Daily Mail & General Trust PLC (LON:DMGT) saw its shares fall back today after the newspapers publisher said while its full year guidance remains unchanged, pretax profit is seen towards the lower end of market expectations.
In morning trading, DMGT shares were 2.1%, or 13.5p lower at 635p.
READ: Daily Mail shares drop after cuts to guidance for both its information and events businesses
In a trading update covering the 11 month period to the end of August 2017, the newspapers group said its reported revenues were up 5%, including a 6% benefit from foreign exchange rates, although underlying pro forma revenue growth was just 1%.
The firm’s dmg media unit saw underlying revenues rise 1%, including strong digital advertising growth, while underlying revenue at its B2B business also grew by 1%.
The group said MailOnline's advertising revenues in the 11 months increased by an underlying £19mln, or 22%, reflecting encouraging growth in both the US and the UK.
It added that this more than offset a decline of £15mln, or 11%, at the Daily Mail and The Mail on Sunday, and advertising revenues across the Mail businesses as a whole, for print and digital combined, consequently grew by an underlying 2%.
DMGT said: “Whilst market conditions remain challenging for some specific Group companies, the guidance for the Full Year remains unchanged. The outlook for the Group as a whole is in line with market expectations with adjusted EPS (earnings per share) towards the higher end of the range and adjusted PBT (profit before tax) towards the lower end of the range.”
Strategic review reaching completion
The group added that its strategic review, including the identification of which businesses and sectors merit further investment, is reaching completion and an update on the firm’s strategy to deliver long-term growth will be provided with the full year results scheduled for November 30.
In a note to clients, analysts at Numis Securities said: “Our numbers were high coming into this statement, we reduce our 2017E PBT/EPS to £213.9m/52p (previous £227m/52.7p).”
But they repeated a ‘buy’ rating and 970p price target on the stock, saying: “DMGT shares have been under considerable pressure over the past 12 months, the shares remain stand out value at current levels.”
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