Shares plunge 25pc as Daily Mail warns of tough 2018
The publisher of Britain's 'Daily Mail' newspaper said revenue and profit would fall in its media business over the coming year, with the tough outlook for the print business sending shares 25pc lower - the biggest single-day decline in two decades.
The share plunge wiped more than £600m (€680m) off the paper value of the business, shaking the wider London equities markets.
That was after Daily Mail & General Trust (DM>) reported a 13pc fall in pre-tax profit in the year to the end of September despite its popular MailOnline website moving into the black in the last three months.
In common with other newspaper groups, DM> is battling tough print advertising markets and long-term declines in circulation.
However, in its home market its newspapers have been outperforming rivals and retain a strong influence on British politics and its comments on what it termed "challenging market conditions" had particular resonance.
CEO Paul Zwillenberg, who joined 18 months ago to overhaul a company that stretches from MailOnline to business-to-business information, said the company needed to raise its game. "Am I happy with the performance? No, not yet," he said.
CFO Tim Collier, who joined the business in April, said the print advertising market would remain difficult and circulation would stay under pressure.
"Last year we managed to offset those circulation declines and advertising decline with increasing cover prices across all three titles and this year we haven't got that," he said. The company said the underlying rate of revenue decline in its media business was expected to be in the mid-single figures in its 2018 financial year.
Underlying revenue rose 1pc in its media business over the past year, driven by an 18pc rise in digital advertising on its site like MailOnline, which Mr Zwillenberg said had "addictive, seriously popular" content.
Print advertising revenue at its 'Daily Mail', 'Mail on Sunday' and the 'Metro' free sheet fell 5pc but cover price rises offset declines in circulations.
Analysts at Liberum, who downgraded their recommendation from "Buy" to "Hold", said the guidance looked underwhelming, with the disappointment coming in the consumer media side, where they had expected flat revenue. "What is clear is that DM> faces another year of "transformation" but it is not entirely clear when we will get the acceleration of top-line growth," they said.
Tim Collier said he had reviewed DM>'s business-to-business units, and had written down the assets by £206m, reflecting challenges in the trading environment for its energy and property information businesses. DM> reported pre-tax profit of £226m and revenue of £1.66bn in the year to end-September. (Reuters)