Shares in media company Daily Mail and General Trust (LON:DMGT) fell by nearly a quarter on Thursday morning, after posting a heavy loss for the year to September and warning on a “volatile” outlook going forward.
Revenue at the group, which owns the Daily Mail and MailOnline, was broadly flat on the year, coming in at £1.6 billion on an underlying adjusted basis. The company maintained a cautious outlook going forward, saying that advertising revenues are “likely to remain volatile” in the DMG Media division and that it expects the current declines in newspaper circulation volumes to continue.
However, other figures posted were more positive. The publications witnessed a strong underlying revenue growth of 20 percent in MailOnline, which offset a 4 percent decrease at the Daily Mail and The Mail on Sunday newspapers. Net debt decreased by £214 million to a total of £464 million, and its media division saw a 10 percent increase in underlying operating profit of £77 million.
Paul Zwillenberg, Chief Executive, commented on the results:
“We are encouraged that DMGT has delivered a resilient underlying performance during the year and made good progress against our strategic priorities.
“The underlying profit growth was particularly encouraging as MailOnline continued to grow its revenue strongly, moving into operating profit during the final quarter, and launched new initiatives, including DailyMailTV in the US.
“As we move into FY 2018, we proceed with confidence towards my vision for DMGT’s future. The Board is confident that the new strategy and strong balance sheet will, over the medium term, generate consistent earnings growth that will underpin DMGT’s long-standing commitment to deliver sustainable annual real dividend growth”, Zwillenberg concluded.
However, the group’s share price suffered on Thursday after the results prompted a downgrade from analysts Liberum. The stock was downgraded to ‘hold’ from ‘buy’ and its target price slashed from 785 pence to 765 pence. The broker said it was primarily “concerned about the guidance” and the future of the company in such a competitive market.
DMGT’s (LON:DMGT) share price is currently trading down 23.79 percent at 535.00 (1021GMT).