DAILY MAIL & GENERAL TRUST PLC: Trading Update
25th March, 2013
Daily Mail and General Trust plc (`DMGT')
Ahead of DMGT's Investor Briefing tomorrow afternoon, this statement provides an update on the Group's progress in the current year. It covers the five month period to the end of February, 2013 as well as the Group's financial position and performance during the period, updated to the latest practicable date.
Trading in line with our expectations; outlook for the year unchanged:
- DMGT underlying# revenue up 2% - Good underlying# growth of 5% from our B2B businesses - Underlying# revenue decline of 2% at dmg media; improved profit margin driven
by cost efficiencies - Underlying# digital advertising growth exceeding print advertising decline^ - Continued strong performance of dmg media's digital assets - Continuation of share buy back programme - Outlook for the year unchanged
Revenue Growth v Prior Year Reported Underlying# 5 Months to February 2013
Group revenue~ 0% +2% B2B~ +8% +5% RMS +4% +5% dmg information +16% +13% dmg events +39% +13% dmg media -7% -2%
Business to Business (B2B)
- Risk Management Solutions (RMS) delivered continued growth, despite the focus this year on the development of the new software platform, RMS(one), to be launched in 2014.
- Strong growth from dmg information with double digit growth rates from the Education (Hobsons), Property (Landmark and EDR) and Energy (Genscape) businesses.
- dmg events performing as expected with good underlying# growth of 13% driven by the biennial ADIPEC and Gastech events. The exceptionally strong growth in reported revenues reflects the benefit of the timing of biennial events.
- For the first half of the year, Euromoney Institutional Investor experienced challenging market conditions and is expected to show a revenue decline of approximately 1%, but adjusted profit before interest and tax broadly in line with last year. Euromoney released its trading update on 22nd March, 2013.
Due to tomorrow's Investor Briefing event, which is focused on dmg media, an extended commentary on that business's performance is provided in this Trading Update.
Revenue Growth v Prior Reported Underlying# Year 5 Months to February 2013 2013
Q1 2 Months 5 Months Q1† 2 Months 5 Months
dmg media -7% -7% -7% -3% -1% -2% Advertising -4% -5% -5% 0% +2% +1% Circulation -6% -8% -7% -6% -6% -6%
- dmg media: underlying# revenues down 2% in the period, with underlying# circulation revenues down 6% in a weak market. Our titles delivered continued market share improvement with Daily Mail's market share increasing to 22.2% and The Mail on Sunday's market share increasing to 21.0%*. Total underlying# advertising revenues were up 1%, with strong digital growth more than offsetting the decline in print advertising.
Underlying# newspaper advertising was down 8% in the period whilst digital advertising experienced strong growth, in particular MailOnline which was up 59%. For the three weeks since 24th February, 2013, total underlying# advertising revenues were in line with last year.
Print advertising revenues from the current portfolio were down £11 million on the same period last year whilst digital advertising revenues from the current portfolio were up £13 million^. This excludes the growth from Zoopla Property Group.
MailOnline's February 2013 performance included:
- 111 million unique browsers+, 22% ahead of February 2012 - Traffic to iPhone and android apps both being at record levels - Mobile access accounting for a record 43% of total visits
MailOnline's revenues for the month of March are expected to be approximately £3.4 million and full year revenues are expected to be around £45 million.
Some other notable monthly performances from dmg media's digital businesses in the first couple of months of 2013 are:
- Wowcher's monthly revenues exceeding £1 million for the first time, with a database of 2.2 million customers.
- Zoopla Property Group's continued strong growth. In January, a record number of house movers used its sites, resulting in 2.5 million enquiries to its agent and developer members, and revenues per member were at record levels. Zoopla Property Group's revenues for the full year are expected to be in excess of £60 million.
- Evenbase had 40 million unique visitors, with over 30% of Jobsite's traffic being mobile. Jobrapido achieved 294 million page views and its database now includes a record 7.1 million active jobseekers. Evenbase's full year revenues are expected to be in excess of £80 million.
Despite increased investment in digital products, dmg media's profit margin for the period increased year on year, due in part to the rationalisation of printing facilities that took place during 2012. Headcount has reduced by 605 (16%) to 3,237 since 30th September, 2012, due to disposals. Excluding disposals, headcount is in line with the end of September 2012 with increased staff levels in the digital businesses being offset by reductions in print and other operational areas.
Net debt / financing
Net debt increased during the period, as expected, due to the usual seasonal cash outflows, including dividend payment. We expect our year end net debt to EBITDA ratio to be about 2.0. On 22nd November, 2012, we announced a share buy back programme of up to £100 million over the following twelve months and as at 22nd March, 2013, DMGT had acquired 5.4 million shares at a cost of £32 million.
DMGT is holding an Investor Briefing for City analysts and investment institutions on 26th March, 2013, to give them an opportunity to learn more about dmg media. The event will be webcast live and it is possible to register for the webcast at `http://dmgt.com/webcast'. There will be no additional update on current trading at the Investor Briefing.
Appointment of joint broker
Numis Securities Ltd has been appointed as DMGT's joint broker, with immediate effect, alongside existing broker, Credit Suisse.
For further information
For analyst and institutional enquiries: Stephen Daintith, Finance Director +44 20 3615 2902 Adam Webster, Head of Management Information and Investor Relations
+44 20 3615 2903
For media enquiries: Kim Fletcher/Will Carnwath, Brunswick Group +44 20 7404 5959
A conference call will be held with City analysts at 8.00 a.m. on 25th March, 2013. The dial-in number is 0800 694 0257 or +44 (0) 1452 555 566; conference code: 24518078. A replay of the call will be available on DMGT's website at www.dmgt.com.
Next trading update
The Group's next scheduled announcement of financial information will be its results for the half year ended 31st March, 2013, which will be released on the morning of 23rd May, 2013.
DMGT is an international business built on entrepreneurship and innovation. We bring together leading companies and talented people to provide businesses and consumers with high-quality analysis & insight, information, news and entertainment.
Group revenues are split broadly equally across the B2B and Consumer businesses.
The B2B business comprises:
- Risk Management Solutions - dmg information - dmg events - Euromoney Institutional Investor
The Consumer business, known as dmg media, comprises:
- The Daily Mail, The Mail on Sunday and MailOnline - Metro - Evenbase (Jobsite & Jobrapido) - Wowcher - Zoopla Property Group (Zoopla & Prime Location), 50.8% stake
DMGT's ambition is to provide the highest quality content and services, across the most attractive growth markets in innovative, responsible and sustainable ways, building on its track record of earnings and dividend growth.
~ DMGT Group revenue growth rates exclude Northcliffe Media, which was disposed of effective 30th December, 2012. DMGT Group and B2B growth rates include Euromoney Institutional Investor.
# Underlying revenue is revenue on a like for like basis, adjusted for constant exchange rates, disposals, closures, non-annual events made in the current and prior year and, with the exception of Euromoney, acquisitions. For dmg information, movements exclude the effects of acquisitions made last year and this year. For dmg events, the comparisons are between events held in the year and the same events held the previous time. The cumulative comparisons exclude Evanta. For dmg media, underlying advertising excludes the effects of the sale of Teletext Holidays and motors.co.uk last year, the disposal of central and eastern European businesses this year, and the merger of the Digital Property Group and Zoopla in May 2012 and total underlying revenue also excludes low margin contract printing revenue. The year on year growth of Jobrapido, which was acquired in April 2012, is included in underlying revenues, having been excluded from previous statements.
^ The underlying growth in digital advertising revenue exceeding the underlying reduction in print advertising revenue refers specifically to dmg media. Print advertising includes revenue from the Daily Mail, The Mail on Sunday and Metro, whilst digital advertising includes revenue from MailOnline, Evenbase (excluding Broadbean and including the year on year growth from Jobrapido), Wowcher, Metro's digital assets, Villarenters and other smaller revenue streams. Zoopla Property Group is a joint venture and consequently its revenues are excluded from dmg media's revenues.
† Q1 figures have been restated to include the year on year growth of Jobrapido, which was acquired by dmg media's Evenbase business in April 2012.
* Daily Mail 22.2% in February 2013, a record level, compared to 21.4% in February last year and The Mail on Sunday's 21.0% share was the highest since the launch of the Sunday Sun. Circulation market share figures are calculated using ABC's February 2012 and February 2013 National Newspapers Reports. The News of the World closed in July 2011 and the Sunday edition of The Sun was launched on 26th February, 2012, so The Mail on Sunday's market share in February 2012 is not considered a relevant comparison.
+ The number of unique browsers is tracked by MailOnline and audited by ABC.
The average £:US$ exchange rate for the first five months was £1: $1.59 (against £1:$1.58 last year).
This Trading Update 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 the Trading Update is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this Trading Update 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 Trading Update involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Trading Update 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 5TT www.dmgt.co.uk Registered in England and Wales No. 184594 END -0- Mar/25/2013 07:00 GMT