17th Sep 2014 08:44
LONDON (Alliance News) - Daily Mail and General Trust PLC Wednesday reaffirmed its outlook for the full year, although it warned that its adjusted operating profit for the year will be at the bottom end of market expectations due to the delayed launch of its RMS(one) software.
The company will post a GBP85 million impairment relating to the postponement of the launch of RMS(one), and noted it also will see GBP5 million in additional operating costs for the year because of the delay.
RMS(one) is a software-as-a-service platform for the insurance and reinsurance industry.
Revenue from the product is not expected to begin until 2016. However, now that the company has changed its approach to the development of the product, it expects its development costs for the financial year 2015 to be "materially lower" than the GBP35 million for the current year.
The company said that in the 11 months to end-August, revenue was up 5%, at constant exchange rates and stripping out exceptional costs. On reported basis, revenue was up 1%.
It saw a good performance from its business-to-business operations, driven by acquisitions, and saw underlying revenue at its dmg media business in line with the previous year as advertising revenue growth offset an expected decline in circulation revenues.
The company also announced a further GBP100 million share buy back programme, after completing a GBP100 million share buy-back September 4.
Daily Mail and General Trust continued to manage its portfolio during the year, it said, disposing of its digital recruitment Evenbase and 39% of its interest in Zoopla Property Group PLC. The UK Competition and Markets Authority has approved its sale of Jobsite, and it expects to complete this sale by the end of October. Following Zoopla's initial public offering, it has a 32% stake in the company.
Investec maintained its Buy rating for the media company, saying that it likes the portfolio refocus story and value creation, but the delays in the launch of RMS(one) are unhelpful.
"Pre close/11M interim management statement is fine in trading, but more RMS(one) delays/issues hold back this year?s numbers to the bottom of the range and look a ?running sore? on sentiment," analyst Steve Liechti wrote in a note following the company's update.
Shares in Daily Mail and General Trust were trading down 6.6% at 761.04 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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