Tabloid and local newspaper publishing group Daily Mail and General Trust has announced its recent shake up, which included the centralisation of two IT departments into one under a single CIO as “decisive action”, as the company reported difficulties in its preliminary results for 2008.
Announcing it’s trading to the year ended 28th September 2008, the newspaper group, which publishes the Metro and Evening Standard local newspapers, had one glimmer of hope, its business to business publishing division continues to grow. Daily Mail and General Trust (DMGT) said it was time to focus on reducing the group’s debt and generate more cash, together it is hoped they will make up for an anticipated fall in advertising revenue to tune of £100 million.
Just a month ago DMGT announced that the IT departments of its national newspapers under the Associated Newspapers banner and its regional newspapers in the Northcliffe Media group were rationalising their IT into a single division dubbed A&N Media IT. In the move Associated CIO Ian Cohen left the company at the end of October. DMGT, yesterday, described the move as “a structure to share services across both divisions and to improve operational efficiency.”
The Financial Times reports that there are talks going on between DMGT and the quality newspaper The Independent, to share IT and back office functions to reduce costs.
“Although the worsening economic conditions had an adverse impact on the newspaper and property business,” said Martin Morgan, DMGT chief executive, “We are taking decisive action to defend profitability.” Revenue for the group increased by three per cent to £2,312 million compared to £2,235 million for the same period in 2007. Operating profit dropped by two per cent though.
DMGT said it was increasingly investing in products outside of its print newspapers in order to generate long term growth, and that 62 per cent of this year’s operating profit went into product development. The Northcliffe Media business was “badly affected by the exceptionally challenging local advertising markets as the impact of the credit crunch spread,” it said. Display advertising in the Associated Newspapers national titles has dropped by 10 per cent.