LONDON (Reuters) - The publisher of Britain’s Daily Mail said volatile advertising and falling circulation would hit its media business next year, sending shares in the group down 10 percent after it published full-year results on Thursday.
Daily Mail & General Trust(DMGT), which owns the Daily Mail, Mail on Sunday and Metro and the MailOnline website, reported a 16 percent drop in profit to 182 million pounds ($232.4 million) for the year to Sept. 30 on flat underlying revenue.
Chief Executive Paul Zwillenberg said the company, which also has business-to-business operations in areas such as property information, delivered a “solid performance”, with results in line with expectations.
It shares, however, fell to a 10-month low of 605 pence as investors baulked at the group’s outlook.
“The outlook, in particular for consumer media, where growth is expected to be down and margins contract, will put pressure on consensus EPS (earnings per share),” said Citi analysts, who have a neutral rating on the stock.
The group’s flagship Daily Mail title, second to The Sun in paid circulation, and its Sunday stablemate recorded a 5 percent decline in circulation revenue, DMGT said.
Print advertising revenue fell 9 percent for the Mail titles, partly offset by 5 percent growth at MailOnline, which attracts 60 million users a day across its website and other platforms.
Online advertising surpassed print advertising for the first time, the company said.
Zwillenberg said that while online revenue growth had slowed - down from 20 percent a year earlier - MailOnline outperformed peers in a challenging year. “Flat to down was very much the norm across the industry,” he said.
He was also satisfied with the Daily Mail, the strongly pro-Brexit title that has thrown its weight behind Prime Minister Theresa May’s Brexit plan under its new editor Geordie Greig.
“The Daily Mail is an incredible franchise, it outperforms the market year in and year out,” he said. “It did so under the editorship of Mr Dacre and it continues to do so under Mr Greig.”
Zwillenberg said he would continue to streamline the group, but would not be drawn on timing.
“We are in six sectors today, down from 10 when I joined,” he said. “I think one is too few and I think six is too many to be successful long term.”
($1 = 0.7831 pounds)
Reporting by Paul Sandle; Editing by David Goodman