(Adds exec comments, analyst reaction, shares)
By Costas Pitas
LONDON, Feb 5 (Reuters) - The publisher of Britain’s Daily Mail tabloid and leading news website MailOnline posted a 6 percent increase in first-quarter revenue on Wednesday, boosted by a jump in online advertising and growth in events and its financial information service.
Shares in Daily Mail & General Trust rose to a 13-year high after the update and were trading up 4.6 percent at 1,013 pence by 0937 GMT.
Underlying revenue at the group, whose MailOnline has grown to be among the world’s most successful newspaper websites and which also publishes the Metro freesheet and Mail on Sunday title, reached 472 million pounds ($769 million) in the three months to Dec. 31.
Online advertising revenue grew 5 million pounds to 14 million for the quarter, offsetting a 1 million drop to 53 million in print advertising revenue at the Daily Mail and The Mail on Sunday.
Whereas some British newspapers including The Times and The Sun, owned by News Corp, have placed content behind paywalls, the Daily Mail has pursued an advertisting-led strategy to boost revenue.
Finance Director Stephen Daintith said he expected to see online advertising revenue in the United States to at least double to 10 million pounds and that e-commerce through the site was proving popular with customers.
“You’ll notice you can click through on certain photographs through to an opportunity to buy a dress or a handbag,” Daintith said. “We’ve got commission rates of anything between 5 percent and 12 percent on retail price that we benefit from.”
MailOnline continued its strong growth, notching up 162 million visitors in December, up 41 percent on last year, and 9.9 million daily visitors, up 39 percent, lured by the website’s mix of celebrity news, pictures and human interest stories.
Circulation revenue at the print titles fell 2 percent year-on-year, though a drop in the number of copies sold was in part offset by cover price rises last February.
Analysts at Citi, who rate the shares “buy”, said the newspaper business was seeing the benefit of an improving economic outlook in Britain and the shift to online, while momentum in business-to-business (B2B) was better than the market expected.
Overall, the group saw 10 percent growth in B2B activities, which includes events, financial information service Risk Management Solutions, and data and analysis platforms in education and energy.
DMG also said it was part of discussions on strategic options for property website Zoopla, of which it owns 52.6 percent. Citi said the Zoopla comment confirmed a sale is possible and leaves DMGT with a chance of being debt free by the end of the year. ($1 = 0.6137 British pounds) (Editing by Paul Sandle and David Holmes)