DMGT.L Regulatory News (DMGT)

Good progress with strategic priorities and Full Year results in line with expectations

Highlights:

· Successful execution against strategic priorities; active portfolio management continued

· Strong financial position, net cash1 of £233m; disposal of ZPG Plc stake realised £642m

· Underlying2 revenue stable, performance in line with expectations

o Good B2B performance: underlying revenues +3% with margin improvement

o Challenging Consumer Media conditions: underlying revenues -4%, margin 10%

· Adjusted3 profit before tax down pro forma4 -16%; adjusted EPS down pro forma -23% to 42.2p reflecting the reduced portfolio of businesses following capital realisation

· Statutory5 operating profit £169m (FY 2017 loss £(129)m); statutory profit before tax £692m (FY 2017 loss £(112)m); statutory EPS 194.7p (FY 2017 97.8p)

· Full year dividend increased +3% to 23.3p

Statutory results5 are stated before any adjustments. Adjusted results3 exclude exceptional costs and other items and are used to give greater insight to financial performance. Pro forma4 growth rates treat Euromoney as an associate for all of FY 2017, consistent with FY 2018, and underlying2 growth rates are on a like-for-like basis, adjusting for disposals and other items.

Paul Zwillenberg, CEO, commented:

"We have made good progress against our three strategic priorities of increasing portfolio focus, improving operational execution and enhancing our financial flexibility. The focus of our portfolio was significantly increased by the disposals of EDR and our stake in ZPG Plc, clearly demonstrating DMGT's long-term approach to value creation. As a result, our balance sheet has strengthened considerably, to a net cash position, enhancing our financial flexibility for balanced capital allocation. We have also continued to implement a series of operational initiatives across the Group that is starting to gain traction.

DMGT's performance during the year was in line with our expectations despite some challenging trading conditions. Our B2B businesses delivered broad-based underlying growth and Consumer Media continued to outperform its markets. MailOnline continues to perform well and has reached an important milestone with digital advertising revenue now exceeding the Mail's print advertising revenues. As we move into FY 2019, our vision for DMGT's future remains unchanged; we seek to deliver profitable growth across a diversified portfolio, driven by our long-term approach to investment and increased focus on innovative technologies. The Board remains confident that the Group's strategy, supported by our strong balance sheet, will over the medium term, deliver consistent earnings growth to underpin DMGT's long-standing commitment to sustainable annual real dividend growth."

Full Year Financial Results:

Full Year 2018 - segmental performance:

A presentation of the Full Year Results will be given to investors and analysts at 9.30am on 29 November 2018, at The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT. There will also be a live webcast available at http://www.dmgt.com/webcastfy18.

Financial reporting calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 24 January 2019.

About DMGT

DMGT manages a diverse, multinational portfolio of companies, with total revenues of around £1.4 bn, 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.

Notes

1 Net cash includes £237m of short-term deposits maturing in December 2018.

2 Underlying revenue or profit is revenue or operating profit on a like-for-like basis, see pages 28 and 29. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition. For events, the comparisons are between events held in the year and the same events held the previous time. For Consumer Media, underlying revenues exclude low margin newsprint resale activities. For FY 2017, central dmg information costs allocated to Property Information, EdTech and Energy Information are reclassified to Corporate costs, consistent with all US central costs being included in Corporate costs in FY 2018.

3 Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. The Board and management team use adjusted results, rather than statutory results, to give greater insight to the financial performance of the Group and the way that it is managed. Similarly, adjusted results are used in setting management remuneration. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, amortisation of intangible assets arising on business combinations, pension finance charges or credits and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 22 to 25. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary during the first three months of Full Year 2017.

4 Euromoney ceased to be a subsidiary at the end of December 2016. Pro forma Full Year 2017 figures have been restated to treat Euromoney as a c.49% owned associate for the whole year, consistent with the ownership profile during Full Year 2018. See page 21.

5 The statutory results are IFRS figures before any adjustments. They are for continuing operations only (excluding the discontinued operations, Euromoney, from the first three months of Full Year 2017), other than basic earnings per share since the statutory figure includes discontinued operations.

~ Percentages are calculated on actual numbers to one decimal place.

The average £:US$ exchange rate for the year was £1:$1.35 (2017 £1:$1.27). The rate at the year end was $1.30 (2017 $1.34).

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

Management Report

This management report, on the audited results for the year ended 30 September 2018, focuses principally on the adjusted results to give a more comparable indication of the Group's business performance.

Explanations of exceptional operating costs, impairment charges and other items included in the statutory results are set out after the divisional performance review and in the segmental note (Note 3). Reconciliations between the statutory and adjusted results for both FY 2018 and FY 2017, as well as supporting explanations, are set out on pages 22 to 25.

The adjusted results are summarised below, with the pro forma4 Full Year 2017 comparatives.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Group revenue for the year was £1,426m, a decrease of 9% on both a statutory and pro forma basis, reflecting the effect of disposals and the weaker US dollar relative to sterling. On an underlying2 basis, however, revenue was in line with the prior year. Underlying growth was delivered in subscriptions, events and digital advertising, but was offset by the anticipated decline in print advertising and circulation. The revenue performance for our B2B businesses and our Consumer Media business, on a reported and underlying basis, is summarised below.

* 2017 figures exclude Euromoney, so are on a pro forma4 basis.

Adjusted operating profit of £145m decreased 19% on a pro forma basis and by 17% on an underlying basis. The underlying performance reflected broadly stable profits from the B2B businesses, with growth from Insurance Risk and EdTech, a decrease from Consumer Media and, as expected, an increase in Corporate costs due to planned investment in central functions to support the implementation of our strategy. These factors resulted in a Group adjusted operating margin of 10%, compared to a pro forma margin of 11% in the prior year.

Excluding Corporate costs, the B2B businesses generated 67% of the adjusted operating profit in the year, with Consumer Media contributing the remainder. More than half of the Group's adjusted operating profit was generated from outside the UK, with over a third coming from North America.

Adjusted profit before tax was £182m, a 16% decrease on a pro forma basis. The share of adjusted operating profits from joint ventures and associates was £74m, a decrease of 6%, reflecting investment in DailyMailTV and the disposal of DMGT's stake in ZPG in July 2018, hence the exclusion of the share of ZPG's profits for the last three and a half months of the year. Finance charges, including DMGT's share of associates' interest costs, were £37m, down 11% on the prior year on a pro forma basis, reflecting the benefit of the stronger balance sheet. As expected, the effective tax rate increased due to new restrictions on the use of historic UK losses and the adjusted tax charge was £33m, up 22% on the prior year on a pro forma basis. Adjusted Group profit after tax and minority interests was £149m, down 23% on a pro forma basis. Adjusted earnings per share of 42.2p also decreased 23% on a pro forma basis.

The full year dividend increased by 3% to 23.3p, in line with our dividend policy of delivering real dividend growth. The Board's decision to recommend increasing the dividend reflects its confidence in DMGT's ability to deliver future long-term earnings growth.

The statutory profit before tax for the year was £692m after £95m of amortisation and impairment charges in respect of goodwill and intangible assets and £25m of exceptional costs, including a £5m share of associates' exceptional charges. The statutory profit before tax benefited from £658m of profit on the sale of assets and compared to a £(112)m loss before tax in the prior year, which included £231m of impairment charges against goodwill and intangible assets. Statutory profit for the year was £688m, compared to £342m in the prior year, which benefited from a £509m gain on the Euromoney transaction, and basic earnings per share of 194.7p were up 99% on the prior year.

The table below sets out the reconciliation from statutory profit before tax to adjusted profit before tax. More detail and explanations are provided on pages 22 to 25.

Strategy

The strategic decisions taken over the past year are enhancing our business model and underpin our commitment to delivering profitable growth across a diversified portfolio. We are encouraged by the good progress made across DMGT's three strategic priorities:

· Improving operational execution: the Performance Improvement Programme includes operating initiatives for each company which are aligned with the business's clear role within the Group. Good progress was made during the year, with initiatives across all five categories of product, commercial, operations, people and technology. Notable examples included revised commercial policies in respect of pricing and the grouping of products at Genscape, Landmark, Hobsons and RMS; the application of machine learning at Genscape and Trepp; and the strengthening of technology talent centrally and across the Group.

· Increasing portfolio focus: significant steps were taken during the year to increase the focus of DMGT's portfolio. In the US Property Information sector, Xceligent ceased trading in December 2017, and the disposal of EDR and partial sale of SiteCompli occurred in April 2018. Hobsons, the EdTech company, sold its Solutions business in October 2017 and is now entirely focused on the faster-growing Naviance, Intersect and Starfish businesses. In September 2018, Genscape, the Energy Information company, merged Locus Energy into AlsoEnergy, in which it retains a minority stake, driving consolidation in the sector. DMGT sold its c.30% stake in ZPG in July 2018, further increasing portfolio focus.

· Enhancing financial flexibility: DMGT's financial flexibility has improved significantly over the year. The net cash1 position was £233m at year end, an improvement of £697m compared to £464m of net debt at the start of the year, and benefited from disposals, notably from DMGT's holding in ZPG which generated £642m of proceeds. Given the progress made strengthening the balance sheet during the course of the year, this strategic priority has now been revised to 'Maintaining financial flexibility'. This will ensure that DMGT has sufficient financial strength to continue investing organically across the Group, support the commitment to real dividend growth and have the ability to take advantage of attractive asset valuations as they arise.

Clear portfolio roles have been identified for each of our businesses, reflecting their financial characteristics. The segmentation helps to frame our capital allocation decisions and determine each business's priorities and performance improvement initiatives. The three roles are:

· Operating at scale: strong, predictable cash contributors. This category includes Trepp and Landmark, two of our Property Information businesses, the Events and Exhibitions business and the Consumer Media Mail and Metro print newspapers. Excluding EDR, which was sold during the year, cumulative revenues were £881m, an underlying decrease of 3% compared to last year. The cash operating income margin was 18%, compared to 21% in the prior year. Cash operating income, 'Cash OI', is adjusted EBITDA less capital expenditure and the margin reflects the cash generation of the businesses as a percentage of revenues.

· Focused growth: large businesses that have the ability to deliver revenue growth with an improving margin and are expected to develop into strong cash generators in the future. This category includes our Insurance Risk, EdTech and Energy Information businesses, as well as MailOnline, our Consumer Media digital business. Cumulative revenues were £492m, underlying growth of 6%. The cash operating income margin improved to 11%, compared to 9% in the prior year.

· Early bets: businesses and minority stake holdings in early-stage companies which will require incremental investment to grow into businesses of the future. This category includes BuildFax, a US Property Information company, and included Locus Energy prior to its merger into AlsoEnergy. Excluding businesses that were sold, closed or became associates during the year, these businesses delivered a break-even performance in the year from revenues of £5m. Since becoming a subsidiary in October 2018, DailyMailTV is now classified as an Early bet business. In addition, dmg ventures, DMGT's early stage investment division, manages a portfolio of minority investments with a focus on disruptive technology start-ups, including Yopa, the hybrid estate agent.

Capital allocation framework

DMGT prioritises organic investment opportunities and takes a long-term approach, investing through the cycle. DMGT is committed to its policy of delivering real dividend growth. The Group adopts a balanced and flexible approach to capital allocation across the two remaining categories of acquisitions and shareholder returns.

DMGT is committed to its disciplined approach to acquisitions, including the application of its investment criteria, and will prioritise bolt-on targets to complement its existing portfolio of businesses. The Group also aims to prioritise the allocation of capital towards growth opportunities, particularly those that can benefit from technological or market disruption.

Maintaining financial flexibility is a key strategic priority, enabling DMGT to continue with its approach to balanced capital allocation, including having the ability to be acquisitive as opportunities arise. Returning capital to shareholders is considered by the Board in light of the acquisition pipeline and the strength of the balance sheet.

Outlook - 2019

B2B: the financial performance will be affected by the portfolio changes that have taken place since October 2017. FY 2018 B2B revenues, restated based on the current portfolio of businesses, were £725m. In FY 2019, the B2B businesses are collectively expected to deliver underlying revenue growth in the low-single digits. The adjusted operating margin is expected to be in the mid-teens, benefiting from the flow-through of operational efficiencies and the absence of RMS(one) amortisation charges offset by the continued investment to support our long-term growth, notably in RMS. At a business level, we are anticipating the following dynamics:

· Insurance Risk: RMS will be increasing its investment in software, data, data analytics and applications. Revenues are expected to grow in FY 2019 and the adjusted operating profit margin will reflect the absence of RMS(one) amortisation charges offset by the increased platform investment, with development costs continuing to be expensed as incurred.

· Property Information: the European businesses are expected to continue to experience subdued conditions, with uncertainty in the UK market, and the remaining US businesses to continue to deliver underlying revenue growth.

· EdTech: Hobsons is expected to continue to deliver underlying growth.

· Energy Information: Genscape is expected to continue to deliver underlying growth.

· Events and Exhibitions: dmg events is expected to continue to deliver underlying revenue growth with a marginally reduced operating margin, reflecting increased investment and Gastech changing to an annual format.

Consumer Media: digital advertising revenues are expected to grow, helping to offset anticipated print advertising declines, with advertising market conditions likely to remain volatile. Circulation volumes are expected to continue to decline, although revenues will benefit from the September 2018 cover price increase of the Monday to Friday editions of the Daily Mail, from 65p to 70p. FY 2018 Consumer Media revenues, restated for the current portfolio of businesses, were £663m and the underlying rate of decline in FY 2019 is expected to be in the mid-single digits. The operating margin is expected to be in the high-single digits in FY 2019, reflecting the anticipated revenue decline, increased newsprint costs and investment in DailyMailTV being partly offset by the benefit of continued cost efficiencies within the newspapers and by an improving contribution from the rest of MailOnline.

Corporate costs: are expected to be less than £45m in FY 2019, compared to £47m in FY 2018, and to be reduced further in FY 2020.

JVs and Associates: will be affected by the absence of ZPG, following the disposal of DMGT's stake in the business. Consequently, the share of adjusted operating profits from joint ventures and associates in FY 2019 is expected to be at least £40m compared to £74m in FY 2018.

Net finance costs: are expected to benefit from the maturing of £219m of bonds in December 2018 and the strength of DMGT's balance sheet. Consequently costs are expected to be around £15m in FY 2019, a reduction on the £37m charge in FY 2018.

Taxation: is expected to be affected by the changing geographical mix of profits. The effective tax rate is expected to increase to around 20% in FY 2019 and gradually increase further over the next few years.

Business Review

Business to Business (B2B)

B2B revenues totalled £773m, up 3% on an underlying basis, with growth from EdTech, Energy Information, Insurance Risk and Events and Exhibitions partially offset by Property Information, which experienced weakness in the UK. Revenues decreased by 12% on a pro forma basis, following disposals of Property Information and EdTech businesses and reflecting the weaker US dollar.

B2B profits were £128m, down an underlying 1%, due to the growth from Insurance Risk and EdTech being more than offset by reductions from Property Information, Energy Information and Events and Exhibitions. The overall B2B operating margin increased to 17% and included the benefit of a stronger Property Information margin following the closure of Xceligent in December 2017. Despite the £5m reduction in operating profit, B2B cash operating income increased £11m to £131m, reflecting the improved operational execution through the Performance Improvement Programme.

Outlook: the B2B financial performance will be affected by the disposal of EDR, which occurred in April 2018. FY 2018 B2B revenues, restated for the current portfolio of businesses, were £725m. In FY 2019, the B2B businesses are collectively expected to deliver underlying revenue growth in the low-single digits and the adjusted operating margin is expected to be in the mid-teens, reflecting the benefits of the Performance Improvement Programme offset by the continued investment to support our long-term growth.

Insurance Risk: RMS

Insurance Risk revenues increased by 5% on an underlying basis, mainly benefiting from one-off project revenues as well as subscription revenues across the core modelling, software and data businesses. Reported revenues decreased 2% to £229m due to the weaker US dollar. Adjusted operating profit grew by 5%, despite the impact of the weaker US dollar, and by 16% on an underlying basis, with the adjusted operating margin increasing to 15%.

RMS continues to invest in model development, reflecting an ongoing commitment to build upon the business's market-leading position. RiskLink18 was released in July 2018 and included updates to the North American Hurricane-Storm Surge model as well as new and updated earthquake and typhoon models that have expanded coverage across the Asia Pacific region. The third-generation model for the cyber risk market was also released in the year.

In line with the Performance Improvement Programme, the management team's enterprise software experience was significantly enhanced during the year, notably with the appointment of Karen White as RMS CEO in March 2018. RMS also strengthened its executive team and reorganised its software development, sales, account management and customer success teams to improve delivery of its full suite of products across the client base.

RMS has recently made an important change to enhance its strategy to deliver long-term growth. Earlier investments in the RMS(one) platform, dating back to 2011 when RMS(one) was conceived, reflected available technologies and the market's attitude to the cloud at that time. The platform was also relatively narrowly focused on natural catastrophe risk management for the property insurance sector. Since then, technology and the insurance sector's acceptance of cloud computing have evolved considerably. There is also demand from RMS's customer base for a broader set of solutions to deliver greater strategic value, across more areas of risk.

Consequently, the decision has been taken to re-architect the RMS(one) platform to take advantage of the growing benefits of cloud technology, better matching capacity to demand. This development is expected to reduce significantly the running costs for customers whilst also improving performance, facilitating more modular delivery and enabling new products and solutions starting in 2019. Throughout 2019 and beyond, RMS will be incorporating modern and innovative technologies, such as artificial intelligence and machine learning, to deliver a platform that will be scalable, secure, flexible and extensible, thereby addressing the evolving and future market for risk.

Since August 2016, all RMS(one) development costs have been expensed as incurred. Historic development costs prior to then were capitalised. Given the decision to re-architect the platform, the historically capitalised development costs incurred prior to August 2016 have been fully impaired, resulting in a charge of £58m.

Priorities in the year ahead: during FY 2019, RMS, one of DMGT's Focused growth businesses, will be increasing its investment in software, data, data analytics and applications. The investment will deliver new strategic benefits to customers and position the business for the long term, by opening up adjacent market opportunities to catastrophic modelling, such as data analytics. Future releases of high-definition (HD) models will be made exclusively on the new RMS(one) platform, starting with US Inland Flood in spring 2019 and North America Wildfire HD later in the year. Revenues are expected to grow in FY 2019 and the adjusted operating margin will reflect the absence of RMS(one) amortisation charges offset by the increased platform investment, with development costs continuing to be expensed as incurred.

Property Information

The focus within the US Property Information portfolio was significantly increased during the year. Xceligent ceased trading in December 2017 and the disposal of EDR was completed in April 2018. Also in April 2018, DMGT reduced its stake in SiteCompli to c.49%, with the founding management team now holding a majority stake; SiteCompli is now classified as an associate rather than a DMGT subsidiary.

The US Property Information portfolio now comprises Trepp, a leading provider of data, analytics and technology solutions to the global securities and investment management industries, and one of DMGT's Operating at scale businesses; and BuildFax, an early stage but leading provider of property condition and history data. The European Property Information portfolio continues to consist of the Landmark Information Group, including Landmark and SearchFlow in the UK and On-geo in Germany.

Property Information revenues decreased by 2% on an underlying basis. Revenue growth in the US was more than offset by the European business, which continued to face challenging conditions in the UK residential market where mortgage approval volumes were down 4% on the prior year. The 17% reported decrease in revenues reflected the reduced US portfolio and the weaker US dollar. Adjusted operating profit decreased by 8% on an underlying basis, including the cost of initiatives to extend Trepp's product offering and reflecting the challenges in the UK market. The adjusted operating margin increased to 21%, benefiting from the absence of loss-making Xceligent for nine months of the year and from central US costs, that were historically allocated to dmg information's cost base, being included in Group Corporate costs in FY 2018.

During the year, as part of the Performance Improvement Programme, SearchFlow launched a new search ordering platform that significantly improves the customer experience. Trepp continued to build-out its TreppLoan platform by enhancing portfolio and workflow capabilities and expanding the breadth of data. The product benefits from the extension of Trepp's existing data and intellectual property, making it relevant to a broader customer segment. BuildFax, the Early bets business, significantly reduced its sales cycle, better positioning it to grow quickly in the future.

Priorities in the year ahead: the existing market dynamics are expected to remain broadly unchanged with notable weakness in the UK market. There will be continued product development at the Operating at scale businesses, Trepp and Landmark Information Group, to enhance their market-leading positions and help generate future growth, and continued strong revenue growth is expected from BuildFax, the Early bets business.

EdTech: Hobsons

EdTech revenues grew by an underlying 9%, with continued growth from each of Hobsons' three product lines: Naviance, the K-12 college and career readiness solution; Intersect, the higher education matching business; and Starfish, the higher education student retention and success platform. The disposal of the Admissions and Solutions businesses, in September and October 2017 respectively, resulted in reported revenues decreasing to £68m. Similarly, adjusted operating profit decreased to £7m although this reflected a £5m improvement on an underlying basis.

During the year, the business delivered a new Naviance Student product, which increases end-user engagement, by providing students and parents with an intuitive mobile-friendly experience. Over 11 million students now have access to Naviance, including over 40% of high school students in the US, with the product being used by over 13,000 schools. Enhancements were also made to the Intersect and Starfish product suites during the year, including an improved mobile experience and the full integration of analytics into Starfish. Over 1,000 US colleges and universities are now using Hobsons' higher education products, Intersect and Starfish.

Priorities in the year ahead: during FY 2019, investment will be made to modernise the core EdTech product platforms and add new client-facing features and functionality. The business will continue to focus on delivering the combination of underlying revenue growth and improving cash generation, with the Performance Improvement Programme helping to support its progress as one of DMGT's Focused growth businesses.

Energy Information: Genscape

Energy Information revenues grew by an underlying 7%, with continued growth from the core oil, power and gas sectors. Including Locus Energy and the adverse effect of the weaker US dollar, total reported revenue decreased slightly to £86m. In September 2018, Locus Energy was merged into AlsoEnergy, in which Genscape retains a minority stake. The combined business benefits from greater scale and an improved ability to innovate on behalf of its clients.

The new management team has been implementing the Performance Improvement Programme to deliver operational efficiencies as well as increasing the focus within the business: several sub-scale business lines were divested or closed to increase focus on growth opportunities; the technology team was reorganised to bring additional scale and expertise to top priorities; a new process, the Product Launch Pad, was introduced for developing products from concept through to commercial launch, ensuring consistent vetting and a more co-ordinated approach for opportunities that can have a significant impact; and the pricing policy was revised to reflect customer value.

The elimination of peripheral products and the streamlining of support functions resulted in some restructuring costs that are included in adjusted profit. Also, a larger proportion of payroll costs were expensed directly, with reduced capitalisation. These two factors resulted in adjusted operating profit declining by an underlying £3m, although the cash operating income of the business improved by £7m.

Priorities in the year ahead: Genscape will continue to invest in product, sales and service in its core power, oil and gas businesses. As one of DMGT's Focused growth businesses, Genscape is expected to continue to deliver underlying revenue growth during FY 2019 and is well-positioned to grow its profits.

Events and Exhibitions: dmg events

Events and Exhibitions revenues grew by 5% on an underlying basis. Big 5 Dubai and ADIPEC, two of the business's three large events, were held in November 2017 and collectively delivered mid-single digit underlying growth. Gastech, the other large event, occurred in Barcelona in September 2018 and, as expected, revenues decreased as a result of moving from the larger Japanese market where it was held in 2017. Reported revenues grew by 1% to £118m despite the impact of the weaker US dollar.

The business continued to geo-clone existing shows by launching into new locations, including a Big 5 Construct Egypt event, and to launch spin-off events, including a Global Power & Energy Exhibition event that ran in parallel with Gastech. Two small businesses were also acquired in the year, with events in the construction and hotel interior design sectors.

The operating profit margin was 24%, a reduction compared to the prior year, due to expected increased costs for the major shows, notably ADIPEC, and holding two separate Index events in Dubai to accommodate the timing of Ramadan. As a result, operating profits decreased by 9%, including the adverse effect of the weaker US dollar, and by an underlying 8%.

During the year, as part of the Performance Improvement Programme, dmg events strengthened its technology team and invested in technology to improve the overall experience for attendees, including the efficiency of attendee time at events.

Priorities in the year ahead: Gastech is changing to an annual format, having previously been held approximately every eighteen months, with the greater frequency expected to deliver an increase in cumulative revenues and profits over time. The reduced interval between shows is, however, expected to have an adverse effect on the absolute revenues and operating margin of the individual event in Houston in September 2019, relative to the September 2018 event.

Big 5 Dubai and ADIPEC, two of the three large events of the year, occurred in November 2018 and are expected to collectively deliver a stable performance, reflecting increasingly challenging conditions in the Middle East, notably the UAE construction market. In addition, the six launches planned for FY 2019 in Africa, the Middle East, South East Asia and Spain illustrate DMGT's willingness to invest to support longer-term revenue growth.

Consumer Media: dmg media

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

In the Consumer Media sector, dmg media's revenues decreased by an underlying 4% to £654m. As expected, the underlying growth from MailOnline of 5% was more than offset by a 5% decrease in circulation revenues and a 5% decline in print advertising revenues. The decrease in reported revenues, including the impact of the weaker US dollar and the disposal of Elite Daily during the prior year, was also 4%.

Total combined advertising revenues across the dmg media portfolio decreased by an underlying 1% to £308m. The 5% decrease in circulation revenues to £291m resulted from a continued decline in circulation volumes being partly offset by the benefit of the cover price increase of The Mail on Sunday from £1.70 to £1.80 in October 2017. The Mail brand remains strong, which is reflected in the growing UK retail market shares held by the Daily Mail and The Mail on Sunday of 24.8% and 21.9% respectively6. In September 2018, the cover price of the Monday to Friday editions of the Daily Mail increased from 65p to 70p.

Revenues for the combined Mail newspaper and website businesses (Daily Mail, The Mail on Sunday and MailOnline) decreased by an underlying 5% to £546m, including £122m from MailOnline. Total advertising revenues across the Mail businesses decreased by an underlying 3% to £239m, including a 9% decline in print advertising revenues, reflecting the continued structural and competitive challenges facing the UK national newspaper advertising market. MailOnline's advertising revenues grew by an underlying 5% and accounted for 51% of total advertising across the combined Mail businesses.

MailOnline continues to focus on attracting traffic directly to its homepages on desktop and mobile or its apps. Indirect traffic, notably via social media and search platforms, has reduced and resulted in total average daily global unique browsers during the year decreasing by 13% to 12.9m. Total minutes spent on the site, however, increased 2% to a daily average of 145m of which 77% came from direct traffic, compared to 74% in the prior year, reflecting growing engagement with its core target audience.

MailOnline continues to increase the engagement with its direct audience in the US and this has been supported by the success of DailyMailTV, which is currently in its second season. In October 2018, DailyMailTV became a wholly-owned subsidiary having previously been a joint venture and will therefore be included within Consumer Media's results in FY 2019.

Metro delivered a robust revenue performance in the context of a declining print advertising market, growing revenues by an underlying 4% to £71m, including the benefit of taking on four franchises from Trinity Mirror (now Reach plc) in January 2017, a further two in January 2018 and one in July 2018. Metro has the largest circulation of any weekday newspaper in the UK, read by an average of 2.8m people each day, and has the largest Monday to Friday advertising market share by volume.

Low margin sales of newsprint to other publishers account for the majority of other revenues and these are excluded from underlying revenue growth calculations.

Adjusted operating profit for the year decreased by 17% to £64m, including the benefit from disposing of the loss-making Elite Daily in April 2017. Profits decreased by 22% on an underlying basis, as the reduction in the Mail Newspapers' cost base and improved contribution from MailOnline only partially offset the adverse effect of decreasing circulation and print advertising revenues. The operating margin was 10% as expected, down from 11% in the prior year.

During the year, as part of the Performance Improvement Programme, the advertising operations of the Metro and Mail were integrated to deliver improved service to customers and to take advantage of dmg media's scale to reduce costs. The cost base of the newspaper businesses continues to be further reduced, albeit in a measured approach that ensures the quality of the content is not compromised, consistent with DMGT's strategy of supporting the longevity of the newspapers' strong cash generation.

Outlook and Priorities in the year ahead

The Consumer Media business is expected to benefit, despite the recent challenging market conditions, from digital advertising growth and to experience circulation volume and print advertising declines, with advertising revenues likely to remain volatile. FY 2018 Consumer Media revenues, restated for the current portfolio of businesses, were £663m and the underlying rate of decline in FY 2019 is expected to be in the mid-single digits. The operating margin is expected to be in the high-single digits in FY 2019, reflecting the revenue reduction, increased newsprint costs and investment in DailyMailTV being partly offset by the benefit of continued cost efficiencies within the newspapers and by an improving contribution from the rest of MailOnline.

Corporate costs

Joint ventures and associates

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

The Group's share of adjusted operating profits from joint ventures and associates was £74m, a 6% pro forma decrease on the prior year.

DMGT holds a c.49% stake in Euromoney, which released its Full Year 2018 results on 22 November 2018 and reported underlying revenue growth of 3% and a 3% increase in adjusted profit before tax. Results were adversely affected by the disposal of its Global Markets Intelligence Division, which completed in April 2018, and DMGT's share of adjusted operating profits was in line with the prior year on a pro forma basis. Euromoney ended the year with £78m of net cash on its balance sheet.

ZPG was acquired by Silver Lake in July 2018 and DMGT's proceeds from the disposal of its c.30% stake were £642m. DMGT's share of profits, however, only included results for the eight and a half months to 18 June 2018, the date that ZPG's shareholders approved the transaction. Consequently, the share of adjusted operating profits from ZPG decreased 5% to £23m.

The share of operating profits and losses from other joint ventures and associates, which are mainly early stage businesses, was a net loss of £5m (FY 2017 £2m). The increase was largely due to investment in consumer businesses, notably DailyMailTV, which is currently in its second season following its successful launch in September 2017. In October 2018, DailyMailTV became a wholly-owned subsidiary within the Consumer Media division. In August 2018, DMGT increased its stake in Yopa, the early-stage UK hybrid estate agent, from c.17% to c.26% and the business is now accounted for as an associate.

Outlook: the share of adjusted operating profits from joint ventures and associates will be affected by the disposal of ZPG, by Euromoney's disposal of its Global Markets Intelligence Division and the inclusion of DMGT's share of Yopa's losses. The share of operating profits from joint ventures and associates in FY 2019 will benefit from DailyMailTV now being a subsidiary and, in the absence of any significant acquisitions and disposals, is expected to be at least £40m.

Net finance costs

Net interest payable and similar charges, including DMGT's £4m share of associates' interest costs, was £37m, a 11% pro forma decrease on the prior year. DMGT benefited from lower average debt levels during the year.

The pension finance credit, which is excluded from adjusted results, was £2m, compared to a £5m charge in the prior year.

Outlook: net finance costs in FY 2019 are expected to be around £15m, reflecting the benefit of DMGT's 5.75% December 2018 bonds maturing, the strength of the balance sheet and reduced trade finance charges.

Other income statement items

· Exceptional items and amortisation

The exceptional cash costs in the year were £3m, a significant reduction compared to the £43m in the prior year, reflecting the absence of exceptional severance and consultancy costs. Total exceptional operating costs, including those of joint ventures and associates, were £25m (FY 2017 £50m) and included £17m in respect of a non-cash past service charge, following a change to the scheme rules of one of the Group's pension plans.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £32m (FY 2017 £50m). Following the decision to re-architect the RMS(one) platform, the carrying value of the RMS(one) asset, which related to costs incurred prior to August 2016, was fully impaired, resulting in a charge of £58m. Total impairment charges in the year were £63 million, including DMGT's share of associates' charges. This was a significant reduction compared to the prior year, when the Group incurred £231m of impairment charges against goodwill and intangible assets of its Energy Information and Property Information businesses and a £41m impairment charge in respect of the closure of the Didcot printing plant.

The Group recorded other net gains on disposal of businesses and investments of £658m, including DMGT's share of associates' gains, compared to a net gain of £530m in the prior year. DMGT recognised a £508m gain on the disposal of its stake in ZPG and a £52m gain on the disposal of EDR, the US Property Information business.

· Taxation

The adjusted tax charge of £33m (FY 2017 £27m pro forma4) is stated after adjusting for the effect of exceptional items. As expected, the adjusted tax rate for the year was 18.2%, an increase on the pro forma basis 12.6% in FY 2017, due to new legislation substantively enacted at the start of the year restricting the use of historic UK losses.

The statutory tax charge for the year was £4m. This excludes the share of joint ventures' and associates' tax charges of £31m, which included £18m of charges on exceptional items. There were tax credits of £23m in respect of amortisation and impairment of intangible fixed assets, tax charges of £18m on the sale of businesses, a one-off credit of £12m on the revaluation of the Group's deferred tax liabilities as a result of the reduction in the US federal tax rate, one-off tax charges of £10m as a result of US tax reform and tax credits of £9m on other adjusting items.

Outlook: the US 'Tax Cuts and Jobs Act' was enacted during the year, reducing the federal tax rate but also introducing various measures to fund that reduction, including restrictions to the deductibility of interest costs and amendments to the taxation of non-US subsidiaries. Overall, we assess the impact of tax changes in the US to be largely neutral for DMGT in the short term, but to be beneficial over time as the Group's US-generated profits increase. Due to the geographical mix of profits, the effective tax rate is expected to increase to around 20% in FY 2019 and gradually increase further over the next few years.

Pensions

The net surplus on the Group's defined benefit pension schemes increased from £62m at the start of the year to £244m at 30 September 2018, calculated in accordance with IAS 19 (Revised). During the year, the value of the assets increased and there was a reduction in the value of the defined benefit obligation.

Funding payments into the main schemes were £13m in the year and are expected to be £13m in FY 2019, in accordance with the existing 2016 funding plan, since the schemes remain in deficit on an actuarial basis. The next actuarial valuation is scheduled for 31 March 2019 and the existing funding plan includes payments of approximately £16m per annum from FY 2020 to FY 2027. In addition, under the existing funding plan, a contribution equal to 20% of any share buy-backs is contributed to the schemes. Contributions will be discontinued should the schemes' actuary agree the schemes are no longer in deficit. The defined benefit schemes are closed to new entrants.

Net cash and cash flow

Net cash1 at the end of the year was £233m, an improvement of £697m compared to the £464m net debt position at the start of the year. The Group's operating cash flow was £117m, including £50m of capital expenditure. The conversion rate of operating profits to operating cash flow was 80% compared to the 87% pro forma4 rate in the prior year. Operating cash flow was adversely affected by the timing of payments for newsprint.

The Group's adjusted cash operating income, which is calculated by adding back depreciation and amortisation and by deducting capital expenditure from adjusted operating income, was £155m. This metric, a Group key performance indicator, reflects the cash generation of the Group's subsidiary businesses and decreased by £26m on a pro forma basis, from £181m in the prior year, due to the £34m pro forma reduction in operating profit and £17m reduction in depreciation and amortisation being partly offset by a £25m reduction in capital expenditure.

Net proceeds from disposals, including expenditure on acquisitions and investments, were £738m and included £642m gross proceeds from the disposal of DMGT's stake in ZPG and £152m from the disposal of EDR. Cash out-flows included dividends of £81m, interest payments of £37m, taxation of £22m and pension funding of £13m. The Group broadly matches the profile of its net debt by currency to the components of its operating cash flow by currency. The stronger US dollar at year end, relative to the prior year end, resulted in an adverse debt revaluation of £4m.

At the year end, the Group's cash, cash equivalents and short term deposits totalled £675m. Bond debt was £424m and comprised £219m of the 5.75% bonds, due December 2018, £9m of the 10.0% bonds, due 2021, and £197m of the 6.375% bonds, due 2027. There was also £18m of net debt in respect of loan notes, collateral and derivatives. The Group's committed bank facilities were £431m, which were completely unutilised.

In December 2017, Standard & Poor's revised its corporate credit rating for DMGT from BBB- to BB+, following the reduction in DMGT's profit margin due to the deconsolidation of Euromoney. In January 2018, Fitch reaffirmed its BBB- investment grade rating. The Group's preferred upper limit for gearing remains a net debt to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 2.0, below the requirements of the Group's bank covenants.

Since FY 2013, when there was a £60m one-off reduction in working capital as a result of changes to the terms and collection of some of dmg media's trade debtors, DMGT has incurred trade finance charges. During the second quarter of FY 2019, dmg media will revert to the original terms and collection and this is reflected in the guidance of DMGT's reduced net finance charges but will also result in a one-off increase in working capital.

The Directors have a reasonable expectation that the Group will continue to operate and meet its liabilities as they fall due over the next three years. Accordingly, they continue to adopt the going concern basis in preparing its accounts.

Financing

During the year, the Group acquired 2.2m 'A' Ordinary Shares for £14m in order to meet obligations to provide shares under its incentive plans. It utilised 2.2m shares, valued at £14m, and a further 0.7m shares from the Employee Benefit Trust, valued at £4m, to provide shares under various incentive plans. As at 30 September 2018, DMGT had 354.3m shares in issue, including 19.9 million Ordinary Shares, and a further 7.8m 'A' Ordinary Shares held in Treasury and the Employee Benefit Trust7.

Dividend

The Board is recommending the payment on DMGT's issued Ordinary Shares and 'A' Ordinary Non-Voting Shares of a final dividend of 16.2 pence per share for the year ended 30 September 2018 (2017 15.8 pence). This will make a total for the year of 23.3 pence (2017 22.7 pence per share). The final dividend will be paid on 8 February 2019 to shareholders on the register at the close of business on 7 December 2018.

Pro forma Full Year 2017 adjusted results

Euromoney ceased to be a c.67% owned subsidiary and became a c.49% owned associate with effect from 29 December 2016. As a subsidiary, 100% of Euromoney's revenue and operating profit was included in DMGT's results whereas as an associate, DMGT recognises its share of operating profits. The tables below make revisions to FY 2017 to treat Euromoney as a c.49% owned associate for the whole year, consistent with the ownership profile during the current year.

Group summary

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Business to business (B2B)

Euromoney Institutional Investor

Adjusted results; statutory profit before tax (PBT) reconciliation to adjusted PBT

The Board and management team use adjusted results, rather than statutory results, as the primary basis for providing insight into the financial performance of the Group and the way it is managed. Similarly, adjusted results are used in setting management remuneration. Adjusted results exclude certain items which, if included, could distort the understanding of the comparative performance of the business during the year.

The tables on pages 24 and 25 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both FY 2018 and FY 2017.

The explanation for each type of adjustment is as follows:

1) Discontinued operations: the adjusted results for FY 2017 include the pre-disposal results of discontinued operations, namely Euromoney, in which DMGT reduced its stake from c.67% to c.49% in December 2016, whereas statutory results only include continuing operations.

2) Exceptional operating costs: businesses occasionally incur exceptional costs, including severance and consultancy fees, in respect of a reorganisation that is incremental to normal operations. Similarly, for the Group's B2B businesses, there may be legal costs in respect of litigation that are outside the ordinary course of business and sufficiently material to be treated as an exceptional cost. These are excluded from adjusted results.

3) Impairment of plant: occasionally the carrying value of an asset in the balance sheet is considered to be greater than the value in use or the fair value less costs to sell and it is appropriate to impair it. The associated charge is excluded from adjusted results since it is unrelated to the ongoing cost of doing business. The ongoing depreciation and amortisation of tangible assets and software, including products, is, however, an everyday cost of doing business and is included in both statutory and adjusted results. A reorganisation may also result in the write-off of the carrying value of tangible fixed assets, as was the case during FY 2017 when the Consumer Media division closed its Didcot printing plant, and this expense is excluded from adjusted results.

4) Intangible impairment and amortisation: when acquiring businesses, the premium paid relative to the net assets on the balance sheet of the acquired business is classified as either goodwill or as an intangible asset arising on a business combination and is recognised on DMGT's balance sheet. This differs to organically developed businesses where assets such as employee talent and customer relationships are not recognised on the balance sheet. Impairment and amortisation of intangible assets and goodwill arising on acquisitions are excluded from adjusted results as they relate to historical M&A activity and future expectations rather than the trading performance of the business during the year. An example is the impairment in FY 2017 of the goodwill and intangible assets associated with Xceligent, the US Property Information business.

5) Profit on sale of assets: the Group makes gains or losses when disposing of businesses, for example on the disposal of EDR, the US Property Information business. These items are excluded from adjusted results as they reflect the value created since the business was formed or acquired rather than the operating performance of the business during the year. Similarly, the gains or losses made by joint ventures or associates when disposing of businesses are excluded from adjusted results.

6) Pension finance credit: the finance credit or charge on defined benefit schemes is a formulaic calculation that does not necessarily reflect the underlying economics associated with the relevant pension assets and liabilities. It is effectively a notional charge and is excluded from adjusted results.

7) Other adjustments: other items that are excluded from adjusted results include changes in the fair value of certain financial instruments and changes to future acquisition payments. They are considered to be unrelated to the ongoing cost of doing business. The share of joint ventures' and associates' tax charges is included in statutory profit before tax but, since it is a tax charge, is excluded from adjusted profit before tax. The share of joint ventures' and associates' interest charges is reclassified to financing costs in the adjusted results.

Reconciliation: Statutory profit to adjusted profit - FY 2018

Reconciliation: Statutory profit to adjusted profit - FY 2017

Reconciliation: Adjusted results including and excluding discontinued operations

Cash operating income

Underlying analysis - Revenues

Notes: M&A adjustments are for disposals and acquisitions. The underlying results include the post-acquisition organic growth from acquired entities whilst sold and closed businesses are excluded from the underlying growth rates. 'Other' includes adjustments for the timing of shows at Events and Exhibitions, for the consistent timing of revenue recognition and for the gross-up, equivalent to the cost of sales, on the low margin resale of newsprint activities.

Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Underlying analysis - Adjusted operating profit3

Principal risks and uncertainties

The Directors confirm that they have completed a robust assessment of the Group's Principal Risks and a thorough review of risk management processes. The Group's risks are categorised as either strategic or operational. Strategic risks are linked to the Group's strategic priorities and impact the whole Group. Operational risks are those arising from the execution of the business functions and typically impact on one or more of the principal businesses.

Strategic Risks

Operational risks

Statement of Directors' responsibilities

The Directors are responsible for preparing the full year financial report, in accordance with applicable law and regulations.

The Directors confirm that to the best of their knowledge:

a) the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

b) the management report includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R.

By order of the Board of Directors

The Viscount Rothermere

Chairman

28 November 2018

1 Net cash includes £237m of short-term deposits maturing in December 2018.

2 Underlying revenue or profit is revenue or operating profit on a like-for-like basis, see pages 28 and 29. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition. For events, the comparisons are between events held in the year and the same events held the previous time. For Consumer Media, underlying revenues exclude low margin newsprint resale activities. For FY 2017, central dmg information costs allocated to Property Information, EdTech and Energy Information are reclassified to Corporate costs, consistent with all US central costs being included in Corporate costs in FY 2018.

3 Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. The Board and management team use adjusted results, rather than statutory results, to give greater insight to the financial performance of the Group and the way that it is managed. Similarly, adjusted results are used in setting management remuneration. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, amortisation of intangible assets arising on business combinations, pension finance charges or credits and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 22 to 25. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary during the first three months of Full Year 2017.

4 Euromoney ceased to be a subsidiary at the end of December 2016. Pro forma Full Year 2017 figures have been restated to treat Euromoney as a c.49% owned associate for the whole year, consistent with the ownership profile during Full Year 2018. See page 21.

5 The statutory results are IFRS figures before any adjustments. They are for continuing operations only (excluding the discontinued operations, Euromoney, from the first three months of Full Year 2017), other than basic earnings per share since the statutory figure includes discontinued operations.

6 Since late December 2017, dmg media has stopped making multiple copy sales of the Daily Mail and the Mail on Sunday; for example, to airlines to give to their customers free of charge. Multiple copy sales previously accounted for approximately 5% of both the Daily Mail's and The Mail on Sunday's circulation volumes. Despite this impact, the Daily Mail's 23.3% average market share during FY 2018 was broadly in line with the 23.4% market share during FY 2017 and The Mail on Sunday's 21.9% average market share during FY 2018 was broadly in line with the 22.1% average during FY 2017. The Daily Mail's market share of UK retail sales averaged 24.8% during FY 2018, an increase from 24.2% in FY 2017, and The Mail on Sunday's UK retail market share averaged 21.9%, an increase from 21.6% in FY 2017. Circulation market share figures are calculated using ABC's National Newspapers Reports and National Newsbrands Reports for each month from October 2016 to September 2018 inclusive and exclude digital subscribers.

7 As at the end of 30 September 2018, there were 4,812,419 'A' Ordinary Shares held in Treasury and 2,981,109 'A' Ordinary Shares held by the DMGT Employee Benefit Trust. 

~ Percentages are calculated on actual numbers to one decimal place.

The average £: US$ exchange rate for the year was £1:$1.35 (2016 £1:$1.27). The rate at the year end was $1.30 (2017: $1.34).

All references to profit or margin in this management report are to adjusted profit or margin, except where reference is made to statutory profit.

A presentation of the Full Year Results will be given to investors and analysts at 9.30am on 29 November 2018, at The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT. There will also be a live webcast available at http://www.dmgt.com/webcastfy18.

Financial Reporting Calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 24 January 2019.

This Full Year Results Report ('Report') 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 Report save as would arise under English law. Statements contained in this Report 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 Report. 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 Report. 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.

Consolidated Income Statement

For the year ended 30 September 2018

(i) Adjusted operating profit is defined as total operating profit from continuing operations before share of results of joint ventures and associates, exceptional operating costs, impairment of goodwill and intangible assets, amortization of acquired intangible assets arising on business combinations and impairment of property, plant and equipment.

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2018