DMGT shares climbed sharply after it reported MailOnline’s 25 per cent sales growth had outstripped falling print revenues.
Reporting half-year figures, Daily Mail and General Trust, the owner of MailOnline, This is Money and the Mail and Metro newspapers, said that a £15million rise in digital revenues ‘more than offset’ a £7million fall from its print titles.
Shares rose almost 10 per cent today, after DMGT said that while revenue for the Daily Mail and Mail on Sunday newspapers dipped 5 per cent to £208million, MailOnline’s revenue jumped by a quarter to £76million.
A £15million rise in revenues at MailOnline more than offset the £7million decline across DMGT’s print newspaper titles
Investors were cheered by DMGT’s success in dealing with the challenges that the newspaper industry faces in the shift from print to increasing digital readership.
Broker Liberum reflected that it seemed possible that within the media industry, ‘advertising is being concentrated in the stronger brand titles at the expense of weaker / less important brands’.
MailOnline’s revenues were boosted by ‘strong organic growth’ for the website and the success of DailyMailTV, which won the Daytime Emmy Award for Outstanding Entertainment News Program earlier this month, and is now wholly-owned and fully included in results.
Metro, which is also owned by DMGT, saw a 12 per cent rise in revenues to £41million, helped by the integration of its advertising operations with the Mail’s.
Overall revenue for the consumer media division was up 3 per cent on the same six-month period the previous year, at £343million, while profits rose 2 per cent to £39million.
DMGT shares closed up 9.6 per cent, or 65p, at 740p.
The Mail brand remains strong, reflected in the large and growing market shares held by the Daily Mail and The Mail on Sunday, DMGT results said
Chief executive Paul Zwillenberg said: ‘DMGT delivered a good performance in the first half of the year, achieving underlying growth in revenue, cash generation and profit.
‘Consumer media delivered a particularly strong performance and we saw continued growth in our business-to-business portfolio.’
Newspaper circulation revenue decreased 2 per cent to £144million, according to DMGT, as fewer paper sales were partially offset by a 5p increase in the weekday edition cover price to 70p.
Paper sales are falling across the industry and the results said: ‘The Mail brand remains strong, reflected in the large and growing market shares held by the Daily Mail and The Mail on Sunday of 25.3 per cent and 22.6 per cent respectively’.
DMGT shares have climbed this year after falling at the end of 2018
The results noted that while indirect traffic to MailOnline decreased due to changes made by social media and search giants Facebook and Google, ‘continued growing engagement with the direct audience, saw it account for 78 per cent of minutes spent on the site’.
DMGT said: ‘MailOnline continues to focus on attracting traffic directly to its homepages on desktop and mobile or its apps.’
Across the wider DMGT business, overall revenue for the six months to 31 March 2019 was down 3 per cent to £724million, due to some B2B disposals made last year, but rose 1 per cent on an underlying basis.’
Statutory pre-tax profits fell from £113million to £50million due to a ‘£72 million reduction in the share of profits from joint ventures and associates’.
However, underlying adjusted pre-tax profits rose 19 per cent to £100million.
Mr Zwillenberg added: ‘The strategy we are pursuing is transforming DMGT and delivering results.
‘The distribution of our stake in Euromoney and the £200m special dividend was a defining moment for DMGT. We returned nearly £900million, or 38 per cent of our market capitalisation, to our shareholders.
‘Our balance sheet remains strong despite this considerable capital return and an additional £117million made available to our pension schemes. We are confident we can invest for growth and maximise the portfolio’s true potential, continuing the transformation we started three years ago.’