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Chairman
Lord Rothermere
Managing Director
Murdoch MacLennan
Editor-in-Chief
Paul Dacre
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July 2002
Metro moved into profit,
increasing its ABC1 profile
to 66% of the readership. |
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The Group’s national newspaper division performed
strongly in a very competitive market.
Associated Newspapers had a good year, despite
unprecedented challenges in the advertising market, which
saw both display and classified revenues down year-on-year.
Given that and the first year investment in Ireland
on Sunday, the division performed extremely well to achieve
a trading profit only 3% down on the previous year. This
was as a result of management actions taken early in the
financial year when it was obvious that there was to be
no recovery on the advertising front. The Daily Mail and
the Mail on Sunday once again recorded circulation growth
despite Saturday and Sunday cover price increases in
an overall declining market and against the background
of a tabloid cover price war from mid-April onwards.
The Daily Mail increased its circulation for the tenth
successive year, despite intense competition and increasing
the cover price of the Saturday product by 10p in October
2001. The average daily sale of 2,437,000 was up 6,000
copies year-on-year and further consolidated the Daily
Mail’s position as the second highest selling national
daily newspaper.
The Mail on Sunday managed to increase its sale by
1,000 copies to 2,360,000, a new record circulation figure.
This was achieved after increasing the cover price by
10p on 30th September, 2001, and in an overall market
showing an annual decline of 1.6%, the Mail on Sunday
increased its market share to 16.5%. During the year, the
newspaper attracted more ABC1 readers than any other
Sunday newspaper and You Magazine achieved the same
status against all other Sunday supplements and reviews.
The Evening Standard average daily sale of 417,000 declined
by 3.2% in the year, although this was to a great extent as
a result of the decision to move away from price cutting
as a means of stimulating sales growth on a one-day basis.
News continues to be the key sales driver for the Evening
Standard and coverage of the Soccer World Cup and the
funeral of the Queen Mother, were perfect examples
where the timing of events allowed the paper to service
the public’s hunger for news.
Metro had a very successful year, culminating in it
reporting a profit nationally in the final quarter of the
financial year. The circulation grew by 0.7% in the year,
retaining its position as the sixth largest circulation
national newspaper. More importantly, the ABC1 profile
of the readership increased from 64% last year to 66%
in the latest available figures.
Total advertising revenues were down 6.2%, with display
down 8.6% and classified up 1.5%. All titles had a very
difficult year with display, and recruitment was down 38%
year-on-year in the Evening Standard. Nevertheless the
Daily Mail and the Mail on Sunday managed to increase
their classified revenue by 5.5% and 12.3% respectively
and Metro increased its display advertising revenue by 3.8%.
Press 80 is back in production and running well at
Harmsworth Quays, providing more flexo printed copies for
the South of England. The Press Enhancement project to
provide increased pagination and colour capacity has been
rescheduled, with the completion date brought forward
by 14 months to November 2004. From this date the
Daily Mail and Evening Standard will have a maximum
pagination of 128 pages with 64 pages of colour and
the Mail on Sunday 160 pages with 128 pages of colour.
During the year production of Associated’s titles started
in two parts of Southern Spain, Greece and Ireland.
Usage of Associated New Media’s sites grew 36% in
the year and ANM achieved revenue growth of 18%.
This is Travel was launched in January 2002, with the
site differing from others in the market by being editorially
led and focusing on searchable travel classifieds, rather
than on-line bookings. The classified section of the site,
TravelAds was launched in April and has made an
encouraging start. Following a strategic review of ANM’s
activities, UK Plus, the UK search directory, was sold to
BT Looksmart. This is London, the oldest site in ANM’s
portfolio was re-launched in September with a new
enhanced look complemented by several new sections
and a wealth of new functionality and content.
Ireland on Sunday is the latest recruit to the DMGT
national newspapers’ stable. The newspaper was acquired
in September 2001, when its weekly circulation stood
at 46,200. The title was successfully re-launched on the
12th May, 2002. Since then, circulation has averaged
154,000 copies per week, an increase of 233%, which
represents an unprecedented achievement in what is
arguably the most competitive newspaper market in
Europe. Ireland on Sunday is now the third biggest
selling Irish newspaper.
Loot, the free ads paper, was acquired by Associated
Newspapers in October 2001. During the last twelve
months the paper has gone through a major transition
with a new management team installed and a re-launch
incorporating a new design, improved layout, editorial
features and increased colour availability. As a result,
advertising revenues grew by over 10% year-on-year.
Circulation remains a challenge but the increased
investment in marketing is beginning to show tangible
results. The website, Loot.com is starting to make a
significant profit contribution. Overall the business
looks set to deliver good growth in profits.
The new financial year has started encouragingly for
Associated Newspapers with circulation strong and
advertising showing modest growth on the previous year.
Although the advertising market is still volatile, with strong
circulation and readership figures, coupled with stringent
control of expenditure, the outlook for the new financial
year for Associated Newspapers is cautiously optimistic.
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