(Alliance News) - Daily Mail & General Trust PLC on Thursday said earnings were dealt a hefty blow as the newspaper publisher felt the full effects of the coronavirus pandemic.
DMGT saw its group revenue increase 3% for the first five months to the end of February, before the impact of Covid-19.
The London-based media company, however, saw its group revenue fall sharply in the third quarter ending June 30, with a drop of 23% to GBP241 million.
DMGT swung to an adjusted operating loss of GBP2 million in the third quarter, from a GBP22 million profit in the third quarter last year. In the nine months to June 30, adjusted operating profit almost halved to GBP63 million from GBP112 million, in the corresponding period last year.
Business-to-business events and exhibitions revenue growth took the largest knock, after no events being held since February, with a decrease of 94% in the third quarter. Insurance risk and EdTech revenues were up 3% and 6% respectively.
The increase in insurance risk revenue reflects continuing high renewal rates from existing customers as well as sales to new customers, the group said.
EdTech revenue, although having increased, is starting to see a dip as customers face budget pressures.
Consumer media revenue growth was down 30% in the quarter and down 11% in the nine months to June 30.
The daily mail newspaper publisher said advertising has reduced for both print and digital. An increase in online traffic however helped cushion the blow, but not enough to change the overall reduction in revenue.
DMGT's junior publication Metro has been particularly affected with circulation volumes being a quarter of usual levels.
The company expects to recover USD20 million from its insurance for event cancellations and postponements this year.
The group's adjusted operating profit swung from a GBP22 million profit for last year third quarter to a GBP2 million loss this year. Group adjusted operating profit for the nine months to June 30 was almost halved at GBP63 million compared to last year's GBP112m.
Despite these losses, the company reported that all business, other than events, operated profitably in the month of June.
DMGT's pro forma net cash at June 30 was GBP144 million compared to GBP163 million at March 31. The reduction included cash outflows for the purchase of shares by the employee benefit trust, the payment of the interim dividend and annual bond interest and the acquisition of 11 small events from CWC Group in April, the company said.
DMGT has decided to withhold guidance as market uncertainty continues.
"DMGT's businesses are positioned to respond to market conditions as lockdown restrictions change and each has a plan for the different scenarios that could occur. At this stage, the outlook for the group remains uncertain and suspension of formal guidance continues," DMGT said.
DMGT shares were up 3.5% at 656.00 pence each on Thursday in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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