Strategic review at DMGT
Wednesday, October 5, 2016
Daily Mail & General Trust (DMGT) has hinted that further print rationalisation could be on the cards, as the company upped its group-wide reorganisation spend from £15m to £50m.
In a pre-close trading update 11 months in to its financial year, recently-appointed chief executive Paul Zwillenberg said he was reviewing DMGT’s strategy and conducting a strategic review of all of the group’s businesses “to create greater focus within the portfolio”.
He said he would set out his detailed thoughts when DMGT announces its final results on 1 December, although a more immediate cost-cutting reorganisation was already underway.
“It is clear that there are some sectors and businesses that continue to face very difficult market conditions. We have therefore implemented some reorganisation initiatives, including headcount reductions and office space consolidation, to help protect profitability across the group,” he said.
More than 400 jobs will go.
Chief financial officer Stephen Daintith said DMGT had been transitioning “from what was ostensibly a print business 15-20 years ago”.
He stated: “We’ve moved from eight printing plants to two over the last five years. We’ve significantly rationalised our distribution platform on the print side. We’ve gone from well over 3,000 headcount in DMG Media to approaching 2,000 now. I think it would be wrong to say that activity is going to cease. There remain opportunities for headcount reductions, and there remain opportunities for print rationalisation.”
Sales at the group’s Harmsworth Quays Printing facility in Thurrock fell from just under £63m to £57.8m last year, while Harmsworth Printing in Didcot posted turnover down £1.3m to £33.8m. Prior to setting up the Thurrock site five years ago the group was understood to have considered contract printing its titles.
However, Zwillenberg also praised the resilience of Daily Mail and MailOnline publisher DMG Media, in the face of “remarkably challenging market conditions over several years”.
DMG Media made an operating profit of £96m on sales of £731m last year.
Zwillenberg joined the business in June, and Daintith resigned last month in order to become CFO at Rolls-Royce. His departure date has not yet been confirmed.
The near-£2bn turnover DMGT business encompasses Daily Mail and MailOnline publisher DMG Media as well as a substantial business-to-business division that includes Euromoney, DMG Information, DMG Events, and Risk Management Solutions.