The shares of Daily Mail & General Trust (LSE: DMGT) climbed 3% to 870p this morning after the media giant revealed a double-digit expansion in its full-year profits.
Boasting pre-tax profits of £282m, DMGT smashed analyst earnings expectations of £270m for the year. The company used its strong cash generation to slash its net debt position by £40m to £573m.
The Mail On Sunday publisher — which has exploited an impressive growth opportunity with its Mail Online website — was boosted by its business-to-business and consumer divisions.
Giving its outlook for the rest of the year, Daily Mail & General Trust added:
“We have entered the new financial year with our businesses performing well and in line with our expectations … First quarter consumer trading to date has been satisfactory but we remain cautious about the medium term outlook, given continuing external uncertainties, particularly for UK advertising. A continued focus on cost efficiencies should provide margin stability.”
With a market cap of £3.1bn, DMGT’s shares trade at 16 times expected earnings, and offer a prospective dividend yield of 2.4%.
Of course, whether that valuation, today’s announcement and the future prospects for the media industry all combine to make shares of Daily Mail General Trust a ‘buy’ remains your decision.
> Mark does not own any share mentioned in this article.