In the midst of the UK general election, right-wing leaning newspaper publisher Daily Mail & General Trust PLC (LON:DMGT) – shares in which have been one of the strongest performers in the media sector in 2019 – will release its full-year results.
The stock has levelled off a little since jumping 54% earlier this year, but shareholders will be hoping for it to regain ground once the numbers are out, especially after the firm upped its guidance for consumer media in July.
Although steady revenues are all it expects, this is much better than the high single-digit declines previously feared, with print media on a downward trend amid falling circulation and aversion from advertisers.
Last week, sector rival and Daily Mirror owner Reach PLC (LONLRCH) said it managed to slow its print declines, with the consumer media also expected to get a short-term boost from government advertising around Brexit and looking ahead to the election – now just two weeks away.
Daily Mail shareholders will also be on the lookout for any hint of a prospective bid for fellow right-leaning news outlet, The Telegraph, which was put on the block earlier this month, and which market watchers have called a “good fit” for DGMT.
DS Smith to wrap up first half
Thursday’s interims are likely to confirm progress in the group’s margins, said to be within the upgraded 10-12% target range a few weeks ago, supported by new business wins in Europe and North America.
The current year may still be more weighted on the second half than it usually is, due to start-up costs at its Indiana plant and the continuing aggregation of Europac acquisition synergy savings.
“The debate has become somewhat polarised with people like ourselves viewing DS Smith as a significant adder of value which is reflected in its margins rather than a commodity producer at the whim of raw materials,” analysts at Peel Hunt said in a preview note.
IG bets are on revenue growth
There is potential for upside if the quarterly revenue progress continues at the current rate, reckons analysts at Peel Hunt, with the second quarter expected to deliver between £105mln and £135mln in revenues.
In the three months to 31 August, IG posted sales of £129mln, broadly flat year-on-year, while the number of active clients rose 5% to 92,300, although average revenues per customer fell 5% to £1,344.
That was despite concerns over the last year that leverage limits on the firm’s retail clients – who are generally more prone to suffering large losses – would impact revenues going forward.
When leverage limits were brought in across the UK and EU last year, IG’s profits plunged by a third, however investors may have been relieved that its last update showed revenues for the region covered by the regulations, which accounts for around 52% of IG’s revenue, were 6% higher than the second to fourth quarter average last year.
Significant announcements expected for Thursday December 5:
Interims: DS Smith plc (LON:SMDS),
Trading announcements: IG Group Holdings PLC (LON:IGG)
Economic data: US jobless claims, US trade balance, US factory orders