DMGT.L Regulatory News (DMGT)

Performance broadly in line with expectations

· Group revenue up underlying# 1% and adjusted operating profit down underlying 11%, reflecting:

o encouraging dmg media performance, MailOnline making good progress

o RMS(one) amortisation and investment in Xceligent, as expected

· Strategy on track and good progress against DMGT's three strategic priorities

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

As in previous years, the IFRS figures ("Statutory results") have been adjusted* for exceptional items and the inclusion of discontinued operations ("Adjusted results").

In December 2016, DMGT reduced its stake in Euromoney from c.67% to c.49% and Euromoney ceased to be a subsidiary of DMGT and became an associate. Euromoney is therefore treated as a discontinued operation and its performance is excluded from statutory results, other than earnings per share. DMGT's adjusted results in the table above include 100% of Euromoney's revenues and operating profits whilst it was a subsidiary during Half Year 2016 and the first quarter of the current year. Thereafter, from January to March 2017, the performance of DMGT's c.49% stake in Euromoney is only included within joint ventures and associates, which is reflected in the adjusted profit before tax and adjusted earnings per share figures.

To allow for a like-for-like comparison, 2016 pro forma† results ("Pro Forma results") have been presented as based on a c.67% stake in Euromoney during the first quarter of the year and a c.49% stake during the second quarter, consistent with the actual holding during Half Year 2017. Except where stated otherwise, commentary throughout this report compares Half Year 2017 adjusted results with the pro forma results. 

Half Year Highlights:

· Group revenue up underlying# 1%, pro forma† and statutory revenue up 5%; adjusted operating profit down underlying 11%

o B2B: revenue up underlying 1% and adjusted profit down underlying 20%, reflecting the start of RMS(one) amortisation and investment in Xceligent

o Consumer: encouraging performance from dmg media; underlying revenue stable; adjusted profit up underlying 5%, with MailOnline making good progress on path to profitability

· Adjusted profit before tax* (PBT) of £105m, down 8% on a pro forma† basis

· Adjusted earnings per share* (EPS) of 24.6p, down 8% on a pro forma† basis. Interim dividend increased by 3%

· Statutory PBT down 76%, statutory EPS of 155.8p, up 204%, including £509 million profit on Euromoney transaction

· Reduction of stake in Euromoney from c.67% to c.49%; net debt reduced to £551 million with net debt:EBITDA ratio of 1.6

· Outlook for the Full Year largely unchanged; strategy on track

· Appointment of Tim Collier as Group CFO with effect from 2 May 2017

Paul Zwillenberg, Chief Executive, commented:

"DMGT's performance in the first half was broadly in line with our expectations. We delivered underlying revenue growth for the Group, highlighting the benefit of a diversified portfolio. We are encouraged by the underlying profit performance at dmg media, where MailOnline continues to increase its revenue, taking real strides on its path to profitability. Gains across the portfolio are offset by more challenging conditions for some of dmg information's businesses and by our planned investment in growth areas such as Xceligent.

We have made good progress against the three strategic priorities during this period of transition, through improving operational execution, increasing portfolio focus and enhancing financial flexibility. The Euromoney transaction was the first significant step in increasing our portfolio focus, alongside strengthening the balance sheet and enhancing our financial flexibility. We are working hard across the Group to improve operational execution and are particularly encouraged by the successful launch of Risk Modeler for RMS(one), a key milestone for the business.

In the second half of the year, although we expect challenging market conditions to persist for some of our businesses, we will continue to focus on improving operational execution and completing our strategic portfolio review during this period of transition. We remain confident that our focus and commitment to reinvigorate and re-shape DMGT will deliver growth in the long-term."

A presentation of the Half Year Results will be given to investors and analysts at 9.30am on 25 May 2017, 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/webcasthy17.

The Group's next scheduled announcement of financial information will be the third quarter trading update on 27 July 2017.

About DMGT

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

Notes

* Unless otherwise stated, all profit and profit margin figures in this Interim Management Report refer to adjusted results and not statutory results. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, pension finance charges, premiums on bond redemptions and amortisation of intangible assets arising on business combinations. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 22 to 25. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

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

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 27 and 28. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying revenues exclude low margin newsprint resale activities.

† Pro Forma Half Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter of Full Year 2016 and a c.49% owned associate during the second quarter, consistent with the ownership profile during Half Year 2017. See page 21.

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

Daily Mail and General Trust plc

Northcliffe House, 2 Derry Street,

London, W8 5TT

www.dmgt.co.uk

Registered in England and Wales No. 184594

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. All year-on-year comparisons are on a like-for-like basis.

In addition, a pro forma† version of the Half Year 2016 adjusted results has been prepared to treat Euromoney as a c.67% owned subsidiary during the first quarter of Full Year 2016 and as a c.49% owned associate during the second quarter, consistent with the ownership profile during Half Year 2017. A reconciliation between the reported and the pro forma† figures is set out on page 21.

An explanation of restructuring and impairment charges and other items included in the statutory results is set out after the divisional performance review and in the segmental note (Note 2). Reconciliations between the statutory and adjusted results for both Half Year 2017 and Half Year 2016, as well as supporting explanations, are set out on pages 22 to 25. The adjusted results are summarised below, with the pro forma† Half Year 2016 and Full Year 2016 comparatives:

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

Notes

* Unless otherwise stated, all profit and profit margin figures in this Interim Management Report refer to adjusted results and not statutory results. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, pension finance charges, premiums on bond redemptions and amortisation of intangible assets arising on business combinations. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 22 to 25. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 27 and 28. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying revenues exclude low margin newsprint resale activities. Euromoney's results are excluded from the underlying growth calculations.  

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

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

µ Current City analyst expectations for dmg events' Full Year 2017 revenue range from £112 million to £128 million with a consensus of £119 million.

The average £: US$ exchange rate for the first half of the year was £1:$1.24 (against £1:$1.48 last year). The rate at the Half Year end was $1.26 (2016: $1.44), compared to $1.30 at the previous 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.

Summary

Group adjusted revenue for the six months to 31 March 2017 was £890 million, growth of 5% on a pro forma† basis. Statutory revenue, excluding Euromoney, also grew 5% despite the absence of the Gastech event, which occurred after the period end, reflecting the benefit from the stronger US dollar relative to sterling. On an underlying# basis, adjusted revenue grew 1%. Good underlying growth was delivered in several revenue categories, particularly digital advertising, subscriptions and events, offset by the revenue decline in print advertising and transactions.

Revenue performance across our B2B businesses and our consumer business, dmg media is summarised below. Reported growth rates include Euromoney's revenues for the six months to March 2016 in Half Year 2016 but only the three months to December 2016 in Half Year 2017. To give a more meaningful comparison, the pro forma† growth rates only include Euromoney's revenues for the three months to December 2015 in Half Year 2016, consistent with the treatment in Half Year 2017. Underlying# revenue growth is on a like-for-like basis, at constant exchange rates, after adjusting for the timing of events, for acquisitions and for disposals, notably Euromoney which is excluded from the growth rates.

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

¹ Euromoney's reported revenue growth compares the three months to December 2016 with the six months to March 2016. Since Euromoney ceased to be a subsidiary with effect from 29 December 2016, its performance is excluded from underlying revenue growth calculations.

Adjusted operating profit* of £100 million was down 8% on a pro forma† basis, with the benefit from the stronger US dollar being more than offset by the absence of the Gastech event and an additional £16 million of expensed costs as a result of ceasing to capitalise, and starting to amortise, the RMS(one) asset. Underlying operating profit was down 11%, with the reduction being primarily due to the increase in RMS(one) related costs and dmg information's investment in Xceligent. The adjusted operating margin in the period was 11%, down from a pro forma† 13% in the first half of the prior year, with the reduction being largely attributable to RMS and Xceligent.

B2B businesses generated 70% of this half year's adjusted operating profit with 30% being generated by consumer media. Well over half of the Group's adjusted operating profit was generated from outside the UK, with around a third coming from North America.

Adjusted profit before tax* was £105 million, a decrease of 8% on a pro forma† basis, reflecting the reduction in operating profit described above. Finance charges, including DMGT's share of associates' interest costs, were £21 million, up 9% on the prior period, reflecting increased finance charges for associates, notably Euromoney and ZPG Plc, and the adverse impact of the stronger US dollar. The adjusted tax charge was £15 million, down 19% on last year, as a result of the reduced profits. Adjusted Group profit after tax and minority interests* was £87 million, down 8% on a pro forma† basis. Adjusted basic earnings per share* of 24.6p decreased by 12%, or 8% on a pro forma† basis.

The statutory profit before tax for the period was £41 million, a decrease of £131 million on the prior year, due to the gains on disposals of continuing operations, notably Local World and Wowcher, in the prior period. Statutory basic earnings per share were 155.8 pence, including the benefit of a £509 million gain on the Euromoney transaction, up 104.5 pence on the prior year.

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

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, as presented at the preliminary results on 1 December 2016, are improving operational execution, increasing portfolio focus and enhancing our financial flexibility. Good progress has been made in improving operational execution with highlights being the successful launch of RMS(one)'s Risk Modeler, the refocus of dmg information and MailOnline's move towards profitability.

On 8 December 2016, DMGT announced its intention to reduce its stake in Euromoney, from c.67%, in two stages. The first stage was a placing of Euromoney shares and the second stage, which reduced DMGT's stake to c.49% with effect from 29 December 2016, was a buy-back of shares from DMGT by Euromoney. The transactions have increased the focus within DMGT's portfolio and strengthened DMGT's balance sheet, enhancing our financial flexibility.

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

Group outlook

The Group's first half performance has been broadly in line with expectations, other than at dmg information, which has experienced lower revenue growth and sales bookings than previously anticipated. The outlook for the Full Year, as provided in December 2016, remains unchanged other than:

· The underlying revenue growth rate at dmg information, which is now expected to be in the low-single digits;

· The underlying revenue growth rate at dmg events, which is now expected to be in the mid-single digits. However, dmg events' Full Year revenue is still expected to be in line with market expectationsµ;

· As previously guided to, the share of operating profits from joint ventures and associates is expected to be approximately £65 million, following Euromoney becoming an associate.

We continue to believe that there are plenty of opportunities within the portfolio which, once supported and enhanced through the implementation of our strategy, have the potential to deliver good returns for the Group.

Business Review

Business to business (B2B)

These results are stated after allocating Group corporate costs on the basis of B2B's share of Group revenues.

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

B2B revenues totalled £540 million, up 11% on a pro forma† basis. The performance in the period benefited from the stronger US dollar, although was adversely affected by the absence of the Gastech event, which occurred in April 2017. On an underlying basis, revenue grew 1%, with growth from dmg events and RMS and a stable performance from dmg information. B2B operating profits, including allocated Group corporate costs, were £71 million, a reduction of 9% on a pro forma† basis and an underlying decline of 20%. The overall B2B operating margin declined to 13%, reflecting lower margins across each of the businesses.

Risk Management Solutions (RMS)

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

RMS's revenues increased by 21% on a reported basis, primarily due to the benefit of the stronger US dollar, and by 1% on an underlying basis, despite continuing consolidation in the re-insurance industry and in line with expectations. As previously indicated, capitalisation of RMS(one) development activities ceased and the amortisation of the RMS(one) asset started in August 2016. Consequently, operating profit declined by an underlying 40% and the margin reduced from 20% to 13%. Excluding the benefit of £8 million of RMS(one) capitalisation in the prior period, as well as depreciation and amortisation, the EBITDA margin was 24%, an improvement on the 17% in the first half of the prior year.

RMS continues to innovate in the risk modelling market. In April 2017, RMS released RiskLink17, which included updates to five models, notably North American Earthquake, and three new models: South East Asia Earthquake, Taiwan Typhoon and South Korea Typhoon. RMS's pipeline of models remains strong, reflecting an ongoing commitment to strengthening the business's leading market position.

A major milestone was achieved in April 2017 with the release of Risk Modeler, the second application to run on the RMS(one) risk management platform. It enables clients to run the full suite of RMS's models on the RMS(one) platform and, in conjunction with Exposure Manager, to gain a real-time understanding of their accumulated exposure to specific risks in specific geographies. There has been a positive response and the first few clients are currently using the application. RMS will continue to carefully manage the roll-out to clients of RMS(one) and, as previously indicated, the incremental revenues from RMS(one) and its associated products are expected to build gradually.

Outlook for RMS

The expectations for RMS for the Full Year remain in line with the guidance provided in December 2016. Underlying revenue growth is expected to be in the low-single digits and the Full Year margin is expected to be in the low-teens, reflecting the amortisation of the RMS(one) asset and the cessation of capitalisation of RMS(one) development activities. The guidance for the EBITDA profit margin of at least 20% is still on track for the Full Year.

dmg information

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

dmg information delivered revenues in line with last year on an underlying basis as a result of growth from the US property information, Education and Energy businesses being offset by a decline in revenues from the European property information business. Reported revenues, including the benefit of the stronger US dollar relative to sterling, were up 13%.

Adjusted operating profit declined by 17% on an underlying basis. The underlying operating profit growth delivered by the rest of dmg information was more than offset by a significant increase in expensed investment in Xceligent. Similarly, the operating profit margin declined from 11% to 9%, although excluding Xceligent the operating profit margin increased.

Property information

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

The property information portfolio's revenues grew by 10%, including the benefit of the stronger US dollar and Euro relative to sterling, and declined by 1% on an underlying basis. The European business was affected by declining residential property transaction volumes in the UK, where mortgage approvals were 3% lower than the previous year, and by reduced revenues from the German business, On-geo.

The five US-based property information businesses collectively delivered underlying revenue growth of 4%, despite a subdued US commercial property market. The earlier stage businesses, Xceligent, BuildFax and SiteCompli, continued to grow well during the period. Trepp, the securitised mortgage data and analytics business, also delivered underlying revenue growth. EDR's revenues are more closely related to US commercial real estate transaction volumes and the business experienced an underlying decline in revenues in the period.

Operating profit declined by 12% on an underlying basis and by 2% on a reported basis, including the benefit of the stronger US dollar and Euro. The European property information business continued to deliver profit growth. There was, however, increased investment in Xceligent, as it continued the expansion of its coverage into more US cities. Good progress has been made at Xceligent with full database coverage of New York City achieved in the period and collection of Chicago data currently underway. The profitability of the other four US-based property information businesses improved year-on-year.

The operating profit margin in the period was 14%, down from 16% in the first half of the prior year, reflecting the increased investment in Xceligent. Excluding Xceligent, the operating profit margin from the property information businesses increased.

Education and Energy information

These results are stated before the allocation of Group corporate costs. Central dmg information costs are allocated to the businesses on a revenue basis. Total revenue and operating profit include AgRisk, which was transferred from dmg information to RMS in March 2017. Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Hobsons' revenue of £54 million was up by 13% on a reported basis, including the benefit of the stronger US dollar and the adverse impact of disposals in the prior period. Underlying revenue growth was 3%, reflecting continued strong growth from its K-12 career and college planning platform, Naviance, its higher education student retention business, Starfish, and its student matching business, Intersect. Hobsons' Admissions business, which supplies software, including Radius, to higher education institutions, is operating in an increasingly competitive environment and experienced declining revenue.

Genscape also continued to grow, with revenue increasing by 2% on an underlying basis. The majority of the Genscape business performed well during the period, although this was partly offset by the challenging market conditions facing Locus Energy, the solar business. Sales of monitors were adversely affected by a decline in the number of new US solar installations and a market shift in distribution.

Operating profit of £1 million in the period reflected the continued seasonality at Hobsons, which is significantly more profitable during the second half of the financial year. The decline in profits compared to the prior year was due to Genscape, reflecting a weaker performance from Locus Energy and increased costs for the Biofuels business.

Outlook for dmg information

The challenging market conditions facing Hobsons' Admissions and Genscape's Locus Energy business are expected to persist and, for the Full Year, dmg information is expected to achieve an overall underlying revenue growth rate in the low-single digits, compared to the mid-single digit guidance given in January 2017. The weaker than previously expected revenue performance is likely to result in the Full Year operating margin being lower than last year, albeit still in the mid-teens, as previously guided to.

dmg events

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

dmg events' revenues increased by 3% on an underlying basis, supported by the launch of new events, notably in Africa, although declined by 5% on a reported basis. The beneficial impact of the stronger US dollar was more than offset by the absence of the Gastech event, which occurred in April 2017, 18 months after the previous event held in October 2015. Big 5 Dubai and ADIPEC, two of the three large events of the year, occurred in November 2016 and collectively delivered low-single digit underlying revenue growth.

Operating profit increased by 2% on an underlying basis compared to last year, including investment in launching new events, notably East Africa Big 5 and the Egypt Petroleum Show. The operating margin in the period was 31%, down from 35% in the first half of the prior year, reflecting the absence of Gastech.

Outlook for dmg events

Gastech, one of the division's three large events, occurred in April 2017 and, as expected, revenue benefited from the show being in Tokyo this year, whereas the previous event was held in Singapore. The sustained low oil price continues to have a negative impact on sales bookings for Canadian energy-related events and there have also been changes to the phasing of the launch programme for new events. Consequently, the Full Year underlying revenue growth rate is now expected to be in the mid-single digits, rather than the high-single digits previously guided to, although Full Year revenues are still expected to be in line with market expectationsµ. The Full Year operating margin is still expected to be around 25%.

Euromoney Institutional Investor

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

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

In December 2016, DMGT reduced its stake in Euromoney from c.67% to c.49%. Consequently, since 29 December 2016, Euromoney has ceased to be a subsidiary of DMGT and is now being accounted for as an associate. Since January 2017, DMGT's consolidated revenues and operating profits have not included Euromoney's results and DMGT has just recognised its share of operating profits within joint ventures and associates. DMGT's adjusted revenue and operating profit in the period therefore includes 100% of Euromoney's results for the three months to December 2016, as shown in the table above. Revenues in the first quarter were £95 million, up 6% on the first quarter of the prior year, including the benefit of the stronger US dollar, and operating profit also grew 6%. Euromoney reported its results for the Half Year on 18 May 2017. Euromoney's performance is excluded from DMGT's underlying revenue and operating profit growth calculations.

Following Euromoney ceasing to be a subsidiary, DMGT's revenue and operating profit for the Full Year will include £95 million and £19 million of Euromoney's results respectively. DMGT's share of Euromoney's results for the nine months to 30 September 2017 will be included in joint ventures and associates.

Consumer media

dmg media

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

Summary

Revenue was £350 million in the period, in line with the first half of the prior year on an underlying basis. As expected, there was good underlying growth from MailOnline (+19%), an increase in circulation revenues (+2%) and declines in print advertising (-8%). Reported revenues declined by 2%, as the benefit of the stronger US dollar was more than offset by the impact of the disposal of Wowcher, which occurred in November 2015, and a decline in newsprint revenues.

The tough newspaper advertising market conditions eased a little in the period with print advertising declining by an underlying 8%, compared to 12% during Full Year 2016. Digital advertising revenues grew by an underlying 12%, including the adverse effect of declining revenue at Elite Daily, which was disposed of in April 2017. Consequently the underlying decline in total advertising revenues was 1% and, excluding Elite Daily, advertising revenue was in line with the prior year on an underlying basis. Circulation revenues grew 2% as the benefit of cover price increases implemented in 2016 more than offset the impact of declining circulation volumes.

Operating profit for the period grew by 5% on an underlying basis to £36 million, with MailOnline making good progress on the path to profitability. Including the impact of portfolio changes and the stronger US dollar, operating profit was lower than last year in absolute terms. The operating margin in the period was 10%, down marginally from 11%, reflecting a decline in Metro's margin.

Mail Businesses

Revenues for the combined newspapers and website businesses (Daily Mail, The Mail on Sunday and MailOnline) increased by 2% to £293 million and were in line with last year on an underlying basis. A £9 million, 12%, decline in print advertising revenue, to £71 million, was more than offset by 2% growth in circulation revenue to £155 million and by MailOnline, which grew revenues by 35%, or 19% on an underlying basis, to £60 million. Declining circulation volumes were more than offset by the benefit of the cover price increases of the Monday to Friday editions of the Daily Mail from 60p to 65p in February 2016, the Saturday edition from 90p to £1.00 in October 2016 and The Mail on Sunday from £1.60 to £1.70 in July 2016. The Mail brand remains strong, which is reflected in the large market shares held by The Daily Mail and The Mail on Sunday of 23.2% and 22.0% in March 2017∞ respectively.

Total advertising revenues across the Mail Businesses were £130 million. This was an increase of £6 million, 5% on the same period last year, including the benefit of the stronger US dollar and the inclusion of MailOnline's Australian revenues, and in line with last year on an underlying basis. In the US, MailOnline's revenues grew by an underlying 26%, reflecting the growing strength of the DailyMail.com brand.

MailOnline continued to grow its audience, with 15.0 million average daily global unique browsers during the period, a 6% increase on the first half of the prior year, including a 14% increase in the US average daily audience. MailOnline has also successfully broadened its reach through other channels, including Facebook and Snapchat.

Other dmg media businesses

Metro delivered a robust revenue performance in the context of a declining print advertising market, growing revenues by 1% to £34 million, including the benefit of increasing circulation in London and taking on four franchises from Trinity Mirror in January 2017. Printing and distribution costs increased in the period, resulting in a decline in Metro's operating profit to £5 million.

Revenue at Elite Daily declined by an underlying 35% to £4 million in the period, reflecting continued challenges with audience retention. The business made operating losses of £4 million in the period, consistent with last year, and was disposed of in April 2017.

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

Outlook for dmg media

Overall outlook for the Full Year remains unchanged. dmg media expects to deliver stable underlying total revenues, in the -2% to +2% range, with underlying digital advertising growth at MailOnline expected to broadly offset circulation and print advertising declines. Reported results will not have the benefit of an additional 53rd week, which contributed £12 million of revenue and £6 million of operating profit in Full Year 2016, and will be impacted by the absence of Wowcher, Elite Daily and 7 Days. The operating margin for the Full Year 2017 is expected to be broadly in line with the 11% achieved in Full Year 2016.

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 the operating profits* of its joint ventures and associates was £26 million, including £16 million in respect of Euromoney for the three months to March 2017, following the reduction in the Group's stake in Euromoney to c.49%. Euromoney's balance sheet is now independent of DMGT's, increasing Euromoney's financial flexibility to be acquisitive and to accelerate the implementation of its strategy. In April 2017, Euromoney completed the acquisition of RISI, the leading price reporting agency for the global forest products market, for $125 million. Euromoney released its Half Year results on 18 May 2017 and reported an underlying decline in revenues of 2% in the period and a 5% increase in adjusted profit before tax, including the benefit of the stronger US dollar.

The share of operating profits from ZPG Plc, formerly Zoopla Property Group, increased to £12 million. There was a particularly strong performance from the Property Services division, which benefited from the acquisition of the Property Software Group in April 2016. In February 2017, ZPG placed new shares amounting to 5% of its issued share capital to part fund its acquisition of Hometrack, and DMGT's stake in ZPG has now been diluted to c.30%. ZPG released its Half Year results on 24 May 2017 and reported revenue growth of 22% and adjusted basic earnings per share growth of 3%.

The share of operating profits and losses from other joint ventures and associates was a net loss of £1 million, including investments in early stage consumer and B2B businesses.

For the Full Year, the share of operating profits from joint ventures and associates will benefit from the inclusion of Euromoney as an associate and is expected to be approximately £65 million, as guided to in December 2016.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs, was £21 million, a 9% increase on the prior year. DMGT benefited from lower average debt levels during the period but the interest payable was adversely affected by the stronger US dollar and an increase in the share of associates' interest payable to £2 million, from £1 million in the prior period.

The pension finance charge, which is excluded from adjusted results, was £3 million for the period, compared to £2 million for the same period last year and £5 million for the prior Full Year.

Outlook for net finance costs

Net finance costs for the Full Year are expected to be around £40 million.

Other income statement items

· Exceptional items and amortisation

Exceptional operating costs were £20 million in the period (HY 2016: £12 million). There were £9 million of severance costs, including £7 million in respect of dmg information, and £5 million exceptional consultancy costs in relation to restructuring. Other exceptional costs comprised £3 million of restructuring costs in relation to the closure of the Didcot printing plant and £3 million of legal fees, mainly in respect of the defence by Xceligent, the US property information business, of a complaint filed by a competitor.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £26 million (HY 2016: £23 million). The Group also incurred a £35 million impairment charge in respect of the Didcot printing plant.

The Group recorded other net gains on disposal of businesses and investments of £530 million (HY 2016: £110 million). DMGT recognised £509 million of gains in respect of the reduced holding in Euromoney, including the gain on the revaluation of the retained c.49% stake. In February 2017, ZPG placed new shares amounting to 5% of its issued share capital to part fund its acquisition of Hometrack, increasing its net assets. DMGT did not participate in this placing and its holding was consequently diluted to c.30%, resulting in a deemed disposal for accounting purposes, and a non-cash gain of £18 million on the increase in value of DMGT's share of ZPG's net assets.

· Taxation

The adjusted tax charge of £15 million (HY 2016: £16 million pro forma†) is stated after adjusting for the effect of exceptional items. The adjusted tax rate for the half year was 14.6%, a slight increase on the pro forma† basis 14.2% in Half Year 2016. The adjusted tax rate is expected to be marginally higher for the Full Year and is expected to increase over the next few years, to over 20%, as the proportion of US-generated profits increases and the expected UK loss and interest restriction rules come into effect.

The statutory tax charge for the period was £10 million. This excludes the charge of £4 million in respect of discontinued operations. There were tax credits of £8 million in respect of the amortisation and impairment of intangible fixed assets, tax charges of £13 million in respect of the derecognition of overseas tax losses and tax credits of £6 million on other adjusting items.

Pensions

The net deficit on the Group's defined benefit pension schemes decreased from £246 million at the beginning of the year to £43 million at the half year (calculated in accordance with IAS 19 (Revised)), with an increase in the value of assets and a reduction in the value of the defined benefit obligation. Exposure to future investment and inflation risk was further reduced in the period. Funding payments into the main schemes during the period were £13 million. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Net debt at the end of the period was £551 million, a reduction of £128 million since the start of the financial year, and the net debt:EBITDA ratio was 1.6. Cash outflows included dividends of £54 million, interest payments of £18 million, pension funding payments of £13 million and taxation of £13 million. Net proceeds from disposals, including expenditure on acquisitions, were £203 million, and included £218 million from the reduction of the stake in Euromoney, after adjusting for the de-consolidation of £96 million cash on Euromoney's balance sheet. Group operating cash flow was £37 million in the period and was adversely affected by the usual seasonal outflows, by the inclusion of £27 million of exceptional operating items and by only including Euromoney's cash flows for the three months that it was a subsidiary. Operating cash flows included capital expenditure of £41 million. The Group broadly matches the profile of its net debt by currency to the components of its operating cash flow by currency. The weakening of sterling, notably against the US dollar, resulted in an adverse debt revaluation of £14 million during the period.

Net debt is usually at its peak around the half year due to the timing of the prior year's final dividend and other annual payments. Allowing for committed investment activity, the ratio of net debt to EBITDA is expected to be 1.5 or less at the year end, comfortably below the Group's preferred upper limit of around 2.0 times.

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 3.9 million 'A' Ordinary Shares for £28 million in order to meet obligations to provide shares under its incentive plans. In addition, 1.1 million shares were used from the Employee Benefit Trust, valued at £9 million, to provide shares under various incentive plans. As at 31 March 2017, DMGT had 353.3 million shares in issue, including 19.9 million Ordinary Shares, and a further 8.8 million 'A' Ordinary Shares held in Treasury and the Employee Benefit Trust∂.

Dividend

The Board has declared an interim dividend of 6.9 pence per Ordinary and 'A' Ordinary Non-Voting share (HY 2016: 6.7 pence) which will be paid on 30 June 2017 to shareholders on the register at the close of business on 9 June 2017.

Appointment of Tim Collier as Chief Financial Officer

As announced on 6 April 2017, Tim Collier has, with effect from 2 May 2017, been appointed Chief Financial Officer and to the Board of DMGT. He joins from Thomson Reuters where he was CFO of the Financial and Risk business.

Pro Forma Half Year 2016 and Full Year 2016 adjusted results

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

Group summary

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

Business to business (B2B)

Euromoney Institutional Investor

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

When reviewing DMGT's performance, the Board and management team particularly focus on adjusted results rather than statutory results. There are a number of items that are included in statutory results but which are considered to be one-off in nature or not representative of the business's performance and which are excluded from adjusted results.

The tables on pages 24 and 25 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both the first half of Full Year 2017 and the first half of Full Year 2016.

The explanation for each type of adjustment is as follows:

1) Discontinued operations: the adjusted results for Half Year 2017 include the results of discontinued operations, namely Euromoney, which ceased to be a subsidiary in December 2016, whereas statutory results only include continuing operations.

2) Exceptional reorganisation costs: businesses occasionally incur exceptional costs in respect of a reorganisation. These are non-recurring in nature and excluded from adjusted results.

3) Impairment of plant: occasionally the carrying value of an asset in the balance sheet is considered too high relative to expected future returns and it is appropriate to impair it. The associated one-off charge is excluded from adjusted results. 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 Half Year 2017 when dmg media closed its Didcot printing plant, and this expense is excluded from adjusted results. There may also be impairments of available for sale assets and these are also 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 are one-off balance sheet items that relate to historic M&A activity rather than the trading performance of the business. An example is the impairment in Full Year 2016 of the goodwill and acquired intangible assets associated with dmg media's Elite Daily business.

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 one-off items are excluded from adjusted results as they reflect the value created since the business was formed or acquired rather than the operating performance of the business during the year.

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

7) Other adjustments: other items that are excluded from adjusted results include changes in the fair value of certain financial instruments and changes to future acquisition payments. They are considered one-off in nature and not reflective of 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 2017

Reconciliation: Statutory profit to adjusted profit - Half Year 2016

Reconciliation: Adjusted results including and excluding discontinued operations

Underlying analysis - Revenues

Underlying analysis - Adjusted operating profit*

Principal risks and uncertainties

The UK Listing Authority's Disclosure and Transparency Rules requires a description of the principal risks and uncertainties for the remaining six months of the financial year.

The principal risks and uncertainties that affect the Group on an ongoing basis are described in our 2016 Annual Report at www.dmgt.com. Euromoney's risks are no longer consolidated into the Group's overall risk profile, although the risks described in the 2016 Annual Report are still considered to be the most relevant risks and uncertainties for the Group at this time. These are summarised below.

Strategic Risks

· Market disruption. Caused by changes in consumer behaviours and client demands, technological developments, the availability of free information, the emergence of competitors and the convergence of key markets or clients.

· 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.

· Failure to identify appropriate acquisitions, acquisitions not yielding 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

· Failure or significant delay to a major change project.

· 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, particularly data privacy.

· Pension scheme deficit within our UK newspaper business, certain other UK 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 2016 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

24 May 2017

* Unless otherwise stated, all profit and profit margin figures in this Interim Management Report refer to adjusted results and not statutory results. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, pension finance charges, premiums on bond redemptions and amortisation of intangible assets arising on business combinations. For reconciliations of statutory profit before tax to adjusted profit before tax and supporting explanations, see pages 22 to 25. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Adjusted results include results from discontinued operations, specifically the Euromoney subsidiary. Euromoney ceased to be a subsidiary on 29 December 2016 and has subsequently been included in continuing operations, as a c.49% owned associate, within statutory and adjusted results.

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

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, see pages 27 and 28. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures and for the inclusion of the year-on-year organic growth from acquisitions. For events, the comparisons are between events held in the year and the same events held the previous time. For dmg media, underlying revenues exclude low margin newsprint resale activities.

† Pro Forma Half Year 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first quarter of Full Year 2016 and a c.49% owned associate during the second quarter, consistent with the ownership profile during Half Year 2017. See page 21.

^ These statutory highlights are for continuing operations only (excluding the discontinued operations, Euromoney), other than basic earnings per share which is the total statutory figure.

µ Current City analyst expectations for dmg events' Full Year 2017 revenue range from £112 million to £128 million with a consensus of £119 million.

∞ Circulation market share figures are calculated using ABC's March 2017 National Newspapers Report excluding digital subscribers.

∂ As at the end of 31 March 2017, there were 5,000,000 'A' Ordinary Shares held in Treasury and 3,759,933 'A' Ordinary Shares held by the DMGT Employee Benefit Trust.

The average £: US$ exchange rate for the first half of the year was £1:$1.24 (against £1:$1.48 last year). The rate at the Half Year end was $1.26 (2016: $1.44), compared to $1.30 at the previous 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 25 May 2017, 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/webcasthy17.

Next trading update

The Group's next scheduled announcement of financial information will be the third quarter trading update on 27 July 2017.

Market Abuse Regulation

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 2017. 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 2017;

· 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 Ireland) 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

24 May 2017

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)

2017

Contacts

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

www.dmgt.com

Copies of this Half Yearly Financial Report are available electronically from the Company's website at www.dmgt.com or from the Secretary upon request.