9th Feb 2011 07:00
9th February, 2011 Daily Mail and General Trust plc (`DMGT') Interim Management Statement Introduction
This Interim Management Statement (`IMS') covers the first quarter of DMGT's financial year, the three month period to 2nd January 2011. It describes the Group's financial position and performance during the period, updated to the latest practicable date.
Summary of the period:
* Revenue for the first quarter was £497 million, up 3% on last year, and up 5% on an underlying# basis. * Trading in line with our expectations. * Good underlying# growth from B2B operations. * National advertising growth continues despite impact of December weather.
Martin Morgan, Chief Executive, said:
"Trading in the first quarter has been in line with our expectations, despite our consumer businesses being hampered by the poor weather in December. Overall our B2B operations are experiencing good momentum and consumer media continues to benefit from national advertising growth, though we have limited visibility. We remain cautious about the medium term outlook, given the external economic environment. Our focus will remain on investment to drive organic growth, while continuing to seek to improve operational efficiency and to reduce debt."
Business to business (B2B)
Revenues from the Group's B2B operations in the quarter were £220 million, 19% higher than for the corresponding period last year, with an underlying# increase of 11%, primarily due to the biennial timing of events.
RMS had a strong first quarter in terms of bookings, reflecting continued growth from both its core modelling business and newer initiatives. Revenues for the quarter rose by 11% to £39 million, an underlying# increase of 7%. RMS remains on track to achieve double digit revenue growth for the year.
Dmg information's revenues for the quarter rose by 4% to £51 million with an underlying# increase of 1%.
Underlying# revenues from the property information companies were flat year on year, with the abolition of Home Information Packs adversely affecting Landmark's revenues, while in the US EDR's revenue increased due to a slight recovery in transaction volumes. In both the UK and US property transaction volumes remain at levels substantially below the historical norm.
In other markets, revenues rose by an underlying# 1% with strong growth from Hobsons, our education business, and continuing growth from Genscape, our energy information business. The financial information market revenues were slightly down year-on-year due to the weak debt markets and Sanborn, serving the geospatial market, continues to experience tough market conditions.
At dmg events, reported revenues grew by 47% including the impact of the biennial Adipec oil show in November which grew strongly. The underlying# revenue increase was 14%, with strong growth from our events serving the energy and digital marketing sectors and from Evanta's executive conferences. In January the main shows, including the New York International Gift Fair, are expected to achieve year-on-year growth and forward bookings for other events later in the year are encouraging.
Euromoney Institutional Investor released its IMS on 20th January. Revenues rose by 20% to £86 million, an underlying# increase of 18% with first quarter growth rates broadly consistent with those achieved in the second half of financial year 2010 for each revenue category. The exception was subscriptions where the rate of growth has continued to improve.
Consumer media
Revenues from A&N Media in the quarter were £277 million, 1% lower than the same period last year, but 1% higher on an underlying# basis. Headcount has been reduced by 332 (4%) in the quarter, mainly at Northcliffe Media. A&N Media is incurring increased newsprint costs from January 2011.
On 1st February, A&N Media announced that it was considering plans to relocate its present Surrey Quays, South London printing operation to a new green field site in Thurrock, Essex.
Associated Newspapers' total revenues for the quarter rose by 1% to £211 million, an underlying# increase of 5%. Underlying circulation revenues were 1% lower, but with both the Daily Mail and The Mail on Sunday improving their market share, both titles achieving record shares in December. Total underlying # advertising revenues were up 6%.
Total underlying advertising revenues from its newspaper operations were up 5%, with print up by 3% and those of its digital activities up by 73%. In print, display was up 4%, with growth in retail (the largest category) and finance, but other categories were, in total, lower than last year. Advertising growth in the quarter was hampered by the impact of the poor weather in December. Mail Online continues to grow strongly with almost 54 million unique visitor numbers in December, 64% higher than December 2009 and over 3 million average daily unique visitors to the site during the month, representing growth of 60%, compared to the same month a year ago.
The revenues of Associated's digital only businesses grew by 11%. Strong growth was experienced from recruitment and property, but travel and motors businesses continue to find market conditions challenging.
Trading in January has seen underlying# advertising revenues for Associated 2% ahead of last year. As usual, visibility on future newspaper advertising performance is very limited.
A&N International revenues were down 30% to £7 million, (down 3% excluding businesses disposed of in the previous financial year). Revenues grew by an underlying 4% in local currency.
Northcliffe Media's total and underlying# revenues were down by 6% to £59 million. Circulation revenues fell by 3%, compared to last year. Advertising revenues were 6% below prior year levels, a similar underlying percentage decline to that experienced in the previous quarter. By category, recruitment revenues are 26% lower and public notices 13% lower, but property revenues were up 1.5%. Other income was also lower.
Digital revenues were marginally lower than prior year levels, a 21% decline in recruitment revenues offset by strong growth in property, motors and services revenues. Visitor numbers to the `Thisis' digital platforms grew by 28% in December. Since December last year, a further 83 Local-people websites have been launched, with December 2010 visitor levels being 225% higher than the prior year.
Northcliffe's cost base continues to be reduced with publishing costs 6% lower than the first quarter of the prior year. Headcount has fallen by a further 8% during the quarter.
Adjusting for the timing of the Bank Holiday, trading in January has seen advertising revenues 6% lower than last year.
Net debt / financing
Net debt at 2nd January, 2011 rose from £862 million at 3rd October, 2010 to £ 910 million due to the usual seasonal cash outflows.
Finance Director succession
Further to the announcement on 28th September, 2010, Stephen Daintith joined the Company at the beginning of January. He is working alongside Peter Williams, who will retire as Finance Director on 25th March, 2011.
Notes
# 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 dmg events, the underlying percentage movements are also adjusted for non-annual events. For A&N Media, the underlying percentage movements exclude London Lite, Loot, the discontinued television activities of Teletext, the digital dating and data businesses and the Slovakian print publishing companies, and for consumer media as a whole DMG Radio Australia.
The average £:$ exchange rate for the first quarter was £1: $1.58 (against £1: $1.63 in the same period last year). The rate at 31st December, 2010 was $1.57, compared to $1.58 at 3rd October, 2010.
DMGT's estimated weighted average number of shares in issue for the full year is currently 382.8 million (2010: 383.0 million). The total number of shares in issue (after deducting shares held in treasury) is currently 382.7 million.
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 / Anastasia Shiach, Tulchan Communications 020 7353 4200
Conference call
A conference call will be held with City analysts at 8.00 a.m. on 9th February, 2011. The dial-in number is +44 (0)20 3140 0668; conference code: 346034#. For a replay of the call, the dial-in number is +44 (0)20 3140 0698 and the replay code: 375882#.
Next trading update
The Group's next scheduled announcement of financial information will be a pre-close trading update on 28th March 2011. This will be followed in the afternoon by an Investor Day. Thereafter the calendar for the year is expected to be as previously indicated, except that the date of the release of the Group's preliminary results is being brought forward by one day to Wednesday, 23rd November 2011 so as to avoid coinciding with the Thanksgiving holiday in the US.
This 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 www.dmgt.co.uk Registered in England and Wales No. 184594 Not for public release until 7am on 9 February, 2011
DAILY MAIL & GENERAL TRUST PLCRelated Shares:
DMGT.L