British newspaper publisher Daily Mail & General Trust Plc beat consensus forecasts with an 8-percent rise in annual profit and said it may sell its regional newspapers, sending its stock sharply higher.
Shares in the owner of the Daily Mail and Evening Standard tabloids jumped 11.2 percent to 752 pence on Wednesday, the biggest gainer among FTSE 100 stocks.
"The shares have gone up so much because it's a very conservative company, very well run, takes long-term views and all of a sudden they've decided to be quite active," said Alex DeGroote, an analyst at brokers Panmure Gordon.
"The market likes companies that restructure. This is a positive surprise. This validates a sum-of-the-parts approach to the valuation."
The company said it had been conducting a review of its regional newspaper division, Northcliffe Newspapers, and had decided to look into its possible sale. It said it would return a substantial portion of any proceeds to shareholders.
"We'll only make a decision when we see what people are willing to pay for it ... It's going to take a while," Finance Director Peter Williams told a conference call.
One analyst estimated the value of the regional papers, which generate a third of group profit, at between 1.2 billion and 1.6 billion pounds ($2.8 billion), adding it would probably be towards the top end of that range.
Comments
Comments are closed.