The Group has warned of challenging market conditions and declining Revenues in the year ahead.
Companies: Daily Mail & General Trust plc Class A
Shares in Daily Mail and General Trust (LON: DMGT) have taken a turn for the worst off the back of the Group's uninspiring full-year results and forecasts for the year ahead.
The stock tumbled on Thursday morning as it reported flat Revenue growth on an underlying basis, while it swung from an underlying Operating Profit of £91m to a Loss of £129m in FY17. This has led to Losses Before Tax ballooning to £112m from a Profit Before Tax last year of £202m.
The company has been making disposals left right and centre, including reducing its stake in Euromoney and disposing of Hobsons' Admissions and Hobsons Solutions as well as Elite Daily, and is in the process of selling EDR.
As well as being "adversely affected" by the recent disposals, the financial year ahead isn't looking promising:
"Digital advertising revenues are expected to grow further, helping to offset anticipated circulation volume and print advertising declines, with advertising market conditions likely to remain volatile. As a result, in FY 2018, the underlying rate of decline of dmg media's revenues is expected to be in the mid-single digits."
DMGT also wrote off £206m of goodwill in impairment charges against subsidiaries Genscape, Xceligent and SiteCompli, further signalling what may be to come in the future.
Management has touted FY18 as a "year of transition" with Group CEO Paul Zwillenberg commenting:
"We have delayered management, reduced overheads, enhanced our talent and refocused each business's priorities. We have sharpened our focus on our strongest products as a result of the Euromoney transaction, restructuring of Hobsons, the sale of Elite Daily and the planned disposal of EDR."
However, it seems the market wasn't buying any of it today, with shares falling 25% at the time of writing.
Rival Trinity Mirror has seen a similar fate this year after it also warned on slumps in advertising and circulation revenues. Its share price has been falling sharply since 2015.
DMGT has been on a similar trajectory with today's share price of c. 540p well below its price of c. 830p this time three years ago. Currently, the Group trades on a forecast PE multiple of 13x and has a Market Cap of c. £2.5 bn.