Mail Online is expected to report full-year revenues of £45m this year with growth in digital advertising more than offsetting the decline in print ad revenues.
Advertising on the Daily Mail’s website, which had 111 million unique users last month, was up £13m in the five months to the end of February 2013 compared with the same period last year.
Print ad revenues at DMG Media, the national newspaper arm of the Daily Mail and General Trust were down £11m over the same five-month period, according a trading update published on Monday.
With a big drop in circulation revenues, DMG Media’s overall revenues were down 7% year on year, or 2% on an underlying basis.
But the company said there had been “improved profit margin driven by cost efficiencies”.
Overall group revenue was flat year on year, with underlying growth of 2%. DMGT said its outlook for the year remained unchanged.
Mail Online’s revenues for March are expected to be £3.4m, with full-year revenues (for the 12 months to the end of September) expected to be around £45m.
This is more than double its previously reported revenues of £19m in 2010/11.
The publisher, which won the digital innovation prize at the British Press Awards earlier this month, said mobile access accounted for a record 43% of total visits, with traffic to its iPhone and Android apps at record levels.
Underlying newspaper advertising was down 8% over the five-month period but there was strong growth in digital advertising, with Mail Online up 59%.
Total underlying ad revenues were flat year on year for the three weeks since 24 February 2013, it said.
Underlying circulation revenues were down 6% in the five months to February in what DMGT described as a “weak market”.
“Our titles delivered continued market share improvement with Daily Mail’s market share increasing to 22.2% and the Mail on Sunday’s market share increasing to 21.0%,” DMGT said.
“Total underlying advertising revenues were up 1%, with strong digital growth more than offsetting the decline in print advertising.
“Print advertising revenues from the current portfolio were down £11m on the same period last year whilst digital advertising revenues from the current portfolio were up £13m.”
It is the first time that digital revenue growth at Daily Mail’s newspaper division has outstripped the decline in traditional print revenues.
DMGT finance director Stephen Daintith described it as an “inflection point” in a conference call with media analysts on Monday.
A watershed moment, it will have been helped by the sale of DMGT’s local newspaper division, Northcliffe Media, last year.
Gareth Davies, analyst at Numis Securities, said group underlying growth was solid.
“Importantly on the consumer side of the business digital advertising growth has more than offset print advertising declines, with January and February advertising at +2% from flat in Q1,” he said.
“Digital assets continue to perform strongly.”
DMG Media’s profit margin was up year on year despite increased investment in digital following the “rationalisation” of its printing plants last year.
Headcount fell 16% since September last year to 3,237 due to disposals.
Excluding disposals, total staff numbers were steady, with increased staff in digital businesses offset by reductions in print and operation areas, it said.
The company saw double-digit revenue growth at its information and events arms, both up 13% on an underlying basis.
DMGT, which announced a £100m share buyback programme in November last year, had acquired 5.4m shares at a cost of £32m by 22 March this year.
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