DMGT increases dividend despite one-third fall in profits

DMGT, the owner of the Daily Mail, has increased its dividend despite a grim year for advertising that cut its underlying pre-tax profits by more than a third in 2020.

The group, which spans news titles, events and data businesses, said it was still unable to provide precise guidance on future trading because of the severity of the pandemic.

But DMGT, whose controlling shareholder is Lord Rothermere, approved a 1 per cent increase in the dividend to 24.1p “despite the weaker profit outlook and deteriorating global economy”. Paul Zwillenberg, chief executive, said the decision reflected “our long-term perspective and our confidence in the future”.

Underlying revenues fell 10 per cent to £1.2bn in the year to September 30, while pre-tax profit dropped by 36 per cent to £72m. Advertising sales fell by 16 per cent across its media titles.

Shares in DMGT were up 3.5 per cent in early trading on Monday.

The pandemic had a devastating impact on DMGT’s events and exhibitions business, which suffered a 33 per cent drop in revenue and an 83 per cent fall in adjusted operating profit. The ADIPEC oil and gas exhibition, DMGT’s largest event, will not be held until 2022.

Other parts of the DMGT business-to-business division, such as insurance risk and the education technology business Hobsons, were more resilient. DMGT said these businesses remained “well positioned to deliver continued revenue growth”.

But the struggling events business, which reported a £10m statutory operating loss, made the company once again reliant on media assets for the bulk of its operating profit. Analysts at Citigroup noted the “more equal performance” between media business and other divisions “than one might have expected”.

Underlying revenues at the Daily Mail and The Mail on Sunday newspaper titles fell 12 per cent to £356m, while MailOnline revenues increased by 3 per cent to £144m.

The Metro free sheet was hit harder, with revenues falling 40 per cent in 2020. Revenues at the i newspaper fell by 10 per cent since it was acquired by DMGT for £49.6m in late 2019.

Overall circulation at DMGT print titles fell 7 per cent, a downward trend it expected to continue, while advertising was off 30 per cent.