Shares in the owner of the Daily Mail jumped five per cent this morning despite the company reporting falling profits amid print advertising troubles.
Daily Mail and General Trust (DMGT) reported adjusted revenue up four per cent to £1.9bn in preliminary results for the year to 30 September.
But operating profit fell four per cent to £277m and pre-tax profits came in at £260m, down seven year per cent.
DMG Media, the division which houses the Daily Mail, Mail on Sunday, MailOnline and Metro and makes up around one-third of the business, reported a three per cent fall in revenue to £706m.
Within this division: the Daily Mail and Mail on Sunday newspapers’ turnover was down three per cent to £484m; Metro’s was down seven per cent to £65m; and MailOnline’s was up 28 per cent to £93m.
Elsewhere, revenues in DMGT’s B2B business were up nine per cent; Risk Management Solutions (RMS) up 10 per cent; DMG Information up 16 per cent; DMG Events up 12 per cent; and Euromoney’s was flat.
Why it’s interesting
It’s been a tough year for newspaper advertising revenues and the Mail and Metro newspapers are among many titles to suffer.
Print advertising revenue declined 12 per cent, DMGT reported, while circulation turnover was down one per cent.
But the company said the decline was “largely offset by an underlying increase in digital advertising revenues across the DMG Media portfolio of 17 per cent”.
This meant total combined advertising revenues were down four per cent to £326m.
What the analysts said
Liberum’s media team, led by Ian Whittaker, was upbeat about DMGT’s results, which beat expectations.
They also noted that the company appears to be “conducing a portfolio review which will lead to a more focused business and which (we think) will likely involve some asset sales”.
Shares were up five per cent to 799p at the time of writing.
What the company said
New chief executive Paul Zwillenberg said:
DMGT’s results reflect the ongoing resilience of the portfolio through varying market conditions. Revenues were supported by good organic growth in many of our B2B and consumer digital operations. This was balanced by challenging market conditions for print advertising, property information, energy and financial sectors.
Our focus has been on prudent financial and strategic management of DMGT’s diversified portfolio. We have continued to invest in long-term growth opportunities across a variety of organic initiatives whilst making small bolt-on acquisitions, maintaining a strong balance sheet and continuing to deliver real dividend growth for our shareholders.
The significant organic and M&A investments made across the group over the past few years have started to bear fruit. Alongside this we have been expanding MailOnline while our newspapers continue to outperform the market.