The negatives in newspaper publisher Daily Mail & General Trust’s (DMGT) latest statement stem from the same issues which have been afflicting its industry for a decade or more.
The decline of the print media as advertising has gravitated elsewhere and readership has fallen is evident again in its latest year end trading update.
Circulation of titles such as the Daily Mail and Mail on Sunday is down but revenue from sales is flat thanks to cover price increases.
Advertising is up 3% but this encompasses a 6% decline in print ads offset by online advertising up 21%.
Reports suggest the group is considering the sale of its Metro free newspaper and investors can expect a strategy update when the company reports its full year results on 30 November.
The latest performance figures as a whole are expected to be towards the lower end of forecasts - helping to explain why the shares are 1.5% lower at 639p following the trading update.
Daily Mail & General Trust’s shares are down nearly 15% over the last 12 months.
Chief executive Paul Zwillenberg, who has a background in digital media having headed up the media arm of multi-national consultancy outfit Boston Consulting Group, will hope to win the market over with an update on his strategic review of the business in just under two month’s time.
The focus is likely to be on MailOnline and its business-to-business division which saw underlying revenue growth of 1%, or 9% including the impact from favourable foreign exchange movements.
Investec analyst Steve Liechti, who rates the stock a ‘buy’ with a 881p price target, comments: ‘Expect some relief here for a bombed out share, and we await the full year strategic review conclusions which might provide further catalysts.
‘We see good value, though shares have been dogged by sequential downgrades across the “stronger” B2B businesses.’
