Daily Mail shares are getting crushed

Shares in Daily Mail General Trust (DMGT) are diving on Thursday morning after the newspaper group downgraded forecasts for the year amid a slowdown in advertising.

DMGT, best known for putting out the Daily Mail and the Mail on Sunday, opened up as much as 9% lower and is still down over 7% after an hour and a half of trade in London.

DMGT's half year results on Thursday showed revenue up 3% to £950 million, but underlying revenue down by 1% and pre-tax profits down 11% to £138 million.

DMGT downgraded estimates for operating margins at its dmg media subsidiary, blaming "further deterioration in the print advertising market."

Liberum's media analyst Ian Whittaker says in a note this morning:

dmg media revenues declined 3% organically in H1. While digital advertising revenues grew strongly, up 23% organically, they did not manage to offset the weak print advertising revenues which were down 13% on an underlying basis in HY. Management therefore reviewed its FY outlook for dmg media and expects operating margins to come in at 10% versus the 13% indicated previously mostly due to the UK print advertising market which seems under pressure. This might come as a surprise given peers have indicated a better month of April after a very volatile and weak start to the year.

Whittaker is more upbeat on the results than many investors and says he expects DMGT's new CEO, who starts in June, to be a "catalyst" to unlock value. New CEO Paul Zwillenberg joins from The Boston Consulting Group.