DMGT shares crash on warning of difficult year ahead

Daily Mail and General Trust shares lost a quarter of their value as the publisher warned of a difficult year ahead after posting a statutory annual loss.

Pre-tax profit for the year to the end of September fell 13% to £226m but the company swung to a statutory loss of £112m from a profit of £202m a year earlier.

The loss included £282m of impairment charges including the value of energy information business Genscape and US property information firms Xceligent and SiteCompli which were written down by a total of £206m.

The publisher of the Daily Mail and Mail on Sunday newspapers said its underlying performance was resilient in a difficult year when print advertising revenues declined. The company's business spans business and consumer publishing, events and information.

But its shares plunged as DMGT warned of thinner margins, lower earnings after business disposals and a volatile advertising market during 2018. The company pledged to invest in digital services and analytics while increasing efficiency and buying and selling businesses.

The shares fell as much as 29% and were down 24% at 534.5p at 11:04 GMT.

"The coming year is expected to be one of transition as we execute against the performance improvement programme. The group's short-term earnings will be adversely affected by recent disposals and challenging conditions in some of our sectors," the group said.

Analysts at Investec said the full year figures were 4% better at PBT and 8% at EPS level, but the consumer outlook "seems worse than we thought"... "with nothing particularly new on the strategy review".

Investec we expects around a 10% downgrade to 2018E EPS, based on guidance and outlook comments, with its forecasts already below the consensus forecast according to FactSet of 52p for the new financial year and 57p for 2019.