A huge slump in profits at Express Newspapers: the Daily Express and Daily Star publisher, owned by pornography tycoon Richard Desmond, saw its pre-tax profits nose-dive from £54.9 million in 2007 to £4.8 million last year, leading to an operating loss of £2.6 million for 2008, according to documents newly filed at Companies House (via PG). Revenue was down eight percent over 2007, at £257.7 million.
With so many big publishing companies being privately held, reports like these showing the depth of the downturn in publishing revenues in recent months are still coming in. But Desmond’s company says it’s not just the advertising slump that’s dragging its profits down: it saw a £17.1 million increase in printing costs, took a hit from promotional newspaper price-cuts, and had to pump extra investment in its Westferry printing plant, after it bought out Telegraph Media Group’s 50 percent stake in the venture last year.
Isn’t it time to review the whole process of price-cutting? The document reveals that money-off vouchers in the Express titles cost the company £6.5 million in revenue — but it keeps circulation up and the publisher says the practice will continue. Is the extra revenue from advertisers, attracted by an artificially high print circulation count, really in excess of £6.5 million? And couldn’t that money be invested in a robust digital commercial model that might even outlive the still dwindling printed Express titles?