DMGT.L Regulatory News (DMGT)

DMGT executes on its strategy and delivers resilient underlying performance

· Group adjusted revenue up underlying# 1% to £1,660 million and adjusted operating profit down underlying 2% to £198 million

· Adjusted earnings per share down 1%, dividend per share up 3% to 22.7 pence

· Good progress made against DMGT's three strategic priorities in 2017

· New Group strategy and vision with Performance Improvement Programme established

# Underlying revenue and operating profit growth rates are on a like-for-like basis, at constant exchange rates, after adjusting for the timing of events, for acquisitions and for disposals, notably Euromoney which is excluded from the growth rates, as set out on pages 32 and 33.

As in previous years, the IFRS figures ("Statutory results") have been adjusted* for exceptional items and the inclusion of discontinued operations ("Adjusted results"). Statutory profits were reduced by impairment charges and statutory earnings per share also benefited from the inclusion of the gain on the Euromoney transaction.

In December 2016, DMGT reduced its stake in Euromoney from c.67% to c.49%. To enable a like-for-like comparison, 2016 pro forma† results ("Pro Forma results") have been presented as though DMGT owned a c.67% stake in Euromoney during the first quarter of the year and a c.49% stake during the remaining nine months, consistent with the actual holding during Full Year 2017. Except where stated otherwise, commentary throughout this report compares Full Year 2017 adjusted results with the Full Year 2016 pro forma results.

Full Year Financial Highlights:

· DMGT statutory and pro forma† revenue up 3%, underlying# revenue up 1%; adjusted operating profit down underlying 2%

o Consumer: encouraging performance from dmg media; revenue up underlying 1%, adjusted profit up underlying 10%, with MailOnline moving into operating profit during the final quarter

o B2B: revenue up underlying 2% and adjusted profit down underlying 15%, reflecting RMS(one) amortisation, planned investment at Xceligent and challenging trading at Genscape

· Adjusted profit before tax* (PBT) of £226 million, up 4% on a pro forma† basis

· Adjusted earnings per share* (EPS) of 55.6p, up 7% on a pro forma† basis; full year dividend increased by 3% to 22.7p.

· Impairment charges of £206 million taken against Genscape, Xceligent and SiteCompli

· Statutory loss before tax of £(112) million, including impairment charges; statutory EPS of 97.8p, up 69%, including £509 million profit on Euromoney transaction

Progress against strategic priorities:

· Improving operational execution: simplification of management structure has already led to faster decision making

· Increased portfolio focus: reduction of stake in Euromoney from c.67% to c.49%; disposal of Hobsons' Admissions and Solutions businesses and Elite Daily; disposal of EDR in progress

· Enhancing financial flexibility: net debt reduced by £214 million to £464 million; net debt:EBITDA ratio of 1.4; comfortably within preferred range

Paul Zwillenberg, Chief Executive, commented:

"We are encouraged that DMGT has delivered a resilient underlying performance during the year and made good progress against our strategic priorities.

dmg media produced another year of outperformance. The underlying profit growth was particularly encouraging as MailOnline continued to grow its revenue strongly, moving into operating profit during the final quarter, and launched new initiatives, including DailyMailTV in the US.

Our B2B companies delivered robust revenues despite challenging markets. RMS(one) Risk Modeler has been released, innovative data-driven products continue to be launched and Hobsons is now entirely focused on its student-success business. As a long-term investor, we continued to invest through the cycle, and this contributed to a decline in B2B profitability, notably within dmg information and RMS.

We have made good progress against our three key priorities of improving operational execution, increasing portfolio focus and enhancing financial flexibility. We have delayered management, reduced overheads, enhanced our talent and refocused each business's priorities. We have sharpened our focus on our strongest products as a result of the Euromoney transaction, restructuring of Hobsons, the sale of Elite Daily and the planned disposal of EDR. Our financial flexibility has improved with net debt to EBITDA now at 1.4 times, the lowest level in over 20 years.

We have now completed the strategic review of the Group. We have defined a new strategic vision, 'Intelligent Insights. Consumer Connections', which will harness DMGT's competitive advantages across B2B and Consumer Media to create value enhancing opportunities. We are also rolling out a company-wide Performance Improvement Programme and these two initiatives will underpin our progress and better position us for the future.

As we move into FY 2018, we proceed with confidence towards my vision for DMGT's future. The Board is confident that the new strategy and strong balance sheet will, over the medium term, generate consistent earnings growth that will underpin DMGT's long-standing commitment to deliver sustainable annual real dividend growth."

A presentation of the Full Year Results will be given to investors and analysts at 9.30am on 30 November 2017, 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/webcastfy17.

Financial reporting calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 25 January 2018. There will be an Investor Briefing held on 1 February 2018. Please note that, unlike in previous years, DMGT does not intend to provide a trading update between the third quarter trading update, scheduled for 26 July 2018, and the announcement of Full Year results on 29 November 2018.

About DMGT

DMGT manages a diverse, multinational portfolio of companies, with total revenues of around £1.5 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 and ZPG Plc.

Notes

* Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. 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 and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 27 to 30. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

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

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 32 and 33. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying growth rates exclude the benefit to Full Year 2016 results of an additional 53rd week and underlying revenues exclude low margin newsprint resale activities.

† Pro Forma Full Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter and as a c.49% owned associate during the remaining nine months, consistent with the ownership profile during Full Year 2017. See page 26.

^ These statutory highlights are for continuing operations only (excluding the discontinued operations, Euromoney), other than basic earnings per share which is the total statutory figure including discontinued operations. The Full Year 2016 statutory results have been revised to exclude discontinued operations.

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 2017, focuses principally on the adjusted results to give a more comparable indication of the Group's business performance. All year-on-year comparisons are on a like-for-like basis.

In addition, a pro forma† version of the Full Year 2016 adjusted results has been prepared to treat Euromoney as a c.67% owned subsidiary during the first quarter of Full Year 2016 and as a c.49% owned associate during the remaining nine months, consistent with the ownership profile during Full Year 2017. A reconciliation between the reported and the pro forma† figures is set out on page 26.

An explanation of restructuring and impairment charges and other items included in the statutory results is set out after the divisional performance review and in the segmental note (Note 4). Reconciliations between the statutory and adjusted results for both FY 2017 and FY 2016, as well as supporting explanations, are set out on pages 27 to 30. The adjusted results are summarised below, with the pro forma† Full Year 2016 comparatives:

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

Notes

* Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. 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 and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 27 to 30. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 32 and 33. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying growth rates exclude the benefit to FY 2016 results of an additional 53rd week and underlying revenues exclude low margin newsprint resale activities.

† Pro Forma Full Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter and as a c.49% owned associate during the remaining nine months, consistent with the ownership profile during Full Year 2017. See page 26.

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

The average £: US$ exchange rate for the year was £1:$1.27 (2016 £1:$1.42). The rate at the year end was $1.34 (2016: $1.30).

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

Summary

Group performance: DMGT has delivered a resilient performance in challenging market conditions. Group adjusted* revenue for the year was £1,660 million, growth of 3% on a pro forma† basis. Statutory revenue, excluding Euromoney, also grew 3%, reflecting the benefit of the stronger US dollar relative to sterling. On an underlying basis, adjusted revenue grew 1% for the Full Year, consistent with the growth during the first half. Good underlying growth was delivered in digital advertising and subscriptions and there was continued growth from events, whilst circulation revenues remained stable. The growth was partly offset by a decline in transaction volume related revenues and reduced print advertising.

The revenue performance for our B2B businesses and our consumer business, dmg media, on a reported and underlying basis is summarised below.

¹ Underlying growth rates for H1 have been restated to exclude the disposed of Hobsons Admissions and Elite Daily businesses, consistent with the H2 and Full Year growth rates.

Adjusted operating profit* of £198 million grew 2% on a pro forma basis. The benefit from the stronger US dollar and reduced Corporate costs more than offset the impact of an additional £26 million of expensed costs as a result of ceasing to capitalise and starting to amortise RMS(one). Underlying operating profit was down 2%, with the reduction being primarily due to the increase in RMS(one) related costs, increased investment in dmg information's Xceligent Property Information business, particularly during the first half of the year, and reduced profits from Genscape, where the solar energy business had a particularly challenging year. The adjusted operating margin was 12%, consistent with the pro forma margin† in the prior year.

Excluding Corporate costs, the B2B businesses generated 66% of the adjusted operating profit in the year, with dmg 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 £226 million, 4% growth on a pro forma† basis. The share of adjusted operating profits from joint ventures and associates was £69 million, an increase of 14% on a pro forma† basis, with good growth from both ZPG Plc and Euromoney. Finance charges, including DMGT's share of associates' interest costs, were £42 million, up 5% on the prior year on a pro forma† basis, due to increased finance charges for associates and the adverse effect of the stronger US dollar. The adjusted tax charge benefited from a reduced effective tax rate and was £29 million, down 4% on the prior year on a pro forma† basis. Adjusted Group profit after tax and minority interests* was £196 million, up 7% on a pro forma† basis. Adjusted earnings per share* of 55.6p declined 1%, although grew 7% on a pro forma† basis.

The full year dividend increased by 3% to 22.7p, 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 loss before tax for the year was £112 million after £282 million of amortisation and impairment charges in respect of goodwill and intangible assets, £42 million of impairment charges in respect of plant and £50 million of exceptional costs, including £30 million of reorganisation related costs and a £7m share of joint ventures' and associates' exceptional charges. The statutory loss before tax compared to a £202 million profit before tax in the prior year, which benefited from gains on disposals, notably Local World and Wowcher. Statutory basic earnings per share were 97.8p, including the benefit of a £509 million gain on the Euromoney transaction, up 40.0p or 69% 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 27 to 30.

Net debt: decreased by £214 million during the year to £464 million, benefiting from disposal proceeds, notably the reduced stake in Euromoney. At the year end, the Group's net debt comprised £424 million of bonds, £46 million of bank borrowings, £2 million of loan notes and derivatives and a cash balance of £7 million. The Group's ratio of net debt to EBITDA was 1.4 at the year end, significantly below the Group's preferred upper limit of around 2.0 and the requirements of the Group's bank covenants.

Strategy

Strategy on track with good progress against three strategic priorities: as presented at the preliminary results on 1 December 2016, DMGT's three key strategic priorities in 2017 have been to improve operational execution, increase portfolio focus and enhance our financial flexibility.

· Improving operational execution: the management structure has been simplified, increasing our agility and enabling faster decision making. The relationship between DMGT and individual businesses has changed from a light-touch approach to one with greater emphasis on performance management. A culture of accountability is being established and the pace of operational change is being accelerated.

· Increasing portfolio focus: significant steps were taken during the year to increase the focus of DMGT's portfolio. In December 2016, DMGT reduced its stake in Euromoney from c.67% to c.49%.

Following the restructure of Hobsons earlier in the year, its Admissions and Solutions businesses were disposed of in September 2017 and October 2017 respectively. Hobsons will now focus on its core business lines that have the most attractive growth opportunities.

A process is currently under way to dispose of EDR, the US commercial real estate environmental information business. The planned disposal will further increase the focus within the portfolio and strengthen DMGT's balance sheet, enhancing financial flexibility.

dmg media, DMGT's Consumer Media business, closed 7 Days, the Dubai based newspaper business, in December 2016 and disposed of Elite Daily, the online publishing business, in April 2017. The sale has enabled dmg media to concentrate its digital resources on MailOnline, particularly in the US. Following these changes dmg media is now comprised of the Mail and Metro businesses, further increasing the focus of the DMGT portfolio.

· Enhancing financial flexibility: DMGT's financial flexibility has improved significantly over the year, with net debt decreasing by £214 million during the year to £464 million including the benefit of disposal proceeds, notably from the reduced stake in Euromoney. The net debt to EBITDA ratio is now 1.4 compared to 1.8 at year end 2016.

Strategic review complete: the completion of our comprehensive strategic review has identified clear roles for each of our businesses in the DMGT portfolio. We have allocated out businesses into three specific areas which reflect their financial characteristics. This segmentation will help frame our capital allocation decisions.

· Operating at scale: strong cash contributors which are operating at scale, an example being the Consumer Media print business.

· Focused growth: businesses which have the ability to deliver focused growth through targeted investment and are expected to develop into strong cash generators; examples include the Energy Information and digital Consumer Media businesses.

· Invest to grow: businesses and minority stake holdings in early-stage companies which will require incremental investment to grow into businesses of the future.

Strategic vision: we have defined a new strategic vision for DMGT entitled 'Intelligent Insights. Consumer Connections'. Due to the Group's capabilities and expertise across B2B and Consumer Media, DMGT is especially well placed to take advantage of two important emerging trends spanning these sectors. Firstly, in B2B sectors, customers increasingly expect to experience the same quality of user interface, the speed of delivery and multi-device accessibility as they do with consumer products. Secondly, the most successful consumer products are built on robust use of data and analytics to gain insight. The agility, speed to market, user engagement and audience understanding demonstrated by MailOnline can be applied to open up new opportunities across our B2B businesses. The advanced analytics and resilient and secure technology required in our B2B sectors can be applied to Consumer Media digital businesses. DMGT's strategy will be focused on seeking opportunities, either through organic initiatives or acquisition, which can exploit the emerging trends across the B2B and Consumer Media sectors.

Performance Improvement Programme: we have introduced the new Performance Improvement Programme, which will build on the progress made against DMGT's three key strategic priorities. The programme will lead to further improvements to the Group's performance and execution, through initiatives in respect of product, technology and people. The increasing focus of the portfolio will be driven by the Group's strengths, notably where the convergence of B2B and Consumer Media gives DMGT a competitive advantage. Similarly, where DMGT is not the best owner, further divestments will be made. DMGT will continue to ensure it has the financial flexibility to pursue opportunities as they arise, notably to build scale in those sectors that can deliver focused growth.

2018 - a year of transition: the coming year is expected to be one of transition as we execute against the Performance Improvement Programme. The Group's short-term earnings will be adversely affected by recent disposals and challenging conditions in some of our sectors. However, the Board is confident that in the medium term the strategy will result in DMGT being well-positioned to generate sustainable earnings growth with a strong balance sheet which will underpin DMGT's long-standing commitment to deliver real dividend growth.

Outlook - 2018

B2B: the financial performance will be adversely affected by the disposals that have taken place in the past year and the planned disposal of EDR.Excluding Euromoney, Hobsons' Admissions and Solutions businesses and EDR, the FY 2017 B2B revenues were £781 million and the adjusted operating margin was 13%. In FY 2018, 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, as the flow-through of operational efficiencies is partly offset by continued investment to support our long-term growth. At a business level, we are anticipating the following dynamics:

· Insurance Risk: RMS will continue to expand the client base for the RMS(one) software platform and associated applications, laying the groundwork for revenue acceleration in FY 2019 and beyond.

· Property Information: the European businesses are expected to continue to experience relatively subdued market conditions and the remaining US businesses to continue to deliver growth.

· Education Technology (EdTech): following the disposal of Hobsons' Admissions and Solutions businesses, the remaining EdTech business is expected to benefit from increased focus and to continue to deliver growth.

· Energy Information: Genscape is expected to continue to deliver growth across most of its sub-sectors, albeit the challenging market conditions are expected to persist.

· Events and Exhibitions: despite challenges in some end markets, notably the energy sector and some Gulf Cooperation Council countries, and the expected reduction in revenues from Gastech, reflecting the change in location in 2018, dmg events is well positioned to continue to target underlying revenue growth.

Consumer Media: digital advertising revenues are expected to grow further, helping to offset anticipated circulation volume and print advertising declines, with advertising market conditions likely to remain volatile. As a result, in FY 2018, the underlying rate of decline of dmg media's revenues is expected to be in the mid-single digits. The operating margin is expected to be approximately 10% in FY 2018, compared to the 11% delivered in FY 2017, with the flow-through of lower revenues being partly offset by continued cost efficiencies within the newspapers and by MailOnline being profitable for the Full Year.

Corporate costs: are expected to be around £45 million in FY 2018, increasing as a result of strengthening central functions, particularly strategy, technology and talent, to better support, monitor and review businesses and to assess potential capital allocation decisions.

JVs and Associates: are expected to benefit from the inclusion of twelve months of Euromoney's results as an associate. The share of adjusted operating profits from joint ventures and associates in FY 2018 is expected to be at least £75 million.

Net debt: the year end net debt:EBITDA ratio of 1.4 is significantly below our preferred upper limit of 2.0 and the Board remains confident in the overall outlook for the Group and its operating cash flows. Net finance costs are expected to be around £40 million in FY 2018, broadly in line with FY 2017.

Taxation: is expected to be affected by changes to UK legislation that will contribute towards increasing the effective tax rate to over 20% within the next three years, with FY 2018 expected to increase to nearer 18%.

Business Review

Business to Business (B2B)

These results are stated before the allocation of Group corporate costs.

† Pro Forma Full Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter and as a c.49% owned associate during the remaining nine months, consistent with the ownership profile during Full Year 2017.

B2B revenues totalled £976 million, up 9% on a pro forma† basis, including the benefit of the stronger US dollar. On an underlying basis, revenue grew 2%, with growth from each of RMS, dmg information and dmg events. Adjusted operating profits, excluding any allocation of Group corporate costs, were £152 million, a reduction of 5% on a pro forma† basis and an underlying decline of 15%, largely driven by RMS and, within dmg information, by Xceligent and Genscape. The overall B2B operating margin declined to 16%, reflecting lower margins across each of the three B2B divisions.

Outlook: the B2B financial performance will be adversely affected by the disposals that have taken place in the past year and the planned disposal of EDR.Excluding Euromoney, Hobsons' Admissions and Solutions businesses and EDR, the FY 2017 B2B revenues were £781 million and the adjusted operating margin was 13%. In FY 2018, 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, as the flow-through of operational efficiencies is partly offset by continued investment to support our long-term growth.

Risk Management Solutions (RMS)

These results are stated before the allocation of Group corporate costs.

RMS's revenues increased by 14% on a reported basis, primarily due to the benefit of the stronger US dollar, and by 2% on an underlying basis, despite continuing consolidation in the re-insurance industry. As previously indicated, in August 2016, the capitalisation of RMS(one) development activities ceased and the amortisation of the RMS(one) asset started. Consequently, adjusted operating profit decreased by 9%, including the benefit of the stronger US dollar, and by 25% on an underlying basis. The operating margin was 14%, broadly in line with the low-teens guidance provided in December 2016. Excluding the benefit of £13 million of RMS(one) capitalisation in the prior period, as well as depreciation and amortisation, the EBITDA margin was 24%, an improvement on the 17% in FY 2016. The increase reflects the improving cash generation of the business.

RMS continues to be a market leader, innovating in the risk modelling market. The business delivered an unprecedented level of modelling solutions during the year, with updates to the North American Earthquake and North American Hurricane models, and new models for South East Asia Earthquake, Taiwan Typhoon and South Korea Typhoon. RMS continued to expand into new lines of risk, with the second release of its cyber models.

A major milestone was achieved in April 2017, with the release of Risk Modeler, the second application to run on the RMS(one) risk management platform, and over a dozen clients are now using applications on the platform. The increasing pace of digitalisation across the risk and insurance market, combined with the requirement for real-time risk assessment on one risk modelling evaluation platform that has integrated data analytics, is expected to create progressive demand for the RMS(one) platform.

Priorities in the year ahead: during FY 2018, RMS will be focusing on the continued successful development and delivery of its core and new models to clients and on managing the gradual migration of clients to the RMS(one) platform. The model pipeline for 2018 covers a wide range of perils, including North America Flood, Central and European Storm, Indian Flood, Japanese Earthquake and Typhoon and North American Wild Fire. Given the extensive acceptance testing required during the clients' adoption processes, the revenues from RMS(one) are expected to have a more significant impact on RMS's overall revenue growth rate and margin improvement in FY 2019 and beyond.

dmg information

These results are stated before the allocation of Group corporate costs.

dmg information continued to grow during the year, with overall revenues up an underlying 2%. The EdTech company, Hobsons, delivered further underlying growth due to the strength of its Naviance, Intersect and Starfish businesses. The Energy Information business, Genscape, faced difficult market conditions, particularly in the solar sector, resulting in muted underlying revenue growth. The Property Information businesses faced some challenging market headwinds, notably in the UK, although overall they delivered a stable underlying revenue performance. Reported revenues benefited from the stronger US dollar and grew 7%. Adjusted operating profit declined by 13% on an underlying basis, with all of the reduction being attributable to increased investment in Xceligent, the US Property Information business, and challenging conditions for Genscape. The performance of these two businesses resulted in the operating margin declining to 13%, from 15% in the prior year.

During the year, DMGT undertook a management delayering and streamlining project. The aim was to reduce complexity and move dmg information's operating companies closer to decision making made by the Group's central management team. Consequently, dmg information no longer exists as a division and in FY 2018 the Property Information, EdTech and Energy Information businesses will be presented as part of the overall B2B portfolio.

Property Information

These results are stated before the allocation of Group corporate costs. Central dmg information costs are allocated to the businesses on a revenue basis. Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

The Property Information portfolio delivered stable underlying revenues. While there was continued good growth from most of the US businesses, the European businesses, Landmark and SearchFlow, were adversely affected by continued uncertainty in the UK residential market, where mortgage approvals were lower than the previous year. In the UK legal property market, SearchFlow delivered a major upgrade of its ordering platform, while Landmark continued to deliver enhancements to its range of conveyancing searches. Landmark has also made significant steps into the UK household insurance market with long-term agreements to provide its risk models to leading players in the industry. Total revenues for the European Property Information businesses declined by an underlying 3%, although were in line with last year on a reported basis, including the benefit of acquisitions and the stronger Euro. Landmark has continued to focus on operational efficiencies, delivering operating margin improvement despite lower revenues, and reducing its cost base as the business develops.

The five US-based Property Information businesses collectively delivered underlying revenue growth of 5%. Xceligent and BuildFax, two early stage businesses, delivered double-digit growth, while Trepp and SiteCompli also continued to deliver underlying growth. The revenues of EDR, the US commercial real estate environmental information business, are more closely related to transaction volumes and the company experienced a more challenging year, with an underlying decline in revenues. EDR is pursuing growth opportunities in managed services, an area the market is expected to transition towards. Service industries are not a preferred area of growth for DMGT and consequently a process is underway to dispose of EDR to a more appropriate owner.

Xceligent, which is a provider of fully researched US commercial property and listing information, increased its investment during the year, completing the build-out of the database for New York and starting the build-out for Chicago. This resulted in adjusted operating profit, for the Property Information businesses as a whole, declining by an underlying 9% to £53 million.

Xceligent's revenue growth in New York has been slower than previously expected and, given the significant further investment and time required to achieve full national coverage, a decision has been taken to reduce the carrying value of the business to zero, resulting in an impairment charge of £42 million. Similarly, SiteCompli's planned expansion into the national retail market has proved more challenging than previously expected and an impairment charge of £24 million has been taken in respect of its carrying value. The impairment charges have been excluded from the adjusted results. Xceligent now has a new management team in place and a strategic review of the business is in progress, whilst the SiteCompli management team are focusing on growth opportunities.

Priorities in the year ahead: the existing market dynamics are expected to continue, with relatively subdued conditions. In the US, there will be continued product development at Trepp, to enhance its market leading position, and continued strong growth is expected from the early-stage businesses. The European Property Information businesses' product development and launch programme will continue and will help to generate future growth.

EdTech and Energy Information

These results are stated before the allocation of Group corporate costs. Central dmg information costs are allocated to the businesses on a revenue basis. Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

In the EdTech sector, underlying revenue growth, which excludes Admissions, was 9%. Growth was driven by the K-12 career and college planning platform, Naviance; the college matching business, Intersect; and the higher education student retention product, Starfish. On a reported basis, Hobsons' revenue of £114 million was in line with last year, reflecting the benefit of the stronger US dollar and the adverse impact of the September 2016 disposal of its US-based enrolment management services (EMS) business. Reported revenues were also adversely affected by weaker trading at the Admissions business, which supplies software to higher education institutions and was disposed of in September 2017. Hobsons delivered underlying profit growth in the year, reflecting strong management of the cost base, partly offset by continued investment in product development.

Following a strategic review of Hobsons, the business underwent a restructuring programme. The sale of the Admissions business was followed by the disposal in October 2017 of the Solutions business, which provided international enrolment management services to higher education institutions, primarily in Australia and the UK.

The remaining EdTech business is now comprised of the faster-growing Naviance, Intersect and Starfish businesses that delivered £69 million of revenue in the year. Operationally, Hobsons made good progress strengthening these core products and services. The first phase of Naviance platform modernisation was launched, with the product successfully transitioned to the cloud during the year. A new, centralised platform for Intersect was built and the integration of Starfish and PAR Framework (acquired in FY 2016) continued, bringing together Starfish's technology with PAR's predictive analytics.

In the Energy Information sector, Genscape faced some challenging market conditions due to the sustained low oil price and low price volatility environment and, most notably, a change in distribution channels for the US residential solar market. Notwithstanding this, the core businesses, operating in the Power, Oil and Gas sectors, continued to grow, reflecting good ongoing product development and client expansion. This was, however, largely offset by the revenue decline from the solar business, Locus Energy. Underlying revenue growth for Genscape as a whole was 1%. Genscape is committed to bringing transparency to global energy markets and is executing on that strategy by building global product offerings. Profitability was adversely affected by increased amortisation costs, associated with previous product development, and by the continued investment in enhancing existing services, as well as by the weaker performance at Locus Energy.

Adjusted operating profit across EdTech and Energy Information was £16 million, 24% lower than the prior year, including the benefit of the stronger US dollar, and an underlying decline of 41%.All of the reduction was attributable to the Energy Information business. Similarly, the operating margin across both businesses was 8% compared to 11% in the prior year, with the EdTech business maintaining its margin but declining profitability in Energy Information.

Given the continued challenges facing the Energy Information sector, notably solar, and the likely time required before the business becomes a major cash generator, the carrying value of the Genscape business has been reduced to £141 million, resulting in an impairment charge of £140 million. The impairment charge has been excluded from the adjusted results. A new management team is in place and is focusing on prioritising growth opportunities.

Priorities in the year ahead: following the disposal of Hobsons' Admissions and Solutions businesses, FY 2018 will be another year of transition for the EdTech business as it continues to refocus and strengthen its high value, high growth core products and services. Operational improvements are expected to flow through as the cost base is streamlined and an agile methodology is adopted across core internal processes. In the Energy Information sector, Genscape is also expected to continue to deliver growth across most of its sub-sectors, albeit the challenging market conditions are expected to continue and there will be a keen focus on repositioning Locus Energy's product in the distribution channel. Genscape will continue to drive operational improvements, particularly around pricing and an enhanced go-to-market strategy.

dmg events

These results are stated before the allocation of Group corporate costs.

In the Events and Exhibitions sector, dmg events produced a resilient performance despite the continued weakness in the oil price, which was particularly challenging for Canadian energy events. Revenues increased by 3% on an underlying basis and by 11% on a reported basis. Gastech, one of the business's three large events, occurred in Tokyo in April 2017 and delivered double-digit revenue growth, benefiting from Japan being the world's largest LNG market, whereas the prior year event was held in Singapore. The two other large events, Big 5 Dubai and ADIPEC, were held in November 2016 and collectively delivered low-single digit underlying revenue growth. Exhibitor and visitor levels also grew across all three of the large events.

The business continued to geo-clone shows by launching into new locations, including two South African events, The Hotel Show Africa and Oil & Gas Africa, as well as East Africa Big 5 and Saudi Stone. There were also a number of new spin-off events launched into adjacencies from the existing construction, energy and hospitality sectors.

The operating profit margin reduced slightly to 26%, reflecting investment in launching new events and in marketing to grow attendance levels to fuel future revenue growth. Profitability was also adversely affected by the weaker performance of Canadian energy events, although action was taken to address the cost base in the region. As a result, operating profits increased 6%, although declined by 7% on an underlying basis.

Priorities in the year ahead

Despite challenges in some Events and Exhibitions end markets, notably the energy sector and some Gulf Cooperation Council countries, and the expected reduction in revenues from Gastech moving from Japan to Barcelona in 2018, dmg events is well positioned to continue to target underlying revenue growth. The five launches planned for 2018 in North Africa, the Middle East and South East Asia illustrate the continued strong commitment to organic growth. Big 5 Dubai and ADIPEC, two of the three large events of the year, occurred in November 2017 and are expected to deliver modest growth.

Euromoney Institutional Investor

These results are stated before the allocation of Group corporate costs. The 2017 figures included in the table above are only for the three months that Euromoney was a subsidiary of DMGT.

† Pro Forma 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter of 2016 and as a c.49% owned associate during the remaining nine months of the year, consistent with the ownership profile during Full Year 2017.

In December 2016, DMGT reduced its stake in Euromoney from c.67% to c.49%. Consequently, since 29 December 2016, Euromoney has ceased to be a subsidiary of DMGT and is now being accounted for as an associate. Since January 2017, DMGT's consolidated revenues and operating profits have not included Euromoney's results and DMGT has recognised its share of operating profits within joint ventures and associates. DMGT's adjusted revenue and operating profit in the period therefore includes 100% of Euromoney's results for the three months to December 2016, as shown in the table above. Revenues in the first quarter were £95 million, up 6% on the first quarter of the prior year, including the benefit of the stronger US dollar, and operating profit also grew 6%. DMGT's share of Euromoney's results for the nine months to 30 September 2017 is included in joint ventures and associates.

Euromoney reported its results for the Full Year 2017 on 22 November 2017. Euromoney's performance is excluded from DMGT's underlying revenue and operating profit growth calculations.

Consumer Media

dmg media

These results are stated before the allocation of Group corporate costs. Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Summary

In the Consumer Media sector, dmg media's revenues grew by an underlying 1% to £683 million, with strong underlying digital advertising growth (+18%), a decline in print advertising and circulation revenues remaining stable on an underlying basis. Reported revenues declined by 3%, including the impact of disposals and the absence of a 53rd week of newspaper revenues, which benefited the prior year.

The tough newspaper advertising market conditions eased a little in the year, helping to support the improvement to a 5% underlying decline in print advertising, compared to 12% in the prior year. Strong digital advertising growth of 18% more than offset the reduction in print advertising, resulting in total combined advertising revenues across the dmg media portfolio growing by an underlying 2% to £319 million. Circulation revenues were stable on an underlying basis, with the benefit of cover price increases offsetting the adverse impact from a continued decline in circulation volumes of the Daily Mail and The Mail on Sunday.

Despite the absence of the 53rd week, dmg media's operating profit of £77 million was in line with the prior year, an underlying increase of 10%. As expected, the underlying profit growth was driven by MailOnline, which moved into profit during the final quarter, and cost savings in the newspaper businesses, notably the closure of the Didcot printing plant. These enabled dmg media to deliver an operating margin of 11%, in line with the prior year.

Progress was made during the year to increase the focus within the dmg media portfolio. In April 2017, dmg media disposed of its Elite Daily website, following the closure in December 2016 of the Dubai based 7 Days newspaper. Consequently, dmg media now comprises the Mail businesses and Metro, brands that reach 71% of the UK adult population each month.

Mail businesses

Revenues for the Daily Mail, The Mail on Sunday and MailOnline combined were £574 million, including £119 million from MailOnline. Revenues were in line with last year on both an underlying and reported basis, as the benefit of the stronger US dollar helped to offset the absence of the 53rd week. Despite the decline in volumes, both the Daily Mail and The Mail on Sunday grew their already substantial market shares, to an average for the year of 23.4% and 22.1% respectively∞. Revenues benefited from the cover price increases of the Monday to Friday editions of the Daily Mail from 60p to 65p, in February 2016, the Saturday edition from 90p to £1.00 in October 2016 and The Mail on Sunday, from £1.60 to £1.70 in July 2016. The cover price of The Mail on Sunday was increased from £1.70 to £1.80 in October 2017.

Total advertising revenues across the Mail businesses increased by £7 million to £248 million, with a £26 million increase in MailOnline's revenues exceeding a £19 million decline in print advertising. On an underlying basis, total advertising revenues from the Mail titles grew 2% as the increase of £19 million, 19% in MailOnline's advertising revenues outstripped the £15 million, 10% decline in print advertising revenues. MailOnline made particularly good progress growing its revenues from programmatic advertising and through partnerships with other channels. In the US, MailOnline's revenues grew by an underlying 36% to £36 million, reflecting the strength of the DailyMail.com brand, which has been further enhanced by the launch of DailyMailTV in September 2017, which attracted an average of 1.3 million viewers a night by its 8th week.

MailOnline successfully broadened its reach through other channels during the year, notably Facebook and Snapchat. The audience on the core site also continues to grow, with 14.9 million average daily global unique browsers during the year, up 4%, of which 4.3 million were in the US, up 8%. The site attracted an average 227 million monthly global unique browsers during the year.

Operating profit from the Mail businesses grew by an underlying 17% to £71 million. The strong performance reflects the encouraging progress made by MailOnline, which moved into operating profit during the final quarter, including an editorial content recharge from the Mail Newspapers, and another resilient performance from the Daily Mail and The Mail on Sunday, with further cost efficiencies achieved.

Other dmg media businesses

Metro delivered a robust revenue performance in the context of a declining print advertising market, growing revenues by an underlying 7% to £68 million, including the benefit of increasing circulation in London and taking on four franchises from Trinity Mirror in January 2017. Metro has the largest circulation of any weekday newspaper in the UK, is read by an average of 3.1 million people each day and has the largest Monday to Friday advertising market share by volume. Printing and distribution costs increased, resulting in a 22% underlying decline in Metro's operating profit to £11 million.

The Dubai based newspaper business, 7 Days, was closed in December 2016 and Elite Daily, the online publishing business, was disposed of in April 2017. The sale enables dmg media to concentrate its digital resources on MailOnline, particularly in the US. dmg media is now a more focused Consumer Media portfolio, comprising of the Mail brands and Metro.

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

Outlook and Priorities in the year ahead

dmg media is expected to continue to benefit from digital advertising growth and to experience circulation volume and print advertising declines, with advertising revenues likely to remain volatile. In FY 2018, the underlying rate of decline of dmg media's revenues is expected to be in the mid-single digits. The operating margin is expected to be around 10% in FY 2018, compared to the 11% delivered in FY 2017, with the revenue reduction being partly offset by the benefit of continued cost efficiencies within the newspapers and by MailOnline being profitable for the Full Year.

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 the operating profits* of its joint ventures and associates was £69 million, including £47 million in respect of Euromoney for the nine months to September 2017, following the reduction in the Group's stake in Euromoney to c.49%. Euromoney's balance sheet is now independent of DMGT's, increasing Euromoney's financial flexibility to be acquisitive and to accelerate the implementatoin of its strategy. Euromoney acquired RISI, the price reporting agency for the forest products market, for $125 million in April 2017. Euromoney released its Full Year 2017 results on 22 November 2017 and reported an underlying decline in revenues of 1%, with subscription revenues, which account for 60% of total revenues, up an underlying 1%. Euromoney's adjusted profit before tax increased by 4%, including the benefit of the stronger US dollar.

The share of operating profits from ZPG Plc, formerly Zoopla Property Group, increased 15% to £25 million. There was a particularly strong growth from the Property Services division, which benefited from acquisitions. In February 2017, ZPG placed new shares to part fund its acquisition of Hometrack, the UK provider of residential market insights, diluting DMGT's stake in ZPG to c.30%. During the year, ZPG also acquired Expert Agent, the provider of workflow tools and websites to property professionals, and Ravensworth, a provider of on-demand print and creative marketing services to UK estate agents. In October 2017, ZPG acquired Money.co.uk, one of the UK's leading financial services comparison websites. ZPG released its Full Year results on 29 November 2017 and reported revenue growth of 24% and adjusted basic earnings per share growth of 20%.

The net share of operating losses from other joint ventures and associates was £2 million, a slight reduction on the prior year. These include investments in early-stage businesses in the Insurance Risk, Property Information, EdTech, Energy Information and Consumer Media sectors. Notable joint ventures and associates include Real Capital Analytics, the US Property Information business, and DailyMailTV.

Outlook for joint ventures and associates

The share of operating profits from joint ventures and associates is expected to benefit from ZPG's continued growth. The share of operating profits from Euromoney in FY 2018 is also expected to increase, due to the inclusion of a full twelve months' trading, although completed and potential disposals by Euromoney will reduce the impact. In the absence of any significant acquisitions and disposals, the share of operating profits from joint ventures and associates in FY 2018 is expected to be at least £75 million.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs, was £42 million, a 5% pro forma† increase on the prior year. DMGT benefited from lower average debt levels during the year but the interest payable was adversely affected by the stronger US dollar and an increase in the share of associates' interest payable to £5 million, from £3 million in the prior period.

The pension finance charge, which is excluded from adjusted results, was £5 million, consistent with the prior year.

Outlook for net finance costs

Net finance costs in FY 2018 are expected to be around £40 million, broadly in line with FY 2017.

Other income statement items

· Exceptional items and amortisation

Exceptional operating costs, excluding those of joint ventures and associates, were £43 million compared to £55 million in the prior year. There were £17 million of severance costs, including £11 million in respect of dmg information, and £8 million of restructuring costs, including £4m in relation to the closure of the Didcot printing plant. Other exceptional costs comprised £14 million of legal fees, principally in respect of the defence by Xceligent, the US property information business, of a complaint filed by a competitor, and £5 million of reorganisation related consultancy charges. The share of joint ventures' and associates' exceptional operating costs was £7 million, compared to £4 million in the prior year.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, reduced by £2 million to £50 million. The Group also made an impairment charge against goodwill and intangible assets of £231 million, including £140 million in respect of the Energy Information business, Genscape, £42 million in respect of Xceligent and £24 million in respect of SiteCompli, the US Property Information businesses. The Group also incurred a £41 million impairment charge in respect of the Didcot printing plant.

The Group recorded other net gains on disposal of businesses and investments of £530 million, compared to a net gain of £138 million in the prior year. DMGT recognised £509 million of gains in respect of the reduced holding in Euromoney, including the gain on the revaluation of the retained c.49% stake. In February 2017, ZPG issued share capital and DMGT did not participate in the placing, resulting in a dilution of DMGT's stake to c.30% and a deemed disposal for accounting purposes on which DMGT recognised a non-cash gain of £18 million.

· Taxation

The adjusted tax charge for the year, after adjusting for the effect of exceptional items, was £29 million, compared to £30 million in the prior year on a pro forma† basis. The adjusted tax rate for the year of 12.8% reduced slightly from the pro forma basis 13.9% in FY 2016, reflecting the increased use of historic UK tax losses, and was lower than previously anticipated due to the slower than expected enactment of new UK legislation restricting the use of losses.

The statutory tax charge for the year was £65 million. This excludes the charge of £4 million in respect of discontinued operations and £5 million in respect of joint ventures and associates. There were tax credits of £30 million in respect of the amortisation and impairment of intangible fixed assets, tax charges of £109 million in respect of tax losses that can no longer be recognised as deferred tax assets and tax credits of £35 million on other adjusting items.

Due to new legislation in respect of the use of historic UK losses enacted since the year end, and to the geographical mix of profits, the effective tax rate is expected to increase to nearer 18% in FY 2018 and to increase further over the next few years, to over 20%.

Pensions

The financial position of the Group's defined benefit pension schemes, on an accounting basis, improved from a net deficit of £246 million at the start of the year to a net surplus of £62 million at 30 September 2017 (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. Action was also taken to further reduce the exposure to future investment, interest rate and inflation risk.

Funding payments into the main schemes were £13 million in the year and are expected to continue at least until the next triennial actuarial valuation, in accordance with the existing 2016 funding plan, since the schemes remain in deficit on an actuarial basis. The funding plan includes payments of approximately £13 million per annum to FY 2019 and £16 million per annum from FY 2020 to FY 2027. In addition 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 next formal actuarial valuation is scheduled for 31 March 2019. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Net debt at the end of the year was £464 million, a decrease of £214 million during the year and a decrease of £87 million since the half year. The Group's operating cash flow was £175 million and was adversely affected by the inclusion of £46 million of exceptional operating items and by only including Euromoney's cash flows for the three months that it was a subsidiary. Operating cash flows included capital expenditure of £79 million. The conversion rate of operating profits* to operating cash flow was 88%, an improvement on 72% in the prior year.

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 £199 million. This metric, a new Group key performance indicator, reflects the cash generation of the Group's subsidiary businesses and improved by 16% on a pro forma† basis, from £172 million in the prior year.

Net proceeds from disposals, including expenditure on acquisitions, were £271 million and included £218 million from the reduction of the stake in Euromoney, after adjusting for the de-consolidation of £96 million cash on Euromoney's balance sheet. Cash out-flows included dividends of £78 million, interest payments of £35 million, taxation of £13 million and pension funding of £13 million. The Group broadly matches the profile of its net debt by currency to the components of its operating cash flow by currency. The slight strengthening of sterling over the course of the year, notably against the US dollar, resulted in a favourable debt revaluation of £4 million.

At the year end, the Group's Bond debt was £424 million and comprised £216 million of the 5.75% Bonds, due December 2018, £10 million of the 10.0% Bonds, due 2021, and £197 million of the 6.375% Bonds, due 2027. Bond debt constitutes less than half of the debt available to DMGT. At the year end, the committed bank facilities were £611 million, of which £565 million was unutilised, there were £2 million of loan notes and derivatives and cash balances were £7 million.

The Group's ratio of year end net debt to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 1.4, significantly below the Group's preferred upper limit of around 2.0 and further below the requirements of the Group's bank covenants. Throughout the year, the Group's corporate credit rating remained at investment grade BBB-.

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 3.9 million 'A' Ordinary Shares for £29 million in order to meet obligations to provide shares under its incentive plans. It utilised 4.1 million shares, valued at £30 million, and a further 1.2 million shares from the Employee Benefit Trust, valued at £9 million, to provide shares under various incentive plans. As at 30 September 2017, DMGT had 353.6 million shares in issue, including 19.9 million Ordinary Shares, and a further 8.5 million 'A' Ordinary Shares held in Treasury and the DMGT Employee Benefit Trust∂.

Dividend

The Board is recommending the payment on DMGT's issued Ordinary Shares and 'A' Ordinary Non-Voting Shares of a final dividend of 15.8 pence per share for the year ended 30 September 2016 (2016 15.3 pence). This will make a total for the year of 22.7 pence (2016 22.0 pence per share). The final dividend will be paid on 9 February 2018 to shareholders on the register at the close of business on 8 December 2017.

Appointment of Tim Collier as Chief Financial Officer

Tim Collier was appointed Chief Financial Officer and to the Board of DMGT with effect from 2 May 2017. He joined from Thomson Reuters, where he was CFO of the Financial and Risk business.

Pro Forma Full Year 2016 adjusted results

Euromoney was a c.67% owned subsidiary throughout Full Year 2016 and during the first three months of Full Year 2017. It ceased to be a 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 Full Year 2016 to treat Euromoney as a c.67% owned subsidiary during the first three months of the year and then as a c.49% owned associate for the remaining nine months of the year, consistent with the ownership profile during Full Year 2017.

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)

Operating profit is before the allocation of Corporate costs.

Euromoney Institutional Investor PLC

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

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 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 performance during the year and the comparability between periods.

The tables on pages 29 and 30 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both FY 2017 and FY 2016.

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 charge. These are excluded from adjusted results.

3) Impairment of plant: occasionally the carrying value of an asset in the balance sheet is considered too high and it is appropriate to impair it. The associated charge is excluded from adjusted results since it is unrelated to ongoing cost of doing business in the year. 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 when dmg media 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 acquired intangible assets associated with the US Property Information business, Xceligent.

5) Profit on sale of assets: the Group makes gains or losses when disposing of businesses, for example on the disposal of Euromoney shares when DMGT reduced its stake from c.67% to c.49%. 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.

6) Pension finance charge: the finance 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 2017

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

Notes: The figures in the Note column above correspond with explanations of the adjustments given on pages 27 and 28.

¹ E'money = Euromoney, ² Corp. costs = Corporate costs, ³ JV's & Ass. = Joint ventures and Associates, 4 Fin. costs = Financing costs

Reconciliation: Statutory profit to adjusted profit - FY 2016

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

Notes: The figures in the Note column above correspond with explanations of the adjustments given on pages 27 and 28.

¹ E'money = Euromoney, ² Corp. costs = Corporate costs, ³ JV's & Ass. = Joint ventures and Associates, 4 Fin. costs = Financing costs

Reconciliation: Adjusted results including and excluding discontinued operations

Underlying analysis - Revenues

Notes: M&A adjustments are for disposals, including Euromoney and Hobsons' Admissions business, and acquisitions. The underlying results include the post-acquisition organic growth from acquired entities. 'Other' adjustments include the timing of shows at dmg events, the gross-up, equivalent to the cost of sales, on the low margin resale of newsprint activities and the exclusion of the benefit from the 53rd week of dmg media's print businesses' results in FY 2016.

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

Underlying analysis - Adjusted operating profit*

Notes: B2B and Consumer underlying figures are stated pre the allocation of Corporate costs. 'Other' includes adjustments for the timing of shows at dmg events.

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

Principal risks and uncertainties

A robust and detailed assessment of the Group's risk register and the Group's risk management processes was carried out by management and overseen by the Audit & Risk Committee. 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.

Changes to the principal risks during the year

1. The risk of 'Major change projects' disclosed last year primarily related to the execution of simplification and reorganisation initiatives which are largely now implemented. For this reason the risk is not considered a principal risk for the Group. The operating companies continue to undertake operational change projects and the associated risks are tracked on the Group's risk register.

2. The principal risk examples below do not include Euromoney's risks as they are no longer consolidated into the Group's overall risk profile.

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

30 November 2017

* Unless otherwise stated, all profit and profit margin figures in this Full Year Results Report refer to adjusted results and not statutory results. 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 and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 27 to 30. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

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

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 32 and 33. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying growth rates exclude the benefit to FY 2016 results of an additional 53rd week and underlying revenues exclude low margin newsprint resale activities.

† Pro Forma Full Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter and as a c.49% owned associate during the remaining nine months, consistent with the ownership profile during Full Year 2017. See page 26.

Π Excluding Euromoney, Hobsons' Admissions & Solutions businesses and EDR, the total B2B revenues in FY 2017 were £781 million, at the average FY 2017 FX rate of $1.27, rather than £976 million. Similarly, the B2B adjusted operating margin was 13% rather than 16%.

∞ Daily Mail's 23.4% average market share during FY 2017 increased from 23.2% during FY 2016 and The Mail on Sunday's 22.1% increased from 22.0% in FY 2016. Circulation market share figures are calculated using ABC's National Newspaper Reports for each month from October 2015 to September 2017 inclusive and exclude digital subscribers.

∂ As at the end of 30 September 2017, there were 4,812,419 'A' Ordinary Shares held in Treasury and 3,710,764  'A' Ordinary Shares held by the DMGT Employee Benefit Trust.

The average £: US$ exchange rate for the year was £1:$1.27 (2016 £1:$1.42). The rate at the year end was $1.34 (2016: $1.30).

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 30 November 2017, 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/webcastfy17.

Financial Reporting Calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 25 January 2018. There will be an Investor Briefing held on 1 February 2018. Please note that, unlike in previous years, DMGT does not intend to provide a trading update between the third quarter trading update, scheduled for 26 July 2018, and the announcement of Full Year results on 29 November 2018.

Market Abuse Regulation

As with previous financial announcements, the information communicated in this Full Year Results Report includes inside information.

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.