13th Sep 2005 06:00
13 September, 2005 Daily Mail and General Trust plc (`DMGT') Trading Update SummaryThis statement updates investors on the Group's progress in the current year,ahead of its year end on 2nd October, 2005. For the newspaper divisions, thereporting period will include one fewer week's results, compared to last year.Since the Group last reported in May, its UK consumer-facing businesses haveexperienced a further weakening in advertising markets and each has undertaken,or embarked upon, cost reduction exercises for varying reasons. The rest of theGroup has continued to trade well, with the information publishing divisionparticularly strong.The Group's long-standing strategy of reducing its dependence on traditional UKadvertising markets is therefore serving it well and means that a satisfactorytrading performance for the full year continues to be expected, a view inaggregate unchanged over the last six months.National NewspapersThe Daily Mail and The Mail on Sunday have again outperformed their peers in adeclining market. The average circulation of the Evening Standard for the sixmonth ABC period to August was up 12%, including the Lite edition, launched inDecember 2004. Metro's distribution averaged over one million copies.Associated Newspapers' overall circulation revenues for the eleven months toAugust were 1.6% below the comparable period last year.Despite weak market conditions since April, Associated's advertising revenueshave increased by 1.7% for the eleven months to the end of August, compared tothe same period last year. Its display advertising revenues rose by 0.4%,buoyed by a strong performance by the retail category in the first half of theyear. Retail and travel have enjoyed year on year increases, but both financeand motors have declined. By title, display advertising at Metro is up 19% andthe Evening Standard up 0.2%, but the Daily Mail is down 2.5% and The Mail onSunday down 1.3%.Overall classified advertising revenues for the eleven months to the end ofAugust were up 5.3%, although this result was enhanced by the good performanceof the digital media properties, principally Jobsite, which was only owned forpart of the previous year.The migration of advertising from mono to colour since the introduction ofincreased colour and pagination at the end of November 2004 has continued,providing some protection of revenues. Colour advertising revenues in thosenine months were up 13% year on year with no reduction in yields.Regional NewspapersNorthcliffe Newspapers, like the rest of the regional newspaper industry, isexperiencing challenging trading conditions. The performance of recruitmentrevenues is the worst experienced for fifteen years, being 14% below last yearover the three months to August.Despite this, Northcliffe's UK advertising revenues for the eleven months toAugust were 1.7% ahead of the same period last year. On a like-for-like basis,UK advertising revenues have increased by 1.1%. The rate of growth of property(up 14%, but only 7% ahead over the past three months) is slowing, whilst thedecline in recruitment (down 5%) has increased over the summer. Motors anddisplay categories continue to find market conditions difficult, but noticesrevenues have benefited from the requirement for restaurants and public housesto reapply for their licences. Revenues from digital publishing are 20% abovelast year for the eleven months to August.UK circulation revenues for the eleven months to August were 1.9% ahead of thesame period last year, or 0.1% excluding acquisitions. In the January to June2005 ABC period, Northcliffe continued to out-perform the regional newspaperindustry average circulation figures.As previously announced, Northcliffe has embarked upon a two-year programme oforganisational and structural improvements, the benefits of which have alreadystarted to accrue.Information publishingDMG Information's business to business division continues to generate strongrevenue and profit growth with total revenues for the year expected to be upapproximately 20% at constant exchange rates and margins improving. In thecareers division, both revenues and profits are expected to increaseyear-on-year.DMG Information will be making a presentation to the City later in the monthwhen further comments on its trading performance will be released to themarket.ExhibitionsDMG World Media is performing in line with last year, despite this being acyclical low year. A strong performance from acquisitions, principally Gastechand Adtech, has offset the absence this year of the Index show in Dubai and ofthe biennial Global Petroleum Show. The consumer sector continues to experiencechallenging trading conditions in the home interest market, both in the UK andNorth America. Business to business and the art & antiques sectors are tradingahead of last year, whilst the gift sector is in line.BroadcastingAt DMG Broadcasting, there has been no improvement in Teletext's tradingconditions with total revenues for the full year expected to finish the yeararound 15% down on last year. Teletext is seeing declining revenues from itsanalogue television services as audiences decline, accentuated this year by atough market generally, online competition and tighter market capacity for lateavailability holidays. As a result, a restructuring of the provision of theseservices is being undertaken. Its new digital services, launched in June, haveseen an encouraging start and its online revenues are up 80% year on year.DMG Radio expects to see like-for-like revenue growth of around 26% for theyear (excluding the regional stations sold in September 2004), partly down tothe completion of the Nova network with its Brisbane launch in April. Therewere signs of a softening advertising market in June and July, but this seemsto have reversed. DMG Radio's new station in Sydney, Vega 95.3 FM, was launchedin August and its sister station, Vega 91.5FM in Melbourne, launched itsbreakfast programme last week.Exceptional itemsThe Group expects to take a charge of approximately ‚£15 million as exceptionaloperating costs, principally for the first phase of Northcliffe'sreorganisation programme and for Teletext's restructuring. These costs will besubstantially offset by net exceptional gains arising on the sale of shares inReuters Group plc and of businesses, including the California Market Center.Accounting policiesAs previously announced, the Group will be reporting its results for the yearto 2nd October, 2005 under applicable UK accounting standards. DMGT will beadopting international financial reporting standards, as required, from its2005/06 financial year and will give a further update on the likely impact onit at the time of its preliminary results' announcement on 30th November.Enquiries: Peter Williams, Finance Director, DMGT, 020 7938 6631 Nicholas Jennings, Company Secretary, DMGT, 020 7938 6625 Andrew Honnor, Tulchan Communications, 020 7353 4200 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. 184594ENDDAILY MAIL & GENERAL TRUST PLCRelated Shares:
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