CANBERRA: The Daily Mail’s Australian operation has unveiled a 15 per cent drop in revenues for the half-year on the back of weak ad sales, highlighting why former joint venture partner Nine sold out. Revenues in Australia amounted to £6.6 million ($AUD13.4m) in the six months ended March 31, down from £7.8 million ($15.4m) in the prior corresponding period, according to unaudited accounts filed to the London Stock Exchange.
A weakening Australian dollar is exacerbating the bleak financial outlook for Daily Mail Australia, weighing down on soft conditions in the ad market and rising operating costs. The result includes a contribution from other smaller businesses in Australia. Revenues reversed course after a flat result at last year’s half-year result, painting a picture of decline as the loss-making business struggles to break even. While Daily Mail Australia’s tales of fashion disasters, celebrity romantic encounters and even nude selfies continues to draw in readers, blue-chip brands have been reluctant to be associated with the website’s notorious sidebar of shame
Launched in November 2013, the local arm of the world’s biggest English-language newspaper website has not only been a financial disappointment, but also an unwanted distraction for online editor-in-chief Martin Clarke. Problems including legal disputes and accusations of plagiarism involving News Corp Australia (publisher of The Australian) and Seven West Media, have been besetting the website since launch.
Joint shareholder Nine exited the business in January after a fractious relationship to focus on its wholly owned digital assets. A worsening financial performance will raise further questions about whether the online news start-up bubble is bursting as Vice Media, Mashable, BuzzFeed and The Guardian’s online operations all axe jobs.
Parent company Daily Mail and General Trust did not disclose other financials for the Australian business as it issued a warning to investors after posting a 12 per cent fall in operating profits on an underlying basis. Growing digital ad sales failed to offset sluggish newspaper circulation and falling print ad sales. Overall, operating profit came in at £138 million on revenues of £950 million compared with £922 million for the prior half year. The publisher downgraded the performance of DMG Media, the division that houses the Daily Mail, Mail Online and freesheet Metro.
“DMGT’s performance in the first half was broadly in line with our expectations, other than the further deterioration in the UK print advertising market which impacted DMG Media’s results,” said chief executive Martin Morgan. “The reduced print advertising revenues had an adverse impact on DMG Media’s operating profits.”
