DAILY Mail and General Trust (DMGT) – publisher of the Daily Mail and The Mail on Sunday – warned yesterday that its advertising revenue over the last four weeks has fallen seven per cent due to the late Easter hurting advertising.
Shares tumbled 7.3 per cent to 893.5p following the announcement as investors reacted to the fall and news that a delayed rollout in DMGT’s Risk Management Solutions division means it is unlikely to report material revenues from that division this year.
“The news that RMS is unlikely to generate material revenue in financial year 2014, though not significant on a group basis, is a disappointment,” said Peel Hunt analyst Malcolm Morgan who maintained his buy rating on the stock with a target price of 1,040p.
Despite the setbacks, underlying revenue for the five months to 31 February rose six per cent and its business-to-business division saw reported revenues up 11 per cent.
MailOnline remained the standout success as advertising revenues rose 51 per cent to £23m during the period, offsetting the £2m decline in print advertising revenue to £84m.
Despite the dramatic online growth MailOnline will likely still miss its £60m revenue target this financial year, falling short of the Trust’s target.
“Advertising (up) and circulation (down) trends are as expected... but other digital growth has slowed,” said Investec analyst Steve Liechti who held a buy rating on the stock with a target price of 1,055p.
On Zoopla, the property search website and app that DMGT holds a majority stake in, DMGT said that its board continues to explore strategic options.
In February DMGT’s shares hit a 13- year high after it confirmed it was considering options that have been reported to include an initial public offering.
“Our view is that DMGT is not a strategic holder of Zoopla and a sale of the stake could drive cash returns,” said Liberum analyst Ian Whittaker last month.
DMGT yesterday maintained its outlook for the full year results as it said trading in the five months to February had been in line with the firm’s expectations.