28th Mar 2007 07:00
28 March, 2007 Daily Mail and General Trust plc ('DMGT') Trading Update Summary
This statement updates investors on the Group's progress in the current year, ahead of its half year ending on 1st April 2007.
The current financial year has maintained its good start. Associated has continued to grow its share of national advertising, although the London newspaper market remains particularly competitive. Northcliffe has offset falls in revenues by cost reductions and has recently seen its first year-on-year advertising revenue increases for nearly two years. Our business-facing operations are achieving further growth in underlying revenues. The Group expects a good half-year performance, driven by increased operating profits from our business to business divisions. This six-month performance will benefit from acquisitions and timing differences and will, as a result, show stronger growth than we currently expect to achieve for the full year.
National newspapers and related activities
Associated Newspapers' circulation revenues for the five months to February 2007 were 5% above the same period last year. The circulations of both Daily Mail and The Mail on Sunday for the six-month ABC period to February 2007 were broadly unchanged and each has again increased its market share.
Total advertising revenues in the same period have increased by 10%. These figures include those of Associated Northcliffe Digital which have risen by 141% year on year (48% excluding acquisitions). Underlying revenues increased by 4% (quarter one was up 8%; January/February up 2%). Associated's newspaper display advertising revenues have increased by 4% for the five months to February 2007. The largest category, retail, has enjoyed strong growth throughout the period. Classified advertising revenues, including those of the Evening Standard, are down by 8% for the same period.
Both the Mail titles have outperformed the wider market, though visibility on future advertising performance is limited as the market remains very short term.
Regional publishing
Northcliffe Media is continuing to see a gradual improvement in advertising trends. UK advertising revenues for the five months to February 2007 (excluding Aberdeen Journals which was sold in April 2006) were 3% below the comparable period last year (quarter one down 4%; January/February down 2%). Property revenues continue to grow strongly, being up by 9%. The decline in recruitment revenues has been reduced to 4% (down less than 2% in February), but motors revenue remains tough, falling by 13%. Revenues from digital publishing have risen by 57% over the previous year, largely in the recruitment category. The first four weeks of March have seen advertising revenues in line with last year.
Circulation revenues for the five months to February 2007 were 2% lower than the same period last year. UK publishing costs are 6% lower than last year for the first five months of the year. The programme of organisational and structural improvements is largely complete and the targeted annual cost reduction of ‚£45 million will be achieved during the next quarter.
Information publishing
DMG Information continues to perform well with year-on-year revenue growth (adjusted to exclude acquisitions and disposals) exceeding 15% and margins slightly higher than last year.
Within the financial and insurance division, Risk Management Solutions' bookings have continued to be strong and Trepp continues to trade well in a buoyant commercial mortgage-backed securities market. Within the property division, Landmark has seen further good growth, driven by strong performances in its legal and environment businesses, although interest rate increases are now beginning to reduce the number of transactions in the UK housing market. Environmental Data Resources' year on year revenues are also growing well despite transaction volumes again being flat. All other companies are showing good growth, including Genscape which was acquired last year.
Financial publishing
Euromoney Institutional Investor plc, in which the Group has a near 61% interest, gave a trading update on 1st February in which it reported that the outlook remained positive and that the integration of Metal Bulletin was progressing well.
Exhibitions
DMG World Media's revenues for the five months to February 2007 have grown by 8% year on year, or 3% when adjusted for timing differences, non-annual events and foreign exchange. Business to business continues to grow strongly, aided by the success of two shows, Gastech and Adipec, which were not held last year and by the growth in our technology sector. These good performances have outweighed falls within consumer events and gift fairs and, to a lesser extent the art and antiques sector.
Radio
DMG Radio Australia's revenues were 4% down year on year for the five months to February 2007, due mostly to a decline in the Sydney advertising market. In the first two surveys of 2007, the Nova network was again the leading national radio network in its target market of listeners under 40. The surveys also showed the Vega stations increasing their ratings which should improve their revenue performance over the coming months.
Exceptional items
The Group expects to report in its half year results net exceptional items in the region of ‚£5 million. This will comprise principally the operating costs of Northcliffe's reorganisation programme. The Group will also be undertaking its regular half-yearly review of the carrying values of its intangible assets for indications of any impairment.
Interim announcement
The Group intends to report its interim results for the half year to 1st April, 2007 on the morning of Thursday 24th May, 2007.
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. 184594
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