Profits turned sharply higher for Daily Mail & General Trust (DMGT) in the first half, helped by a modest bounce back in advertising. DMGT has also cut deeply into costs, taking a £28m charge as it axed 680 staff, about 8 per cent of total headcount. So despite seeing a 10 per cent fall in revenues, DMGT, which owns the Daily Mail and about 100 regional newspapers, reported a 42 per cent year-on-year hike in adjusted pre-tax profits to £110m, before amortisation and one-off impairment charges wiped £74m off the reported numbers.
National newspaper advertising income edged up to £181m in the first half, rising 11 per cent year on year in the second quarter, which reversed a 7 per cent first-quarter decline. Circulation revenue is still falling, though, down 3 per cent to £175m, even though both the Daily Mail and Mail on Sunday increased market share, with the daily paper's share of the national market above 20 per cent for the whole period. It was therefore cost savings and the absence of loss-making ventures that led to the sharp rise in profits, up from £18m to £42m at Associated Newspapers, which also includes the Metro daily paper.
It was a similar story at the group's Northcliffe regional arm, with ad revenues falling 9 per cent to £93m, but the rate of decline slowing from 13 per cent in the first quarter to 5 per cent in the second quarter. Recruitment advertising was particularly weak, showing double-digit declines both online and in print. UK circulation declined 7 per cent to £33m, but with operating costs 15 per cent lower and headcount reduced, the division managed to raise underlying profits from £6m to £14m. A strong performance from Euromoney, which reported record first-half results, accounted for the balance of the increase in group profits in the period.
JP Morgan Cazenove expects consensus EPS to rise from 41.5p to 44p for the 12 months to September 2010.
DAILY MAIL & GENERAL TRUST (DMGT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 470p | MARKET VALUE: | £1.79bn | |
| TOUCH: | 470.2-470.7p | 12-MONTH HIGH: | 539p | 264p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | NA | |
| NET ASSET VALUE: | 23p* | NET DEBT: | £1.02bn | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009** | 1059 | -222 | -46.0 | 4.80 |
| 2010 | 958 | 36.0 | 24.3 | 5.00 |
| % change | -10 | - | - | +4 |
Ex-div:09 Jun Payment:09 Jul *Includes intangible assets of £784m, or 204p **2009 results restated | ||||
