Daily Mail and General Trust reported a 23 per cent drop in revenue for April and swung to an operating loss as the effects of the coronavirus pandemic continued to hurt news publishers.
The media and events group, which publishes the Daily Mail, Metro and Mail Online, said on Thursday that it suffered an adjusted operating loss of £3m in April, during which the UK and much of the world was in lockdown. That loss compared with a £5m profit in the same month a year ago.
The group did not specify the drop in April revenue in figures but said that its consumer media business “is experiencing a particularly difficult advertising market as well as reduced circulation volumes due to the UK’s lockdown restrictions”.
Pre-tax profit, adjusted for exceptional items and goodwill impairment, fell 44 per cent to £56m in the six months to March. Adjusted revenue fell 5 per cent to £690m from the same period a year earlier.
However DMGT raised its interim dividend 3 per cent to 7.5p a share, which it said reflected the overall trading performance in the first half of its financial year. It also said that although it expected a small loss for its consumer business in May, the picture was improving.
“The severity and duration of the Covid-19 crisis remains unclear but DMGT has a robust balance sheet, access to significant funding and a diversified portfolio,” said Paul Zwillenberg, chief executive. “This gives me, and the board, confidence that we will weather the current storm and withstand a sustained period of global economic uncertainty.”
Shares in DMGT fell 6.5 per cent in early London trading on Thursday, bringing their decline for the year to more than 15 per cent.
“Incremental detail in April/May trends suggest that trading has not got materially worse between the two months, at least for the consumer business,” Natasha Brilliant, head of small and mid-cap equities at Citi, said in a note. “DMGT is fortunate enough to be sitting on a healthy balance sheet (net cash), which is extremely valuable in this market.”
Rating the stock a sell, the Citi analyst said there was “clearly downward pressure on growth”.
Almost all of the group’s events that would have run in its second half have been cancelled or postponed, with £8m of “accelerated costs” relating to these recognised in its interim results. “Covid-19 is adversely affecting the consumer media, UK property information and events and exhibitions businesses,” the group said.
DMGT has attempted to simplify its sprawling business in recent years. The group, which disposed of some of its property and energy assets late last year, acquired the i, the UK national newspaper and its website, in November. In March, it raised its stake to 23 per cent in Cazoo, an online start-up that seeks to change the way people buy used cars in the UK.