15th Mar 2006 07:00
15 March, 2006 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 half year end on 2nd April 2006.Since the Group last reported in November 2005, it has continued to see verydifferent trading conditions for its divisions. The businesses-facing divisionsare seeing good growth in revenues and are finding new opportunities; theconsumer-facing divisions have seen continuing difficult conditions,particularly when compared with their trading performance inthe first half of last year. Overall, the Group remains on track for asatisfactory year.National NewspapersAssociated Newspapers' overall circulation revenues for the five months toFebruary 2006 were 1% below the same period last year. Advertising revenues inthe same period have decreased by 9%, compared to last year (quarter one down8%; January/February down 9%), reflecting the well-reported difficulties withinthe market.The Daily Mail has continued to increase its share of an extremely competitivenational newspaper market and has again begun to record year-on-yearcirculation increases. The Mail on Sunday has performed in line with the marketfor the six-month ABC period to February 2006. Both titles continue to investin a range of new initiatives, such as The Mail on Sunday's launch of LiveMagazine, the re-design of You Magazine on high-quality silk paper and theFebruary launch of a new mid-week pull-out puzzle section in the Daily Mail.The Evening Standard achieved a reduced year-on-year decline in its paid-forcirculation for the third successive six-month period. Metro's distributioncontinued to average over one million copies and has increased by 10% recentlyas a result of new franchises in Liverpool and Cardiff. In addition, Metro waslaunched in Dublin as a joint venture in December 2005.Associated's newspaper display advertising revenues have fallen by 10% for thefive months to February 2006, although yields in the national titles aregenerally being maintained or improved, despite the challenging tradingconditions. Classified advertising revenues are down by 11% for the sameperiod.Digital advertising revenues from Associated's many online brands includingJobsite, Find a Property and Prime Location, have, however, risen by 43% yearon year and continue to show signs of encouraging growth. Associated is now oneof the leading players in the UK internet jobs and property markets. Theproperty site, primelocation.com, which was acquired in January, is tradingwell.Advertising revenue at Teletext, which is now part of Associated Newspapers, isdown 19% year on year, as the predicted decline in analogue viewing continues.Revenues from digital services (television and internet) are, however, up over70% in the five month period to February.Although visibility on future advertising performance is very limited, therehave been recent signs that the year-on-year decline in advertising revenue mayease in the second half of the financial year, but in any event all cost areasare being rigidly controlled, with significant savings already flowing through.Regional NewspapersNorthcliffe Newspapers continues to experience tough trading conditions. UKadvertising revenues for the five months to February 2006 were 7% below thecomparable period last year (quarter one down 6%; January/February down 8%).Excluding recruitment revenues, which have declined by 16%, advertisingrevenues are 3% lower so far this year. The rate of decline in recruitmentrevenues has slowed, from 19% in the first quarter to 12% in both January andFebruary. Property (up 6%) has continued to grow, but motors has fallen by 14%.Revenues from digital publishing are 17% above last year for the five months toFebruary 2006.Circulation revenues for the five months to February 2006 were in line with thesame period last year. In the July to December 2005 ABC period, Northcliffeevening titles continued to out-perform the regional newspaper industry averagecirculation figures. Northcliffe morning titles also out-performed the regionalnewspaper industry average circulation figures.The implementation of the Aim Higher programme of organisational and structuralimprovements is continuing, leading to significant year-on-year cost reductionscurrently running around ‚£20 million on an annualised basis. For the fivemonths to February 2006, operating costs are 5% lower than in the previousyear, despite suffering a newsprint price increase and significantly higherenergy costs. A third print site, Lincoln, has been closed recently followingthe press closures last year at Exeter and Swansea.As previously stated, a further announcement regarding the future organisationof Northcliffe Newspapers will be made soon.Information publishingDMG Information's business to business division continues to grow strongly withyear-on-year revenue growth exceeding 20% and margins remaining at similarlevels to last year. Landmark is seeing particular strength in its residentialmarket, as the number of transactions in the UK housing market has picked up.Environmental Data Resources continues to deliver consistent revenue growth.Risk Management Solutions has experienced record levels of bookings includingfrom new re/insurance companies established in Bermuda (as a consequence ofHurricane Katrina) and from renewals secured at increased rates. Treppcontinues to grow strongly in a buoyant commercial mortgage-backed securitiesmarket that has just completed a record year for issuance in both the U.S. andEurope.Within the careers division, the revenues of both Hobsons, with the US andAustralian businesses to the fore, and Study Group show year-on-year revenuegrowth in excess of 10% and margins are continuing to improve.Financial publishingTrading at Euromoney Institutional Investor has followed a similar pattern to2005. Demand for its events, training and electronic information products hascontinued to increase, and the outlook for advertising has gradually improved.The trading outlook for global financial markets remains positive, andEuromoney is optimistic it can make further progress in the second half inimplementing its strategy of increasing profits through a mix of organicgrowth, strategic acquisitions and margin improvement.ExhibitionsDMG World Media has seen the same divergence in results as the Group overall,with its consumer events struggling, but its business shows performingstrongly. The home and gift fairs have had a tough period, albeit with signs ofrecovery recently in the North American home shows. There have beenparticularly good performances from Palm Beach 3, the contemporary art,sculpture and photography show, and SurfExpo in Florida, from Index and Big 5in Dubai, and from AdTech's online marketing show and conference in New York.Revenue, when adjusted for timing differences, non-annual events and foreignexchange, has grown by around 11% year on year.BroadcastingDMG Radio continues to see strong growth in revenues in excess of 20% from itsradio network, despite a slowing radio advertising market and one disappointinglistener survey result in Sydney. The most recent survey shows Nova to benumber one in the five main cities in the 18-24 age group, as well as being theleading national network in its target market of listeners under 40. The newVega stations have been slow to build audience and changes are currently beingimplemented.Exceptional itemsThe Group expects to report in its half year results a charge in the region of‚£15 million as exceptional operating costs. This charge will comprise theprofessional costs of the strategic review of Northcliffe, together with thecosts for the second phase of its reorganisation programme.Interim announcementThe Group will be reporting its interim results for the half year to 2nd April,2006 for the first time under international financial reporting standards. Theannouncement of these interim results will be made on the morning of Thursday25th May, 2006.Enquiries: Peter Williams, Finance Director, DMGT 020-7938 6631Nicholas Jennings, Company Secretary, DMGT 020-7938 6625Andrew 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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