3,500 this year from 4,500. Mr Williams said on a conference call the majority had already been agreed or were in consultation.
Daily Mail said its seasonal net-debt peak at the half-year point would be accentuated this year by trading and the cost of redundancies and would likely reach close to £1.25 billion, after which debt should be steadily cut.
Daily Mail shares have lost 46 per cent of their value over the past year and the company's market capitalisation is now £910 million.
Reuters