Earnings: DMGT Digital Profit Drops £2 Million On Investment, Regional Online Revs Up 77 Percent

Operating profit at Daily Mail (LSE: DMGT) publisher DMGT’s Associated Northcliffe Digital (AND) division fell by £2 million to £11 million in preliminary results for the year to September 30, thanks to what it called “continued revenue investment” – and the unit expects to burn cash at a similar rate next year. Online classifieds revenue from sites like Jobsite, Motors.co.uk and Primelocation rose 46 percent to £86 million

National: Associated Newspapers’ digital revenue rose 46 percent to £86 million. The unit’s profit fell 16 percent to £83 million on three percent better revenue of £986 million, with the same justification – internet investment – jostling alongside “significant activity in the London evening newspaper market”. What internet investment? We know DMGT bought JobsGroup.net for £10 million, began to take its ailing regional sports newspapers online only, resurrected EveningStandard.co.uk as a serious news outlet and decided to overhaul its long-in-the-tooth fleet of 40 regional ThisIs sites in the year – but the latter, most significant development has not yet occurred.

Regional: Northcliffe’s digital revenues rose 77 percent. Operating profit is up four percent to £93 million and the division claims it “has been revitalised as an integrated provider of local media services”.

Teletext: Still looking the poor relation in the online age, however – it posted an operating loss of £4 million on revenues 20 percent down at £41 million, described as “disappointing”. DMGT reckons it can increase use of the aging TV text system on Freeview sets to five million by early 2008.

Overall profit was up 11 percent to £288 million, on three percent better revenue of £2.235 billion. DMGT confirmed DMG Information MD Martin Morgan will replace Charles Sinclair as CEO (via announcement).

From the analyst call: Financial director Peter Williams reckons “something in the order of £10 million investment is going in to that line (digital)”. Outgoing CEO Sinclair on AND: “Investment is the key – we’ve acquired and built strong positions here and we must capitalise on them, in what I think is an enviable position in the UK digital market.”

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