Profits down at Richard Desmond's RCD1 Ltd

Profits at Richard Desmond's RCD1 Ltd, the holding company for his Northern & Shell publishing empire, which includes Daily Express and OK! magazine, dipped 25% to £41.6m last year as the recession took hold.

Profits at the private company, RCD1, which also owns the Daily Star, a group of adult TV channels and West Ferry Printers, fell from £55.4m in 2007, according to a directors' report filed with Companies House. RCD1 paid no dividend.

The accounts revealed that the highest paid director, presumed to be Desmond, was paid a salary of £641,000, an increase of £10,000 on 2007.

Revenue at the group, including shares from joint ventures, was £483.9m last year, down from £485m in 2007.

The group revealed that it had bought out the Telegraph Media Group from its joint printing joint venture earlier this year and that heavy losses at its OK! USA were continuing.

RCD1 was hit by continuing start-up losses from the wholly owned US edition of celebrity magazine OK!, which launched in 2005. Last year losses were £20.6m, down from £24.3m in 2007.

Northern & Shell's West Ferry Printers incurred extra charges of £17.1m in 2008. Northern & Shell jointly owned the printing plant with Telegraph Media Group until it bought out the TMG stake in March.

The price was to be determined by an agreed settlement or arbitration, the directors' report said.

"In newspapers a value-for-money concept has been pursued through pricing and product quality and in television added value offerings have been provided to customers," the report said.

The pricing strategy included dropping the Daily Star to 20p in November last year and offering discount vouchers in the Daily Express and Sunday Express. The vouchers, started in October 2008, cost the company £6.5m but increased the Express titles' market share, the directors' report said.

Publishing and printing, excluding the US, made a pre-tax profit of £45.1m last year, down from £71.2m the year before.

The US division lost £14.2m, an improvement on the £18m loss in 2007. The TV division made £5.8m, down from £8.2m year on year.

OK! USA and the Australian version of OK! made good progress, but OK! in Spain, home of arch-rival Hello!, closed in March after its joint venture partner dropped out.

The company has 17 overseas editions OK! published under licence and 21 in total.

RCD1 said that it reduced its pensions liability to £31m from £48.4m in 2007 and last year made charitable donations of £554,000.

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