Daily Mail shares tumble as it says profit will be at lower end of forecasts

Shares in Daily Mail and General Trust tumbled after it said full-year results are likely to be towards the lower end of market expectations as a result of a weaker-than-expected UK print advertising market and more challenging conditions for B2B.

The publisher of the Daily Mail and Mail on Sunday said group revenue on a reported basis was up 2% for the three months to end June 2015, but down 1% on an adjusted basis.

Underlying revenue in its DMG media business was down 3% on a reported basis, while in the B2B segment it rose 1%. The company said circulation revenues were down 3% due to lower volumes, although both Mail Newspaper titles continued to grow market share, with the Daily Mail and The Mail on Sunday achieving 23.4% and 22.1% respectively.

Net debt fell by £67m to £687m, in line with expectations.

Numis trimmed its 2015 pre-tax profit estimate on the back of the update, to £275.6m from £281.4m and its earnings per share forecast to 56.6p from 58p.

It retained its ‘buy’ recommendation and 1,075p price target on the stock.

Investec said the results were disappointing.

"3Q is quite poor as we had feared so expect some near-term share price weakness,” it said.

However, it retained its ‘buy’ stance on the stock, pointing to mid-term value.

At 10:50, DMGT shares were down 8.4% at 851p.