Daily Mail shares make for worrying read
Year profits encourage a 25% slump
by Abi Moses on 1st December, 2017 and updated 1st December, 2017 1:17pm
This week, Daily Mail's publisher announced details of their full-year profits, shedding light on the less-than-impressive 12 months for the news title. Daily Mail & General Trust (DMGT) told that they had experienced a 12% drop in profit before tax, with the figure sitting at £226m. As news rippled across the investor network, shares in the company quickly shifted, dropping 23.72% to 535p. Though profits were inevitably struggling, revenue stood at £1.7bn, up 1%.
But, why was 2017 such a hard year for the organisation? Reporting a decline in advertising spend, the business also commented that the market conditions were unlikely to change anytime soon, feeling things were "likely to remain volatile".
"[DMGT's guidance] suggests the group will have flattish underlying revenue growth vs our expectation pre-today of low single digit growth, with the disappointment being at the consumer media side where we had expected revenues to be flat. There may also be some caution on the B2B growth estimates given the lowering of guidance over the years," Liberum analysts said in a note.
"The question we would have is, if Mail Online is becoming a greater part of the group (17 per cent of revenues in 2017) and is moving into profits and is faster growth, why is the like for like revenues trend going backwards as well as the margin."
Chief executive Paul Zwillenberg said he was encouraged by DMGT's "resilient underlying performance" in the year.
"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."
As seen by various quotes from an eclectic range of analysts, things are not looking rock solid for the print industry, suggesting slumping profits and losses could be a reoccurring theme. If you would like to devise a spread bet, predicting the future of DMGT, be sure to register with one of our trading partners today.
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