Yesterday DMGT released its half-year results for the six months leading up to March 31st 2017. In the immediate aftermath of its publication, the group’s shares fell 9 percent despite the results showing that MailOnline in particular was making “good progress towards profitability” despite all the well-publicised headwinds facing digital advertising.

The biggest reason for the drop appears to be the downgrading of growth expectations for DMGT’s information services and an 8 percent fall in adjusted operating profit before tax to £105 million as a result. Chief executive Paul Zwillenberg’s statement reads, in part:

“We are encouraged by the underlying profit performance at dmg media, where MailOnline continues to increase its revenue, taking real strides on its path to profitability. Gains across the portfolio are offset by more challenging conditions for some of dmg information’s businesses and by our planned investment in growth areas such as Xceligent [DMGT’s hyperbolically named real estate data service.”

dmg information ‘s underlying operating profit fell 17 percent, while dmg events – the growth of which has been a priority at DMGT – grew an underlying two percent. Of the former, the results note:

“The challenging market conditions facing Hobsons’ Admissions and Genscape’s Locus Energy business are expected to persist and, for the Full Year, dmg information is expected to achieve an overall underlying revenue growth rate in the low-single digits, compared to the mid-single digit guidance given in January 2017. The weaker than previously expected revenue performance is likely to result in the Full Year operating margin being lower than last year, albeit still in the mid-teens, as previously guided to.”

Let’s examine the MailOnline results specifically for a moment. The words ‘path to profitability’ are plastered all over the results, with the tone of a patient driver convincing their passengers that, yes, we are nearly at Alton Towers. The results make clear that in terms of raw reach, MailOnline continues to be a significant presence on the digital media stage, with upwards of 49 million average viewers per day across their platforms. 

While the headline figures are likely to be the growth in its Snapchat and Facebook audiences (698 and 349 percent YOY), the 8 percent growth in daily viewers of MailOnline to 15 million is worth mentioning, particularly since ABC figures show that MailOnline’s daily viewer number has been down month-on-month for the last quarter. Consequently DMGT is making noise about the growth on their other platforms – and trailing its future Daily Mail Online TV platform as well.

The presentation that accompanied the release makes plain the extent to which dmg media is dependent on the UK to generate its revenue, with over £300 million of the total £350 million it generates from its media holdings coming from the UK (£24 million comes from US, up 26 percent on an underlying basis).

By contrast its former US-based offering Elite Daily appeared to be in something of a holding pattern (it made an operating loss of £4 million), hence the vitriol-laden sale to Bustle earlier this year.

Between MailOnline’s success and an increase in circulation revenue (due to increases in cover prices across its titles, since circulations continue to fall) the results note that declining print advertising revenue “was more than offset by 2 percent growth in circulation revenue to £155 million and by MailOnline, which grew revenues by 35 percent, or 19 percent on an underlying basis, to £60 million”.

Regardless of what you think about the Daily Mail’s editorial decisions (and there’s been plenty said in the wake of their quiestionable (putting it mildly) coverage of the May Manchester attacks), it’s impossible to deny that they’re an enormous presence on the digital publishing stage. It’s long been the maxim at TMB that the digital advertising ecosystem would only allow a few players of enormous size to survive given the pressures on digital ad prices. It looks like MailOnline’s maintaining its position as one of the few big fish able to survive in that shrinking pond.

The issue is that, given how reliant upon its information services DMGT has been over the past few years, and the legitimate questions about the viability of scale as an end in itself when it comes to advertising, these results show DMGT faltering in areas that should have been easy wins.