Daily Mail and General Trust was one of the biggest gaining FTSE 100 companies today after an analyst said its potential growth had been underestimated.
The company’s share price was up 31p and closed at 592p, a rise of 5.53 per cent.
DMGT’s share price has fallen 17 per cent in the past two months but Merrill Lynch said the company offered ‘compelling value from every angle”.
Full-colour advertising, which the company’s national newspapers will have from 1 January thanks to a new printing plant at Didcot, reduced losses at London Lite and improved B2B data services all contributed to the positive rating.
DMGT finance director Peter Williams said the good news ‘makes a change’from normally gloomy City assessments of consumer media, but warned that share prices may continue to drop despite positive notes.
He said: ‘Most of the analysts have ‘buy’ notes out but all at different prices, but its hasn’t stopped the share price going down until today.
‘It seems to have gone down inexorably along with the consumer media [market] over the past two or three months. But it’s nice to see a little bit of acceptance that newspapers are not completely dead.”
Williams said Independent News and Media chief operating officer Gavin O’Reilly was “being unfair” when he told the Society of Editors conference last week that city analysts were ‘teenage scribblers’who undervalued the media industry.
‘Quite a few of these ‘teenage scribblers’ in fact have buy notes out on newspapers but it hasn’t stopped the share price going down. They are not the ones who buy and sell the shares – that’s the institutions.”
DMGT’s pubslishing rivals appear to have benefited from the positive report: Johnston Press ended the day at 273.75p, a rise of 16.25p or 6.3 per cent, and Trinity Mirror ended on 346p, a rise of 11.25p or 3.3 per cent.