Q1 revenue up 3.0 per cent at Daily Mail and General Trust

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SymbolPriceChange
DIB.MI3.250.00

LONDON (ShareCast) - Underlying group revenue rose 3.0 per cent to 503m pounds in the three month period to December 30th at Daily Mail and General Trust, an interim management statement for the company has disclosed.

The company reported underlying growth of 8% from its business-to-business businesses and 4% underlying growth at its Risk Management Solutions business.

Underlying revenue declined by 4% at Associated Newspapers - since renamed as dmg media- and the improved profit margin was described as having been driven by cost efficiencies.

Newspaper advertising declined in the quarter while digital advertising increased, reflecting a wider trend seen in the media industry.

In the case of the former revenues were down by 9% in the quarter but improved as the quarter progressed, with December 2012 advertising stable year-on-year.

Digital (Milan: DIB.MI - news) advertising was up 18% and the group reported that it had put up the price of its weekday print newspaper on February 4th. The price of the Monday-to-Friday published Daily Mail was increased to 60p from 55p previously.

Despite increased investment in digital products, dmg media's profit margin for the quarter increased year-on-year due to the rationalisation of printing facilities that took place during 2012. The group reported that headcount had reduced by 3% to 3,179 individuals.

"In line but encouraging"

Research analysts at Credit Suisse (NYSE: CRP - news) described the first quarter results as being "in line but encouraging".

"We believe the group's results released this morning are encouraging, with the group's business-to-business (B2B) division continuing to provide good solid growth more than offsetting weakness from its consumer division. Given the group reiterated full year guidance we do not believe consensus will move on the back of today's release however do beliecve there is cause for optimism."

Credit Suisse retained its rating for the group of "outperform" and listed a target price of 700p.

The group's share price rose 3.64% to 626p at 09:38 on Wednesday morning.

MF