Mail Online revenues up 70% - but no profit yet

The UK's biggest newspaper website, Mail Online, has reported a 70 per cent year-on-year increase in revenue in the last three months of 2011, to almost £6 million.

Daily Mail and General Trust (DMGT) said the "strong digital performance" had helped to offset a decline in print advertising at its national and local newspapers.

In a trading update, issued this morning, the group quoted data from Omniture, claiming 99 million unique browsers for Mail Online in January - up 77 per cent on the same month in 2011.

However, Mail Online advertising revenue, at about £6 million in the first quarter, still represents a small percentage of Associated Newspapers' total revenue of £219 million in the same period.

Chief executive of DMGT, Associated's parent company, Martin Morgan told reporters he was "not going to make a forecast" for when the site would break even, adding: "We're continuing to invest in the US and don't expect to be in overall profit in this financial year."

According to comScore, in December, the Mail website overtook the New York Times to become the world's most visited English-language news site - and last month an online version for the Indian market was launched.

Morgan told reporters this morning that the group was "placing importance on digital for future revenue growth". DMGT expects the number of staff working for Mail Online to increase "modestly" this year.

However, the group warned of a difficult start to 2012 at Associated and Northcliffe, with January advertising revenue down 9 per cent and 10 per cent respectively compared with the same period last year.

DMGT finance director Stephen Daintith said on today's conference call: "I wouldn't read too much into January, but we were disappointed." He said retail and travel advertising were particularly affected.

Today's update from DMGT covers the first three months of the group's financial year, from October to the end of December 2011.

Revenue at Associated Newspapers, which publishes the Mail titles and Metro, was up 1 per cent year-on-year on a like-for-like basis, at £219 million. Circulation revenues were 5 per cent higher, following two cover price rises and the Mail on Sunday consolidating its position in the Sunday newspaper market following the closure of the News of the World.

Regional newspaper division Northcliffe reported a 9 per cent drop in revenue to £53 million in the quarter. Circulation revenue at Northcliffe fell by 7 per cent following four titles' move from daily to weekly: the Exeter Express and Echo, Torquay Herald Express, Scunthorpe Telegraph and Lincolnshire Echo.

Both Associated and Northcliffe continued to reduce its staff numbers in the last quarter, cutting net headcount by 160 to 6,710, although some additional jobs were created in digital.

Overall trading at DMGT was described as "in line with our expectations". Total group revenue for the quarter stood at £495 million, up 2 per cent on a like-for-like basis. Revenue from the group's business-to-business operations was up 3 per cent year on year to £224 million.

Morgan said in the trading update: "We have made a solid start to the year with trading in the first quarter in line with our expectations.

"Overall our B2B operations achieved good underlying revenue growth, whilst our consumer media operations were resilient with increased national circulation revenues which, together with a strong digital performance, offset a decline in print advertising revenues.

"Whilst we acknowledge the continuing external uncertainties, particularly for UK advertising, the outlook for the year remains unchanged."

The company is holding its annual general meeting this morning.

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