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Year of transition for media group

Daily Mail shares plunge on trading forecast

Mail on Sunday

Mail shot: shares in the company plunged by more than a quarter

Shares in Daily Mail and General Trust, publisher of the Daily Mail and Mail on Sunday, lost a quarter of their value as the publisher warned of a difficult year ahead.

Pre-tax profit for the year to the end of September fell 13% to £226 million but the company swung to a statutory loss of £112m from a profit of £202m a year earlier.

The loss included £282m of impairment charges including the value of energy information business Genscape and US property information firms Xceligent and SiteCompli which were written down by £206m.

The publisher said its underlying performance was resilient in a difficult year when print advertising revenues declined. The company’s business spans business and consumer publishing, events and information.

Chief executive Paul Zwillenberg said DMGT delivered a “resilient underlying performance during the year and made good progress against our strategic priorities”.

But its shares plunged as it warned of thinner margins, lower earnings after business disposals and a volatile advertising market over the next year.

The company said it will be investing in digital services and analytics while increasing efficiency.

The shares fell as much as 29% and were down 23.5% at 537p at mid-day.

In a statement, the company said: “The coming year is expected to be one of transition as we execute against the performance improvement programme. The group’s short-term earnings will be adversely affected by recent disposals and challenging conditions in some of our sectors.”

Analysts at Liberum have downgraded Daily Mail owner-DMGT from “buy” to “hold” with a 20p cut to the target price of 765p. It may take a while to get back to that even given shares have sunk to 531p today – a five-year low.

“The full-year results were broadly in line with our forecasts and the news that Mail Online has moved into profitability may be taken well but we are concerned about the guidance, several aspects of the results and that we have a reshuffle of how the divisions are reported,” Liberum say.

“What is clear is that DMGT faces another year of ‘transformation’, but it is not entirely clear when we will get the acceleration of top-line growth.”


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