Daily Mail, whose flagship newspaper is the country’s top-selling mid-market tabloid the Daily Mail, said trading was in line with its expectations, adding it had little insight into momentum in advertising markets.
“We remain cautious about the medium-term outlook, given the external economic environment. Our focus will remain on investment to drive organic growth, while continuing to seek to improve operational efficiency and to reduce debt,” it said.
UBS analyst Alastair Reid said while overall sales of 497 million pounds were in line with consensus, the results were a “mixed bag,” highlighting slower growth at some B2B units.
“With the shares having spiked 7 percent in the past week, we believe they could drift back today given some concerns over slower momentum,” he said in a note.
Advertising revenue at Daily Mail’s national titles rose 6 percent in the quarter but only two percent in January. Regional ad revenue fell six percent in the quarter and in January.
Local media have suffered from persistent weakness through the downturn as recruitment and property advertising have dropped off. The government has been considering liberalising cross-media ownership restrictions to help the sector.
Daily Mail chief executive Martin Morgan reiterated that his company had no ambitions to be an acquirer but might be prepared to sell its regional titles.
“We are not interested in putting fresh capital into that sector. We are open to any worthwhile approaches concerning consolidation if they were to occur,” he told journalists on a conference call.
DMGT’s B2B business, which includes the financial publications of its separately listed Euromoney unit as well as risk-management products, increased sales 11 percent.
Euromoney last month reported an 18 percent rise in fiscal first-quarter revenue, driven by strong subscriptions to its publications buoyed by recovery in the financial sector.
Daily Mail had said in November it was cautiously optimistic for another year of growth but was concerned about a sales-tax rise in January.
The company’s shares have risen by a third in the past year, giving the company a market value of 2.26 billion pounds.
They trade at 11.4 times forward earnings, below the European publishing sector average multiple of 14.7, reflecting the company’s exposure to consumer and advertiser demand.
