Daily Mail publisher sells energy arm for £300m in latest retreat
THE owner of The Daily Mail has cashed in its energy information arm for £300m in the latest stage of a radical pruning that has increased its focus on the tough newspaper market.
DMGT announced yesterday that it had sold Genscape, which provides data on oil and gas markets, among other fields of energy, to Wood Mackenzie, the Edinburgh-based consultancy arm of US giant Verisk Analytics.
The deal comes two years after weak trading, especially in the US solar energy market, forced DMGT to knock £140m off the book value of Genscape leaving it rated at only £141m.
Paul Zwillenberg, DMGT chief, said the business had been turned around by shutting down unsuccessful ventures. DMGT would however “not be the best long-term owner”, he added.
The sale, which leaves the company with £200m cash on its books, is just the latest that reduces its complexity.
DMGT recently offloaded its 49pc stake in the listed financial publisher Euromoney and returned cash to shareholders in a landmark transaction that increased the dominance of Lord Ro- thermere, its chairman. His family founded the company and the 51-yearold now owns a 36pc financial interest as well as all the voting rights available in its unusual share structure.
Lord Rothermere and Mr Zwillenberg, his former college room-mate, have also shut down an unsuccessful US property information venture and sold a major stake in the owner of Zoopla, among other disposals.
The step-by-step retreat from professional markets has increased DMGT’S exposure to the challenging consumer media sector, which is increasingly unpopular with institutional investors as print declines and massmarket publishers struggle to make a living from digital advertising. In the latest national newspaper circulation figures, The Daily Mail lost 8pc of its sales compared with July last year. Meanwhile doubts persist over the ability Mail Online, its free website, to convert its large audience into profits.
Credit Suisse analysts warned last night that the sale further increases the company’s reliance on the Mail titles. They applauded the price achieved, however, which equates to more than 20 times the cash earnings from the energy information business.
Despite investor concerns, Lord Rothermere and Mr Zwillenberg have attempted to further expand DMGT’S consumer publishing interests. The company has recently been an unsuccessful bidder for the Irish newspaper group Independent News & Media and for Dennis Publishing, the company behind the humour magazine Viz.
Sources said DMGT is now pursuing the national newspaper The i, which has been put up for sale as part of JPI Media, the portfolio of mostly local titles formerly known as Johnston Press.
The retrenchment of DMGT and its increasing focus on consumer media has prompted some analysts to question whether it will remain listed.