Daily Mail and General Trust (DMGT) has axed 400 jobs across its publishing business amid a 9 per cent fall in profits as advertising revenues continue to tumble.

The company confirmed today that it has cut 400 jobs but refused to comment on recent reports that it is planning 300 job cuts at Associated Newspapers in London, the division that houses Daily Mail and the Evening Standard.

Profits at Northcliffe Media, home to DMGT's network of local newspapers, dropped 32 per cent in the last year as the economic slowdown forced a decline in advertising. Overall, revenues rose 3 per cent to £2.3 billion while profits declined to £262 million.

However, shares in the company rose 8.38 per cent to 221.5p as the company increased its dividend by 2 per cent to 14.7p.

Operating profits at Northcliffe, publisher of 100 titles in the UK, fell to £68 million. Underlying revenues dropped 11 per cent, with the three months from July to September down "an unprecedented" 23 per cent.

In a statement this morning, DMGT said: "The gloomy economic outlook points to extremely challenging conditions for our key adevrtising markets throughout the coming year."

It said all categories of advertising had fallen in the past 12 months. Property advertising fell 22 per cent — in September property advertising was only half that of September 2007.

Recruitment advertising was down 11 per cent over the year, and 30 per cent in September on a like-for-like basis. Motor advertising also declined, by 12 per cent. While this was partly due to falls in the number of car sales, the group also noted the impact of the continued shift to online advertising.

DMGT warned of "worsening trends" when it presented its interim results in May as revenues at its regional newspapers tumbled after a weak period in the spring.

This morning's results are the latest indication of the continuing challenges for local and regional titles.

Earlier this week, Trinity Mirror announced that it would close 28 local newspapers, and more would go next year, after advertising revenues dropped 21 per cent.

Carolyn McCall, chief executive of Guardian Media Group which owns the Manchester Evening News, gave warning last week that the paper was "fighting for its survival".

DMGT said Associated Newspapers achieved a "commendable result", despite economic difficulties and competition. Circulation revenue was flat, inching up 1 per cent to £382 million. Operating profits fell to £73 million, down from £83 million last year.

The group said that last month total advertising revenues at Associated fell 10 per cent.

But it added: "...it is difficult to predict trading performance for the rest of the first quarter, with even less visibility thereafter."

DMGT is looking at cost-cutting within Associated, with plans that include an increase in the cover price of the Daily Mail on Saturdays.

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