LONDON (Alliance News) - Daily Mail and General Trust PLC on Wednesday reported a slight rise in revenue in the first quarter of its financial year, boosted by growth in its business-to-business arm that was capped by a weak performance from its dmg media newspaper operation.
The company said revenue for the first quarter to the end of December was GBP476 million, up 1% on both a reported and underlying basis. Underlying revenue is defined by DMGT as revenue on a like-for-like basis, adjusted for constant exchange rates, disposals, closures, non-annual events occurring in the current and prior year, and acquisitions.
Revenue growth in its business-to-business arm, which comprises its Risk Management Solutions, dmg information, and dmg events arms, as well as Euromoney Institutional Investor PLC, was 5% for the quarter. Revenue from its dmg information business rose by 10% while dmg events rose by 23%, but growth was more subdued in its Risk Management Solutions business, up 2%, and revenue declined from its Euromoney business, falling 4%.
Risk Management Solutions revenue was up 2% to GBP45 million, with growth in its core business offset by a decline in RMS(one) consultancy revenue. RMS(one) is the group's much-delayed software-as-a-service platform for the insurance and reinsurance industry. It had originally been scheduled for release in April 2014, but the group said in November it expects delivery of the first models by late 2015. That delay will hit its profits for the current financial year to the end of September, as revenue from the new products will not flow through until 2016.
Revenue for the dmg information business rose to GBP99 million in the quarter, boosted by acquisitions. Its Genscape energy business produced double-digit underlying growth in the quarter, with mid-single digit underlying growth in its property information portfolio and in its Hobsons education business. Growth rates in the property and education segments are expected to increase over 2015, the company said.
The company's dmg events business reported revenue of GBP47 million, with strong growth from the Big 5 Dubai and ADIPEC shows which took place in November.
Euromoney, the FTSE 250-listed company in which DMGT owns a 67% stake, reported a fall in revenue in line with its expectations given the challenging trading conditions in its market.
But revenue in the dmg media business dropped to GBP190 million. Circulation revenue was down 4% on the back of declining volumes, though the group said both the Daily Mail and the Mail on Sunday continued to win market share, with the Daily Mail increasing its market share to 23% in the quarter, up from 22.6% a year earlier.
Total advertising revenue dropped by 11% due to the sale of its Evenbase digital recruitment business over the year. Digital advertising revenue growth for the MailOnline business held up better, up 21% in the quarter to GBP18 million. It increased its monthly unique users in December to 200 million, up 24% year-on-year. Its average global daily unique users rose 25% to 12.3 million in the quarter.
The Wowcher voucher deals business performed well in the quarter, with its database increased to 6.3 million subscribers, a 47% rise year-on-year.
The group said it net debt rose in line with its expectations, up GBP69 million to GBP672 million, and said it maintains its revenue and profit outlook for the full year.
DMGT shares were up 0.3% to 884.00 pence on Tuesday.
Numis said the underlying performance was a touch below expectations, but said the miss was not sufficient to necessitate any change to its forecasts for the company.
"All in we will tweak divisional assumptions a little, but do not expect to make any material change to headline estimates at this stage," says Numis analyst Gareth Davies.
"DMGT shares remain very good value at current levels, we retain a blended multiples based target of 1,075p and reiterate our Buy recommendation," the analyst adds.
Numis acts as a broker to the company and makes a market in the stock.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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