Daily Mail rise whittled down by US ventures

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The Independent Online
LOSSES on two new US ventures dented the half-year figures of the Daily Mail and General Trust, writes Gail Counsell.

As expected, the newspaper publisher took a pounds 9.7m exceptional charge in respect of its share of the profits and losses of associated undertakings.

The charge includes pounds 9.6m for its share of the losses of Whittle Communications, the specialist US interactive television network in which it has a 24.9 per cent stake. It also includes pounds 2.6m for the group's share of the losses of Whittle Schools, formed to manage state schools in the US. Its 22 per cent stake in the venture has risen to 40 per cent as part of the refinancing of the project.

Both ventures - carried in the accounts at nil cost - have required heavier-than-expected investment. The company said in January that it would have to provide between pounds 15m and pounds 20m to cover its share of full-year losses and development costs.

Despite problems in the US, the DMGT has rewarded shareholders with an 11 per cent increase in its interim dividend to 4p (3.6p).

The rise is substantially more than its 7 per cent rise in earnings per share to 13p, although if adjusted for exceptional items, the figure improves to 21.2p, a 26 per cent increase.

Pre-tax profits in the six months to 3 April rose 14 per cent to pounds 24m ( pounds 21m) on the back of turnover up 12 per cent at pounds 368.3m. Newspapers provided the lion's share, accounting for trading profits of pounds 42.8m and turnover of pounds 314.9m.

Trading profits rose 19 per cent to pounds 43.2m. However, that was before the pounds 9.7m loss ( pounds 1.2m loss) in respect of associated undertakings.

A higher tax charge of pounds 9m ( pounds 7.9m) was balanced by a lower interest charge of pounds 8.9m ( pounds 10.4m). Net borrowings at the end of the period were up pounds 11m to pounds 212m, giving gearing of just under 50 per cent.

The group was relatively bullish about its trading prospects, saying these were 'responding well to the general improvement in the economy and in the advertising markets in particular'.