DMGT’s Rothermere clan sells £4.5m in stock

Lord Rothermere has presided over Daily Mail & General Trust (DMGT) as chairman and its controlling stakeholder for multiple decades now. We are therefore not overly concerned that an associated party has sold around £4.5m-worth in shares, which a source close to the group said was related to a property transaction. 

That is not to say investors should brush off the underlying issues that persist at DMGT. This year the Daily Mail publisher has grappled with the same challenges that plague the rest of the newspaper industry – chief among them is a reliance on revenue generated by advertising. This leaves them dangerously exposed to the (currently feeble) health of the economy. 

As in most areas of the market, 2020 has hit fast forward on digital Darwinism for newspapers. So far, print products have not proven as robust as their online counterparts. This represents a significant challenge at DMGT, whose print version of the Daily Mail still makes up the bulk of revenues in the group's consumer media business. Its smaller print titles are suffering too: the Metro, for example, saw its ad sales slump by two-fifths this year.

But there is a tendency to underestimate DMGT’s digital capacities,  which the company anticipates will drive the media division’s growth. Its MailOnline average daily unique global browsers grew by 38 per cent in 2020 to 17.3m. 

The Rothermere family’s 28 per cent stake in DMGT means that the Viscount’s guiding hand could ultimately control whether or not the media titan will emerge from the coronavirus crisis weaker or better off in the long run. As we have previously written, its digital products are both more compelling and more successful than some investors might assume. If the group can hold onto the online growth that it achieved this year, and put it at the core of the consumer media business, it should be able to maintain its top spot as the nation’s favourite publisher. Hold at  755p. 

Last IC View: Hold, 695p, 24 Nov 2020