Yahoo Finance Daily Mail publisher considers sale of Metro
DMGT, the publisher of the Daily Mail, is considering a sale of its Metro free newspaper as print advertising sales decline and commuters increasingly read their news on smartphones.
The family controlled company has appointed bankers to explore options for the title, which is not considered a core part of its consumer business.
Metro suffered a 9pc decline in underlying revenues last year to £65m as well as a 12pc fall in operating profit as advertisers shifted their spending online. Its revenue in the first half of this year was stable, but operating profits sank again by more than a third to £5m as the fall in sterling sharply increased the cost of imported paper.
Discussions over a possible sale of Metro are part of a broader review of DMGT’s portfolio of businesses by Paul Zwillenberg, its recently appointed chief executive. He was brought in by his former university room-mate Lord Rothermere, who controls all of the voting rights in the company.
Mr Zwillenberg has repeatedly told investors that there are “no sacred cows” in the review, but a sale of The Daily Mail by the Rothermere family, which founded it more than 120 years ago, is viewed as unlikely.
Metro was first published by DMGT in 1999. It reports a daily readership of more than three million but faces increasing competition for attention online. A recent Barclays note highlighted the threat to the Metro from the planned introduction of mobile coverage on the London Tube network.
Based on Johnston Press’s acquisition of the i paper last year for £24m, 4.6 times its operating profit, Metro could attract bids of more than £40m, although its status as a freesheet is likely to incur a discount. Potential bidders include Trinity Mirror, which formerly ran some regional Metro franchises.
DMGT declined to comment.
