Daily Mail H1 profit drops, warns on print advertising

Daily Mail & General Trust shares tumbled on Thursday as the company posted drop in first-half profit and warned that a weak print advertising market will hit margins in the media business.

In the six months to the end of March, pre-tax profit fell 11% to £129m as print advertising revenues declined 13%, reflecting a further deterioration in market conditions.

However, digital advertising revenues grew strongly, by an underlying 23%, and as a result, the underlying decline in total advertising revenues was limited to 4%.

Circulation revenues fell 3% due to the continued decline in the circulation volumes of the Daily Mail and the Mail on Sunday.

Overall revenue was up 3% on a reported basis to £950m, but down 1% on an underlying basis.

Chief executive officer Martin Morgan said: “DMGT's performance in the first half was broadly in line with our expectations, other than the further deterioration in the UK print advertising market which impacted dmg media's results.

“The group's revenue has remained broadly stable on an underlying basis, with growth from our B2B companies offsetting the decline from dmg media.”

Other than the further deterioration in the print advertising market, DMGT said the first-half performance was broadly in line with expectations.

The company said the outlook for the full year provided back in November remains unchanged, but the operating margin for dmg media is now expected to be around 10% rather than remaining at the prior year level of 13%.

At 0830 BST, DMGT shares were down 9.1% to 676.50p.