28th Mar 2011 08:01
28th March, 2011 Daily Mail and General Trust plc (`DMGT') Trading Update Introduction
Ahead of its half year end on 3rd April, 2011, this statement provides a further update on DMGT's progress in the current year. It covers the five month period to the end of February 2011 and includes comments on March, where appropriate.
Summary
* Revenue for the period up 2% on last year, and up 5% on an underlying# basis. * Good underlying# growth from B2B operations. * Overall growth in national advertising in the period. * Trading for the period remains satisfactory. * Continued uncertainty over medium term outlook, particularly for B2C businesses, given the external economic environment and fragile consumer confidence in the UK.
Business to business (`B2B')
Revenues from the Group's B2B operations for the period were 11% higher than for the corresponding period last year, with an underlying# increase of 10%.
At a divisional level, Risk Management Solutions' revenues grew by 11%, an underlying# increase of 10%, reflecting continued growth from both its modelling business and more recent initiatives.
At dmg information, reported revenues grew by 1% with underlying# revenues flat. In the U.S. our property information business, EDR, grew strongly whereas in the U.K. the depressed level of housing transactions continues to affect Landmark, so that overall property revenues were flat. In the non-property sectors, Hobsons, dmgi's education business, grew strongly and there was also growth at Trepp, serving the financial information market, and Genscape, serving the energy information market.
At dmg events, reported revenues grew by 24% including the impact of a highly successful biennial Adipec oil show held in November. The underlying# revenue increase was 11%, with strong growth from our events serving the energy and digital marketing sectors and from Evanta's executive conferences. The New York International Gift Fair, held in February, was up 4% year on year, and the recent Surf Expo show grew strongly.
B2B revenues include those of Euromoney Institutional Investor, which released its trading update on 25th March. As expected, subscriptions, advertising and sponsorship revenues have all continued to grow, although at slower rates than those achieved in the first quarter as revenue comparisons have become much tougher since the start of the second quarter. Sales trends over the past three months have been broadly positive, particularly for the events businesses, although delegate sales for the training business have struggled to achieve year-on-year growth. Overall trading has remained in line with its expectations.
Consumer media
Underlying# revenues from A&N Media for the period were 1% higher than for the corresponding period last year. Reported revenues were 1% lower. Headcount has fallen by 520 (7%) over the period, 317 of whom relate to Northcliffe Media. As announced on 1st February, A&N Media is consulting with its employees over plans to relocate its present printing operation to a new green field site in Thurrock, Essex.
For Associated Newspapers, total revenues were up 2% on last year, an underlying# increase of 3%. Though underlying# circulation revenues were 2% lower, both the Daily Mail and The Mail on Sunday have continued to improve their market share.
Total underlying# advertising revenues were up 5%. The more positive trend of October and November 2010 weakened in December and this weakening has continued into the new calendar year. Associated's newspaper operations grew advertising revenues by 4% with digital advertising revenues supplementing the more subdued and volatile print advertising. By major category, retail, financial and telecoms performed strongly. Digital only businesses grew revenues by 9% due to the continued strength of the recruitment and property companies, offset by lower revenues from the travel and motors companies.
For the quarter to March so far1, total underlying advertising revenues are 2% higher than last year, with newspaper operations up 1% and digital only businesses up 4%. Whilst overall growth was lower than the 6% growth experienced in the first quarter, performances are set against tougher comparatives, given the improvement in the markets of a year ago.
Northcliffe Media's total and underlying# revenues were 8% down for the period, including circulation revenues 3% lower and advertising 8% lower. The year-on-year advertising revenue performance was affected by lower recruitment (down 27%) and notices (down 12%) in particular, other categories being down a more modest 3% in total. For the quarter to March so far1, advertising revenues are 12% lower than last year, a deterioration on the 6% decline experienced in the first quarter, although as with national titles advertising, this is against tougher comparatives.
Group
Operating profits* for the first half of the year are expected to show some improvement on last year, reflecting a good revenue performance from B2B overall, offset somewhat by increased investment, and a solid performance from our consumer operations, despite the impact of increased newsprint costs for one quarter. We also expect Group profits to include the benefit of lower net finance costs due to the impact on the pension financing item of a lower pension fund deficit and of the discount rate used.
The profits* for the first half of the year will incorporate the changes in presentation, explained in November 2010. The inclusion of the charge for amortisation of software and internally generated intangible assets will reduce adjusted profits* reported in the prior period by £8 million and by a similar level in the current half year. In addition, the results of A&N International Media will be reported within Associated, rather than within Northcliffe, with those of the prior period restated on a comparative basis.
The Group is likely to report exceptional costs of around £10 million, mainly at A&N Media, arising from reorganisation costs. Any decision to relocate the Surrey Quays printing operation would result in further exceptional costs.
Notes
* References to profits are to adjusted profits, which exclude amortisation (other than that of software and internally generated intangible assets) and impairment of intangible assets and exceptional items.
# Underlying revenue is revenue on a like for like basis, adjusted for acquisitions, disposals, closures and non-annual events made in the current and prior year and at constant exchange rates. 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.
1 The quarter to March so far refers to the 11 weeks to 20th March 2011.
The average £:$ exchange rate for the half year is estimated at £1: $1.59 (against £1:$1.59 in the same period last year). For the 5 month period, the rate is £1: $1.59 (against £1:$1.60 in the same period last year).
DMGT's estimated weighted average number of shares in issue for the half 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:
Stephen Daintith, 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 9.00 a.m. on 28th March, 2011. The dial-in number is +44 (0)20 3140 0668; conference code: 356497#. For a replay of the call, the dial-in number is +44 (0)20 3140 0698 and the replay code: 376716#.
Change of Finance Director
As separately announced, Stephen Daintith today became Finance Director of DMGT, succeeding Peter Williams.
Investor Day
DMGT is this afternoon holding an Investor Day for City analysts and institutions to give them an opportunity to learn more about the Group and its growth potential with no additional update on current trading being given. Further details of this event will be set out in a separate announcement.
Next trading update
The Group's next scheduled announcement of trading will be its results for thehalf year ending 3rd April which will be released on the morning of Thursday26th May, 2011. 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 7 am on 28 March, 2011
DAILY MAIL & GENERAL TRUST PLCRelated Shares:
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