Publisher of 'Daily Mail' gives warning over expected 2011 earnings
BRITAIN'S Daily Mail & General Trust (DMGT) has warned of worse-than-expected earnings this year.
The UK-listed newspaper group said yesterday that full-year earnings in 2011 will come in at the low end of forecasts.
The group blamed weak advertising, particularly in travel and retail.
Advertising income fell 11pc in just 11 weeks up to September 18.
DMGT said underlying revenue at its consumer media business fell 3pc in the 11 months to the end of August. Better results in its business division were not enough to buck the trend.
However, the fall in underlying ad revenues in the 11 weeks to September 18 showed a significant improvement on the previous quarter and shares in the group rose 1.9pc in morning trading, slightly lagging the FTSE 100 index.
In Ireland the group publishes an edition of the Daily Mail. The most recent Irish accounts published for its Associated Newspapers (Ireland) subsidiary show business here depends on financial support from the UK parent.
Irish accounts show the business was sitting on retained losses of €64.3m at the end of 2010, despite not suffering an operating loss last year.
Turnover was recorded at almost €19m for the year but the accounts show the Irish company's main source of income is service contracts with other companies in the same group. Unrelieved trading losses on the other hand stood at €56m,
That support includes a €51m capital contribution from the UK, which is used to absorb the bulk of Irish losses.
The Irish unit owes more than €12m in inter-company loans. Chief financial officer Stephen Daintith said yesterday that group operating profits would be down by a mid-single digit percentage on last year.
He said he was still worried about the company's first quarter that starts in October.
"The weak consumer advertising environment means that full year group operating profit will be lower than last year," DMGT chief Martin Morgan said.
"We expect some growth in earnings per share compared to last year, given lower finance and tax costs, but at the lower end of market expectations."
The outlook for operating profit was in line with forecasts, but analysts said the comments on earnings were disappointing. (Additional reporting Reuters)