DMGT.L Regulatory News (DMGT)

26 January 2017

Daily Mail and General Trust plc ('DMGT')

First Quarter Trading Update

This trading update covers the first quarter of DMGT's financial year, the three month period to 31 December 2016.

Profit outlook for the year unchanged; trading in line with our expectations

· Revenue for the first quarter of £520 million, in line with last year on an underlying# basis.

· Underlying# revenue growth of 1% from our B2B businesses.

· Underlying# revenue decline of 1% from dmg media.

· Reduction of stake in Euromoney from c.67% to c.49%.

· Net debt increased by £9 million to £688 million, including usual seasonal cash outflows and Euromoney share placing proceeds. Further £125 million net proceeds received from Euromoney's buy-back in January 2017 with adjusted pro forma^ quarter end net debt of £563 million.

· Revenue and profit FY 2017 outlook: profit outlook unchanged; dmg information's revenues in line with market expectations~ although underlying revenue growth rate reduced to mid-single digit.

* Including Euromoney, the Group and B2B underlying revenue growth rates were -1%.

Business to Business (B2B)

· Risk Management Solutions (RMS): revenues grew 24% to £59 million, including the benefit of the stronger US dollar, and by 1% on an underlying basis. A major milestone is set to be achieved in Spring 2017 with the release of Risk Modeler version 1.0 on the RMS(one) platform, following successful completion of product testing.

· dmg information: revenues grew 16% to £130 million, including the benefit of the stronger US dollar, and by 1% on an underlying basis. Genscape (our energy business), Hobsons (our education business) and the US property information businesses continued to deliver underlying growth. As expected, the European property information businesses were adversely affected by reduced activity levels in the UK market. As indicated in the FY 2016 preliminary results release on 1 December 2016, underlying revenue growth is expected to accelerate during the year. Forward sales bookings have, however, been slower than anticipated given challenging market conditions and, as a result, dmg information's FY 2017 underlying revenue growth rate is now expected to be in the mid-single digits, rather than the high-single digits previously guided to. Full Year revenue, including the benefit of the stronger US dollar at current levels, is expected to be in line with market expectations~.

· dmg events: revenues declined 6% to £59 million, reflecting the later occurrence of Gastech this year and including the benefit of the stronger US dollar, and grew by 3% on an underlying basis. Two of our three large events, Big 5 Dubai and ADIPEC, occurred during the first quarter and collectively delivered low-single digit underlying revenue growth. The underlying revenue growth for the full year is still expected to be in the high-single digits, driven by Gastech, the third of our large events, which will be held in Tokyo in April 2017.

· Euromoney Institutional Investor: revenues grew 6% to £95 million, including the benefit of the stronger US dollar, and declined by 5% on an underlying basis. The performance was consistent with expectations and the underlying decline was mostly due to the continuing impact of Euromoney's strategic decision in the second half of last year to restructure some its event and training activities. Euromoney released its first quarter trading update earlier today.

dmg media

· dmg media: revenues declined by 5% to £178 million, an underlying# decline of 1%. Circulation revenues grew by 3%, reflecting the benefit of cover price increases more than offsetting the adverse impact of declining volumes. Total advertising revenues across dmg media were down by an underlying# 4% with a stable performance from the Mail titles. Print advertising declined by an underlying 11%, significantly outperforming the UK National Newspaper advertising market, and was largely offset by 10% underlying growth in digital advertising. Reported digital advertising growth was adversely affected by the prior year including £7 million of revenues from Wowcher, which was disposed of in November 2015.

· Mail businesses: MailOnline's advertising revenues increased by £9 million, or 38%, to £32 million, including Australian revenues and the benefit of the stronger US dollar, and by 17% on an underlying basis. This exceeded a decline of £5 million, or 12%, to £36 million in print advertising revenues at the Daily Mail and the Mail on Sunday for the quarter. Advertising revenues across the Mail businesses as a whole, for print and digital combined, consequently increased by £4 million and, on an underlying basis, were in line with last year. MailOnline's average global daily unique browsers during the quarter was 14.4 million, up 0.7 million, or 5%, on last year, and the average global unique browsers per month were 223 million, an increase of 1% on last year.

For the full year, dmg media still expects to deliver stable underlying revenues, in the -2% to +2% range.

Net debt / financing

Net debt at 31 December 2016 was £688 million compared to £679 million at 30 September 2016. Net proceeds from disposals and acquisitions were £94 million in the quarter, including the £127 million placing of Euromoney shares in December 2016, and there were the usual seasonal outflows. Further proceeds of £125 million were received on 6 January 2017 as a result of Euromoney's buy-back of its own shares and net of amounts owed to Euromoney. The pro forma^ net debt at quarter end, including the net proceeds, would have been £563 million and the corresponding pro forma net debt:EBITDA ratio at quarter end would have been 1.7.

Reduction of stake in Euromoney

On 8 December 2016, DMGT announced its intention to reduce its stake in Euromoney, from c.67% to c.49%, in two stages. The first stage was a placing of Euromoney shares that reduced DMGT's stake to c.57%, generating proceeds of £127 million, and which completed in December 2016. The second stage was a buy-back of shares from DMGT by Euromoney, which was approved at a Euromoney General Meeting on 29 December 2016. This generated gross proceeds of £188 million although, net of amounts owed to Euromoney, the net proceeds were £125 million and were received on 6 January 2017. The reduction in the Euromoney stake will increase the focus within DMGT's portfolio and enhance its financial flexibility, consistent with the strategic priorities presented at the preliminary results on 1 December 2016.

Following the share buy-back, Euromoney is no longer a subsidiary of DMGT and will be accounted for as an associate. DMGT's consolidated revenues and operating profits will not include Euromoney's results and, as for Zoopla, DMGT will just recognise its share of operating profits within joint ventures and associates. As previously announced, DMGT's FY 2017 revenues and operating profits will include 100% of Euromoney's results for the 3 months to December 2016 and Euromoney will be accounted for as an associate for the 9 months to September 2017. DMGT's total share of operating profits from joint ventures and associates, including Euromoney, is expected to be approximately £65 million for the full year, as guided to on 9 December 2016.

Market Abuse Regulation

As with previous financial announcements, the information communicated in this announcement includes inside information. DMGT has included this statement in this announcement in order to comply with the Market Abuse Regulation, which came into effect on 3 July 2016.

A conference call will be held with City analysts at 8.00am on 26 January 2017. The dial-in number is +44 (0)20 3059 8125. 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 31 March 2017, which will be released on 25 May 2017.

About DMGT

DMGT manages a diverse, multinational portfolio of companies, with total revenues of almost £2bn, that provide businesses and consumers with compelling information, analysis, insight, events, news and entertainment. DMGT is also a founding investor and the largest shareholder of Euromoney Institutional Investor PLC and Zoopla Property Group Plc.

Notes

# Underlying revenue is revenue on a like-for-like basis, adjusted for constant exchange rates, disposals, closures, non-annual events occurring in the current and prior year and acquisitions. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions, excludes disposals and includes revenues from one-off sales of IP assets, consistent with prior years. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying comparisons exclude Wowcher, which was disposed of last year, and 7 Days, which was closed this year. dmg media's underlying growth includes the year-on-year organic growth from acquisitions and underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities. Euromoney ceased to be a subsidiary of DMGT on 29 December 2016 and Euromoney is excluded from DMGT's underlying revenues. For Euromoney itself, acquisitions and disposals are excluded completely and no adjustments are made for the timing of events.

~ Current City analyst expectations for dmg information revenue range from £534 million to £591 million with a consensus of £560 million.

^ The pro forma net debt of £563 million adjusts the actual net debt of £688 million to include the £125 million of proceeds from the Euromoney share buy-back, net of amounts owed to Euromoney. The pro forma EBITDA is based on the 12 months to December 2016, restated to reflect DMGT's c.49% holding in Euromoney. The pro forma net debt:EBITDA ratio compares the pro forma net debt, restated at average exchange rates for the 12 months to December 2016, with the pro forma EBITDA.

† dmg media's results are for the thirteen weeks to Sunday 1 January 2017 and are compared to the thirteen week period to Sunday 27 December 2015.

Daily Mail's market share in December 2016 was 23.5% and compared to 23.4% last year. The Mail on Sunday's share was 22.3% and compared to 22.0% last year. Circulation market share figures are calculated using ABC's December 2016 and December 2015 National Newspapers Reports and exclude digital subscribers.

The average £:$ exchange rate for the three months was £1:$1.24 (against £1:$1.52 in the same period last year).

This trading update is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its Directors, employees, agents and advisers accept and assume no liability to any person in respect of this trading update save as would arise under English law. 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 facts stated and views expressed may change after that date.

This document and any materials distributed in connection with it may include forward-looking statements, beliefs, opinions or statements concerning risks and uncertainties, including statements with respect to the Group's business, financial condition and results of operations. Those statements and statements which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the Group's Directors' beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and which may cause results and developments to differ materially from those expressed or implied by those statements and forecasts. No representation is made that any of those statements or forecasts will come to pass or that any forecast results will be achieved. You are cautioned not to place any reliance on such statements or forecasts. Those forward-looking and other statements speak only as at the date of this trading update. The Group undertakes no obligation to release any update of, or revisions to, any forward-looking statements, opinions (which are subject to change without notice) or any other information or statement contained in this trading update. Furthermore, past performance of the Group cannot be relied on as a guide to future performance.

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per DMGT share for the current or future financial years would necessarily match or exceed the historical published earnings per DMGT share.

Nothing in this document is intended to constitute an invitation or inducement to engage in investment activity. This document does not constitute or form part of any offer for sale or subscription of, or any solicitation of any offer to purchase or subscribe for, any securities nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. This document does not constitute a recommendation regarding any securities.

Daily Mail and General Trust plc

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www.dmgt.com

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