Daily Mail Shares Slump on Declining Full-Year Sales, Cautious Forecast
Daily Mail & General Trust Plc, the publisher of Britain’s Daily Mail newspaper, dropped as much as 7 percent in London as sales continued to decline and the company said it remains cautious about the medium-term outlook.
Full-year sales fell 4.6 percent to 1.97 billion pounds ($3.11 billion), the company said in a statement today. That compares with the 1.99 billion-pound average estimate of 14 analysts surveyed by Bloomberg. The stock dropped as much as 39.5 pence to 525 pence and was down 2.3 percent at 551.5 pence as of 8:50 a.m.
An increase in sales at some business-to-business units failed to make up for a decline at national and regional newspaper units. The Northcliffe regional newspaper business is facing “another tough year” after the unit’s revenue dropped 10 percent to 294 million pounds, the company said.
The company remains “cautious about the medium-term outlook, particularly given continuing economic uncertainties,” Chief Executive Officer Martin Morgan said in the statement. Still, the company is “well positioned for 2011 and beyond.”
Net income for the year was 199.8 million pounds, after a loss of 303.4 million pounds a year earlier, helped by job cuts and profit growth at business-to-business operations.
Daily Mail’s U.K. consumer media operations, which include the Daily Mail and the Mail on Sunday newspapers, showed “sharp improvement,” Morgan said. International business-to-business operations such as the company’s conference unit also boosted profit, he said.
Higher Dividend
The company recommended a final dividend of 11 pence a share, bringing the full-year dividend to 16 pence compared with 14.7 pence a year earlier.
Daily Mail said it was “cautiously optimistic” it would achieve another year of underlying growth and said it is focusing on controlling costs, cash generation and debt reduction.
Attendance and booking at the events unit have been “moderately encouraging,” with improvement expected into 2011, Daily Mail said. Advertising revenue at its Associated Newspapers unit has continued to recover since January and the Mail Online website is attracting new readers, it said.
To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net.
To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net.
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