Daily Mail and General Trust PLC (LON:DMGT) said it returned to profitability in June despite a sharp decline in advertising during its latest quarter.
In a trading update, the newspaper group reported that in the three months to June 30 underlying advertising revenue dropped 45% alongside a 12% decrease in circulation revenues as the coronavirus pandemic hit both its print and digital advertising formats.
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While growth in offline traffic had helped to mitigate the damage, DMGT said it was “not enough to compensate for the overall reduction” in ad spending.
Group revenues in the company’s third quarter fell 23% to £241mln, while it also swing to an operating loss of £2mln compared to a £22mln profit a year ago.
Things were also negative in the wider nine months to June 30, with the company’s revenues down 7% at £934mln and adjusted operating profit falling to £63mln from £112mln.
Despite this, DMGT reported “continued growth” from its B2B subscription business in the third quarter, while its consumer media arm had been on an “improving trend” since April. All business, other than the dmg events division, also operated profitably in June.
Looking ahead, the company said its business are “positioned to respond to market conditions as lockdown restrictions change”, although the outlook remained uncertain and formal guidance was still suspended.
However, the return to profitability in June appeared to lift the market, with DMGT shares up 2.8% at 652p in early trading on Thursday.