Daily Mail & General Trust (DGMT), publisher of the Daily Mail, has produced newsworthy full-year results, increasing profits by 10 per cent despite virtually flat revenues.
The good news doesn't end there: on the back of these results it will buy-back up to £100m shares over the coming year. Investors will also receive a bumper 18p full-year dividend, up 6% on the previous year.
ResultsFor the 12 months to September 30th revenues at £1.96bn were 1% down on the previous year's £1.98bn, with pre-tax profits at 10% higher at £255m than the comparative £232m.
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Operating profit was up 7% at £300m (2011: £281m ) driven by its business--to-business operations, particularly the international side. Excluding Northcliffe Media, the proportion of this year's operating profit generated from B2B operations and from outside the UK was 79% and 71% respectively.
During the period it also reduced net debt by £106m to £613m.
The most significant move made following the period covered by these results was the sale of Northcliffe Media, its regional newspaper arm to Local World, a new venture in which DMGT will retain a 38.7% stake announced on November 21st.
In addition to its stake it will receive £52.5m in cash, part of which will go into DGMT's group pension funds, with the remainder being used for acquisitions in line with DMGT's acquisition strategy.
Broker commentCredit Suisse has an 'outperform' rating on DGMT and a price target of 500p.
Its analysts commented: "The valuation looks too low in our view as the shares trade on 8.4 times earnings per share estimates for calendar year 2013. This is a 33% discount against the media sector, excluding internet companies of 12.6%"
CM
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