In a statement today, the publisher of the Daily Mail said the sale of the loss-making business will enable its consumer division, dmg media, to concentrate its digital resources on MailOnline, reportedly the world’s most-read news website.
The group added that its focus will particularly be in the US “where MailOnline remains committed to expanding its editorial offering and growing its audience on the web on Snapchat Discover and on DailyMailTV, which launches in the autumn of 2017.”
DMGT also disclosed that, in the six months to March 2017, MailOnline grew its revenues by approximately 20% on an underlying basis, including underlying growth in excess of 25% in the US.
No sacred cows …
The move comes after the firm announced in December that it was cutting its stake in separately-listed financial information service Euromoney PLC (LON:ERM).
DMGT’s new chief executive Paul Zwillenberg has said there would be “no sacred cows” as he conducts a strategic review of the publishers’ business.
DMGT bought Ellite Daily in January 2015 to try and capitalise on the site’s popularity with younger audiences on Facebook.
But at the end of last year, DMGT wrote down the value of the business, resulting in an impairment charge of £25mln.
In a note to clients, Liberum Capital analyst Ciaran Donelly said: “This is consistent with DMGT's strategy announced at the FY'16 presentation that they were looking to dispose of non-core assets and focus investment on a small number of assets.
“MailOnline is one of the assets we highlighted as one of the potential core assets that DMGT would focus investment on and the RNS supports this thesis.”
Liberum repeated a ‘buy’ rating and 900p price target on DMGT.
In early morning trading, DMGT shares were 0.4%, or 3p lower at 713.5p.
-- Adds broker comment, share price --