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DAILY MAIL PROFIT SLUMP SEES SHARES DIVE

Shares in the Mail newspaper have tumbled after profits plunged

Friday May 23,2008

By Peter Cunliffe, Deputy City Editor

DAILY MAIL & General Trust shares nosedived yesterday after it reported a slump in profits and a massive rise in debts.

Profits plunged 83 per cent to £23million in the half year to the end of March, sending the shares in the publisher of the Daily Mail and The Mail on Sunday tumbling as much as 6 per cent at one stage.

They closed down 6p at 400p — back at the level they were 11 years ago. The shares have lost more than half their value in the past 12 months and in December the company was relegated from the FTSE 100 index.

Results showed net debt had swollen to £1.14billion, up from £999million a year ago, as the company counted the cost of an online spending spree.

After splashing out on a string of new internet businesses, the group now generates less than half its profits from newspapers.

But the strategy suffered a humiliating setback earlier this year when it was forced to close its SimplySwitch energy-price comparison website just 18 months after buying it for £16.5million.

At Associated Newspapers, which publishes the national papers, profits fell 4 per cent, hit by falling circulation at the two Mail titles and a 10 per cent drop in classified advertising.

DMGT has been accused of hypocrisy by raising the cost of the Daily Mail in April, soon after launching a cost of living index. The price of The Mail on Sunday went up in November.

Associated Northcliffe Digital, which runs websites including Findaproperty and Primelocation, saw profits plunge £3.6million to £2.2million after heavy spending on a car website and marketing of the property websites.

Regional newspapers division Northcliffe Media, publisher of titles including the Leicester Mercury and Nottingham Evening Post, suffered a 13 per cent drop in underlying profits.

Northcliffe’s revenues fell 2 per cent as advertising plunged 12.5 per cent in motoring and 9 per cent in residential property, while circulation revenues dropped 3 per cent.

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