DMGT (DMGT.L), the owner of the Daily Mail, i and Metro newspaper, said on Wednesday it had returned to profit after a slump driven by the COVID-19 pandemic.
DMGT said advertising revenue collapsed by 45% in the three months to 30 June, pushing its newspaper division to a loss. Circulation revenues also fell 12% as Brits ventured to the shops less often due to lockdown.
“Since March, the impact of COVID-19 has resulted in a pronounced reduction in advertising revenues across both print and digital formats,” DMGT said.
“Growth in online traffic has helped to mitigate the impact on digital but not enough to compensate for the overall reduction in advertising spend. Metro has been particularly affected as circulation volumes are currently approximately a quarter of their usual levels.”
However, pressure on the business has begun to ease in recent weeks and DMGT said its newspaper division returned to profitability in June.
Alongside newspapers, DMGT also operates businesses handling property information, insurance risk, educational technology, and events. The company said all divisions, bar events, returned to profitability last month.
The update on profitability came as DMGT said revenue for the three months to 30 June — the company’s financial third quarter — dropped by 23% to £241m ($307m).
In the first nine months of its financial year, revenue was down just 7% to £934m. Revenue had been tracking a 3% rise in February, before the COVID-19 pandemic struck.
Despite the return to profitability, DMGT said “the outlook for the group remains uncertain and suspension of formal guidance continues.”
Shares rose 2.8% in early trade.
The pandemic has hit media companies hard, with a slump in advertising and sales across the industry. The Guardian said last week it was facing a £25m revenue shortfall this year as it announced plans to cut 180 jobs.