27th Jul 2010 07:00
27 July, 2010 Daily Mail and General Trust plc (`DMGT') Interim Management Statement
This Interim Management Statement (`IMS') covers the third quarter of DMGT's financial year to 4th July 2010 and describes the Group's financial position and performance during the period, updated to the latest practicable date.
Summary of the period:
* Revenue for the third quarter £508 million, down 2% on last year, but up 6% on an underlying# basis. * Trading ahead of our expectations, with underlying# growth from both B2B and consumer media businesses. * Continuing focus on cost control. * On track towards our target of 2.5 times net debt: EBITDA by the financial year end.
Martin Morgan, Chief Executive, said:
"Trading in the third quarter has continued to reflect the generally positive trends in our international B2B and UK consumer media businesses, although we remain wary about the medium term outlook, particularly in the UK. Our significant exposure to non-UK markets leaves us well positioned to continue to deliver profitable organic growth over the longer-term."
Business to business (`B2B')
Revenues from the Group's B2B operations in the quarter were £234 million, 8% higher than for the corresponding period last year. The underlying# increase was 9%, reflecting prior year disposals within dmg information and dmg events offsetting the impact of a decrease in the average sterling: US dollar exchange rate. We continue to expect to achieve growth in the year, driven by solid subscription revenues and good cost control.
Risk Management Solutions' revenues rose by 28% to £42 million. Cumulatively, underlying# revenues rose by 11% for the nine months to 30 June, 2010, compared to the same period in 2009, reflecting continued good growth from RMS's core modelling business and from its newer initiatives.
The revenues of dmg information rose by 15% to £63 million. The underlying# increase was 4%, with double digit growth coming from the property information companies and growth continuing in the financial and energy information markets. Sanborn, serving the geospatial market, continues to experience tough market conditions.
The revenues of dmg events fell, as expected, by 30% to £30 million due to the impact of disposals. Underlying# revenues were down by 3%, an improvement on prior quarters, as some events returned to growth. A successful Global Petroleum Show was held in Calgary in June.
Euromoney Institutional Investor released its IMS on 21 July. Revenues rose by 16% to £98 million, an underlying# increase of 15%, driven by a strong performance from its event businesses and a continued recovery in advertising revenues. Subscription revenues returned to growth, increasing by an underlying # 4%.
Consumer media
Revenues from the Group's consumer media operations in the quarter were £274 million, 10% lower than for the corresponding period last year, but with an underlying# increase of 4%. The current advertising trends, together with A&N Media's focus on cost control, with continuing reductions in headcount, will have a continuing positive effect on profitability for the full year. In July, A&N Media announced its decision to streamline the organisational structure around its digital activities.
Associated Newspapers' total revenues for the quarter fell by 3% to £201 million. Circulation revenues were 0.7% higher due to the timing of Easter. Both the Daily Mail and The Mail on Sunday maintained their market share. Total underlying# advertising revenues rose by 13% with revenues from Associated's newspaper operations up by 13%. Display was up 15%, classified down 3% and digital up 46%. Retail, the largest display category, grew by 19% in the quarter with growth also across most other categories. The underlying# revenues of Associated's pure play digital activities rose by 16%, including an increase from the Jobs businesses. These advertising trends have broadly continued into July though, as usual, visibility on future performance remains limited.
Northcliffe Media's total revenues for the quarter were down by 4% to £66 million, a similar underlying percentage decline to that experienced in the previous quarter. Advertising revenues were 4% below prior year levels. By major category, both retail and recruitment revenues were 6% lower, but in contrast, property revenues were 9% above last year. Digital revenues were 10% above prior year levels, driven by strong property and motors revenues. July has seen similar trends. Circulation revenues fell by 5% compared to last year.
A&N International Media's revenues for the quarter were down by 27% to £7 million. The underlying# decrease was only 1% after disposals with improving trends from contract print and digital revenues.
Net debt / financing
Net debt at 4th July, 2010 fell from £1,018 million at 4th April, 2010 to £970 million. The Group continues to pay down debt and remains on track to be close to our target of 2.5 times net debt: EBITDA by the end of the financial year. We spent £8 million on acquisitions, all being pre-contracted payments, including shares issued under subsidiary option plans. After 4th July, Landmark acquired Calnea Analytics and Argyll Environmental, and A&N Media sold its Loot and Bargain Pages classified advertising businesses.
DMGT has taken its share of the interim dividend from Euromoney in the form of a scrip, thereby increasing its equity interest from 66.1% to 66.3%.
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 A&N Media, the underlying percentage movements exclude the Evening Standard, London Lite and the discontinued television activities of Teletext.
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 27th July, 2010. The dial-in number is +44 (0) 1452 568 051; conference code: 87101679. For a replay of the call, the dial-in number is +44 (0) 1452 550 000 and the replay code: 87101679#.
Next trading update
The Group's next scheduled announcement of financial information will be a pre-close trading update, provisionally scheduled for 28th September, 2010.
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 5TTTel 020 7938 6000Fax 020 7938 4626www.dmgt.co.uk
Registered in England and Wales No. 184594
Not for public release until 7.00am on 27 July, 2010
DAILY MAIL & GENERAL TRUST PLCRelated Shares:
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