Daily Mail & General Trust (DMGT) swung wholeheartedly into the black during the year to September, although this was largely facilitated by the sale of assets, including its stake in ZPG. Indeed, underlying pre-tax profits fell 16 per cent to £182m, dampened by the absence of three-and-a-half months’ worth of profits from ZPG and the effects of a weaker dollar.
That said, the shares’ considerable markdown on results day was likely driven by DMGT’s outlook for the current financial year. Management anticipates a mid-single-digit decline in underlying revenues for the consumer media business – despite a recent rise in the cover price of the Daily Mail. Weighed on by higher newsprint costs and investment in DailyMailTV, the operating margin here is expected to reach high-single-digits. That's not exactly shoot-the-lights-out guidance; in FY2018, consumer media’s underlying revenues fell by just 4 per cent – giving a 10 per cent margin.
Meanwhile, bosses expect a mid-teens margin for the dominant ‘B2B’ segment in FY2019, implying a slight year-on-year contraction – tempered by planned investment into DMGT’s RMS (one) platform, which is undergoing “re-architecture” to capitalise on new technologies. This is a strategy worth monitoring; RMS’s past development costs have been written off via a £58m charge to 2018’s P&L.
According to Bloomberg, analysts expect adjusted EPS of 37.2p in FY2019.
| DAILY MAIL & GENERAL TRUST (DMGT) | ||||
| ORD PRICE: | 625.5p | MARKET VALUE: | £2.1bn | |
| TOUCH: | 625.5-626.5 | 12-MONTH HIGH: | 781p | LOW: 500p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 3 | |
| NET ASSET VALUE: | 493p* | NET CASH: | £10m | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1.81 | 267 | 61.4 | 20.4 |
| 2015 | 1.84 | 216 | 46.2 | 21.4 |
| 2016 | 1.51 | 202 | 48.6 | 22.0 |
| 2017 | 1.56 | -112 | -49.3 | 22.7 |
| 2018 | 1.43 | 692 | 195 | 23.3 |
| % change | -9 | - | - | +3 |
| Ex-div: | 6 Dec | |||
| Payment: | 8 Feb | |||
| *Includes intangible assets of £464m, or 138p a share | ||||
