Annual Financial Report

Full Year adversely affected by Covid-19; strong financial position and continued investment

· Group results down due to Covid-19 pandemic and planned B2B investment:

o Revenue of £1,211m, down 10% underlying¹

o Cash operating income²of £110m, 9% margin

o Adjusted³ operating profit of £90m, 7% margin

o Adjusted profit before tax of £72m, down 36% underlying

· Adjusted EPS down 32%; reflects reduced profits partially offset by reduced number of shares

· Statutory4 revenue £1,203m, statutory profit before tax £52m and statutory EPS 83.1p

· Strong financial position maintained: pro forma net cash £168m5 and £373m of committed undrawn bank facilities; statutory net cash £185m

· Full year dividend increased +1% to 24.1p

· B2B subscription businesses delivered resilient performance, with underlying revenue growth from Insurance Risk, US Property Information and EdTech

· Consumer Media, UK Property Information and Events & Exhibitions' results impacted by Covid-19 following a good first five months

· Active portfolio management continued with £113m acquisitions and investments and £311m disposals in FY 2020:

o Recent increased investment in Cazoo; fully diluted holding c.20% as at 7 October 2020, £409m valuation

· Suspension of formal guidance continues

Paul Zwillenberg, CEO, commented:

"Our experience through Covid-19 has demonstrated the benefits of the transformation we have implemented over the last four years. The pandemic has brought significant disruption and change to our markets but the strategic and financial actions we have taken have ensured that we coped well and remained on the front foot.

We have benefitted from our diversified portfolio of market-leading businesses and strong balance sheet. MailOnline performed strongly, growing revenue and profit margin, and RMS achieved a major milestone in the year, delivering a truly unified model and analytics platform that customers are now migrating to. We have also continued our approach of selective investment to take advantage of the opportunities for value-accretive growth ahead. A compelling example of this is our stake in Cazoo which is currently worth over £400 million, a return of over three times on our investment.

I am pleased with DMGT's performance in a highly challenging environment and am immensely proud of the way that everyone at DMGT has responded. We have an embedded performance management culture with a ROI mindset and the Group is resilient, adaptable and future-focused. We will, as always, retain our long-term perspective and our confidence in the future is reflected by the Board's recommendation to increase the dividend to 24.1 pence per share."

Full Year 2020 Financial Results Summary

Segmental performance:

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

* The DMGT Group statutory operating profit shown above excludes the share of operating profits from joint ventures and associates.

· Revenue of £1,211m; underlying decrease -10%: Events and Exhibitions, Consumer Media and UK Property Information were adversely affected by the Covid-19 pandemic, more than offsetting the resilient performance from Insurance Risk, EdTech and US Property Information, which continued to grow throughout the year.

· Cash operating income (Cash OI)² £110m; underlying decrease -29%: primarily due to the operating profit impact of Covid-19 as well as planned increased investment in the B2B businesses, most notably Insurance Risk and Property Information. Cash OI includes £7m of accelerated costs relating to FY 2021 events that have been cancelled or postponed.

· Adjusted operating profit £90m; underlying decrease -35%: reflecting impact of Covid-19 and B2B investment; reduced B2B and Consumer Media profit partly offset by reduced Corporate Costs.

· Statutory operating profit £15m: decreased from £67m in the prior year, primarily due to the reduction in adjusted operating profit.

· Losses from JVs and associates: following the distribution of DMGT's stake in Euromoney in April 2019, the share of adjusted operating losses was £8m compared to profits of £13m in the prior year.

· Adjusted profit before tax (PBT) £72m: down an underlying -36%, including £4m underlying reduction in net finance costs to £10m. Statutory PBT £52m (FY 2019 £134m) with the prior year benefitting from gains on disposals.

· Tax: adjusted tax charge £13m (FY 2019 £29m); with the adjusted tax rate reducing to 18% (FY 2019 20%), including the benefit of reduced US tax. The statutory tax credit was £1m.

· Earnings per share: adjusted EPS down -32% to 26.1p (FY 2019 38.6p). First full year of reduced number of shares at 228m (FY 2019 296m), following the April 2019 Euromoney transaction. Statutory EPS was 83.1p (FY 2019 30.7p) reflecting the profit on disposal of the Energy Information business.

· Pro forma net cash5 was £168m as at 30 September 2020, adjusted to exclude £117m cash expected to be made available to the pension schemes and £100m of lease liabilities recognised following the adoption of IFRS 16. The net cash:EBITDA ratio was 1.4 on this basis. Excluding the adjustments described above, the net cash and net cash:EBITDA ratio as at 30 September 2020 were £185m and 1.3 respectively.

· Portfolio management: the disposal of Genscape, the Energy Information business, in November 2019 reduced DMGT's sector exposure from six to five, further increasing the focus of the Group's portfolio. BuildFax, the US Property Information business, was sold in October 2019. The Group also strengthened its position in existing sectors with bolt-on acquisitions. The 'i' was acquired for the Consumer Media portfolio in November 2019. Landmark Information Group, the UK Property Information business, strengthened its conveyancing capabilities with the acquisition of OneSearch Direct in December 2019. dmg events acquired 11 small events from CWC Group in April 2020, strengthening its presence in Africa and its leading position in the energy sector, as well as a construction event in February 2020. In March 2020 and October 2020, DMGT increased its investment in Cazoo, an online business which aims to transform the way people buy used cars. DMGT's investment stake is now c.20% on a fully diluted basis and was recently valued at £409m.

· Outlook: DMGT manages a diverse portfolio of market-leading businesses. The financial performance in FY 2021 is expected to reflect varying levels of impact from the Covid-19 pandemic and its economic consequences. The Insurance Risk, US Property Information and EdTech businesses are well positioned to deliver continued revenue growth. The outlook for UK Property Information and Consumer Media remains difficult to predict, whilst for Events and Exhibitions, conditions remain particularly challenging. We will continue to invest in our portfolio, to deliver returns consistent with our disciplined approach, and this will impact margins as we build our businesses for the long-term.

Enquiries

A presentation of the Full Year Results will be given at 9.30am on 23 November 2020 and will be followed by a question and answer session for City analysts and investors. The presentation will be available on our website at www.dmgt.com/webcastfy20 and the dial-in number for questions is +44 (0)330 336 9125, confirmation code 6106593.

Financial reporting calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 21 January 2021.

About DMGT

DMGT manages a portfolio of companies that provide businesses and consumers with compelling information, analysis, insight, events, news and entertainment. The Group takes a long-term approach to investment and has market-leading positions in consumer media, insurance risk, property information, education technology and events & exhibitions. In total, DMGT generates revenues of around £1.2bn.

Notes

1 Underlying growth rates are on a like-for-like basis, see pages 30 to 32. Underlying revenues, cash operating income2 and operating profits are adjusted for constant exchange rates, the exclusion of disposals and business closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition. Cash operating income, operating profits and finance costs are also adjusted in respect of IFRS 16, so the calculation methodology is consistent across years. For events, the comparisons are between events held in the year and the same events held the previous time and underlying growth includes the adverse impact of event cancellations and postponements. Consequently, underlying growth rates include all costs for events that were scheduled in FY 2020 and were cancelled or postponed, but exclude all costs associated with events originally scheduled in FY 2021. For Consumer Media, underlying revenues exclude low margin newsprint resale activities. The underlying change in the share of operating profits from joint ventures and associates excludes Euromoney Institutional Investor PLC.

2 Cash operating income (Cash OI) is calculated by adding back depreciation and amortisation expenses, which are non-cash items, to adjusted operating profit and then deducting capital expenditure. The depreciation charge on the additional right-of-use assets, which has resulted since 1 October 2019 from the adoption of IFRS 16, the lease accounting standard, is not added back when calculating Cash OI.

3 Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. The Board and management team use adjusted results, rather than statutory results, to give greater insight to the financial performance of the Group and the way that it is managed. Similarly, adjusted results are used in setting management remuneration. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, amortisation of intangible assets arising on business combinations, pension finance credits and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 24 to 27.

4 The statutory results are IFRS figures before any adjustments. Statutory revenue, operating profit and profit before tax figures are for continuing operations only and exclude discontinued operations, namely the Energy Information business, Genscape.

5 The actual net cash position as at 30 September 2020 was £185m including £100m of additional lease liabilities in respect of the adoption of IFRS 16, the lease accounting standard, and the net cash:EBITDA ratio was 1.3. The lease liabilities largely reflect the future operating costs of renting office space and are not considered a component of net debt when the Board reviews the Group's available capital. Consequently, they are excluded from pro forma net cash. Excluding the additional lease liabilities, net cash would have been £285m. However, £117m has been made available to the Group's pension schemes but continues to be held as cash by DMGT. The pro forma net cash of £168m as at 30 September 2020 is stated after adjusting net cash to exclude the £117m. The pro forma net cash:EBITDA ratio, including lease costs in EBITDA, was 1.4.

The pro forma net cash of £168m includes gross cash of £363m, £204m of bond debt and £8m net cash in respect of collateral and derivatives. Gross cash includes cash, cash equivalents and short-term deposits, net of overdrafts, and excludes the £117m made available to the pension schemes.

~ Percentages are calculated on actual numbers to one decimal place.

The average £:US$ exchange rate for the year was £1:$1.28 (2019 £1:$1.28). The rate at the year end was $1.29 (2019 $1.23).

Daily Mail and General Trust plc

Northcliffe House, 2 Derry Street,

London W8 5TT

www.dmgt.co.uk

Registered in England and Wales No. 184594

Full Year 2020: Strategy Review

2020 has been an extraordinary year for everyone. We are proud that the adaptability and dedication of DMGT's employees, customers and business partners enabled a swift, smooth and safe transition to remote working and a subsequent return to the office. Uninterrupted product delivery was achieved throughout, delivering our usual high standards across the Group, with the unfortunate exception of our physical events which all had to be cancelled following the full onset of the pandemic in March.

Covid-19 actions

Several initiatives were implemented in response to the Covid-19 situation. There were measured reductions in discretionary spend and, where appropriate, headcount, notably within Consumer Media, Events and Exhibitions and UK Property Information. Investment initiatives were re-prioritised, reflecting changing expected returns, particularly to pursue opportunities as sectors experience faster digitisation trends. A temporary plan was introduced replacing a portion of salary of higher earners with equity in DMGT and this plan ended in June.

We continue to support the communities we serve. Mail Force, a charity to source personal protective equipment (PPE) for the NHS, was established, together with Salesforce, in April. It has raised over £11m to date, including generous donations from the Mail's readers, DMGT, Salesforce and other individuals. Landmark provided free access to environmental information to support the design of NHS Nightingale hospitals and Hobsons gave free access to Naviance Curriculum, benefitting more than three million US students. We committed to operating Metro at a loss to ensure the provision of free newspapers for keyworkers and our news titles have supported small businesses, providing £5m of free advertising space.

Strategic priorities

In recent years, DMGT has streamlined its portfolio of businesses and is now focused on assets with the potential to drive compelling returns through strong cash flow generation and, or, growth in capital value. The balance sheet has been strengthened significantly over that time, moving into a net cash position. These actions leave the Group well positioned to manage through the economic repercussions of Covid-19 and to continue investing in our businesses to enhance the value of the portfolio.

Importantly, the Group's strategy remains the same. We have continued to make good progress against the three strategic priorities which have served DMGT well in its transformation to date.

· Increasing portfolio focus: through the disposals of Genscape and BuildFax, we reduced our sectors from six to five. The Group also invested selectively to strengthen existing capabilities in Consumer Media, UK Property Information and Events and Exhibitions. DMGT has maintained a balanced portfolio by geography, business model and across our three portfolio roles: Predictable performers, Growing and delivering, and Businesses for the future.

· Improving operational execution: excellent operational execution is embedded in our culture and is a continuous process. Our operational response to the Covid-19 situation demonstrates our agility in this regard, with remote publishing of our newspapers being just one example of how we adapted our operations. Disruption in digital markets has accelerated and we have responded by re-prioritising our product development investment initiatives. We remain committed to ensuring that a high-performance culture pervades everything that we do, through a clear ROI mindset and a focus on cash operating income.

· Maintaining financial flexibility: the balance sheet remains strong with pro forma net cash of £168m. We will take advantage of attractive opportunities as they arise, investing for the long term through both organic investment and acquisitions.

Capital allocation and dividends

The Group has always taken a long-term approach to capital management and DMGT's capital allocation framework remains unchanged. Organic investment is DMGT's priority and was equivalent to 10% of revenues in FY 2020. The Group continues to invest through the cycle and does not focus on short-term EPS growth. Following reconsideration by the Board during the year, DMGT also remains committed to its policy of delivering dividend per share growth in excess of inflation.

With its strong balance sheet, DMGT has capacity for meaningful acquisitions and will remain highly disciplined in its use of capital. We will prioritise the allocation of capital towards opportunities that build on our skills, combining proprietary content, data science and sophisticated analytics, particularly those that deliver insights about risk.

Group Financial Review Full Year 2020

This review of the audited results for the year ended 30 September 2020 focuses principally on the adjusted3 results, to give a more comparable indication of the Group's business performance. The adjusted results are summarised below:

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Revenue

Group adjusted revenue for the year, including discontinued operations, was £1,211m, an underlying¹ decrease of 10%. Adjusted revenues decreased 14% as the benefit of acquisitions was more than offset by the effect of disposals. Underlying growth was delivered in subscriptions and digital advertising but was more than offset by the decrease in events, print advertising, circulation and transactions, which were significantly affected by the pandemic during the final seven months of the year. The revenue performance for our B2B businesses and our Consumer Media business, on a reported and underlying basis, is summarised below.

* The Energy Information business, Genscape, was disposed of in November 2019.

Cash operating income

Cash operating income ('Cash OI') was £110m, a £52m decrease compared to the prior year. The Group Cash OI margin was 9%, compared to 11% in the prior year. Cash OI is considered by the Board to be a good indicator of the underlying cash generation of the businesses and it is included as a core element of the incentive plans for all senior management teams. The underlying decrease of 29% was primarily due to the adverse impact of the Covid-19 pandemic on the profitability of Events and Exhibitions, UK Property Information and Consumer Media. It also reflects planned, increased investment in Insurance Risk, Property Information and EdTech. The absolute reduction includes the accelerated recognition of £7m of costs relating to cancelled or postponed events that were scheduled for FY 2021. Corporate cash operating costs decreased by £9m, partly offsetting the underlying reductions in both B2B and Consumer Media Cash OI.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

* The Energy Information business, Genscape, was disposed of in November 2019.

Operating profit

Adjusted operating profit of £90m decreased by 35% on an underlying basis and 38% on a reported basis. The Group adjusted operating margin was 7%, compared to 10% in the prior year. As described above, the reduction reflected the impact of the Covid-19 pandemic on revenues as well as investment in the B2B portfolio. The large majority of product development and technology costs continued to be expensed, not capitalised.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

* The Energy Information business, Genscape, was disposed of in November 2019.

** The DMGT statutory operating profit shown above excludes the share of operating profits from joint ventures and associates.

UL: Underlying change

Excluding Corporate costs, the B2B businesses generated 55% of the adjusted operating profit in the year, with Consumer Media contributing the remainder. More than half of the Group's adjusted operating profit was generated from outside the UK, with well over a third coming from North America.

Profit before tax

Adjusted profit before tax was £72m, an underlying decrease of 36%, with the decrease in adjusted operating profit partly offset by reduced net finance costs. Including the impact of the Euromoney distribution, adjusted profit before tax was £73m less than the prior year.

The adjusted tax charge was £13m, a decrease of 57% on last year, due to the reduction in profit before tax and a decrease in the adjusted tax rate to 18%. Adjusted earnings per share of 26.1p decreased by 32%.

The statutory profit before tax for the year was £52m, a decrease of £82m on the prior year, due to the lower operating profit and the prior year benefitting from gains on the disposal of continuing operations. Statutory basic earnings per share include the benefit on the disposal of discontinued operations, Genscape, and were 83.1p, a 171% increase on the prior year.

Dividend

The Board reconsidered the dividend policy carefully during the year and, despite the weaker profit outcome and deteriorating global economy, resolved to leave it unchanged. The policy is to grow the dividend per share in real terms and, in the medium term, to distribute around one-third of the Group's adjusted earnings. It aims to deliver a reliable and predictable dividend growth trajectory, unaffected by fluctuations in earnings or capital gains, while also being sufficiently prudent to make significant investments in the long-term future growth of the business.

The decision to recommend a real increase in the dividend reflects the Board's conviction in the appropriateness of the policy and DMGT's ability to deliver earnings growth over time, underpinned by a strong balance sheet.

The full year dividend increased by 1% to 24.1p.

Statutory reconciliation

The table below sets out the reconciliation from statutory profit before tax to adjusted profit before tax. More detail and explanations are provided on pages 24 to 27.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Outlook for FY 2021

The duration and severity of the Covid-19 pandemic remains unclear, with a range of possible outcomes over different timeframes. Consequently, it is still prudent not to provide formal quantitative guidance. What is certain is that we will remain alert, adjusting our behaviour and actions as circumstances change. The Board is confident that DMGT is positioned to withstand these uncertainties of the period ahead and to continue with its long-term approach.

Group: the underlying financial performance in FY 2021, for the Group as a whole, will depend on the dynamics of the individual businesses, as described below.

B2B: there will be continued significant organic investment in FY 2021, reflecting the opportunities to create value over time. At a business level, we are anticipating the following dynamics:

· Insurance Risk: RMS is expected to continue to deliver modest revenue growth in FY 2021 before a gradual acceleration as the new products and services gain further traction with customers. There will continue to be significant investment in the business, albeit at a slightly reduced level to FY 2020. Profitability is expected to improve in FY 2021 and in the following years as revenue growth accelerates.

· Property Information: market conditions for Landmark in the UK are likely to remain volatile because of the Covid-19 pandemic and its economic repercussions, although its revenues may grow following a particularly weak FY 2020. Trepp is expected to grow sales and benefit from increased demand from its customers. Investment to drive long-term growth in both businesses will continue in the coming year.

· EdTech: revenue growth is expected but at a slower rate, due to pressure on customers' budgets in the US education market caused by the disruption of Covid-19. Significant investment to modernise the core EdTech product platforms will continue and this is expected to reduce profit contribution in FY 2021.

· Events and Exhibitions: the market conditions in the events sector are particularly challenging. Social distancing measures, exhibitors' and delegates' willingness to travel internationally and challenging conditions in the oil, gas and construction sectors are all likely to affect revenues and profitability in FY 2021. Big 5 Dubai and Gastech, two of the business's three largest events, are scheduled to be held this financial year in September 2021. The ADIPEC exhibition, the business's largest event, will not be held until FY 2022. The Group's insurance cover is expected to partly offset the adverse impact of Covid-19 on operating profits.

Consumer Media: the advertising market inherently lacks visibility and conditions are likely to remain both challenging and volatile. Circulation volumes are expected to decline from current levels as the structural changes in newspaper readership continue. The cash operating income margin and operating margin will reflect a mix of the revenue dynamics and the benefit of continued cost efficiencies within the newspapers.

JVs and associates: are primarily early-stage businesses that DMGT invests in to generate long-term capital value. DMGT neither controls them, nor is operationally involved, unlike subsidiary businesses. The current expectation is that the JVs and associates will continue to generate significant cumulative net losses in FY 2021.

Net finance costs: are expected to increase in FY 2021 as a result of significantly reduced interest income on DMGT's gross cash deposits due to lower interest rates.

Taxation: the adjusted tax rate will depend on the impact of the Covid-19 pandemic, including on the geographical mix of profits. The FY 2021 rate is currently expected to be in the low twenties.

Business Review

Business to Business (B2B)

Our B2B businesses operate in four sectors: Insurance Risk, Property Information, EdTech and Events & Exhibitions. B2B revenues totalled £606m, down 7% on an underlying basis, compared to 4% underlying growth during the first five months of the year. This reflected the severe impact of the Covid-19 pandemic on the UK Property Information and Events & Exhibitions businesses. The EdTech, Insurance Risk and US Property Information businesses continued to deliver revenue growth and collectively grew revenues an underlying 3%, including 3% over the final seven months of the year. Total B2B revenues decreased by 18% in absolute terms including the impact of disposals. The Energy Information business, Genscape, was disposed of in November 2019, reducing the number of B2B sectors from five to four, and the On-geo and BuildFax Property Information businesses were also disposed of in 2019.

B2B cash operating income decreased by an underlying 27% to £79m, reflecting reduced revenues from Events & Exhibitions and UK Property Information, as well as planned investment in Insurance Risk, Property Information and EdTech. Similarly, B2B adjusted operating profits were down an underlying 32% to £69m. The overall B2B cash operating income margin and operating margin decreased to 13% and 11% respectively.

Outlook: the B2B financial performance in FY 2021 is expected to continue to be affected by Covid-19, particularly that of the Events & Exhibitions business. There will continue to be significant organic investment, reflecting the opportunities to create value over time. The cash operating income margin and operating margin will depend on the rate at which UK Property Information and Events & Exhibitions revenues recover during the year.

Insurance Risk: RMS

The Insurance Risk business, RMS, provides solutions that help insurers, reinsurers, brokers, financial markets and public agencies evaluate and manage catastrophe risks globally. It leads the catastrophe risk modelling industry that it helped to pioneer, delivering models, data, analytical services and software to its customers, mainly through multi-year subscriptions.

Insurance Risk revenues grew by 2% on an underlying and reported basis to £248m, reflecting high contract renewal rates as well as sales to new customers.

Investment increased as planned, to accelerate new product releases and unlock exciting long-term growth potential. RMS continues to expense these development costs as they are incurred and the cash operating income margin and adjusted operating margin reflected this, both decreasing to 14% from 17% in the prior year.

2020 was a milestone year for RMS. In September, the company launched Risk Modeler 2.0 on the cloud-based Risk Intelligence platform. The launch enables, for the first time, a truly unified model and analytics platform, a goal that has been important to RMS's customers. Through Risk Modeler 2.0, RMS's RiskLink models and seven high-definition ('HD') models now run on the platform, alongside the new 'IQ' applications. This significantly enhances the capabilities of Risk Intelligence, which is offered as software as a service (SaaS) and first launched in May 2019. It opens up opportunities for those customers requiring a fully unified platform, as well as enabling further adoption of HD models.

Risk Modeler 2.0 combines familiar features with an enhanced, intuitive user interface. It delivers significantly faster model execution, enables real-time model analytics and improves the price-performance metric for customers, targeting lower total cost of ownership. Customers that have signed up to Risk Modeler 2.0 are now deploying.

Risk Intelligence also offers a suite of new advanced applications that are tailored for specific analytics in support of portfolio management and underwriting tasks. ExposureIQ 1.3 was released in September 2020, helping customers gain a quicker assessment of potential losses before, during and after a catastrophic event, and the first customers have been onboarded. TreatyIQ, which is being made available in December 2020 and is in 'Preview' currently, harnesses Risk Intelligence's scale and architecture to enable the analysis of complex reinsurance portfolios. The 'IQ' products support RMS's expansion into the high-growth Insurance Risk Management Analytics market, which is approaching US$2.0bn in size.

RMS continues to invest in model development, reflecting an ongoing commitment to build upon its market-leading position. A new HD Europe Convective Storm model was released in the year and updated versions of four other existing HD models were made available on Risk Modeler 2.0. RMS's continued investment in models remains important to customers and helped to expand long-term commercial relationships during the year, as well as win new customers.

Priorities in the year ahead: the focus for FY 2021 is on building on the strong foundation of the core business and supporting customers as they deploy on the cloud-based Risk Intelligence platform. RMS is expected to deliver modest revenue growth over the next year before a gradual acceleration as the new products and services gain further traction with customers. Accelerated investment to deliver the product roadmap will continue, albeit at a slightly reduced level to FY 2020. The FY 2021 operating margin is expected to reflect the benefit of the business having passed peak investment and subsequent profitability is expected to improve as revenue growth accelerates.

Property Information

The Property Information portfolio is comprised of two businesses: Landmark Information Group (Landmark), which operates in the UK and Ireland; and Trepp in the US. Landmark derives revenues from providing services across the value chain, using technology, data and workflow to streamline and help reduce the risk associated with commercial and residential property transactions. The majority of Landmark's revenues are generated from volume-related transactions. Trepp provides risk, valuation and data solutions for the commercial mortgage-backed securities (CMBS) market as well as tools, analytics and models for commercial real estate (CRE) investors and lenders. The majority of Trepp's revenues are from subscriptions.

Property Information revenues for the year decreased 6% on an underlying basis, with continued growth from Trepp insufficient to offset reduced revenues at Landmark, which is the significantly larger business. During the first five months of the year, prior to the onset of Covid-19, revenues were stable. In absolute terms, Property Information revenues decreased 16% due to the disposals of On-geo in June 2019 and BuildFax in October 2019.

There was an underlying decrease in Property Information cash operating income and adjusted operating profit, as well as a reduction in margins, due to the lower UK revenues and increased investment in both businesses.

Landmark

Property transaction volumes in the UK reduced as a result of the Covid-19 pandemic. The lockdown restrictions affected physical viewings of properties as well as the ability of estate agents, conveyancers and valuers to deliver their services. Landmark's revenues decreased accordingly. We consider there to be an inherent minimum transaction volume in a UK residential market that is functioning normally, due to death, divorce and default. This was breached, with volumes falling significantly below this floor from March through to June 2020, reflecting the distorting impact of the lockdown. Market activity has increased in recent months, supported by reductions in stamp duty introduced in July 2020, although volumes are expected to remain volatile.

Landmark made encouraging strategic and operational progress, strengthening its product lines and market position. The business continues to invest in technology to make the processes involved in property transactions more efficient and transparent. Landmark amended its product roadmap, following the onset of Covid-19, to accelerate initiatives that are most likely to benefit from the digitisation of the sector. In December 2019, Landmark made a small bolt-on acquisition, OneSearch Direct, to strengthen its conveyancing capabilities. The business provides property information and conveyancing solutions to solicitors and other customers in England and Wales.

Trepp

Trepp's revenue growth was driven by increased demand for its analytics and research, particularly in the banking and CRE sectors. New subscription bookings were notably strong during the second half of the year, including for CMBS products, reflecting customers' desire to understand the risk and cash flow profile associated with debt instruments at a time of heightened market uncertainty. Significant product development in new market opportunities continued in the year to support Trepp's strong position with its customers. Trepp launched TreppCLO, its collateralised loan obligations (CLO) product, on a new integrated platform and continues to enhance the product. Trepp's new data lake, application programming interface (API) and business intelligence tools are expected to form the foundation, over the coming years, of both its unified technology infrastructure and its delivery platform for customers.

Priorities in the year ahead: in FY 2021, there will be continued investment to enhance Landmark and Trepp's market-leading positions and drive future revenue growth. Notable initiatives include the integration of technology across Landmark's businesses, facilitating cross-selling opportunities, and the development of a centralised data lake at Trepp. Market conditions for Landmark are likely to remain volatile because of the Covid-19 pandemic and its economic repercussions, although its revenues may grow following a particularly weak FY 2020. Trepp is expected to grow sales and benefit from increased demand from its customers.

EdTech: Hobsons

The EdTech business, Hobsons, is a leading provider of college and career readiness and student success solutions to the North American education market. Hobsons' products help students to succeed by making informed decisions about their college and career options, as well as helping colleges to attract and retain students. Revenues continued to grow, increasing 7% on an underlying and reported basis. Growth was achieved across each of Hobsons' three product lines: Naviance, the K-12 college and career readiness solution; Intersect, the higher education match and fit business; and Starfish, the higher education student retention and success platform.

The US higher education and K-12 markets have been unsettled by the social and economic ramifications of the Covid-19 pandemic. Customer budgets have come under pressure, affecting renewal rates as well as new bookings, and this resulted in slower revenue growth during the second half of the financial year.

The cash operating income and adjusted operating profit margins increased, even with ongoing investment in technology and products. Hobsons is part way through a product platform modernisation programme which is expected to reduce future operating costs and enable faster product development. The business also invested in customer-facing features and functionality to drive future revenue growth and enhance its strong market position. The Naviance product was improved by the development of enhanced analytics in respect of student readiness. Over 13,000 schools subscribe to the Naviance platform, with the product available to over 10 million pupils, including over 40% of US high school students. Enhancements were also made to the Intersect and Starfish product suites, with over 1,100 colleges and universities now using these higher education products, driving better customer relationships and growth opportunities.

Priorities in the year ahead: significant investment to modernise the core EdTech product platforms will continue and this is expected to depress profitability in FY 2021. Revenue growth is expected but at a slower rate, due to weaker customer budgets. Over the medium term, the business is well positioned to deliver growth and improved cash generation, supported by a continued focus on operational execution and the benefits of platform modernisation.

Events and Exhibitions: dmg events

The Events and Exhibitions business, dmg events, is an organiser of B2B exhibitions and conferences with industry-leading events in the energy, construction, interiors, hotel, hospitality and leisure sectors. The business has been severely affected by the impact of Covid-19. To ensure the safety of customers, employees and delegates, no physical events were held in the last seven months of the financial year.

Revenues decreased by 35% on an underlying basis for the year, compared to 8% growth in the first five months of the financial year prior to the onset of Covid-19. ADIPEC and Big 5 Dubai, two of the three largest events, occurred in November 2019 and collectively delivered stable underlying revenues despite challenging conditions in the Middle East, notably in the construction sector. Gastech, the third large event, was postponed a year to September 2021 and is still expected to be held in Singapore.

The business acted quickly to reduce its cost base but continued to incur overhead costs throughout the year. dmg events also recognised £18m of committed costs relating to events that were cancelled or postponed, of which £7m was accelerated into FY 2020 in respect of events scheduled for FY 2021. The business has insurance cover for communicable diseases, of up to US$20m per financial year until September 2022, and the FY 2020 results include the full benefit of £16m in respect of insurance. Both the cash operating income margin and operating profit margin were 5%, reflecting the non-occurrence of events partially offset by insurance.

The acquisition of 11 small events from CWC Group, in April 2020, strengthened dmg events' position in the energy sector, especially in LNG and in Africa. Ethiopia's leading construction event, Addisbuild, was acquired in February 2020, strengthening the Big 5 construction portfolio.

Several virtual events have been run and are planned. Although not financially significant, they help to maintain the brand profiles, expand audiences and sustain customer relationships.

Priorities in the year ahead: dmg events has worked closely with its major customers and sponsors regarding the timing of scheduled events to ensure they are well attended and safely managed in the new environment. Big 5 Dubai and ADIPEC have been rescheduled from November 2020 to September 2021 and November 2021 respectively. Consequently, the ADIPEC exhibition, the business's largest event, will not be held in FY 2021, although the adverse impact on operating profit is expected to be largely offset by the Group's insurance cover. Similarly, several smaller events in the portfolio will not be held in FY 2021. Sales bookings for the larger events are generally encouraging at this early stage. However, social distancing measures, exhibitors' and delegates' willingness to travel internationally and challenging conditions in the oil, gas and construction sectors are likely to result in reduced revenues and profitability for those events that are held in FY 2021.

DMGT believes the longer-term outlook for Events and Exhibitions is strong, as the importance of face-to-face events increases in a digitising world, and the business will continue to launch new events where opportunities arise.

Energy Information: Genscape

DMGT no longer operates an Energy Information division, following the disposal of Genscape for US$364m in November 2019.

Consumer Media: dmg media

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

The Consumer Media portfolio includes two of the UK's most read paid-for newspapers, the Daily Mail and The Mail on Sunday; Metro, its free newspaper, which was the UK's highest circulation weekday newspaper pre Covid-19; the 'i', the UK national newspaper and website; and MailOnline, one of the world's leading English-language newspaper websites.

Covid-19 affected trading from March. In the first five months, revenues grew an underlying 1% but decreased by an underlying 13% over the full year to £604m. Full year underlying growth of 3% from MailOnline was more than offset by a 7% decrease in circulation revenues and a 30% decline in print advertising revenues, exacerbated by reduced readership of Metro.

Circulation volumes were impacted by the UK lockdown and circulation revenues decreased 7% on an underlying basis to £284m, with lower volumes partly offset by the benefit of a 10p cover price increase of the Saturday edition of the Daily Mail to £1.10 in January 2020. Total combined advertising revenues across the dmg media portfolio decreased by an underlying 16% to £283m. There was a pronounced reduction in the final seven months of the year, particularly print advertising, whilst the impact on digital advertising was partly offset by increased traffic. Total Consumer Media revenues decreased 10% in absolute terms, benefitting from the inclusion of the 'i', which was acquired for £50m at the end of November 2019.

The cash operating income margin and adjusted operating profit margin reduced to 11% and 9% respectively, with the benefit of the 'i' acquisition and continued profit growth from MailOnline more than offset by the challenging trading conditions. Cash operating income and adjusted operating profit both decreased by an underlying 27% to £64m and £56m respectively. The focus on managing costs increased further following the onset of Covid-19 and total costs were down 9%, or £57m, despite the addition of the 'i'.

In October 2020, three printing plants were acquired, strategically strengthening dmg media's position in the market.

Mail businesses

Revenues for the combined Mail newspaper, website and TV businesses (Daily Mail, The Mail on Sunday, MailOnline and DailyMailTV) decreased by an underlying 9% to £508m, of which £144m was generated by MailOnline. Total advertising revenues across the Mail businesses decreased by an underlying 9% to £231m, including a 26% decline in print advertising revenues, reflecting the impact of Covid-19 as well as the continued structural and competitive challenges facing the UK national newspaper advertising market. Digital advertising accounted for 65% of total advertising across the combined Mail businesses.

The Mail newspapers' competitive positions remain strong, with large and growing UK retail market shares held by the Daily Mail and The Mail on Sunday, estimated to be 26.4% and 23.7% for the year respectively6.

Demand for the digital version of the Mail newspapers' content increased significantly during the year. The 'Mail+' briefings service, which offers readers additional insight, news and entertainment via video, podcast and articles, was launched in October 2019 and by September 2020 attracted over 120,000 unique visitors a week. Similarly, subscribers to 'The Digital Edition', a paid-for enhanced version of the Mail newspaper, have more than doubled to over 80,000.

MailOnline continued to focus on attracting traffic directly to its homepages, on desktop and mobile, or its apps. There was good audience growth in the year, with total average daily global unique browsers, excluding other platforms such as Snapchat and Facebook video, increasing by 38% to 17.3 million. The audience growth included the benefit of indirect traffic, primarily via social media and search platforms, driven by interest in the Covid-19 pandemic. The increase in traffic helped to mitigate the impact of reduced digital advertising spend. Total minutes spent on the site, excluding time viewing videos, increased 14% to a daily average of 145 million. The direct audience accounted for 79% of minutes spent, reflecting continued high levels of engagement with these valuable and loyal consumers. DailyMailTV continues to raise awareness of MailOnline in the US, though the business's own revenues decreased to £8m, compared to £13m in the prior year, and costs were managed appropriately. The show is currently in its fourth season and attracts an average of 1.1 million viewers a day.

Metro

Following the onset of Covid-19 and implementation of lockdown measures, Metro's circulation initially reduced to approximately a quarter of the usual pre-Covid level. Readership has increased as more commuters have returned to using public transport but as at September 2020, volumes were still less than half of the pre-Covid level. Revenues decreased by 40% to £47m for the year, reflecting a particularly challenging print advertising market as well as the reduced readership. Prior to Covid-19, Metro had the largest circulation of any weekday newspaper in the UK, read by an average of 2.3m people each day, and had the largest Monday to Friday advertising market share by volume.

The 'i'

Revenues from the 'i' decreased an underlying 10% to £27m in the ten months of ownership to September 2020, reflecting the impact of lockdown measures on circulation and the particularly challenging advertising market. Following a review of the acquisition by the UK Competition and Markets Authority, the business was integrated into dmg media's existing infrastructure during the second half of the year, realising all the planned cost savings.

Low margin sales of newsprint to other publishers account for the majority of other revenues and these are excluded from underlying revenue growth calculations.

Outlook and Priorities in the year ahead

dmg media will continue to harness the value of the Mail and 'i' brands for both readers and advertisers and invest in the quality of their popular journalism. The advertising market inherently lacks visibility and conditions are likely to remain both challenging and volatile until economic confidence returns. Circulation volumes of the Mail and 'i' are expected to decline from current levels. The cash operating income margin and operating margin will reflect a mix of the revenue dynamics and the benefit of continued cost efficiencies within the newspapers.

Corporate costs

Joint ventures, associates and investments

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

As well as a diverse portfolio of operating companies, DMGT holds minority stakes in early-stage businesses. There were no profits from Euromoney in the year, compared to £23m in the prior year, following the distribution to DMGT's shareholders, in April 2019, of all of the Euromoney shares held by DMGT.

The Group's net share of adjusted operating losses from its joint ventures and associates was £8m in the year. This compared to a £13m net profit, including Euromoney, and £10m net loss from other joint ventures and associates in FY 2019.

Yopa, a UK hybrid estate agent in which DMGT owns a c.45% stake, made good operational progress during the year. It continues to disrupt the estate agency sector and strengthened its position within a particularly challenged market.

As well as joint ventures and associates, DMGT invests in and develops early-stage businesses in which the Group holds smaller stakes. As the percentage holdings are too small or DMGT's level of influence insufficient for the companies to be associates, the Group does not recognise a share of profits or losses from these investments. DMGT's most significant investment is Cazoo, which aims to transform the way people buy used cars in the UK and has the potential to develop into a major business. Cazoo successfully launched its services to customers in December 2019 and DMGT increased its stake from c.19% to c.23% in March 2020. DMGT participated in a subsequent funding round on 7 October 2020 and its stake of c.22%, or c.20% on a fully diluted basis, was valued at £409m, compared to a total cost of £117m.

Outlook: DMGT's joint ventures and associates are primarily investment-stage businesses and DMGT does not control them, unlike subsidiaries. The current expectation is that they will continue to generate significant cumulative net losses in FY 2021.

Net finance costs

Net interest payable and similar charges were £10m including £13m of charges on bond debt and £8m of interest income. The 17% decrease on the prior year was primarily due to the maturing of £219m of bond debt in December 2018. The decrease in net finance costs was 36% on an underlying basis, after adjusting for £2m of finance costs recognised following the adoption of IFRS 16.

The pension finance credit, which is excluded from adjusted results, was £4m, reflecting the pension surplus on an accounting basis. This compared to £7m in the prior year.

Outlook: net finance costs are expected to increase in FY 2021 as a result of significantly reduced interest income on DMGT's gross cash deposits due to lower interest rates.

Other income statement items

· Exceptional items and amortisation

The exceptional cash costs in the year were £15m, compared to £9m in the prior year. Total exceptional operating costs, including discontinued operations and associates, were £24m (FY 2019 £36m). There were £9m of exceptional severance costs in the year, as headcount was reduced in the Consumer Media, Events & Exhibitions and Property Information businesses, to enhance the future profitability of individual product lines and support the businesses' margins. The costs also included a £20m non-cash charge as a result of amendments to the existing RMS 2015 Equity Incentive Plan to ensure the scheme works appropriately for the broader employee base in light of the current business plan.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £11m (FY 2019 £20m). Total impairment charges in the year were £19m, primarily in respect of Events & Exhibitions, compared to £49m in the prior year. The Group recorded other net gains on disposal of businesses and investments, including discontinued operations, of £177m, primarily in respect of the disposal of Genscape, the Energy Information business (FY 2019 £67m).

· Taxation

The adjusted tax charge for the year, after excluding the effect of exceptional items, was £13m compared to £29m in the prior year. The adjusted tax rate was 18%, a slight reduction on 20% in the prior year and less than previously expected, primarily due to a reduced US tax charge, reflecting the benefit from the Foreign-Derived Intangibles Income (FDII) incentive.

The statutory tax credit for the year was £1m and there was also a statutory tax charge of £11m on discontinued operations, giving a total charge of £10m. There were £3m of net exceptional tax credits in total.

Outlook: the adjusted tax rate will depend on the impact of the Covid-19 pandemic, including on the geographical mix of profits. The FY 2021 rate is currently expected to be in the low twenties.

Pensions

The pro forma net surplus on the Group's defined benefit pension schemes decreased from £332m at the start of the year to £240m at 30 September 2020, calculated in accordance with IAS 19 (Revised). The pro forma surplus includes £117m that has been made available to the pension schemes but which currently remains as cash on DMGT's balance sheet, as well as the statutory net surplus of £123m. During the year, there was an increase in the value of the defined benefit obligation, caused by lower discount rates, and a decrease in the value of the assets.

Funding payments into the main schemes were £16m in the year. The actuarial valuation of the pension schemes as at 31 March 2019 showed that the schemes remain in deficit on an actuarial basis. A new funding plan has been agreed with the Trustees. In FY 2021, £121m will be paid into escrow, including the £117m that has been made available to the pension schemes, and direct funding payments into the schemes will be £14m. From FY 2022 to FY 2025 inclusive, payments of £11m p.a. will be made directly into the schemes and, in addition, payments of £7m p.a. will be paid into escrow. Also, in certain circumstances, a contribution of up to 20% of any share buy-backs shall be contributed to the schemes. Contributions will be discontinued should the schemes' actuary agree the schemes are no longer in deficit, calculated on an actuarial basis.

A portion of the funds in escrow will be used to fund the schemes between FY 2021 and FY 2027, with the amounts dependent on the actuarial deficit, interest rates and other factors. In FY 2027, some or all of the amount in escrow may be used to fund the schemes, depending on the size of the actuarial deficit, and the remainder will be returned to DMGT.

The defined benefit schemes are closed to new entrants and the next actuarial valuation is scheduled for 31 March 2022.

Net cash and cash flow

Pro forma net cash5 at the end of the year was £168m, a decrease of £79m compared to the start of the year, reflecting £113m spent on acquisitions. Pro forma net cash as at 30 September 2020 is stated after adjusting to:

i) exclude £117m of cash that was made available to the Group's pension schemes in April 2019 but which currently remains as cash on DMGT's balance sheet; and

ii) exclude £100m of lease liabilities that are included in statutory net cash following the adoption of IFRS 16, the lease accounting standard. The lease liabilities largely reflect the future operating cost of renting office space and are not considered a component of net debt when the Board reviews the Group's available capital. Consequently, they are excluded from pro forma net cash.

The Group's cash operating income of £110m is stated after £18m of capital expenditure, a significant reduction on £30m in the prior year which reflects a larger proportion of technology costs being expensed directly. The Group remains committed to investing for the long term and organic investment was equivalent to 10% of revenues in the year. Other operating cash net outflows totalled £11m including £18m of funding into the Employee Benefit Trust. Group operating cash flow was £99m, a 110% conversion rate of operating profits to operating cash flow, compared to 109% in the prior year.

Pro forma net expenditure on acquisitions and investments, including proceeds from disposals, was £84m. Proceeds from the disposal of the Energy Information business, Genscape, were included in the pro forma net cash at the start of the year and so are excluded from the pro forma cash flow. This included £50m to acquire the 'i' newspaper and website and £37m invested in Cazoo, the early-stage business accounted for as an investment. There were proceeds of £20m from the disposal of BuildFax.

Payments in the period included dividends of £55m, pension funding payments of £16m, taxation of £8m and net interest payments of £6m. The weaker US dollar at year end, relative to the prior year end, resulted in an adverse cash revaluation of £9m.

The Group's cash, cash equivalents and short-term deposits, net of overdrafts, totalled £480m at year end. On a pro forma basis, excluding £117m made available to the pension schemes, the Group's cash, cash equivalents and short-term deposits totalled £363m. At year end, bond debt was £204m, comprised of £203m of the 6.375% bonds, due 2027 and less than £1m of the 10.0% bonds, due 2021. There was also £8m of net cash in respect of collateral and derivatives. The Group's committed bank facilities, which mature in March 2023, were £373m and were completely unutilised.

In May 2020, Fitch reaffirmed DMGT's BBB- investment grade rating. The Group's preferred upper limit for gearing remains a net debt to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 2.0, below the requirements of the Group's bank covenants.

The Directors have a reasonable expectation that the Group will continue to operate and meet its liabilities as they fall due for at least one year. Accordingly, they are satisfied that it is appropriate to continue to adopt the going concern basis in preparing DMGT's accounts.

Financing and shares

During the year, the Group acquired 2.8m A Ordinary Shares for £20m in order to meet obligations to provide shares under its incentive plans. It utilised 1.0m shares, valued at £7m, and a further 0.3m shares from the Employee Benefit Trust, valued at £2m, to provide shares under various incentive plans. As at 30 September 2020, DMGT had 226.6m shares in issue, including 19.9 million Ordinary Shares, and a further 8.2m A Ordinary Shares held in Treasury and the Employee Benefit Trust7.

Dividend

DMGT's dividend policy is to grow the dividend per share in real terms and, in the medium term, to distribute around one-third of the Group's adjusted earnings. The Board reconsidered the dividend policy during the year and decided to leave it unchanged. The decision reflects the Board's conviction in the appropriateness of the policy, its long-term approach and confidence in the Group's ability to deliver earnings growth over time, underpinned by a strong balance sheet.

The Board is recommending the payment on DMGT's issued Ordinary Shares and A Ordinary Non-Voting Shares of a final dividend of 16.6 pence per share for the year ended 30 September 2020 (2019 16.6 pence). This will make a total for the year of 24.1 pence (2019 23.9 pence per share), continuing DMGT's long-standing track record of increasing the dividend by more than inflation. The recommended FY 2020 full year dividend is equivalent to 92% of the adjusted earnings per share for the year since short-term earnings have been adversely affected by the impact of Covid-19, disposals and organic investment. The final dividend will be paid on 5 February 2021 to shareholders on the register at the close of business on 4 December 2020.

Adjusted results; statutory profit before tax (PBT) reconciliation to adjusted PBT

The Board and management team use adjusted results, rather than statutory results, as the primary basis for providing insight into the financial performance of the Group and the way it is managed. Similarly, adjusted results are used in setting management remuneration. Adjusted results exclude certain items which, if included, could distort the understanding of the comparative performance of the business during the year.

The tables on pages 26 and 27 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both FY 2020 and FY 2019.

The explanation for each type of adjustment is as follows:

1) Discontinued operations: the adjusted results include the pre-disposal results of discontinued operations, namely Genscape, the Energy Information business, whereas statutory results only include continuing operations. The gain on the disposal of Genscape in FY 2020 is excluded from both statutory and adjusted profit before tax.

2) Exceptional operating costs: businesses occasionally incur exceptional costs, including severance and consultancy fees, in respect of a reorganisation that is incremental to normal operations. These are excluded from adjusted results.

3) Intangible impairment and amortisation: when acquiring businesses, the premium paid relative to the net assets on the balance sheet of the acquired business is classified as either goodwill or as an intangible asset arising on a business combination and is recognised on DMGT's balance sheet. This differs to organically developed businesses where assets such as employee talent and customer relationships are not recognised on the balance sheet. Impairment and amortisation of intangible assets and goodwill arising on acquisitions are excluded from adjusted results as they relate to historical M&A activity and future expectations rather than the trading performance of the business during the year. Software, including products, is also recognised as an intangible asset on the balance sheet but the ongoing amortisation of software is similar to the depreciation of tangible assets and is an everyday cost of doing business, so is included in both statutory and adjusted results.

4) Profit on sale of assets: the Group makes gains or losses when disposing of businesses, for example on the disposal of BuildFax, the US Property Information business, in FY 2020. These items are excluded from adjusted results as they reflect the value created since the business was formed or acquired rather than the operating performance of the business during the year. Similarly, the gains or losses made by joint ventures or associates when disposing of businesses are excluded from adjusted results.

5) Pension finance credit: the finance credit on defined benefit schemes is a formulaic calculation that does not necessarily reflect the underlying economics associated with the relevant pension assets and liabilities. It is effectively a notional credit and is excluded from adjusted results.

6) Other adjustments: other items that are excluded from adjusted results include changes in the fair value of certain financial instruments and changes to future acquisition payments. They are considered to be unrelated to the ongoing cost of doing business. The share of joint ventures' and associates' tax charges is included in statutory profit before tax but, since it is a tax charge, is excluded from adjusted profit before tax. The share of joint ventures' and associates' interest charges is reclassified to financing costs in the adjusted results.

Reconciliation: Statutory profit to adjusted profit - FY 2020

Reconciliation: Statutory profit to adjusted profit - FY 2019

Reconciliation: Adjusted results including and excluding discontinued operations

Cash operating income²

Full Year 2020

Full Year 2019

Underlying¹ analysis - Revenues

Notes: M&A adjustments are for disposals and acquisitions. The underlying results include the post-acquisition organic growth from acquired entities. 'Other' includes adjustments for the timing of shows at Events and Exhibitions, for the consistent timing of revenue recognition and for the gross-up, equivalent to the cost of sales, on the low margin resale of newsprint activities.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Underlying¹ analysis - Adjusted³ operating profit and profit before tax

Underlying1 analysis - Cash operating income²

Principal risks and uncertainties

The Directors confirm that they have completed a robust assessment of the Group's principal risks and a thorough review of risk management processes. The Group's risks are categorised as either strategic or operational. Strategic risks are linked to the Group's strategic priorities and impact the whole Group. Operational risks are those arising from the execution of the business functions and typically impact on one or more of the principal businesses.

In light of the Covid-19 pandemic, 'Business continuity event' has been added as a new principal operational risk. Such events would include pandemics, epidemics and natural or man-made disasters. Previously, the exposure to such an event has been reflected within other principal risks, including 'Reliance on key third parties' and 'Economic and geopolitical uncertainty'. Despite the Group's resilience during the Covid-19 pandemic and benefit of mitigating factors, such as insurance cover, it is considered appropriate to identify a specific principal risk due to the significant potential operational and financial impact.

Strategic Risks

Operational risks