Daily Mail owner takes profit hit as it revamps portfolio in digital shift
The Daily Mail’s parent company has reported a sharp fall in pre-tax profit for the full year, days after it snapped up the i newspaper for £50m.
Daily Mail and General Trust (DMGT) posted a 21 per cent drop in pre-tax profit to £145m in the year to the end of September, while revenue slipped one per cent to £1.41bn.
Read more: Daily Mail owner buys i newspaper for £50m
However, the media group said the fall in profit was largely caused by the sale of its stake in Zoopla in July last year, while its figures were impacted by vast changes in the firm’s portfolio.
Shares in DMGT were up roughly four per cent, as investors welcomed a 19 per cent rise in underling pre-tax profit.
The figures revealed mixed success across the group’s portfolio of titles, as a rise in revenue from consumer media was offset by a decline in the business-to-business division.
And while revenue from circulation and print advertising from the Daily Mail and Mail on Sunday titles slipped four per cent, this was more than offset by the boom for Mail Online, where revenue grew 14 per cent to £140m.
Overall, DMGT hailed “good progress” in its transformation strategy, as it looks to slim down its sprawling media empire and refocus efforts on digital advertising.
During the year the company sold its Genscape energy data business for $364m (£297m), and offloading stakes in Buildfax, On-geo and Real Capital Analytics. The firm also returned its 49 per cent stake in business media group Euromoney to shareholders.
Over the last three years, the group has moved from 10 sectors to five, and slashed its portfolio from 40 operating companies to just eight.
Last week’s acquisition of the i newspaper from private equity owners JPI Media marked a doubling down of DMGT’s focus on its profitable consumer division. However, chief executive Paul Zwillenberg insisted that the firm will continue to invest in its B2B businesses.
The boss has said his company will take a “highly disciplined” approach to merger and acquisition opportunities, but offered no update on a potential bid for the Telegraph titles, which have been put up for sale by the billionaire Barclay brothers.
DMGT said it was in a strong financial position, with net cash of £247m at the year end, and the firm upped its dividend three per cent to 23.9p.
“Daily Mail & General Trust is a great deal more than its flagship newspapers and its broad spread of media, information and event assets gives it stability in an unforgiving advertising marketplace,” said Tom Stevenson, investment director at Fidelity Personal Investing.
“Today’s full-year figures provided no surprises, which is an impressive feat in a year of considerable change, that has included the distribution of DMGT’s 49 per cent stake in Euromoney to shareholders and buying the i newspaper.”
DMGT said its full-year results for 2020 will reflect “significant portfolio changes”, adding it expected group revenue to be broadly stable.
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Chief executive Zwillenberg said: “We will continue with our active portfolio management approach, focusing on those assets that have the potential to drive good returns through strong cash flow generation and growth in capital value.
“We are now in the next phase of the Group’s transformation, optimising our business through targeted and disciplined investment whilst maintaining significant financial flexibility to enhance shareholder value. The recent acquisition of the ‘i’ demonstrates the opportunities we have to invest in high quality, content-led businesses with a compelling strategic and financial rationale.”