Publishers have scrambled to offset declining print revenues by investing in events, digital initiatives, business-to-business products and stakes in other companies. Despite having interests in all those areas, operating profit from continuing operations at Daily Mail & General Trust (DMGT) slumped 9 per cent to £198m.
The group incurred a £45m impairment charge after it delayed the launch of its new risk management platform, RMS(one). The product's growing costs, yet to be recouped with revenues, will depress overall profits this year. On the other hand, the group netted £180m from the summer flotation of property portal Zoopla. This is the key reason for the sharp rise in pre-tax profit in our table.
Broad gains across DMGT's divisions drove a 5 per cent rise in underlying sales. True, revenues were flat at its key dmg media segment, which contains the Daily Mail and Metro newspapers. But investors will be relieved to see a 5 per cent rise in underlying advertising revenues, as digital growth offset print declines. Indeed, the average number of monthly unique visitors to MailOnline soared 41 per cent. Costs also fell, thanks to last year's closure of several printing sites and other measures. The result was a wider operating margin and a 28 per cent surge in the segment's underlying operating profit.
Broker Numis forecasts pre-tax profits of £280m, giving EPS of 53.5p.
| DAILY MAIL & GENERAL TRUST (DMGT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 780p | MARKET VALUE: | £2.7bn | |
| TOUCH: | 779-782p | 12-MONTH HIGH: | 1,074p | LOW: 699p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | 155% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.97 | 146 | 43.5 | 16.0 |
| 2011 | 1.75 | 126 | 29.7 | 17.0 |
| 2012 | 1.75 | 203 | 52.0 | 18.0 |
| 2013 (restated) | 1.67 | 179 | 32.1 | 19.2 |
| 2014 | 1.81 | 267 | 61.4 | 20.4 |
| % change | +8 | +50 | +91 | +6 |
Ex-div:04 Dec Payment:06 Feb *Includes intangible assets of £1.1bn, or 325p a share | ||||
