DMGT: Mail drop


Newspaper readers may be consuming more news during the pandemic but advertisers are in retreat. The gift of life — as the Daily Mail hailed the latest coronavirus vaccine to win approval — is pivoting share prices higher. That includes DMGT, whose shares bumped up a couple of percentage points on Monday after the Daily Mail owner raised its dividend.

DMGT, whose controlling shareholder is Lord Rothermere, has been hit on several fronts. Events and exhibitions, a £119m revenue business last year, have given way to webinars and other online versions that entail less travel, less networking and less spending. Revenues this year were two-thirds of last time and adjusted operating profit came in at just £4m. Profits from property information halved.

Having already flagged ballpark numbers, the media group reported revenues of £1.2bn in the year to the end of September, down by a tenth, and pre-tax profit slashed by a third to £72m. But the newspaper proprietor is struggling to share a read-through for the current year: divisions are variously expected to face volatility, challenges or simply to “lack visibility”.

Undeterred, DMGT is keeping the faith. Its record of 30 years and counting of progressive dividend policy remains unbroken with a final payout of £37.7m, or 16.6p a share. It is also continuing to invest. One-tenth of revenues will be funnelled into operating expenditure this year, in line with its projected minimum levels of 5 per cent a year. This time, “significant” investment is earmarked for property information and education technology. Both would appear to face an uncertain 2021 with real estate transactions shaky and US education budgets constrained. DMGT’s product is more marketing than course content.

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In its favour, the group’s conference business is more about trade exhibitions for heavy industry — much harder to migrate online — and two big shows are scheduled for this fiscal year. The much derided (and much read) Mail Online has been profitable on a quarterly basis since April 2018. Along with Reach, it is among the cheapest picks on the newsstand. That makes it well worth a look if vaccines do indeed bring back normal life.

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