DMGT.L Regulatory News (DMGT)

30 May 2019

Daily Mail and General Trust plc ('DMGT')

Half Yearly Financial Report for the six months ended 31 March 2019

Good performance and major capital return to shareholders

· Group underlying¹ growth achieved:

o Revenue +1%

o Cash operating income² +11%

o Adjusted³ operating profit +11%

· Adjusted profit before tax +19% underlying including reduction in net finance costs

· Adjusted EPS down 8% reflecting ZPG Plc disposal and tax normalisation

· Interim dividend increased +3% to 7.3p

· Statutory4 operating profit £39m (H1 2018 £133m); statutory profit before tax £50m (H1 2018 £113m); statutory EPS 12.9p (H1 2018 32.2p)

· £862m of capital returned to shareholders in April 2019, including £200m special dividend

· Significantly increased portfolio focus, in line with strategy:

o Distribution of DMGT's entire Euromoney stake to DMGT shareholders

o RCA disposal for US $89m in May 2019, On-geo sale expected to complete in June 2019

· Strong financial position: net debt £146m5 and net debt:EBITDA ratio of 0.65 adjusted for April 2019 distribution outflows

· Group outlook for the Full Year in line with market expectations6

Paul Zwillenberg, CEO, commented:

"DMGT delivered a good performance in the first half of the year, achieving underlying growth in revenue, cash generation and profit. Consumer Media delivered a particularly strong performance and we saw continued growth in our B2B portfolio.

The strategy we are pursuing is transforming DMGT and delivering results. The distribution of our stake in Euromoney and the £200m special dividend was a defining moment for DMGT. We returned nearly £900m, or 38% of our market capitalisation, to our shareholders. Our balance sheet remains strong despite this considerable capital return and an additional £117m made available to our pension schemes. We are confident we can invest for growth and maximise the portfolio's true potential, continuing the transformation we started three years ago.

Consumer Media delivered a strong performance in the first half. Given the inherent lack of visibility of our advertising revenue streams, exacerbated by the uncertain macro environment, we remain cautious about the remainder of the year. Guidance for B2B remains unchanged with higher planned investment in the second half, notably in RMS. 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 2019 Financial Results:

Half Year 2019 - segmental performance:

A presentation of the Half Year Results will be given to investors and analysts at 9.30am on 30 May 2019, at J.P. Morgan, 60 Victoria Embankment, London, EC4Y 0JP. There will also be a live webcast available on our website at www.dmgt.com/webcasthy19.

DMGT will be hosting an Investor Briefing on 2 July 2019, with a focus on the Insurance Risk business, RMS.

The Group's next scheduled announcement of financial information will be its nine month trading update on 25 July 2019.

About DMGT

DMGT manages a portfolio of companies that provide businesses and consumers with compelling information, analysis, insight, events, news and entertainment. The Group takes a long-term approach to investment and has market-leading positions in consumer media, insurance risk, property information, education technology, energy information and events & exhibitions. In total, DMGT generates revenues of around £1.4bn.

Notes

1 Underlying growth rates are on a like-for-like basis, see pages 20 to 22. Underlying revenues, cash operating income2 and operating profits 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. The underlying change in the share of operating profits from joint ventures and associates excludes ZPG Plc, Euromoney Institutional Investor PLC and DailyMailTV but includes the year-on-year organic growth from Yopa. The underlying net finance costs exclude the share of finance costs from ZPG Plc and Euromoney Institutional Investor PLC and the underlying H1 2018 costs have also been adjusted to include an assumed £6m benefit from £642m proceeds on the disposal of ZPG Plc.

2 Cash operating income (Cash OI) is calculated by adding back depreciation and amortisation expenses, which are non-cash items, to adjusted operating profit and then deducting capital expenditure.

3 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 credits and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 16 to 18.

4 The statutory results are IFRS figures before any adjustments.

5 The actual net cash position as at 31 March 2019 was £172m and the net cash:EBITDA ratio was 0.7. In March 2019, however, shareholder approval was given for a £200m special dividend and making £117m available to the Group's pension schemes. The £200m special dividend was paid in April 2019 and the £117m cash is expected to be made available to the pension schemes in the current financial year. Adjusting for a £317m reduction in cash, the net debt position as at 31 March 2019 would have been £146m and the net debt:EBITDA ratio would have been 0.6.

6 Current City analyst expectations for DMGT for FY 2019, as published on the Group's website (www.dmgt.com), are based on seven analysts that have updated their projections since the distribution of Euromoney shares and £200m cash that was announced on 3 March 2019. Expectations range from £1,361m to £1,410m for revenue, from £130m to £137m for adjusted profit before tax and from 35.6p to 37.7p for adjusted basic earnings per share with a consensus of £1,388m, £134m and 37.1p.

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

The average £: US$ exchange rate for the first half of the year was £1:$1.29 (against £1:$1.36 last year). The rate at the Half Year end was $1.30 (2018: $1.40), compared to $1.30 at the September 2018 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 on the adjusted results to give a more comparable indication of the Group's business performance. The adjusted results are summarised below:

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 2019 was £724m, a decrease of 3% on both a statutory and absolute basis, reflecting the effect of disposals. On an underlying¹ basis, revenue grew 1%. Underlying growth was delivered in subscriptions, digital advertising and events, but was partly offset by the expected decline in print advertising, circulation and transactions.

Cash operating income ('Cash OI') of £97m grew 12% in absolute terms and 11% on an underlying basis. The Board considers Cash OI to be a good indicator of the underlying cash generation of the businesses and it is included as a core element of the incentive plans for all senior management teams. Good progress was made by EdTech and Energy Information in particular, reflecting the strong focus on improving operational execution across those businesses.

Adjusted operating profit of £90m grew 8% and by 11% on an underlying basis. The underlying performance reflected profit growth from Consumer Media and, within B2B, from Insurance Risk, EdTech and Energy Information. There was also a 22% underlying decrease in Corporate costs, reflecting the Group's more focused portfolio. The adjusted operating margin was 12%, an improvement on the 11% in the first half of the prior year.

Adjusted profit before tax was £100m, a decrease of 3% in absolute terms but 19% growth on an underlying basis. The share of operating profits from joint ventures and associates decreased £23m, following the disposal of ZPG Plc, and decreased £1m on an underlying basis. This was partly offset by a £13m reduction in net finance costs. The adjusted tax charge was £19m, an increase of 19% on last year, due to an expected increase in the effective tax rate to 19.4%. Adjusted basic earnings per share of 22.5p decreased by 8%.

The statutory profit before tax for the period was £50m, a decrease of £63m on the prior year, due to the prior year benefiting from gains on disposals, including those made by associates, and the current year including impairments in respect of Euromoney and On-geo. Statutory basic earnings per share were 12.9p, a 60% reduction 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 16 to 18.

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 remain consistent: 1) improving operational execution, 2) increasing portfolio focus and 3) maintaining financial flexibility.

Good progress continues to be made with improving operational execution as the businesses pursue initiatives to optimise their performance. The 11% underlying growth in cash operating income, a key metric used to measure operational performance, reflects this progress.

In April 2019, DMGT distributed £862m to shareholders, comprising its entire holding of Euromoney shares and a £200m special dividend. The distribution of the listed Euromoney shares increased the Group's focus towards a balanced portfolio of cash generative and growing businesses. Today we announced two further disposals: On-geo, the German based Property Information business, and DMGT's c.40% stake in RCA, the US-based Property Information business. On a pro forma basis, adjusted for the £200m cash distributed to shareholders in April 2019 and £117m cash expected to be made available to the pension schemes in the coming months, the net debt:EBITDA ratio was 0.6 at the period end. The balance sheet flexibility will be further enhanced with the proceeds of US $89m from the RCA disposal announced today.

Our approach to capital allocation remains unchanged. We seek to maximise the potential of the portfolio and create long-term value. The commitments to organic investment and consistent, real growth in dividend per share 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.

Group outlook

The outlook for the Full Year is in line with market expectations6 and guidance remains broadly unchanged:

· B2B: low-single digit underlying revenue growth and an adjusted operating margin in the mid-teens

· Consumer Media: low-single digit underlying revenue decline, revised from mid-single digit decline, and an adjusted operating margin in the high-single digits

· Corporate costs: less than £45m

· Joint ventures and associates: share of adjusted operating profits around £15m, as guided to when the distribution of Euromoney shares was announced in March 2019

· Net finance costs: around £15m

· Effective tax rate: around 20%

Group revenues for FY 2019 are expected to be stable on an underlying basis, with a broadly stable adjusted operating margin.

Business Review

Business to Business (B2B)

B2B revenues totalled £381m, up 2% on an underlying basis. EdTech and Events and Exhibitions grew and there were stable performances from Insurance Risk, Property Information and Energy Information. Revenues decreased by 7% in absolute terms due to disposals within the Property Information and Energy Information sectors in 2018. B2B cash operating income increased an underlying 2% to £75m, with notable improvements from EdTech and Energy Information. There was an increase in the overall B2B cash operating income margin to 20%. B2B operating profits were down 1% underlying. The performance was adversely affected by a larger proportion of development costs being expensed, not capitalised. By business, the underlying profit growth from Insurance Risk, EdTech and Energy Information was more than offset by decreases from Property Information and Events and Exhibitions. The overall B2B operating margin increased to 19%, driven by increases in the Insurance Risk and Energy Information margins.

Outlook: the guidance for B2B remains unchanged. The financial performance during the remainder of the year will be impacted by planned increased investment, notably in Insurance Risk. Market conditions are expected to remain largely unchanged. 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

The Insurance Risk business, RMS, provides models and solutions that help insurers, reinsurers, brokers, financial markets and public agencies evaluate and manage catastrophe risks globally. Revenues were stable on an underlying basis. The benefit of favourable contract renewals during the first half was offset by the impact of industry consolidation as well as historic RMS(one) delivery issues. Reported revenues grew 6% to £119m, benefiting from the stronger US dollar.

The cash operating income margin decreased to 22% as the business increased its investment in software, data, data analytics and applications to drive future growth. Adjusted operating profit benefited from the absence of RMS(one) amortisation, which was £7m in H1 2018, following the impairment of the asset in September 2018. Consequently, the adjusted operating margin improved from 17% to 22%. Investment will increase further during the second half of the year, with development costs continuing to be expensed as incurred, resulting in lower cash operating income and adjusted operating profit margins for the Full Year.

In May 2019, RMS held its annual client conference and announced the launch of Risk Intelligence, an open and flexible platform built to enable better risk management and support profitable risk selection. Risk Intelligence enables clients to access the Risk Data Lake, a repository that can securely unify RMS's data, clients' data and third-party data to provide risk insights and enable data-driven decisions. RMS also introduced two new analytics applications: SiteIQ, which synthesises risk data for a single location, is being made available on Risk Intelligence in June 2019 and will allow underwriters to immediately gain a better understanding of property risk; and ExposureIQ, aimed at exposure management, is expected to be released in September 2019. Risk Intelligence brings additional functionality and reduced running costs for clients, superseding the RMS(one) platform which has now been retired.

The model pipeline remains strong and will help to strengthen the leading market position held by RMS. The US Inland Flood high-definition (HD) model, which is available on Risk Intelligence, was successfully released in April 2019 and the US Wildfire HD model is expected to be released on Risk Intelligence in September 2019.

Property Information

The Property Information portfolio of businesses operates in Europe and the US, providing commercial and residential property related products and services. Revenues were stable on an underlying basis, with growth from the US businesses, Trepp and BuildFax, offsetting a decrease from the European business, which continues to face challenging market conditions in the UK. The 25% reported decrease in revenues reflected the disposal of EDR and SiteCompli in April 2018 and Xceligent's cessation of trading in December 2017.

There was significant product development in the period across all businesses, notably at Trepp including initiatives for the collateralised loan obligation (CLO) market. The underlying decrease in cash operating income and adjusted operating profit was a result of the increased cost base, reflecting the increased investment, although margins benefited from the prior year changes to the Property Information portfolio. The sale of the German business, On-geo, was agreed in April 2019 and is expected to complete in June 2019, after which the European business will comprise of Landmark and SearchFlow. The greater focus, both geographically and in the services offered, will enable its new management team to prioritise growth opportunities. On-geo generated £3m of operating profit from £29m of revenues in FY 2018.

EdTech: Hobsons

* Cash operating income improved by £5m on an underlying basis from negative to positive.

The EdTech business, Hobsons, is a leading provider of college and career readiness and student success solutions to the North American market and continues to perform strongly. Revenues grew by an underlying 14% with continued growth from each of the three product lines: Naviance, the K-12 college and career readiness solution; Intersect, the higher education matching business, and Starfish, the higher education student retention and success platform.

At the same time, the focus on improving operational execution delivered a high flow-through from revenue growth to cash generation, driving a transformation in cash operating income and the margin improvement from 1% to 12%.

Good progress has been made modernising the core EdTech product platforms and adding new client-facing features and functionality, which have helped to drive revenue growth. A larger proportion of expenditure on technology was expensed directly rather than capitalised in the period, contributing to a decrease in the adjusted operating margin from 10% to 8%.

Energy Information: Genscape

* On an underlying basis, cash operating income improved by £4m and adjusted operating profit by £3m.

The Energy Information business, Genscape, delivers innovative solutions to improve market transparency and efficiency across several asset classes and geographies. Revenues were stable on an underlying basis. There was continued growth from the core oil and gas sectors which was offset by the power sector, where market conditions have become more challenging. The solar business, Locus Energy, was merged into AlsoEnergy in September 2018 and its absence resulted in revenues decreasing 14% on a reported basis to £37m.

Improvements in operational execution, including the elimination of peripheral products and streamlining of support functions, drove an increase in the cash operating income margin from 2% to 15%. A larger proportion of expenditure on technology was expensed directly and not capitalised. This resulted in a smaller increase in the adjusted operating margin from 0% to 9%.

Events and Exhibitions: dmg events

The Events and Exhibitions business, dmg events, is an organiser of B2B exhibitions and associated conferences with industry-leading events in the energy, construction, interiors, hotel, hospitality and leisure sectors. Revenues grew 2% on an underlying basis. Big 5 Dubai and ADIPEC, two of the business's three largest events, were held in November 2018 and collectively delivered underlying revenue growth despite challenging conditions in the Middle East, notably in the construction sector. Revenues grew 1% on an absolute basis, with the benefit of the stronger US dollar being more than offset by timing differences, notably the Index interior design show being held in September 2019, having previously occurred in March 2018. During the period, new events were successfully launched in Saudi Arabia, South Africa and Thailand. Following a successful EGYPS event in February 2019, DMGT acquired the local partner's stake in the Egyptian energy show. The wholly owned event further strengthens dmg events' presence in Africa.

The cash operating income and operating margins decreased to 25%, reflecting investment in driving attendance to support the future growth of the major events as well as in new launches. As previously indicated, Gastech, one of the three largest events in the portfolio, is moving to an annual format having previously been held every eighteen months. The greater frequency is expected to deliver an increase in cumulative revenues and profits over time. The reduced interval between shows is, however, expected to have an adverse effect on the absolute revenues and operating margin of the September 2019 event, exacerbating the usual seasonality of lower margins during the second half of the year.

Consumer Media: dmg media

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

The Consumer Media portfolio includes two of the UK's most read paid-for newspapers, the UK's highest circulation weekday newspaper and MailOnline, one of the world's leading English language newspaper websites. Revenue grew by an underlying 1% to £343m, benefitting from favourable conditions in the advertising market. The underlying growth from MailOnline of 16% more than offset a 3% decrease in print advertising revenues and a 2% decrease in circulation revenues. Revenues grew 3% in absolute terms, benefiting from the inclusion of DailyMailTV, which became a wholly owned MailOnline business in October 2018.

Revenues for the combined Mail newspaper and website businesses (Daily Mail, The Mail on Sunday and MailOnline) were £284m, stable on an underlying basis. Circulation revenue decreased 2% to £144m with the continued decline in volumes being partly offset by the benefit of the 5p cover price increase in September 2018 of the weekday editions to 70p. The Mail brand remains strong, reflected in the large and growing market shares held by the Daily Mail and The Mail on Sunday of 25.3% and 22.6% respectively7. A 12% underlying decline in print advertising revenue to £57m was more than offset by MailOnline, which grew revenues by an underlying 16% to £76m, reflecting strong organic growth for both the website and DailyMailTV.

MailOnline continues to focus on attracting traffic directly to its homepages on desktop and mobile or its apps. Indirect traffic, primarily via social media and search platforms, decreased year-on-year, notably in the first quarter, due to changes made by the platforms in the prior year. This resulted in total average daily global unique browsers during the period decreasing by 7% to 12.7m. Total minutes spent on the site decreased by 1% to a daily average of 145m, although growth was achieved in the second quarter. The direct audience accounted for 78% of minutes spent, compared to 76% in H1 2018, reflecting continued growing engagement with the direct audience.

Following the integration of the advertising operations of the Metro and Mail in April 2018, Metro delivered a robust performance. Revenues grew by 12% to £41m, a good achievement in the context of a declining print advertising market. Revenues also benefited from the addition of two regional franchises in January 2018, one in July 2018 and a further one in January 2019.

Cash operating income and adjusted operating profit grew by an underlying 14% and 13% respectively, reflecting the continued focus on improving operational execution and the flow through of revenue growth to profits. The cash operating margin of 13% was in line with the prior year, as was the operating margin of 11%.

Outlook: Advertising in the first half was stronger than expected but we remain cautious about the remainder of the year. Circulation volumes are expected to continue to decline. Margins in the second half will be adversely affected by the anticipated reduction in revenues. Given the stronger than expected first half performance, the underlying rate of decline in Consumer Media revenues for the Full Year is expected to be in the low-single digits, rather than the mid-single digits previously guided to. The operating margin is still expected to be in the high-single digits.

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 £18m, a 57% decrease on the prior year. DMGT's stake in ZPG was disposed of in July 2018 and consequently no profits were generated from the business in the period, compared to £17m in the prior year.

The share of profits from DMGT's c.49% stake in Euromoney was £23m, down 16% on last year, reflecting disposals made by Euromoney in 2018. On 2 April 2019, all of the Euromoney shares held by DMGT were distributed to DMGT's shareholders and Euromoney is no longer an associate.

The net share of operating losses from other joint ventures and associates was £6m, notably from Yopa, the early-stage UK hybrid estate agent which became an associate in August 2018. The performance benefited from the absence of DailyMailTV, another early-stage business which is now a wholly owned part of MailOnline. On an underlying basis, excluding ZPG, Euromoney and DailyMailTV and including Yopa's organic year-on-year performance, the share of net losses increased by 15%.

In May 2019, the focus of the portfolio was further increased by the disposal of DMGT's c.40% stake in Real Capital Analytics (RCA), the US-based Property Information business, for US $89m.

The most significant businesses within the remaining portfolio of joint ventures and associates are Yopa and Excalibur, which operates the online discount businesses Wowcher and LivingSocial UK, in the Consumer Media sector; Praedicat in the Insurance Risk sector; and AlsoEnergy in the Energy Information sector. dmg ventures, the DMGT's venture capital unit, manages the majority of the portfolio, as well as smaller stakes in other early-stage investments.

Outlook: the results during the second half of the year will reflect the disposals made, notably the absence of Euromoney and ZPG. The remaining businesses are expected to deliver net losses during the second half of the year reflecting continued investment. The Full Year share of operating profits from joint ventures and associates is expected to be around £15m, as guided to in March 2019 on the announcement of the distribution of Euromoney shares.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs, were £8m. The 63% decrease on the prior year was due to several factors, primarily the net cash held in the period, the maturing of £219m of bond debt in December 2018 and a reduced share of associates' interest payable. The decrease in finance costs was 32% on an underlying basis, after adjusting for the disposal of the Euromoney and ZPG associates and for the proceeds from the ZPG disposal.

The pension finance credit, which is excluded from adjusted results, was £4m for the period, reflecting the pension surplus on an accounting basis. This compared to a £1m credit for the same period last year and £2m for the prior Full Year.

Outlook: net finance costs for the Full Year are expected to be around £15m.

Other income statement items

· Exceptional items and amortisation

Following a significant reduction in exceptional operating costs in FY 2018, costs remain at low levels compared to previous years. Exceptional operating costs, including those of joint ventures and associates, totalled a £1m credit in the period. This included £3m of charges in respect of exceptional cash items.

There were impairment charges of £49m in the period (H1 2018 £2m), including £28m in respect of the Euromoney associate and £21m in respect of On-geo. The carrying value of Euromoney included DMGT's share of the cumulative statutory profits since it became an associate and exceeded the market value at the period end. The carrying value of On-geo included an accounting gain on change in control in 2016 and the total cash returns from the investment are expected to be positive.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £14m (H1 2018 £19m). The Group recorded other net gains on disposal of businesses and investments of £16m, primarily in respect of the disposal of the Group's remaining stake in SiteCompli (H1 2018 gain £41m).

· Taxation

The adjusted tax charge of £19m (H1 2018 £16m) is stated after adjusting for the effect of exceptional items. As expected, the adjusted tax rate for the half year was 19.4%, an increase on 15.8% in H1 2018, reflecting the geographical mix of profits.

The statutory tax charge for the period was £4m and the share of associates' tax charge amounted to £7m. There were £8m of exceptional tax credits including a £10m non-cash item arising on the recognition of additional UK tax losses.

Outlook: the effective tax rate is expected to be around 20% in FY 2019 and gradually increase further over the next few years.

Pensions

The net surplus on the Group's defined benefit pension schemes reduced marginally from £244m at the start of the year to £236m at the half year (calculated in accordance with IAS 19 (Revised)), with an increase in the value of the defined benefit obligation exceeding the increase in the value of the assets. Funding payments into the main schemes during the period were £13m.

In conjunction with the distribution of £862m of assets to shareholders in April 2019, a further £117m will be made available to the pension schemes in the current financial year and DMGT and the pension Trustees are working on finalising arrangements. The triennial actuarial valuation of the defined benefit schemes as at 31 March 2019 is also currently in progress. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Prior to adjustment, net cash at the end of the period was £172m, a decrease of £61m since the start of the financial year, reflecting the usual seasonal cash outflows.

In March 2019, shareholder approval was given to pay a £200m special dividend in April 2019 and for a further £117m to be made available to the Group's defined benefit pension schemes. The nature and timing of payments to the schemes are yet to be agreed and it is likely that a significant portion of the £117m will remain as cash on DMGT's balance sheet. Given the anticipated restrictions associated with the use of funds, however, the Board considers it appropriate to exclude the £117m when reporting pro forma net debt and pro forma gearing. Adjusting to exclude the £200m special dividend and £117m being made available to the pension schemes, net debt at the period end was £146m and the net debt:EBITDA ratio was 0.6.

Cash operating income of £97m is stated after £17m of capital expenditure, a significant reduction on £26m in H1 2018, reflecting a larger proportion of technology costs being expensed directly. Other operating cash net outflows totalled £61m including the expected increase in trade debtors for dmg media, following the cessation of a trade finance arrangement, and the usual seasonal outflows. Group operating cash flow was £36m in the period, a 40% conversion rate of operating profits to operating cash flow, an improvement on 28% in H1 2018.

Payments in the period included dividends of £58m, pension funding payments of £13m, interest payments of £11m and taxation of £5m. Net expenditure on acquisitions and investments, including proceeds from disposals, was £9m.

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 as well as the seasonality of operating cash flows. In May 2019, DMGT disposed of its c.40% stake in RCA for US$ 89m, further enhancing the Group's financial flexibility.

In December 2018, £219m of bond debt matured and consequently the remaining bond debt as at 31 March 2019 was £202m. The Group also has £372m of bank facilities available.

In April 2019, Standard & Poor's revised its corporate credit rating for DMGT from BB+ to BB, following the distribution of Euromoney shares and £200m cash to shareholders. In February 2019, Fitch reaffirmed DMGT's BBB- investment grade rating.

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 and shares

During the first half of the year, the Group acquired 0.4m 'A' Ordinary Shares for £3m in order to meet obligations to provide shares under its incentive plans. In addition, 1.2m shares were used from the Employee Benefit Trust, with a carrying value of £9m, to provide shares under various incentive plans.

In April 2019, as part of the distribution of Euromoney shares and £200m cash to shareholders, 127.3m 'A' Ordinary Shares were returned to DMGT and cancelled. Following the cancellation of these shares, DMGT had 227.8m shares in issue as at 30 April 2019, including 19.9m Ordinary Shares, and a further 7.0m 'A' Ordinary Shares were held in Treasury and the Employee Benefit Trust8. The reduced share count will support earnings per share growth over the coming year.

Dividend

The dividend policy is to grow the dividend in real terms and, in the medium term, to distribute about one-third of the Group's adjusted earnings. The Board has declared an interim dividend of 7.3 pence per Ordinary and 'A' Ordinary Non-Voting share (H1 2018 7.1 pence) which will be paid on 28 June 2019 to shareholders on the register at the close of business on 7 June 2019.

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 17 and 18 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both the first half of FY 2019 (H1 2019) and H1 2018.

The explanation for each type of adjustment is as follows:

1) 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.

2) Intangible 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. Amortisation of intangible assets and goodwill arising on acquisitions are excluded from adjusted results as they relate to historical M&A activity rather than the trading performance of the business during the period.

3) Profit on sale of assets: the Group makes gains or losses when disposing of businesses, for example on the disposal of EDR, the US Property Information business, in April 2018. 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.

4) Pension finance credit: the finance 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 credit and is excluded from adjusted results.

5) 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 2019

Reconciliation: Statutory profit to adjusted profit - Half Year 2018

Cash operating income2

Half Year 2019

Half Year 2018

Underlying1 analysis - Revenues

Underlying1 analysis - Adjusted3 operating profit and profit before tax

Underlying1 analysis - Cash operating income²

Principal risks and uncertainties

The principal risks and uncertainties that affect the Group on an ongoing basis are described in our most recent Annual Report (FY 2018). These are still considered to be the most relevant risks and uncertainties for the Group at this time. 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.

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

· Economic and geopolitical uncertainty.

· 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 and sectors.

· Pension scheme deficit with the risk that funding of the deficit could be greater than expected owing to adverse changes in investment performance.

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 2018 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

29 May 2019

Notes

1 Underlying growth rates are on a like-for-like basis, see pages 20 to 22. Underlying revenues, cash operating income2 and operating profits 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. The underlying change in the share of operating profits from joint ventures and associates excludes ZPG Plc, Euromoney Institutional Investor PLC and DailyMailTV but includes the year-on-year organic growth from Yopa. The underlying net finance costs exclude the share of finance costs from ZPG Plc and Euromoney Institutional Investor PLC and the underlying H1 2018 costs have also been adjusted to include an assumed £6m benefit from £642m proceeds on the disposal of ZPG Plc.

2 Cash operating income (Cash OI) is calculated by adding back depreciation and amortisation expenses, which are non-cash items, to adjusted operating profit and then deducting capital expenditure.

3 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 credits and fair value adjustments. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 16 to 18.

4 The statutory results are IFRS figures before any adjustments.

5 The actual net cash position as at 31 March 2019 was £172m and the net cash:EBITDA ratio was 0.7. In March 2019, however, shareholder approval was given for a £200m special dividend and making £117m available to the Group's pension schemes. The £200m special dividend was paid in April 2019 and the £117m cash is expected to be made available to the pension schemes in the current financial year. Adjusting for a £317m reduction in cash, the net debt position as at 31 March 2019 would have been £146m and the net debt:EBITDA ratio would have been 0.6.

6 Current City analyst expectations for DMGT for FY 2019, as published on the Group's website (www.dmgt.com), are based on seven analysts that have updated their projections since the distribution of Euromoney shares and £200m cash that was announced on 3 March 2019. Expectations range from £1,361m to £1,410m for revenue, from £130m to £137m for adjusted profit before tax and from 35.6p to 37.7p for adjusted basic earnings per share with a consensus of £1,388m, £134m and 37.1p.

7 The Daily Mail's market share of UK retail sales averaged 25.3% during the six months to 31 March 2019 (H1 2019), an increase from 24.6% in H1 2018, and The Mail on Sunday's UK retail market share averaged 22.6%, an increase from 21.8% in H1 2018. Circulation market share figures are calculated using ABC's National Newspapers Reports, excluding digital subscribers

8 As at the end of 30 April 2019, there were 4,701,905 'A' Ordinary Shares held in Treasury and 2,299,458 'A' Ordinary Shares held by the DMGT Employee Benefit Trust.

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

The average £: US$ exchange rate for the first half of the year was £1:$1.29 (against £1:$1.36 last year). The rate at the Half Year end was $1.30 (2018: $1.40), compared to $1.30 at the September 2018 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 30 May 2019, at J.P. Morgan, 60 Victoria Embankment, London, EC4Y 0JP. There will also be a live webcast available on our website at www.dmgt.com/webcasthy19.

DMGT will be hosting an Investor Briefing on 2 July 2019, with a focus on the Insurance Risk business, RMS.

The Group's next scheduled announcement of financial information will be its nine month trading update on 25 July 2019.

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 2019. 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 2019;

· 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

29 May 2019

Shareholder Information

Financial Calendar (provisional)

2019

Contacts

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

www.dmgt.com.

Condensed Consolidated Financial Statements

Condensed Consolidated Income Statement

For the 6 months ended 31 March 2019

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

Condensed Consolidated Statement of Comprehensive Income

For the 6 months ended 31 March 2019

Condensed Consolidated Financial Statements

Condensed Consolidated Statement of Changes in Equity

For the 6 months ended 31 March 2019