Profits at Telegraph Media Group jumped 11% to almost £60m in 2010 thanks to a rebound in advertising markets and continuing cost savings from putting print and digital operations together.
The Daily Telegraph owner unveiled pre-tax profits of £58.9m in the year to 2 January, an increase of £5.8m on 2009’s performance, which also benefited from an extra week of trading. The results were revealed in a statement published ahead of full financial details of the group’s 2010 performance being made public on the Companies House website.
TMG said that the 2009 pre-tax profits had been flattered by a one-off boost of £13.2m from the sale of land and a share in two printing ventures. The company added that when the impact of these one-off items was stripped out of the figures the increase in 2010 pre-tax profits was closer to 50%.
Turnover rose 2.1% to £323m thanks to an improvement in market conditions following in the wake of the 2009 recession. “After weak advertising markets in 2009, the group saw a return to advertising revenue growth in 2010,” the company said. “Circulation, digital and other consumer revenue categories all achieved year-on-year growth.
“The improved revenue performance along with [a] continued focus on tight cost control, operational efficiencies and lower newsprint prices, enabled the group to achieve its substantial profit increase.”
All newspaper publishers face pressure on costs this year as newsprint prices have soared by as much as 20%, in part due to demand for recycled newsprint from Chinese manufacturers.
TMG credited its profitability in part to the move to becoming a multimedia publisher, spearheaded by chief executive Murdoch MacLennan, which has seen significant costs cut out of the operation. In 2008 the company reported a £15.7m loss.
Former editor-in-chief Will Lewis, now group general manager at News International, engineered the transformation of TMG’s news operation, overseeing the move of the Daily Telegraph, Sunday Telegraph and Telegraph.co.uk from Canary Wharf to a new multimedia newsroom in Victoria in 2006. Integration of print and online operations has continued since then.
The publisher is preparing to start charging for some of its digital content from later this year in a bid to develop new revenue streams and increase the perceived value of content to its subscriber base. TMG, which has been working on a range of online content charging plans since November, is looking to introduce a “very light touch” model.
It is thought that the paid-content model, which TMG says has not yet been given the green light, will be in a similar vein to that unveiled by the New York Times (NYSE: NYT), with a “very generous allowance” of browsing allowed before users reach the metered limit and are forced to register and pay.
This article originally appeared in MediaGuardian.