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850 leave Northcliffe as cost-saving moves kick in

Some 850 people have left Northcliffe in the past year while re-organisation has been under way, according to a report out today.

The half-yearly results show that the Aim Higher initiative is on course to save around £28m per year with the previously announced target of £45m per year set to be met by September next year.

Northcliffe’s operating profit fell by £800,000 to £39.1m on revenue down four per cent to £247m for the half year ended April 2, latest figures show.

A report by Lord Rothermere, chairman of owners Daily Mail and General Trust, said: “The extended Aim Higher programme of organisational and structural improvements continues.

“Annualised cost reductions from the programme are currently running at around £28m. Staff numbers have fallen from around 6,800 (excluding Aberdeen Journals) in June 2005 to around 5,950 at the end of April 2006.

“We are confident of achieving our announced target of £45m cost reduction by the end of September 2007.”

He added that the restructuring had cost the company £14.8m.

In the July to December 2005 ABC period, Northcliffe morning and evening daily titles declined less than industry average circulation figures. Advertising revenues in the UK fell by 6.4 per cent.

Lord Rothermere added: “We are encouraged by the progress being made on the further restructuring of Northcliffe, but there is little sign of an advertising recovery in regional newspaper titles.”

At DMGT as a whole, the group made an adjusted profit before tax of £108.7m for the six months to April 2, an increase of seven per cent compared with the equivalent figure for the previous year.

The chairman’s report said: “This result reflects a good trading performance particularly from our business to business and fast expanding digital activities. Consumer advertising revenues have been depressed and our newspaper divisions have been reducing costs to protect their profits.”

Statutory profit before tax for the period is £184.8 million, up 93 per cent on last year due to the inclusion of profits on disposal of businesses.

The company results have been produced for the first time in accordance with International Financial Reporting Standards.

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