B2B pays off for Daily Mail - just

Although Daily Mail and General Trust's newspaper business still fails to buck industry trends by pulling in more readers, management's focus on its business-to-business (B2B) operation has at least managed to offset the damage, so far.

Accounting for 60% of group revenue, B2B grew by 4% in the first quarter, boosted by a 14% jump at the events business to £47 million. But even here, information services - a provider of analysis for the property, education, energy and finance sectors - rose by 6% like-for-like to £99 million, less than expected. And both DMGT's risk management solutions business and business publisher Euromoney Institutional Investor reported underlying sales down by 1%.

Revenue at the newspaper and online division fell 2% to £190 million and newspaper circulation by 4%. But this trend is being seen across the industry as circulation numbers fall, although Daily Mail titles still grew market share to a record 23%. And with many media groups still struggling to nail the art of making money online, DMGT's popular MailOnline website is going from strength to strength. The number of unique global monthly browsers surged by a quarter in December to a record 200 million, with average global daily unique browsers at 12.3 million.

Newspaper adverts are becoming less profitable as more of the world continues to turn to their screens for news, but online ad revenue soared by 21% to £18 million, partly offsetting the £5 million (10%) decline in print ad revenues, to £48 million at the Daily Mail and the Mail on Sunday. Other digital ad revenue, mainly Wowcher, was up by over a third. And, encouragingly, total underlying advertising revenue for the media business is up 4% in the five weeks since 28 December - it was 5% after adjusting for Metro, which did not publish in January this year.

Management are confident of meeting guidance, but net debt did increase to £672 million from £603 million at the end of 2014, due to pension contributions and as a result of a premium bond repayment.

At 874p, Daily Mail shares trade on 16 times forward earnings and are attractive enough for JP Morgan to stick with its 'overweight' rating.

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