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Daily Mail & General Profit Up; Says Outlook In Line With Market View; Stock Up

Daily Mail General 052214

Shares of Daily Mail & General Trust Plc (DMGT.L) are gaining around 6 percent in the morning trading in London, after the company reported higher profit in its first half, with strong underlying growth in B2B revenues. The company also hiked its dividend, and said its outlook for fiscal 2014 remains in line with market expectations.

The UK-based multi-media and information company also announced that digital media business, Zoopla Property Group, in which Daily Mail holds 52.6 percent stake, has announced its intention to make an initial public offering on the London Stock Exchange. Daily Mail said it intends to participate in the IPO and reduce its stake in Zoopla Property.

Separately, Daily Mail said its dmg media division has agreed to the disposal of its job board business, Jobsite, to StepStone, an Axel Springer unit. The companies will seek approval of the transaction by the Competition and Markets Authority prior to completion, which is expected in the final quarter of calendar 2014.

The company noted that the latest sale will complete dmg media's disposal of Evenbase, following the recent disposal of OilCareers, Broadbean and Jobrapido, and exit from the digital recruitment market, enabling it to increase its focus on the core Mail businesses.

Regarding its operating results, Daily Mail said its first-half pre-tax profit climbed to 113.8 million pounds from last year's 83.4 million pounds. The prior-year results have been restated.

Adjusted pre-tax profit was 151 million pounds, 16 percent higher than last year's 130 million pounds, despite the adverse impact of the stronger pound during the first half.

Profit for the period attributable to owners of the company, meanwhile, declined to 80.7 million pounds or 21.3 pence per share from 96.3 million pounds or 24.6 pence per share, reflecting higher tax rate.

Adjusted earnings per share grew to 29.4 pence from 24.4 pence a year ago. Underlying operating profit increased 21 percent and operating margin improved to 17 percent.

First-half revenues increased to 931 million pounds from 866 million pounds a year ago. On an adjusted basis, revenues increased 2 percent, and underlying revenues went up 6 percent.

In the six months, international B2B companies' underlying revenues grew 11 percent, while underlying revenues from consumer business, dmg media, edged up 1 percent, with the growth from digital revenues more than offsetting the decline in print revenues.

The company noted that its first-half results benefited from the February 2013 increase to the cover price of the Daily Mail and the print rationalisation that took place during 2013.

Looking ahead, Daily Mail warned that its second-half results would be adversely impacted by the cover price increase, increasing newsprint costs, the ramp up of costs relating to RMS and the strong pound. For fiscal 2014, the company said its outlook remains in line with market expectations.

According to the firm, the current City analyst expectations of adjusted pre-tax profit for fiscal 2014 range from 277 million pounds to 304 million pounds, and adjusted basic earnings per share from 51.7 pence to 58.0 pence, with a consensus of 286 million pounds and 54.3 pence.

Further, the company said its Board has declared an interim dividend of 6.2 pence per Ordinary and 'A' Ordinary Non-Voting share, higher than last year's 5.9 pence

In London, Daily Mail stock is gaining 51.50 pence or 6.17 percent, and trading at 886 pence.

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