Falling consumer media sales, combined with £38.6m of one-off costs, largely explain Daily Mail & General Trust's profit slide. And even though the shares have slipped about 15 per cent since February, they still remain too demandingly rated.
Even sales at the group's usually robust business-to-business (B2B) operation were flat at £431m - with strengths in the information and education and energy solutions businesses offset by a 45 per cent contraction in sales at the events business. The events division suffered from the absence in the period of two biennial events and a loss of revenue from having sold US trade show business GLM.
Meanwhile, the consumer division's sales fell 3 per cent to £542m. And while aggressive cost-cutting at Northcliffe Media allowed that division's operating profits to rise 34 per cent to £11m, operating profit at Associated Newspapers slumped 26 per cent to £34m - so the consumer division's operating profit fell 24 per cent to £33m. Moreover, and despite a cover price increase on the flagship title, Daily Mail, and activity around the Olympics, full-year revenues are still expected to be lower than last year.
Investec Securities expects full-year pre-tax profit of £152.8m, giving EPS of 22.8p (from £124.9m and 27.8p in 2011).
DAILY MAIL & GENERAL TRUST (DMGT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 398p | MARKET VALUE: | £1.52bn** | |
| TOUCH: | 397-398p | 12-MONTH HIGH: | 498p | LOW: 336p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | * | NET DEBT: | £809m | |
| Half-year 1 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 991 | 72.5 | 13.0 | 5.30 |
| 2012 | 973 | 45.5 | 15.8 | 5.60 |
| % change | -2 | -37 | +22 | +6 |
Ex-div: 30 May Payment: 6 Jul *Negative equity shareholders' funds **Reflects both ordinary and non-voting 'A' shares | ||||
