Regional publisher Northcliffe Media saw a £10m fall in profits during the year to 2 October despite axeing a total of 602 staff.
Results published today by its parent company DMGT show Northcliffe reduced its costs by £15m during its last financial year.
But with revenues falling £25m from £261m in 2009-10 to £236m this year, profits were down £10m from £27m to £17m.
The reduction in staff numbers of 602 – with more expected in 2012 – constituted almost a fifth of the entire workforce.
A statement accompanying the results said: “Northcliffe continued its restructuring and process innovation and delivered year-on-year cost savings of £15m.
“Total headcount reduced by a further 19pc, or 602 people. Greater efficiency has been delivered across all departments.
“Northcliffe’s titles continued to be affected by weak advertising markets, with total revenues down by 10pc to £236m.
“Operating profits of £17m and an operating margin of 7pc were in line with our expectations.”
Advertising revenues were down 10pc year-on-year, with the biggest falls being seen in recruitment where revenues fell 29pc.
Newspaper sales revenues fell by 6pc or £4m.
The statement also outlined some of the management changes that have taken place in Northcliffe since last year, with the appointment of Steve Auckland as managing director and the dismantling of the group’s regional editorial structure.
The changes also included separating Northcliffe Digital into a standalone enterprise under Roland Bryan to speed the pace of digital development.
Looking ahead to 2012, the statement said the underlying revenue trends were expected to continue alongside continued cost-reduction initiatives.
“The ambition for Northcliffe is to be operating a simplified portfolio of titles with a customer focused structure and a modern culture,” it said.
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7k profit per employee – i think UK Plc would go for that. Shareholders, come and sit in a local office for a week, and see how hard we work for your returns.
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“a simplified portfolio of titles with a customer focused structure and a modern culture”..
I love it!
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Surely it should read ‘Northcliffe profits fall because it axed 600 staff’
Or am I just stuck in the past in thinking that more staff gives more time for quality journalism. In turn that adds to circulation which makes it easier for advertising staff to sell adverts. And more advertising staff means more adverts which means more profit…
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It’s going to continue going downwards as less people buy goods, thus less firms have less money to axe etc. Wonder what happens when the minimum possible number of staff is reached? Can’t be far off now
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When he says “a customer focused structure and a modern culture” what does he mean by “customer”? No chance it’s the reader, is it? It’s the ad buyer. So bugger off, you pesky readers, and stop wanting proper local news to read. Ohh…
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Shocking, twiki!
Are you possibly implying that more staff on the ground doing the job rather than excessively expensive management, whose idea of creative management is to lazily think they can improve profits by just cutting low paid jobs, might possibly lead to a better product that customers want to buy and advertisers want to advertise in?
Next thing you’ll be suggesting is that investing in the business rather than asset stripping and dismantling it piecemeal might be a good idea if they truly want to promote growth, or that excessive executive bonuses and shareholder dividends might be better targets for cuts than the people who actually get the product out of the door and on the shelves…
Crazy talk!
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When he says “a customer focused structure and a modern culture” what does he mean by “customer”? No chance it’s the reader, is it? It’s the ad buyer. So go away, you pesky readers, and stop wanting proper local news to read. Ohh…they did…
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Couldn’t agree more with twiki. Here’s a strange thought – it’s a recession, profits are falling in many businesses, let’s take a hit in the short term to ensure our “products” survive in the long term and the firm still has a business. With the announcement today of 14 more jobs going at Media Wales (Western Mail and Echo to those of us who care about brands), the speculation about a certain regional daily going weekly is bound to reach fever pitch.
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It’ll be time to sell the land beneath the buildings next to stay in profit, any takers for Derby,Leicester or Hull.
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A Northcliffe spokesman said: “Our digital networking platforms have sparked an encouraging inverted traffic growth which we are utilising as part of our wider strategy for media displacement.
“We are also continuing with our exciting strategic programme of reproviding our historic daily titles as vibrant weekly publications. Circulation has increased by 1 million per cent.
“Our innovative morning print initiatives have increased our net shelf exposure which is expected to deliver significant long-term circulation productivity.”
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Sorry to say this but It appears to me that Northcliffe Media is on the way out! I worked for a great company for over 21 years with strong managers and motivated teams. Yes we had our bad times but we always looked at ways to bring in extra revenue without just cutting the heart (people) out of the business. This included the editorial and commercial/circulation teams working together either on short term projects or over protracted time scales and it was not just all about print either.
We all know how bloody hard times are – but to be honest the “senior managers” (those that are left that is) at NM just look unable to do ANYTHING BUT CUT COSTS/STAFF (hubs aside of course)!!!!!!!!!!!!!!!!!!
The print model could and should survive but probably not as part of a “corporate” entity. We need local papers run by local people – not by accountants and corporate executives – it just won’t work like that any more – if it ever really did. Let staff look at MBO’s just as an alternative to redundancies and closures etc. I know that in some cases the ROI would be a difficult model, but at least it could be looked into case by case. The corporates could still take a franchise fee – just look at good old Mac’s.
Soap box now vacated!!
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I worked for 42 years for Northcliffe in times when profits were buoyant to say the least. The company got rid of the trade unions and the marketing people became more and more influential. Words like we are being market led became the norm. But NNG didn’t become market led, it became sales led and led right down the garden path to the pond at the end. Proper cost control went out of window, millions spent on technology were there was never a proper return. Titles became more and more remote from their parishs and now I have heard the final straw adverts are to be made up INDIA of all places. Don’t blame lifestyle or the internet for Northcliffe’s demise.