10th February, 2010
Daily Mail and General Trust plc (`DMGT')
Interim Management Statement
This Interim Management Statement covers the first quarter of DMGT's financial
year, the three month period to 31st December 2009. It describes the Group's
financial position and performance during the period, updated to the latest
Summary of the period:
* Revenue for the first quarter was £482 million, down 15% on last year, as
expected, but only down 8% on an underlying# basis.
* Underlying growth from non-event B2B businesses.
* Improved margins resulting in operating profit* near to last year's strong
* Encouraging quarter for consumer operations with improved trading in new
* Net debt reduced to £1,030 million.
Martin Morgan, Chief Executive, said:
"Trading in the first quarter has been ahead of our expectations and the new
calendar year has started well, but we remain cautious about the outlook for
the rest of the year, particularly in the UK. We continue to manage the
business actively to defend profitability with the focus on driving organic
growth remaining our priority."
Business to business (B2B)
Revenues from the Group's B2B operations in the quarter were £186 million, 20%
lower than for the corresponding period last year, but an underlying# fall of
only 7%. The performance in the quarter reflects underlying# growth in revenues
from Risk Management Solutions and DMG Information, offset by lower revenues
from DMG World Media and Euromoney. Overall, operating margins* have improved,
resulting in a higher operating profit*.
Risk Management Solutions
RMS's revenues for the quarter rose by 2% to £35 million, an underlying#
increase of 7%, with stable margins*. This reflects continued solid growth from
its core modelling business as a result of the improving conditions in the
insurance and capital markets. Looking forward, there are encouraging signs
that the sales pipeline is strengthening for the rest of the year.
DMGI's revenues for the quarter fell by 6% to £49 million, with an underlying#
increase of 6%, although operating profits* were well ahead of last year. The
property information companies delivered an underlying# increase of 12%, driven
by an improvement in residential transaction volumes in the UK, which remain
significantly below the long-term norm, and by slight improvements in the
commercial property markets.
In other markets, revenues continued to grow in the education, financial and
energy information markets and we remain encouraged by the prospects for these
DMG World Media
DMG World Media's revenues for the quarter were 47% lower at £31 million,
reflecting the divestments of businesses last year as part of our strategy to
focus the portfolio on the B2B sector, and the absence of a biennial event.
There was an underlying# decrease of 11%.
In the quarter our major shows in the Middle East and the several events in the
technology sector operated in line with expectations and bookings for events
early in 2010, such as the New York International Gift Fair, are moderately
Euromoney Institutional Investor
Euromoney released its interim management statement on 21st January. First
quarter trading continued in line with its expectations. Revenues for the
quarter fell by 16% to £71 million, an underlying# decrease of 17%.
As expected, revenues from subscription-based products declined as the lag
effect of cuts in headcount and information buying by customers during the
first half of 2009 worked their way through into revenues. Revenues from events
and training continued to decline at similar rates to those experienced from
the second quarter of financial year 2009 after tight cost controls were
implemented by customers from January 2009. In contrast, the demand for
advertising, which was the first revenue stream to be hit by the credit crisis,
is showing possible signs of recovery.
Revenues from the Group's consumer operations in the quarter were £297 million,
12% lower than for the corresponding period last year, an underlying# fall of
9%. These revenues include those of DMG Radio Australia (DMGRA) up until 16th
December 2009 after which date it is being accounted for as an associate.
Overall, margins* improved slightly and operating profit* was broadly
Headcount fell by 334 (4%) in the quarter, due to further reductions at
Harmsworth Printing, Northcliffe Media and in Associated Newspapers through the
closure of London Lite. A&N Media will benefit from lower newsprint prices this
Associated Newspapers' total revenues for the quarter fell by 12% to £208
million, an underlying# fall of 6%, after excluding the Evening Standard and
London Lite (which was closed on 13th November, 2009). Underlying# circulation
revenues were 6% lower than the same period last year. The investment in a
sustained subscription/home delivery initiative, the upfront cost of which is
charged against circulation revenues, has contributed to an improved
circulation performance for both the Daily Mail and The Mail on Sunday. Both
titles achieved an increased market share in the quarter.
Total underlying# advertising revenues in the quarter fell by 11%. Within this
figure, revenues from Associated's newspaper operations fell by 8%. Display was
down 8%, classified down 10% and digital up 4%. Retail, the largest display
category, grew by 7% in the quarter and motors advertising was flat. All other
major categories were down year on year. The revenues of AN Digital from its
core operations in jobs, property and motors fell by 13%, due mainly to the
depressed recruitment market.
There is a continuing focus on costs, which fell by 7% in the quarter on a like
for like basis, despite significant investment in promotional spend on the
Trading in January has shown a marked improvement on last year, with
advertising revenue up year on year in the newspapers and their online
"companion" sites, although, as usual, visibility on future advertising
performance is very limited. At AN Digital too there are clear signs that
things are improving, particularly in jobs and property.
Northcliffe Media's total revenues for the quarter were down by 15% to £73
million. Of this, UK revenues were down 14% and International down 23% (down an
underlying 27% in local currency).
In the UK, comparisons with the previous year are slightly distorted by the
inclusion of a 53rd week ending 4th October in the prior financial year. We
estimate that underlying# revenues for the quarter were 11% below last year.
All revenue percentages below are similarly adjusted for improved
UK advertising revenues for the quarter were 13% lower than the same period
last year, compared with a year-on-year decline of 18% in the previous quarter.
Trading conditions were challenging particularly for recruitment advertising
which was down 33%. In addition, retail declined by 7%, Property was down 5%
and Motors fell by 8%. January has seen a continuing improvement in advertising
UK digital revenues for the quarter were 11% higher than the same period last
year, supported by good performances from Property, Motors and Retail.
UK circulation revenues for the quarter were 8% below last year. Copy sales of
daily and weekly paid for titles declined by 8% and 5% respectively in the July
to December 2009 ABC period (unaudited).
The continuing transformation of Northcliffe's cost base resulted in UK
publishing costs being 18% lower than last year. As a consequence, profits*
were up on the previous year.
Net debt / financing
Net debt at 31st December, 2009 fell from £1,049 million at 4th October, 2009
to £1,030 million. The £64 million proceeds from the sale of 50% of DMGRA were
partly offset by the traditional delays in debtor collection over the New Year
The Group spent £10 million on acquisitions, all being pre-contracted payments,
including shares issued under subsidiary option plans.
In December 2009, the Group extended the maturity of its bond debt by issuing
further 5.75% Bonds due 2018 in exchange for £144 million of 7.5% Bonds due
DMGT's weighted average number of shares in issue for the full year is
currently estimated at 382.9 million (2009 382.9 million).
DMGT has taken its share of the final dividend from Euromoney in the form of a
scrip. This has increased the Group's equity interest from 66.8% to 67.1%,
though it is expected to be diluted back towards 66% on or after 12th February
through the vesting of the final tranche of Euromoney's capital appreciation
* References to operating profit are to adjusted operating profit, which
exclude amortisation and impairment of intangible assets and exceptional items.
#Underlying revenue is revenue on a like for like basis, adjusted for
acquisitions, disposals and closures made in the current and prior year and at
constant exchange rates. For A&N Media, the underlying percentage movements
compare 13 weeks with 13 weeks and exclude the Evening Standard and London
The average £:$ exchange rate for the first quarter was £1: $1.63 (against £1:
$1.57 in the same period last year). The rate at 31st December, 2009 was $1.61,
compared to $1.59 at 4th October, 2009.
For further information
For analyst and institutional enquiries:
Peter Williams, Finance Director, DMGT 020 7938 6631
Nicholas Jennings, Company Secretary, DMGT 020 7938 6625
For media enquiries:
Andrew Honnor / Tom Rayner, Tulchan Communications 020 7353 4200
A conference call will be held with City analysts at 8.00 a.m. on 10th
February, 2010. The dial-in number is +44 (0) 1452 568 051; conference code:
52079544. For a replay of the call, the dial-in number is +44 (0) 1452 550 000
and the replay code: 52079544#.
Next trading update
The Group's next scheduled announcement of financial information will be a
pre-close trading update, provisionally scheduled for 30th March 2010. This
will be followed on 19th April, 2010 by an Investor Day.
This Interim Management Statement (IMS) is prepared for and addressed only to
the Group's shareholders as a whole and to no other person. The Group, its
directors, employees, agents or advisers do not accept or assume responsibility
to any other person to whom IMS is shown or into whose hands it may come and
any such responsibility or liability is expressly disclaimed. Statements
contained in this IMS are based on the knowledge and information available to
the Group's Directors at the date it was prepared and therefore the facts
stated and views expressed may change after that date. By their nature, the
statements concerning the risks and uncertainties facing the Group in this IMS
involve uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. To the extent that
this IMS contains any statement dealing with any time after the date of its
preparation such statement is merely predictive and speculative as it relates
to events and circumstances which are yet to occur. The Group undertakes no
obligation to update these forward-looking statements.
Daily Mail and General Trust plc
Northcliffe House, 2 Derry Street,
London, W8 5TT
Tel 020 7938 6000
Fax 020 7938 4626
Registered in England and Wales No. 184594
Not for public release until 7am on 10 February, 2010