DMGT.L Regulatory News (DMGT)

Performance in line with expectations and continued progress against strategic priorities

Highlights:

· Underlying¹ revenue growth +1%; stable underlying adjusted operating profit

o Good B2B performance: underlying revenues +4% with margin improvement

o Challenging Consumer Media conditions: underlying revenues -3%, margin 11%

· Adjusted² profit before tax up pro forma³ +8%; adjusted EPS up pro forma +2% to 24.4p

· Statutory⁴ operating profit £133m (HY 2017 £17m); statutory profit before tax £113m (£41m); statutory EPS 32.2p (155.8p)

· Interim dividend increased +3% to 7.1p

· Good progress made against key strategic priorities

· Strong financial position: net debt:EBITDA ratio of 1.2 including EDR disposal (Apr '18 proceeds)

· Recommended offer for ZPG Plc on 11 May 2018; c.£640m potential proceeds

· Outlook for the Full Year unchanged

Paul Zwillenberg, Chief Executive, commented:

"DMGT's performance in the first half was in line with our expectations as we continue to transition the Group and execute against our three strategic priorities. We have delivered continued, broad-based growth across our B2B businesses and a strong performance from our Consumer Media business in challenging market conditions.

We have made good progress with increasing our portfolio focus, notably through the disposal of EDR. Most recently, the expected disposal of our stake in ZPG Plc is a clear demonstration of our long-term approach to value creation. As a result of this portfolio activity, our balance sheet will be strengthened considerably, enhancing our financial flexibility for balanced capital allocation. We have also continued to implement a series of performance improvement initiatives across the Group which are starting to gain traction.

Guidance for the Full Year remains unchanged. Although progress during the period was encouraging, we remain cautious about the outlook as we continue to transition the Group during challenging market conditions for some of our businesses. However, the Board remains confident that the Group's strategy and 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."

Half Year 2018 Financial Results:

· Revenue of £746m; underlying growth +1%: the underlying growth reflects broad-based growth from Insurance Risk, EdTech, Energy Information and Events and Exhibitions and stable revenues from Property Information, partially offset by a decrease from Consumer Media.

· Adjusted operating profit of £84m; stable underlying performance: the growth from Insurance Risk and EdTech was offset by lower Consumer Media profits and increased Corporate costs.

· Statutory operating profit of £133m increased from £17m in the prior year due to reduced exceptional operating costs, the absence of impairment charges and the share of associates' gains on disposals.

· Income from JV's and Associates: the share of adjusted operating profit increased +14% on a pro forma basis to £41m, primarily due to growth from ZPG Plc.

· Profit before tax (PBT): adjusted PBT grew +8% on a pro forma basis to £103m, including finance charges of £21m (£21m) and the adverse effect of the weaker US dollar. Statutory PBT was £113m (£41m).

· Tax: the adjusted tax charge was £16m (£14m pro forma) and the adjusted effective tax rate increased to 15.8%, as expected, whilst statutory tax was a credit of £4m. Overall, we estimate that the impact of tax changes in the US will be largely neutral in the short term but become beneficial as US-generated profits increase.

· Earnings per share: adjusted EPS grew +2% on a pro forma basis to 24.4p (24.6p). Statutory EPS was 32.2p (155.8p) reflecting the prior year gain on the disposal of Euromoney.

· Net debt was £534m as at 31 March 2018, excluding the benefit of £146m of proceeds from the disposal of EDR, which completed in April 2018. The net debt:EBITDA ratio was 1.6 compared to 1.4 as at 30 September 2017 and 1.6 as at 31 March 2017, reflecting the usual seasonal cash outflows. Including the proceeds from EDR and excluding EDR's profits, the net debt:EBITDA ratio would have been 1.2 as at 31 March 2018.

· Portfolio management: the focus within the portfolio has been further increased by Xceligent's cessation of trading, the disposal of EDR and Hobsons' Solutions business and the partial sale of SiteCompli, which is now classified as an associate rather than a subsidiary. The potential disposal of DMGT's stake in ZPG Plc was announced in May 2018 and is expected to complete during the final quarter of the current financial year with c.£640m potential proceeds. The Events and Exhibitions business made two small acquisitions during the period.

· Outlook: the outlook and guidance for the Full Year remain unchanged, with the expectation of slower revenue growth in the second half due to challenging conditions for advertising and property information as well as timing factors. The B2B businesses are collectively expected to deliver a Full Year underlying revenue growth rate in the low-single digits and an operating margin in the mid-teens. The Consumer Media business, dmg media, is expected to experience a mid-single digit underlying decline in revenues and to deliver an operating margin of around 10%.

Half Year 2018 - segmental performance:

A presentation of the Half Year Results will be given to investors and analysts at 9.30am on 24 May 2018, at the offices of Numis Securities Limited, The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT. There will also be a live webcast available on our website at www.dmgt.com/webcasthy18.

The Group's next scheduled announcement of financial information will be the third quarter trading update on 26 July 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

1 Underlying revenue or profit is revenue or operating profit on a like-for-like basis, see pages 22 and 23. 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.

2 Unless otherwise stated, all profit and profit margin figures in this Interim Management 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 and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 16 to 19. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary during the first three months of Half Year 2017.

3 Euromoney ceased to be a subsidiary at the end of December 2016. Pro Forma Half Year 2017 figures have been restated to treat Euromoney as a c.49% owned associate for the whole period, consistent with the ownership profile during Half Year 2018. See page 15.

4 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 Half 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 first half of the year was £1:$1.36 (against £1:$1.24 last year). The rate at the Half Year end was $1.40 (2017: $1.26), compared to $1.34 at the September 2017 year end.

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

Interim Management Report

This interim management report focuses principally on the adjusted results to give a more comparable indication of the Group's business performance. The adjusted results are summarised below, with the pro forma³ Half Year 2017 and pro forma 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 six months to 31 March 2018 was £746m, a decrease of 6% on both a statutory and pro forma basis, reflecting the adverse effect of the weaker US dollar relative to sterling. On an underlying¹ basis, adjusted revenue grew 1%. Underlying revenue growth was delivered in subscriptions, digital advertising, events and transactions, but was partly offset by the anticipated decline in print advertising and circulation.

Adjusted operating profit of £84m grew 3% on a pro forma basis, including the impact of the disposal and closure of loss-making businesses, and was stable on an underlying basis. The underlying performance reflected growth in profits from the B2B businesses, notably Insurance Risk and EdTech, a decrease from Consumer Media and, as guided to, an increase in Corporate costs. The adjusted operating margin in the period was 11%, an improvement on the pro forma 10% in the first half of the prior year, with the increase being largely attributable to Insurance Risk and Property Information.

Adjusted profit before tax was £103m, pro forma growth of 8%, reflecting the growth in operating profit and a 14% pro forma increase in the share of operating profits from joint ventures and associates. The adjusted tax charge was £16m, a pro forma increase of 20% on last year, due to an increase in the effective tax rate as well as the impact of increased profits. Adjusted basic earnings per share of 24.4p grew by 2% on a pro forma basis.

The statutory profit before tax for the period was £113m, an increase of £72m on the prior year, due to reduced exceptional costs, the absence of impairments and the benefit of the share of gains on associates' disposals. Statutory basic earnings per share were 32.2p, a reduction on the prior year which included a gain on the Euromoney transaction.

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 16 to 19.

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

Progress on Strategic Priorities

DMGT's three key strategic priorities are improving operational execution, increasing portfolio focus and enhancing financial flexibility. As presented at the DMGT Investor Briefing event on 1 February 2018, the Performance Improvement Programme includes operating initiatives for each company that are aligned with each business's clear role within the Group. Good initial progress was made during the period, with initiatives across all five categories of product, commercial, operations, people and technology.

The focus within the portfolio has been further increased by Xceligent's cessation of trading, the disposal of EDR and Hobsons' Solutions business and the partial sale of SiteCompli. DMGT's financial flexibility has been further enhanced and, including the impact of the EDR disposal, which completed in early April 2018, the net debt:EBITDA ratio was 1.2 at the period end. The potential disposal of DMGT's c.30% stake in ZPG Plc, which is expected to complete during the final quarter of the current financial year, would be a clear demonstration of long-term value creation, further increasing portfolio focus and significantly enhancing financial flexibility. Our approach to capital allocation remains structured and disciplined. The commitment to organic investment and consistent, real dividend growth will continue to be our highest priorities. We take a balanced view on the relative merits of acquisitions, reducing net debt and returning capital to shareholders through share buy-backs.

Group outlook

The Group's first half performance has been in line with expectations and the outlook for the Full Year, as provided in November 2017, remains unchanged:

· The B2B businesses are collectively expected to deliver underlying revenue growth in the low-single digits and an adjusted operating margin in the mid-teens;

· The underlying rate of decline in Consumer Media's revenues is expected to be in the mid-single digits and the adjusted operating margin is expected to be around 10%;

· Corporate costs are expected to be around £45m;

· The share of adjusted operating profits from joint ventures and associates is expected to be at least £75m, excluding any impact from the ZPG Plc disposal occurring pre year end;

· Net finance costs are expected to be around £40m; and

· The effective tax rate is expected to be around 18%.

Business Review

Business to Business (B2B)

B2B revenues totalled £411m, up 4% on an underlying basis, with growth from EdTech, Energy Information, Insurance Risk and Events and Exhibitions whilst Property Information delivered a stable underlying performance. Revenues decreased by 7% on a pro forma basis, following disposals by the EdTech business in September and October 2017 and reflecting the weaker US dollar. B2B operating profits were £71m, up an underlying 15%, driven by Insurance Risk and EdTech. 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.

Outlook: the guidance for the B2B businesses remains unchanged. The financial performance during the remainder of the year will be impacted by the disposal of EDR, which occurred in April 2018, and by the sale of the seasonal Hobsons Admissions and Solutions businesses, which had profits weighted towards the second half. The challenging conditions facing the UK property market are also expected to continue. The underlying revenue growth rate for the Full Year is expected to be in the low-single digits and the adjusted operating margin is expected to be in the mid-teens.

Insurance Risk: RMS

RMS's revenues increased by 6% on an underlying basis, including the benefit of one-off project revenues and a 3% underlying increase in subscription revenues. Reported revenues decreased 4% to £113m due to the weaker US dollar. The adjusted operating margin improved to 17% and included the benefit of some timing differences to the cost base which are expected to reverse in the second half.

RMS's pipeline of models remains strong, reflecting an ongoing commitment to strengthening the business's leading market position. The new high definition US inland flood, North American wildfire and European severe convective storm models, as well as the third generation cyber models, are expected to be made available to customers by the end of calendar year 2018. Also, RiskLink18 is scheduled for release in July 2018 and will include updates to the US storm surge model as well as new and updated earthquake and typhoon models that will expand coverage across the Asia Pacific region.

Karen White was appointed RMS CEO in March 2018, bringing significant experience of leading enterprise software companies. RMS will continue to invest and to target growth in its core catastrophe model business. At the same time, the company will enhance its software platform, RMS(one). In order to give clients greater flexibility, a more modular approach to the delivery of RMS(one) to the market will be adopted, enabling clients to choose modules and functionality that best meets their needs over time.

Property Information

The focus within the US Property Information portfolio has been significantly increased this financial year. Firstly, Xceligent filed for liquidation in December 2017. Secondly, the disposal of EDR for US$205m was completed in April 2018. Thirdly, also in April 2018, DMGT reduced its stake in SiteCompli to 49%, with the founding management team now holding a majority stake in the business. SiteCompli is now classified as an associate rather than a DMGT subsidiary. The underlying performance during the period excludes these three businesses.

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 were stable on an underlying basis as the growth in the US offset the decrease from the European business, which continued to face challenging conditions in the UK with lower volumes of residential transactions. The 6% reported decrease in revenues reflected the weaker US dollar and the absence of Xceligent during the second quarter. Adjusted operating profit grew by 1% on an underlying basis and the operating margin increased to 18%. The margin benefited from the absence of loss-making Xceligent during the second quarter and with central US costs, previously allocated to dmg information's cost base, now being included in Group Corporate costs in the current year.

EdTech: Hobsons

* The underlying operating profit performance has improved from a loss to a profit, with a £4m improvement.

EdTech revenues grew by an underlying 10%, with continued growth from each of Hobsons' three product lines: Naviance, the K-12 career and college planning 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 £33m. Adjusted operating profit was £3m, in line with the prior year, but a £4m improvement on an underlying basis. Due to the seasonality of the Admissions and Solutions businesses, the adverse profit impact will be more pronounced during the second half of the year than it was in the first half.

Energy Information: Genscape

* The underlying operating profit performance has deteriorated from a profit to a loss, with a £1m change.

Energy Information revenues grew by an underlying 6%, with continued strong growth from the core Oil, Power and Gas sectors and a reduction in the rate of decline from the solar business, Locus Energy. Including the adverse effect of the weaker US dollar, revenue decreased slightly to £43m. An efficiency and performance improvement programme has been instigated by the new management team which resulted in some non-exceptional restructuring costs being incurred during the period. The breakeven profit performance during the period also reflected a larger proportion of payroll costs being expensed directly, with reduced capitalisation.

Events and Exhibitions: dmg events

Events and Exhibitions revenues increased by 3% 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 revenue growth. The Index interior design show occurred in March 2018, having previously been held in May 2017. Although the Index show was a smaller event this year, the timing benefit supported the 5% year-on-year growth in total revenues in the period to £72m, despite the weaker US dollar. The operating margin was 28%, a slight reduction compared to the prior year, due to expected increased costs for the major shows, notably ADIPEC. Two small businesses were also acquired in the period, with events in the construction and hotel interior design sectors.

The Gastech event, one of the three large events in the portfolio, is being held in Barcelona in September 2018 and is expected to generate less revenue than the April 2017 Tokyo event, which benefited from Japan being the largest LNG market. An additional Index Elements event will also be held in September 2018, however, and this is expected to offset the Gastech impact. In FY 2019, all three of the business's large events will occur; Gastech, which has historically been on an 18 month cycle, will be held in Houston in September 2019.

Consumer Media: dmg media

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

Revenue decreased by an underlying 3% to £335m. As expected, the underlying growth from MailOnline (+5%), was more than offset by decreasing circulation revenues (-6%) and declines in print advertising (-3%). Total advertising revenues were in line with last year on an underlying basis. Including the impact of the disposal of Elite Daily in April 2017, reported revenues decreased by 4%.

Revenues for the combined Mail newspaper and website businesses (Daily Mail, The Mail on Sunday and MailOnline) decreased by an underlying 4% to £280m. A 6% reduction in circulation revenue, to £147m, and a 9% decline in print advertising revenue, to £64m, was partly offset by MailOnline, which grew revenues by an underlying 5%, to £61m. Continued declining circulation volumes were 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 large market shares held by the Daily Mail and The Mail on Sunday of 23.4% and 22.0% respectively∞.

MailOnline continues to grow the number of visitors coming directly to its site. Indirect traffic, notably via search and social platforms, has reduced however, and this resulted in total average daily global unique browsers during the period decreasing by 9% to 13.6m. These challenging market conditions resulted in the slowing underlying revenue growth rate for MailOnline in the period. Total advertising revenues across the combined Mail newspaper and website businesses were £124m, an underlying decrease of 3%.

Metro delivered a robust revenue performance in the context of a declining print advertising market, growing revenues by 8% to £37m, including the benefit of taking on four franchises from Trinity Mirror in January 2017 and a further two in January 2018.

Adjusted operating profit for the period grew by 5% to £38m, including the benefit from disposing of the loss-making Elite Daily business. Profits decreased by 8% 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 in the period was 11%. The operating margin in the same period last year was 10% although, excluding Elite Daily and 7 Days to give a like-for-like comparison, it would have been 12%.

Outlook: the Consumer Media outlook remains unchanged. The challenging conditions in the advertising market are expected to continue and further declines in circulation volumes are anticipated. The underlying rate of decline in Consumer Media revenues for the Full Year is expected to be in the mid-single digits and the operating margin is expected to be around 10%.

Corporate costs

Joint Ventures & 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 £41m, a 14% pro forma increase on the prior year. The share of profits from DMGT's c.49% stake in Euromoney was £27m, up 6% on last year on a pro forma basis. Euromoney released its Half Year results on 17 May 2018 and reported underlying revenue growth of 4% in the period, driven by 11% growth from its events businesses, and a 6% increase in adjusted profit before tax. In April 2018, Euromoney disposed of its Global Markets Intelligence Division and, including the proceeds, the company is now in a net cash position.

The share of adjusted operating profits from DMGT's c.30% stake in ZPG Plc increased 47% to £17m. ZPG released its Half Year results on 23 May 2018 and reported revenue growth of 33% and a 41% increase in adjusted EBITDA, including the benefit of acquisitions, with strong growth across both the Property and Comparison divisions. In May 2018, DMGT gave an irrevocable undertaking to accept Silver Lake's offer to acquire DMGT's entire holding of 131m ZPG shares for £4.90 per share. The ZPG disposal is expected to complete during the final quarter of the current financial year with c.£640m of potential proceeds.

The share of operating profits and losses from other joint ventures and associates, which are mainly early stage businesses, was a net loss of £4m (HY 2017 £2m). The increase was largely due to investment in consumer businesses, notably DailyMailTV which has been renewed for a second season following its successful launch in September 2017.

Outlook: the results during the second half of the year will be adversely affected by Euromoney's disposal of its Global Markets Intelligence Division. The Full Year share of operating profits from joint ventures and associates is expected to be at least £75m, excluding any impact from ZPG Plc disposal occuring pre year end.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs, was £21m, a 2% increase on the prior year. DMGT benefited from lower average debt levels during the period but the interest payable was adversely affected by an increase in the share of associates' interest payable to £3m, from £2m in the prior period.

The pension finance credit, which is excluded from adjusted results, was £1m for the period, reflecting the pension surplus on an accounting basis. This compared to a £3m charge for the same period last year and £5m charge for the prior Full Year.

Outlook: net finance costs for the Full Year are expected to be around £40m.

Other income statement items

· Exceptional items and amortisation

The exceptional cash items in the period amounted to a credit of £2m in respect of previously accrued legal fees. This was a significant reduction compared to the £20m charge for exceptional cash items in the first half of the prior year. Total exceptional operating costs, including those of joint ventures and associates, were £2m in the period (HY 2017 £23m).

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £19m (HY 2017 £26m). There were no impairment charges in the period, other than DMGT's £2m share of associates' charges, whereas the Group incurred a £35m charge in respect of the Didcot printing plant in the first half of the prior year. The Group recorded other net gains on disposal of businesses and investments of £41m, primarily from Euromoney's disposal of its investment in Dealogic (HY 2017 gain £530m).

· Taxation

The adjusted tax charge of £16m (HY 2017 £14m pro forma³) is stated after adjusting for the effect of exceptional items. As expected, the adjusted tax rate for the half year was 15.8%, an increase on the pro forma basis 14.2% in Half Year 2017, due to new legislation substantively enacted during the period restricting the use of historic UK losses. The rate for the Half Year is lower than the expected rate of 18% for the Full Year, due to the majority of profits in low tax countries being earned in the first half of the year.

The statutory tax credit for the period was £4m and the share of associates' tax charge amounted to £10m. There were £10m of exceptional tax credits including a one-off non-cash tax credit of £16m on the revaluation of the Group's US deferred tax liabilities as a result of the reduction in the US federal tax rate.

Outlook: the US 'Tax Cuts and Jobs Act' was enacted during the period, 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 our US-generated profits increase. The effective tax rate for the Full Year is still expected to be around 18%. The rate is then expected to increase further over the next few years, to over 20%.

Pensions

The net surplus on the Group's defined benefit pension schemes increased from £62m at the start of the year to £79m at the half year (calculated in accordance with IAS 19 (Revised)), with an increase in the value of assets exceeding the increase in the value of the defined benefit obligation. Funding payments into the main schemes during the period were £13m and are expected to continue at least until the next triennial actuarial valuation as the schemes remain in deficit on an actuarial basis. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Net debt at the end of the period was £534m, an increase of £70m since the start of the financial year, reflecting the usual seasonal cash outflows. The net debt:EBITDA ratio was 1.6. Cash outflows in the period included dividends of £56m, interest payments of £17m, pension funding payments of £13m and taxation of £1m. Net expenditure on acquisitions and investments, including proceeds from disposals, was £17m. Group operating cash flow was £24m in the period, including £26m of capital expenditure, and was adversely affected by the usual seasonal outflows. The seasonality was also reflected in the 28% conversion rate of operating profits to operating cash flow, an improvement on the 22% pro forma³ rate 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 Group adjusted operating income, was £87m in the period. This metric, a Group key performance indicator, reflects the cash generation of the Group's subsidiary businesses and improved by 4% on a pro forma basis, from £84m in the prior year.

The Group broadly matches the profile of its net debt by currency to the components of its operating cash flow by currency. The strengthening of sterling, notably against the US dollar, resulted in a favourable debt revaluation of £11m during the period.

Including the benefit of the proceeds from the disposal of EDR, which completed in April 2018, and eliminating EDR's profits, the net debt:EBITDA ratio would have been 1.2 at the period end. Net debt is typically at its peak at around the half year, due to the timing of the payment of the prior year's final dividend and other annual payments. The potential disposal of DMGT's c.30% stake in ZPG Plc was announced in May 2018. The disposal is expected to complete during the final quarter of the current financial year, with c.£640m proceeds, which will strengthen the balance sheet further.

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 DMGT's BBB- investment grade rating. In March 2018, DMGT renewed its bank facilities, with largely similar terms, and the Group now has £415m of facilities available until March 2023, in addition to £424m of bond debt at the period end.

The Directors consider that the Group has adequate resources to continue in operational existence for at least the next twelve months. Accordingly, they continue to adopt the going concern basis in preparing the half yearly report.

Financing

During the first half of the year, the Group acquired 0.7m 'A' Ordinary Shares for £5m in order to meet obligations to provide shares under its incentive plans. In addition, 1.4m shares were used from the Employee Benefit Trust, valued at £10m, to provide shares under various incentive plans. As at 31 March 2018, DMGT had 354.3m shares in issue, including 19.9m Ordinary Shares, and a further 7.8m 'A' Ordinary Shares held in Treasury and the Employee Benefit Trust∂.

Dividend

The Board has declared an interim dividend of 7.1 pence per Ordinary and 'A' Ordinary Non-Voting share (HY 2017 6.9 pence) which will be paid on 29 June 2018 to shareholders on the register at the close of business on 8 June 2018.

Pro Forma Half Year 2017 and 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 Half Year 2017 and Full Year 2017 to treat Euromoney as a c.49% owned associate for the whole period, 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, 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 period and the comparability between periods.

The tables on pages 18 and 19 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both the first half of FY 2018 (HY 2018) and HY 2017.

The explanation for each type of adjustment is as follows:

1) Discontinued operations: the adjusted results for HY 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 HY 2017 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 period. An example is the impairment during the second half of FY 2017 of the goodwill and 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 period. Similarly, the gains or losses made by joint ventures or associates when disposing of businesses are excluded from adjusted results.

6) Pension finance charge: the finance charge or credit 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 - Half Year 2018

Reconciliation: Statutory profit to adjusted profit - Half Year 2017

Reconciliation: Adjusted results including and excluding discontinued operations

Cash operating income

Underlying analysis - Revenues

Underlying analysis - Adjusted operating profit²

Principal risks and uncertainties

The principal risks and uncertainties that affect the Group on an ongoing basis are described in our 2017 Annual Report. These are still considered to be the most relevant risks and uncertainties for the Group at this time and they are summarised below.

Strategic Risks

· Market disruption creates opportunities as well as risks. Disruption enables us to move into new markets and geographies to grow the business. Failure to anticipate and respond to market disruption may affect the demand for our products and services and our ability to drive long-term growth.

· Internal investments in new products and services, and developments of existing products and services, may fail to achieve customer acceptance and yield expected benefits.

· Economic and geopolitical uncertainty.

· Acquisitions and investments not delivering as expected, portfolio changes not delivering expected benefits, or not divesting from non-core businesses at the right time.

· Failure to secure and retain the right people for senior and business critical roles.

Operational Risks

· Information security breach or cyberattack.

· Reliance on key third parties; a failure of one of our critical third parties may cause disruption to business operations.

· Compliance with laws and regulations across multiple jurisdictions. Readiness for the General Data Protection Regulation, which comes into effect on 25 May 2018, has been a specific focus area for the Group.

· Pension scheme deficit within our newspaper business, certain other businesses and DMGT head office.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Half Yearly Financial Report, in accordance with applicable law and regulations.

The Directors confirm that to the best of their knowledge:

a) this Condensed set of Financial Statements which should be read in conjunction with the annual financial statements for the year ended 30 September 2017 and has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union; and

b) the Interim Management Report includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R.

By order of the Board of Directors

The Viscount Rothermere

Chairman

23 May 2018

Notes

1 Underlying revenue or profit is revenue or operating profit on a like-for-like basis, see pages 22 and 23. 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.

2 Unless otherwise stated, all profit and profit margin figures in this Interim Management 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 and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 16 to 19. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary during the first three months of Half Year 2017.

3 Euromoney ceased to be a subsidiary at the end of December 2016. Pro Forma Half Year 2017 figures have been restated to treat Euromoney as a c.49% owned associate for the whole period, consistent with the ownership profile during Half Year 2018. See page 15.

4 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 Half 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.

∞ 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 23.4% average market share during the six months to March 2018 was in line with a 23.4% average during the six months to March 2017 and The Mail on Sunday's 22.0% average market share during the six months to March 2018 was in line with a 22.0% average during the six months to March 2017. Circulation market share figures are calculated using ABC's March 2018 and March 2017 National Newspapers Reports and exclude digital subscribers.

∂ As at the end of 31 March 2018, there were 4,812,419 'A' Ordinary Shares held in Treasury and 3,023,124 'A' Ordinary Shares held by the DMGT Employee Benefit Trust.

The average £: US$ exchange rate for the first half of the year was £1:$1.36 (against £1:$1.24 last year). The rate at the Half Year end was $1.40 (2017: $1.26), compared to $1.34 at the September 2017 year end.

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

A presentation of the Half Year Results will be given to investors and analysts at 9.30am on 24 May 2018, at the offices of Numis Securities Limited, The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT. There will also be a live webcast available on our website at www.dmgt.com/webcasthy18.

Next trading update

The Group's next scheduled announcement of financial information will be the third quarter trading update on 26 July 2018.

This Interim Management Report ('IMR') 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 IMR save as would arise under English law. Statements contained in this IMR 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 IMR. 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 IMR. 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.

Independent review report to Daily Mail and General Trust plc

Report on the Condensed Consolidated Financial Statements

· Our conclusion

We have reviewed Daily Mail and General Trust plc's Condensed Consolidated Financial Statements (the "interim financial statements") in the Half Yearly Financial Report of Daily Mail and General Trust plc for the six month period ended 31 March 2018. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

· What we have reviewed

The interim financial statements comprise:

· the Condensed Consolidated Statement of Financial Position as at 31 March 2018;

· the Condensed Consolidated Income Statement and Condensed Consolidated Statement of Comprehensive Income for the period then ended;

· the Condensed Consolidated Cash Flow Statement for the period then ended;

· the Condensed Consolidated Statement of Changes in Equity for the period then ended; and

· the explanatory notes to the interim financial statements.

The interim financial statements included in the Half Yearly Financial Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

· Our responsibilities and those of the directors

The Half Yearly Financial Report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the Half Yearly Financial Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

· What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

23 May 2018

a) The maintenance and integrity of the Daily Mail and General Trust plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Shareholder Information

Financial Calendar (provisional)

2018

Contacts

For further investor information and contacts, please visit the Company's website at

www.dmgt.com.