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DMGT issues Nine Month Trading Update

Daily Mail and General Trust plc reports that the performance for the first nine months of FY 2018 was in line with expectations.

DMGT issues Nine Month Trading Update

As reported by DMGT:

The trading outlook for the year remains unchanged and consistent with current market expectations.

Business to Business (B2B)

* Broad-based underlying revenue growth of 4% for the nine months, with continued good levels of growth delivered from Insurance Risk, EdTech, Energy Information and Events and Exhibitions.

* Pro forma reported revenue was 14% lower, reflecting disposals and the weaker US dollar, which affected all of the B2B divisions.

* Full Year guidance maintained: low-single digit underlying revenue growth with adjusted operating profit margin in the mid-teens.

Insurance Risk (RMS)

Underlying revenue growth was 7%, including 4% growth in subscription revenues. The core modelling business remains strong and RMS continues to enhance its software and pursue a modular approach to the RMS(one) platform.

Property Information

Revenue decreased by 1% on an underlying basis, as growth from the US businesses was more than offset by Europe, given low transaction volumes in the UK property market. Reported revenue performance was impacted by the disposal of EDR, the partial disposal of SiteCompli in April 2018 and the cessation of trading at Xceligent in December 2017.

EdTech (Hobsons)

Underlying revenue growth of 10% reflected continued strong growth from each of the businesses: Naviance, Intersect and Starfish. Reported revenue performance was impacted by the disposal of the Admissions and Solutions businesses in September and October 2017.

Energy Information (Genscape)

Underlying revenue growth of 6% was delivered with continued growth from the oil, power and gas businesses, partly offset by lower revenue at the solar business.

Events and Exhibitions (dmg events)

Underlying revenue growth was 2% for the nine months and, as expected, there were no major events held in the third quarter. Reported revenue performance was affected by the absence of Gastech, which last occurred in April 2017 and will be held again in September 2018.

Consumer Media (dmg media)

* Underlying revenue decline of 4% and reported revenue decline of 5%, in line with our expectations.

* Full Year guidance maintained: mid-single digit underlying decline in revenues with the adjusted operating profit margin around 10%.

Circulation revenue declined 6%, with volume reductions partly offset by the cover price increase of The Mail on Sunday in October 2017. There was an underlying decrease in advertising revenue of 2% across dmg media, with the 5% decline in print being partly offset by 4% growth from digital. The Mail newspaper titles continue to hold significant market shares and we remain confident in the future growth opportunities at MailOnline, which continues to improve audience engagement.

Joint ventures and associates

On 18 June 2018, ZPG Plc announced that all resolutions relating to Silver Lake’s offer to acquire the business had been approved. Consequently, DMGT ceased to recognise its share of ZPG Plc’s profits from that date and will only include the results for the first eight and a half months of the year. The Full Year share of operating profits from all joint ventures and associates is therefore now expected to be around £70m, rather than the previous guidance of at least £75m.

Net debt

Net debt at 30 June 2018 was £447m, compared to £534m at 31 March 2018, including the benefit of £146m of proceeds from the disposal of EDR, which completed in April 2018. On 25 July 2018, DMGT received £642m of proceeds on the disposal of its c.30% stake in ZPG Plc and the Group is now in a net cash position.