May 30, 2019
By Paul Sandle
LONDON (Reuters) – Stronger demand for advertising on news and gossip website MailOnline helped owner DMGT report a better-than-expected 19% rise in first-half profit on Thursday, lifting its shares to a eight-month high.
“We delivered a good performance in the first half with a combination of underlying revenue growth, cash income growth and profit growth,” Chief Executive Paul Zwillenberg said in an interview.
“This is on the back of a particularly strong performance in our consumer media and continued growth in our B2B (business to business) portfolio.”
Underlying revenue grew 16% at MailOnline, one of the world’s leading English language newspaper websites, more than three times the rate recorded for the whole of the company’s previous financial year.
“It’s great to see MailOnline back to those sorts of levels of growth rates,” Chief Financial Officer Tim Collier said. “That’s driven by our ability to get traffic to come direct to our portal or our app, which is particularly encouraging.”
Facebook reduced the prominence of news websites on its platform last year, resulting in the number of daily unique browsers on MailOnline falling 7% to 12.7 million.
DMGT, however, was already focusing on the more valuable customers who come directly its site and app.
The rise in revenue from online services and its Metro freesheet more than made up for a 5% decline at its Daily Mail and Mail on Sunday print titles.
AJ Bell investment director Russ Mould said the market was expecting a “pretty terrible” set of figures from DMGT given the Brexit uncertainty that continues to stalk the UK economy.
“Little wonder the market is responding positively as first-half numbers turn out to be somewhat better than feared, suggesting the strongest media brands can still attract advertising spend,” Mould said.
DMGT, which also had business-to-business and events divisions, reported pretax profit of 100 million pounds ($126 million), up an underlying 19 percent, on revenue of 724 million, up 1% on the same basis, for the six months to March 31. Analysts at Numis had expected profit to come in at 86 million.
Shares in the group, which reiterated its full-year guidance, were up 9% at 737 pence by 0829 GMT. The company said it would increase its interim dividend 3% to 7.3p.
Analyst at Citi, who have a “sell” rating on DMGT, said the results were “decent”, with a “healthy beat on the bottom line”, but they added that limited visibility on the outlook meant consensus expectations were unlikely to change.
(Reporting by Paul Sandle; Editing by Kate Holton and David Holmes)