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Regional publisher reports 34pc profits increase

Regional publisher Northcliffe Media has reported a 34pc increase in profits in the first half of its financial year despite falling revenues.

Operating profits at the group rose from £8m in the period October 2010 to March 2011 to £11m in the same period in 2011-12, according to half-yearly results published by parent company DMGT today.

The growth came in spite of a 10pc reduction in revenues from £120m to £107m.

At the same time, publishing costs fell by 13pc, with 164 fewer people employed at the group than in October 2011.

Today’s report said the profits increase reflected the “early benefits of the transformation plan” put in place at the group since the arrival of Steve Auckland as chief executive last year.

This included converting four daily titles to weekly, leading to a 5pc overall fall in circulation revenues to £29m.

However the group said cover price increases had mitigated the sales decline and, excluding the dailies-turned-weeklies, it saw an underlying circulation revenue increase of 2pc.

Advertising revenues were down 11pc to £75m, but the group said the new national advertising partnership with Trinity Mirror which began this month was expected to deliver improvements.

Said Steve: “We set out so simplify the business in 2011 and this first phase has largely been achieved. There’s been an enormous amount of activity and change necessary to deliver these results and the team have displayed real professionalism. We now have a pace and momentum to the business.

“We’re particularly keen to continue to strengthen the core pillars of the business – local content and local sales, both in print and in digital. The opportunities within digital are particularly exciting, as currently 90pc of our regular print customers are not being served with a digital solution.

“Warren Buffet last week purchased 63 local US papers. He commented at the time that in towns and cities where there is a strong sense of community, there is no more important institution that the local paper.

“Northcliffe has a portfolio of incredibly powerful local brands that have strong ties with their community and outsell all national newspapers in their towns and cities. We look forward to building on this strength.”

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  • May 24, 2012 at 1:36 pm
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    “Northcliffe has a portfolio of incredibly powerful local brands that have strong ties with their community”. That’s in spite of all the management’s best efforts to destroy those links, particularly in the West Country and Gloucestershire. Auckland may be trying to undo the damage, but he’s got a long way to go!

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  • May 24, 2012 at 3:09 pm
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    National sales increases via Trinity Mirror (AMRA) – well surprisingly we heard this 3 years ago when they got rid of the in house teams!! In fact sales fell off the cliff. Having stated the above – maybe there now is only one way to go – we shall see as AMRA are a good outfit and I wish them well.
    The closure of the in house “National Team” was partially as a result of local “MD’s” banging on about how poor these teams where. In fact when the business moved the new sales house could no believe the revenues delivered by the disbanded teams!
    This was a real case of “be careful what you wish for”, and boy did they get it. Well that’s history – mind you they never bloody learn anyway. The only reason at all for the profit “increase” is because of more drastic cost cutting. It’s also interesting to note that they still only have an appallingly small sector of the “local” digital market – 10%!! It was not that long ago that motors.co.uk was tasked with delivering 90% of the online local automotive platform.
    Look what has happened to that one – sold.
    On the up side Steve Auckland seems to be trying – it’s a shame they did not get him in 5 years ago.
    Anyway it’s lovely weather and I have retired – yippee – no more working for senior managers with no vision!

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  • May 24, 2012 at 3:39 pm
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    Auckland is doing nothing to reverse the decline. The only answer he has is cut, cut, cut.
    It’s the same short-sighted response as those before him and it will only end when they’ve got nothing left to cut, which, from where I’m sitting, can’t be very long at all.
    Senior managers in Northcliffe have no ideas whatsoever to stop this decline – and yet they keep accepting their bonuses and big pay rises.
    Surely it’s time they were cut, before it really is too late.

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  • May 24, 2012 at 4:40 pm
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    The sun is shining and a Regional Press operator reports a rise in profits – musn’t grumble.

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  • May 25, 2012 at 11:46 am
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    Getting behind all the fluff, look at the figures:
    10% reduction in revenues from £120m to £107m
    5% overall fall in circulation revenues to £29m
    Advertising revenues down 11% to £75m
    In short, the 34% profits increase is entirely due to the 13% decline in publishing costs, while all the other numbers are getting worse.
    The only ‘pace and momentum to the business’ I can see is circling the plughole.

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