21st Jul 2016 11:01
LONDON (Alliance News) - Shares in both FTSE 250 listed Euromoney Institutional Investor PLC and Daily Mail & General Trust PLC, which holds a 68% stake in Euromoney, were up Thursday after they delivered positive third quarter trading updates.
Euromoney said trading conditions continued in line with its expectations since the beginning of April, with revenue for its third quarter to end-June down 1% to GBP104.7 million from GBP105.4 million, but slowed from the 6% decline it saw the first half of the year.
The company said it had been boosted by the strength of the dollar against the weaker pound, which helped to offset a drop in revenue caused by the sale of its Gulf Publishing and Petroleum Economist businesses in April.
Underlying revenue, at constant currency and excluding acquisitions and disposals, also fell 1%. Within this, underlying subscription revenue rose 1%, as this started to benefit from strategic initiatives the company is taking around new products, pricing and sales.
The third quarter is key for Euromoney's event business, it said, and a return to growth in sponsorship revenue was due to a robust performance from a number of its largest events in finance and telecoms.
Looking ahead, Euromoney said that its results for its full year to end-September depend heavily on the final month, which traditionally accounts for at least 20% of its full year profit. Visibility for September is limited, the company said, particularly for advertising and event delegates.
Notably, Euromoney said that the UK's vote to leave the European Union had resulted in no significant hit to its third quarter trading, and the weakness of sterling in the wake of the vote is set to be a boon to profits if it continues.
Euromoney said it was difficult to assess the impact of Brexit on its trading, but should exchange rates remain at current levels, it should provide Euromoney with some protection against "increased volatility and uncertainty in investment banking and asset management".
Meanwhile, DMGT said that its performance in the third quarter had been broadly in line with expectations, although the Brexit vote has created some uncertainty, notably in UK advertising and property markets. The Daily Mail was an outspoken advocate of leaving the European Union.
Despite this uncertainty, DMGT reiterated that its outlook for its full year to September 30 is in line with market expectations. It gave current analyst expectations as a pretax profit of between GBP237 million to GBP256 million, adjusted earnings per share of 49.4 pence to 584.8 pence, and revenue of between GBP1.81 billion to GBP1.91 billion.
This compares to an adjusted pretax profit of GBP281 million in the year to end-September 2015, on revenue of GBP1.85 billion, with earnings per share of 59.7 pence.
DMGT said that in the third quarter underlying revenue, which is at constant exchange rates and strips out sales, closures, acquisitions and non-annual events, was up 1% compared to the previous year, helped by the stronger dollar. On a reported basis, revenue rose 2%.
This makes its underlying revenue growth in the year to date flat, and reported revenue year to date up 3%.
In the quarter revenue, growth was largely driven by a robust performance from DMGT's B2B segment, as its Risk Management Solutions and its DMG Information segments were boosted by the strong dollar. That offset a decline in the company's DMG Media segment, which houses its Daily Mail and Mail on Sunday papers.
In B2B, DMG Events was hit by the weak Canadian energy market, hit by recent wildfires, as well as the absence of the digital market events it disposed of last September.
In DMG Media revenue fell 6%, or 2% on an underlying basis, hit by a fall in advertising revenue and circulation revenue.
Circulation revenue fell 1%, as declining volumes were partly offset by a cover price increase for the Monday to Friday editions of the Daily Mail from February to 65 pence. The cover price of the Mail on Sunday was increased by 10 pence to GBP1.70 earlier this month.
Meanwhile, advertising continued to be hit by a decline in traditional print advertising, which was not offset by growth in digital advertising, particularly from its MailOnline business.
Both DMGT and Euromoney expect to issue their next trading update September 29.
Shares in Euromoney were up 0.7% at 970.50 pence Thursday, whilst DMGT was trading up 2.6% at 693.50 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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