Thursday, British media company Daily Mail and General Trust Plc (DMGT.L) reported a pre-tax loss for fiscal year 2008, compared to a profit last year, hurt by foreign exchange losses on hedges of intra-group financing and other charges. Meanwhile, the company's adjusted pre-tax profit declined 9%. Amid challenging economic conditions, the company divulged that short-term outlook remains difficult, while long term strategy remains in place.
Announcing its preliminary results, the company reported a pre-tax loss of GBP 68.1 million for fiscal 2008, compared with a profit of GBP 142.1 million last year. Daily Mail experienced disappointing results for the year after charging GBP 68 million of foreign exchange losses on tax equalization hedging transactions, which cause an equal and opposite reduction in the tax charge, and non-cash amortization and impairment charges of GBP 264 million.
Annual adjusted pre-tax profit decreased 9% to GBP 262 million from GBP 288 million a year ago. Adjusted results excluded exceptional items and amortization and impairment of intangible assets.
Profit from continuing operations came in at GBP 16.6 million, sharply down from GBP 121.8 million a year ago. The company posted a loss per share of 0.2 pence, compared with a profit of 27.1 pence last year.
Total profit declined to GBP 16.8 million from GBP 122.3 million in the prior year. Profit attributable to shareholders was nil, compared to GBP 107.0 million in the previous year. On a per share basis, the company posted loss of $0.1 pence, compared to a profit of 27.2 pence a year ago.
The company's adjusted group profit stood at GBP 181 million, down 6% from GBP 192 million in the previous year. Adjusted earnings per share were 47.9 pence, a 3% decline from 49.3 pence in fiscal 2007.
Revenue for the year improved 3% to GBP 2.31 billion from GBP 2.23 billion in the same period a year earlier.
Daily Mail & General said its business-to-business divisions increased their profits in the year, despite economic conditions affected DMG Information's property companies and DMG World Media's remaining consumer exhibitions. According to the company, the events experienced by financial markets and institutions in September had no material impact on the year's results.
DMG Information recorded revenues of GBP 315 million for the year, up 8% from GBP 293 million a year ago, irrespective of the turmoil in financial and property. On a like-for-like basis, underlying revenue increased 5%.
Revenue from DMG World Media reached GBP 202 million, a 23% growth over GBP 164 million in the prior year, reflecting strong growth in its B2B and B2R sectors. On a like-for-like basis, underlying revenues advanced 2%.
Daily Mail's Associated Newspapers business achieved almost flat year-over-year sales of approximately GBP 988 million, amid challenging economic conditions in the second half of the financial year and the continued competitive activity in the London evening newspaper market.
Meanwhile, revenue from Northcliffe media unit declined 6% to GBP 420 million from GBP 447 million a year ago, as the U.K. regional advertising markets were exceptionally challenging during the year. On a like-for-like basis, underlying revenues dropped 11%.
Further, Daily Mail said it recommended a final dividend of 9.90 pence per share for the year, bringing annual dividend to 14.70 pence, up 2% over a year ago. The final dividend will be paid on February 13, 2009 to shareholders on the register at close of business on November 28, 2008.
As announced earlier, the company said it has extended all its bank facilities for a further three to five years with no change in basic financial covenants. Most of the Group's debt remains in long-term bonds, the earliest of which is not repayable until 2013.
Additionally, Daily Mail announced the departure of Ian Park as a director of the company, at the annual general meeting held on February 11, 2009, after serving for 14 years.
Last month, the British media company announced the appointment of Martin Morgan as its chief executive officer, replacing Charles Sinclair. Morgan also joined DMGT's financial information division Euromoney's Board as non-executive director.
Going forward, Daily Mail noted that its new financial year has started with very challenging economic conditions, particularly in the U.K, and is affecting its UK consumer media businesses. However, its business to business divisions are generally continuing to trade well, with the benefit of significant subscription revenues.
The company noted that it has put in place revenue and cost initiatives worth nearly GBP 100 million in order to counter anticipated advertising weakness and newsprint price increases.
While it becomes difficult for the company to provide short term outlook, its long term strategy remains in place and is confident that will emerge well from the current economic downturn.
On the LSE, DMGT.L is trading at 266.50 pence, up 16.50 pence or 6.59%, on a volume of 445K shares.
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