DMGT.L Regulatory News (DMGT)

First Half performance impacted by weak print advertising market

Half Year Financial Highlights:

· DMGT underlying# revenue down 1%; reported revenue up 3%

· Underlying operating profit* down 12%; operating margin resilient at 15%

· B2B underlying revenue up 1% and underlying operating profit down 2%

· dmg media underlying revenue decline of 3%, with print advertising decline of 13%; reduced profit margin resulted in underlying operating profit down 29%

· Adjusted profit before tax of £129m, down 11%; adjusted earnings per share down 11%

· Active portfolio management continued; acquisitions for dmg information, dmg events and dmg media, disposals of Wowcher and Local World completed

· Net debt up £17m to £719m; net debt:EBITDA ratio of 2.0

· Interim dividend increased by 3%

· Outlook for the Full Year adjusted for change in guidance to dmg media's operating margin

· Announcement of Chief Executive Martin Morgan's retirement and appointment of Paul Zwillenberg with effect from 1 June 2016

· Statutory results, including exceptional items: revenue up 3%, operating profit down 15%, profit before tax up 54% and earnings per share up 27%

Martin Morgan, Chief Executive, commented:

"DMGT's performance in the first half was broadly in line with our expectations, other than the further deterioration in the UK print advertising market which impacted dmg media's results. The Group's revenue has remained broadly stable on an underlying basis, with growth from our B2B companies offsetting the decline from dmg media.

Within our international B2B companies, revenue growth at RMS, dmg information and dmg events was partly offset by Euromoney, which continues to face challenging market conditions. The operating profits of the B2B businesses declined slightly, by 2% on an underlying basis. The underlying revenues of our consumer business, dmg media, declined by 3%, with the growth from digital advertising revenues partially offsetting the decline in print advertising and circulation revenues. The reduced print advertising revenues had an adverse impact on dmg media's operating profits.

Relative to last year, the first half benefited from the occurrence of the Gastech event and from the stronger US dollar relative to sterling, although was adversely impacted by the disposal of Local World. Given the particularly weak print advertising market, dmg media is now expected to deliver an operating margin of around 10% for the Full Year whilst the expectations for the B2B businesses remain in line with previous guidance.

We have continued to actively manage our portfolio of businesses and have made several acquisitions and disposals during the period, in line with our strategy to improve the overall quality and growth prospects of the Group.

I will be retiring as Chief Executive at the end of this month, after 27 years with the Group and nearly 8 years as Chief Executive. I am delighted that Paul Zwillenberg has been appointed as my successor and confident that DMGT will remain well positioned to deliver long-term growth."

A presentation of the Half Year Results will be given to investors and analysts at 9.30am on 26 May 2016, at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. There will also be a live webcast available on our website at www.dmgt.com/webcasthy16.

The Group's next scheduled announcement of financial information is its third quarter trading update on 21 July 2016.

About DMGT

DMGT manages a balanced multinational portfolio of entrepreneurial companies, with total revenues of almost £2 bn, that provides a diverse range of businesses and consumers with compelling information, analysis, insight, news and entertainment.

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 a reconciliation of Group profit to adjusted Group profit, see Note 9. These adjusted results, including revenue and operating profit, are for total operations, including those treated as discontinued, namely dmg media's digital recruitment business, Evenbase. Evenbase contributed £1 million of operating profit from £3 million of revenues in FY 2015, all of which occurred in the first half of the year, and these amounts are included in the FY 2015 adjusted results. A reconciliation of adjusted results including discontinued operations to adjusted results excluding discontinued operations is shown on page 17.

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

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, adjusted for constant exchange rates, disposals, closures, non-annual events occurring in the current and prior year and acquisitions; see pages 18 and 19. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions and excludes disposals. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, disposals are excluded and a biennial event that took place during the period is also excluded. Euromoney's underlying profit excludes the benefit in FY 2015 of the release of the accrual, charged in FY 2014, for the CAP incentive plan. For dmg media, underlying comparisons exclude Evenbase and Wowcher, which were disposed of during the prior and current years. dmg media's underlying growth includes the year-on-year organic growth from acquisitions and underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities.

^ These statutory highlights are for continuing operations only (excluding the discontinued operations, dmg media's digital recruitment business, Evenbase), other than earnings per share which is the total statutory figure.

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 underlying business performance. All year-on-year comparisons are on a like-for-like basis.

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). 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.

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 a reconciliation of Group profit to adjusted Group profit, see Note 9. These adjusted results, including revenue and operating profit, are for total operations, including those treated as discontinued, namely dmg media's digital recruitment business, Evenbase. Evenbase contributed £1 million of operating profit from £3 million of revenues in FY 2015, all of which occurred in the first half of the year, and these amounts are included in the FY 2015 adjusted results. A reconciliation of adjusted results including discontinued operations to adjusted results excluding discontinued operations is shown on page 17.

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, adjusted for constant exchange rates, disposals, closures, non-annual events occurring in the current and prior year and acquisitions; see pages 18 and 19. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions and excludes disposals. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, disposals are excluded and a biennial event that took place during the period is also excluded. Euromoney's underlying profit excludes the benefit in FY 2015 of the release of the accrual, charged in FY 2014, for the CAP incentive plan. For dmg media, underlying comparisons exclude Evenbase and Wowcher, which were disposed of during the prior and current years. dmg media's underlying growth includes the year-on-year organic growth from acquisitions and underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities.

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

The average £: US$ exchange rate for the first half of the year was £1:$1.48 (against £1:$1.55 last year). The rate at the half year end was $1.44 (2015: $1.48), compared to $1.51 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 revenue for the six months to 31 March 2016 was £950 million, compared with £922 million for the prior half year, with revenues down 1% on an underlying# basis. Revenues increased by 3% on a reported basis, benefiting from the stronger US dollar relative to sterling and from the occurrence of the Gastech event this year. Good underlying growth was delivered in several revenue categories, particularly digital advertising and subscriptions, offset by the revenue decline in print advertising and circulation.

Performance across our B2B businesses and our consumer business, dmg media, on a reported and underlying basis is summarised below.

Operating profit* of £138 million was down 12% on the figure for the previous half year on an underlying basis. The reduction was principally due to dmg media, which suffered a 13% decline in print advertising revenues. Including the benefit of the occurrence of Gastech and the stronger US dollar relative to sterling, the reported decline in operating profit was 8%. The operating margin was 15%, a solid performance compared to 16% in the prior year.

The Group's B2B businesses grew operating profits by 6% on a reported basis, an underlying decline of 2%, and the operating profits from dmg media, the consumer media business, were down 30%, an underlying decrease of 29%. B2B businesses generated 76% of this half year's operating profit with 24% being generated by consumer media, compared to 67% and 33% for the prior half year. Well over half of the Group's operating profit was generated from outside the UK, with a third coming from the US.

Adjusted profit before tax* decreased by 11% to £129 million. This reflected the reduction in operating profit described above and a decrease in income from joint ventures and associates* following the disposal of DMGT's stake in Local World in November 2015. Finance charges, including DMGT's share of associates' interest costs, increased by £1 million to £20 million, reflecting an increase in Zoopla Property Group's net debt, following its acquisition of uSwitch in June 2015. The adjusted tax charge declined slightly to £19 million due to the reduction in operating profit. Adjusted Group profit after tax and minority interests* was down 14% to £99 million, and adjusted earnings per share* decreased by 11% to 27.9p.

The statutory profit before tax for the period was £195 million, an increase of £68 million on the prior year, including the benefit of gains on disposals, notably Wowcher and Local World.

Active portfolio management

Active portfolio management has continued throughout the period with acquisitions totalling £20 million and disposals totalling £112 million. ETSOS, a UK-based provider of conveyancing searches, was acquired in October and complements dmg information's existing European property information businesses, Landmark and SearchFlow. In December, Hobsons acquired PAR Framework, a provider of predictive models that improve student retention and graduation rates in US higher education institutions. Exhibition Management Services, which runs five events in Africa, was acquired by dmg events in March. Daily Mail Australia became a wholly owned MailOnline business in February, following the acquisition of 50% of the business from Nine Entertainment Company.

In November, dmg media disposed of its online discount business, Wowcher, to a newly formed company, Excalibur, in which DMGT holds a c.30%† economic interest. Excalibur also acquired the UK and Ireland operations of LivingSocial, which was approximately half the size of Wowcher, and expects to realise synergies from the combined operations and databases. Also in November, DMGT sold its 39% stake in Local World to Trinity Mirror.

Since the period end, Trepp, the property information business, has acquired Codean, a software and data analytics business. In April 2016, Euromoney sold its energy publishing businesses, Gulf Publishing Company and Petroleum Economist, in line with its strategy of actively managing its portfolio of assets.

Outlook for the Group

The Group's first half performance has been broadly in line with expectations, other than the further deterioration in the print advertising market. The outlook for the Full Year, as provided in November 2015, remains unchanged other than the operating margin for dmg media which is now expected to be around 10% rather than remaining at the prior year level of 13%.

Business Review

Business to business (B2B)

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

Revenues from the B2B group totalled £592 million, up 8% on the prior half year, including the beneficial impact of the stronger US dollar and the occurrence of the Gastech event, with an underlying increase of 1%. The B2B group's operating profits increased by 6% to £116 million, as growth at RMS and dmg events exceeded the reduction in profits from Euromoney and dmg information. The underlying operating profit decreased by 2% and the overall B2B margin remained at 20%.

Risk Management Solutions (RMS)

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

RMS's revenues increased by 6% on a reported basis, including the benefit of the stronger US dollar, and by 1% on an underlying basis, despite the continuing adverse impact of some client consolidation. Revenues benefited from the release of RiskLink15 and the enhanced North Atlantic Hurricane and European Windstorm models in 2015. The operating margin in the period improved to 20%, despite a reduction in capitalisation, reflecting lower employment costs and reduced operating expenses.

RMS continues to innovate in the risk modelling market. Earlier this year, the business released its first models for the growing cyber insurance market. RMS has completed its first three High Definition models, for pan-European Flood, Japan Typhoon and New Zealand Earthquake and these are being released to clients in June 2016. RMS also expects to release RiskLink16 in June 2016, including updates to its terrorism model, new flood data for the US market and RMS's first model for global Marine Cargo risk, which incorporates wind, storm surge and earthquake risk and databases for 150 ports in 43 countries. RMS's pipeline of models remains strong, reflecting a significant increase in model development resources over the past two years and an ongoing commitment to strengthening the business's leading market position.

The RMS(one) suite of products and solutions remains on track to be released in stages to RMS's client base. The first application to run on RMS(one), Exposure Manager, was successfully previewed last week at RMS's annual Exceedance client conference in Miami and is expected to be released this summer and, as previously guided to, the amortisation of the RMS(one) asset will commence at that time. Given the approach of staged releases to select clients, incremental revenues from the RMS(one) suite of products and solutions are expected to develop gradually during FY2016 and FY2017, with a greater impact on RMS revenues anticipated in future periods.

Outlook for RMS

The expectations for RMS for the Full Year remain in line with the guidance provided in November 2015. Given the continued consolidation in the re-insurance industry and the limited impact that the RMS(one) suite of products and solutions is expected to have on short-term revenues, underlying revenue growth is expected to be in the low-single digits in FY2016. The business will incur increased costs in respect of RMS(one) during the second half of the year; notably in respect of sales and support staff, reduced capitalisation of development activities and the commencement of amortisation costs. RMS's overall profit margin for the Full Year is expected to be similar to the 14% achieved in FY2015.

dmg information

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

dmg information delivered good growth in the first half, with overall underlying revenues up 6% and growth achieved by each of the three information sectors: Property, Education and Energy. Genscape, the energy information business, performed particularly strongly. Reported revenues, including the benefit of acquisitions and of the stronger US dollar relative to sterling, were up 14%.

Operating profit increased by 1% on an underlying basis, with a decline in profits from Hobsons (education), which is expected to reverse in the second half, being more than offset by growth from Genscape (energy) and the property information portfolio. As expected, given the acquisition during the second half of the prior year of a number of investment phase and high revenue growth businesses, along with the impact of the timing of Hobsons' profits, the operating margin declined slightly from 13% to 11%.

Property information

Operating profits are stated after including the allocation of central dmg information costs but before the allocation of Group corporate costs.

Our property information portfolio grew underlying revenues by 5%. There was good revenue growth from the US businesses, up 7%, and a more muted performance of 3% growth from the European businesses, Landmark and SearchFlow.

In the US, Trepp, Xceligent, SiteCompli and BuildFax each delivered double-digit underlying revenue growth, with Trepp benefiting from the success of the TreppPort product; the lending, surveillance and risk management platform for commercial real estate lenders and investors. EDR's underlying revenues declined slightly due to a reduction in the volume of transactions in the US commercial real estate market. In Europe, the higher margin business, Landmark, delivered stronger revenue growth than the conveyancing search business, SearchFlow.

Operating profit grew by 5% on an underlying basis and by 9% on a reported basis. The European property information business delivered good profit growth. The US profit performance, however, was adversely impacted by the combination of lower transaction volumes and further product development at EDR as well as increased investment in SiteCompli.

In October 2015, the European property information business acquired ETSOS, a UK-based provider of conveyancing searches. ETSOS is well established in the North of England and will complement the existing portfolio well. In May 2016, Trepp acquired Codean, a business that provides collateralised loan obligation (CLO) investors with a web-based software and data analytics platform, broadening the product range available to Trepp's existing client base. 

Education and Energy information

Operating profits are stated after including the allocation of central dmg information costs but before the allocation of Group corporate costs.

Underlying revenues grew by 8%, with Genscape, the energy information business, continuing to perform particularly strongly. Reported revenue growth of 18% benefited from the stronger US dollar relative to sterling and acquisitions made in the prior year, notably by Genscape. Operating profit declined by 41% on an underlying basis, reflecting a temporary reduction in Hobsons' profits, which is expected to reverse in the second half. Reported operating profit declined by 70%, reflecting the impact of acquisitions and disposals.

Hobsons' underlying revenues increased by 1%, including continued strong growth from the K-12 school business and, in the higher education market, the Starfish retention product that was acquired in the prior year. Revenues were adversely impacted by reduced volumes of higher education students, outside of the US, handled by the enrolment management business (EMS), as well as the prior year including revenues from a one-off transaction. Hobsons' profits were significantly lower than the prior period, reflecting the reduced revenues from EMS and the absence of revenue from the one-off transaction, as well as the impact of portfolio management, notably the disposal of Hobsons' Australian publishing business. Sales bookings remain strong and expectations for the second half of the year are for an acceleration in Hobsons' underlying revenue growth rate and for strong profit growth. In December, Hobsons acquired Predictive Analytics Reporting (PAR) Framework, which provides predictive models to US higher education institutions in order to improve student retention and graduation rates, complementing the Starfish business.

Genscape increased underlying revenues by 19%, with particularly strong growth from its solar and natural gas products. The electricity, oil and maritime businesses delivered slower growth, reflecting the impact of low electricity prices, due to the mild winter in North America, and the challenging market conditions resulting from the low oil price. Locus Energy, the solar energy information business acquired in September 2015, has delivered an encouraging performance, benefiting from the favourable trends in the US solar market.

Outlook for dmg information

Underlying revenue growth rates are expected to improve during the second half of the year, including notably for Hobsons. For the Full Year, dmg information is expected to achieve an underlying revenue growth rate of around 10%, as guided to in November 2015. The Full Year operating margin is expected to be in the mid-teens due to investment in organic initiatives and the impact of lower-margin and loss-making acquisitions made in the prior year.

dmg events

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

dmg events' revenues increased by 5% on an underlying basis with reported revenues growing by 24%. The reported revenue growth includes the benefits of the occurrence of the Gastech event, which previously occurred in March 2014, and the stronger US dollar relative to sterling. Across our more significant shows, the Big 5 Dubai construction event performed particularly strongly and, in the energy sector, ADIPEC delivered revenue growth. Gastech revenues, however, were at a similar level to the prior event.

Operating profit declined by 2% on an underlying basis, reflecting investment in growing attendance levels, to support future revenues, and with Singapore being a more expensive location for Gastech than the 2014 South Korea event. The operating margin in the period was 35%, up from 30%, benefitting from the occurrence of Gastech this year and the disposal, in September 2015, of the low-margin digital marketing business.

In March 2016, dmg events acquired Exhibition Management Services, a South African based company which runs five events across Africa. The acquisition is expected to support dmg events' strategy of geo-cloning existing events into new geographies and accelerate its expansion in Africa.

Outlook for dmg events

The sustained low oil price continues to have a negative impact on sales bookings for Canadian energy-related events, including the Global Petroleum Show, the one remaining large event of the four occurring this financial year. The outlook for dmg events for the Full Year remains unchanged from that given in November 2015 with underlying and reported revenue growth rates expected to be in the mid-single digits and an operating margin of around 25%.

Euromoney Institutional Investor

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

Euromoney announced its first half results on 19 May 2016. Revenue declined by 2% on a reported basis, including the benefit from the stronger US dollar and the timing of events, and by 6% on an underlying basis. The trend was consistent with that experienced since the start of the second half of the prior year. Subscriptions, which accounted for 56% of revenue in the period, grew by 1% on an underlying basis. The continued weakness in the energy sector and commodity markets contributed to a 12% underlying decline in revenue from events, training and conferences, which accounted for 32% of revenue in the period, and to an underlying 13% decline in advertising, which accounted for 9% of revenue in the period.

Operating profit declined by 12% on a reported basis and by 15% on an underlying basis, after adjusting for the timing of events and excluding the benefit in the prior year from releasing an accrual for CAP incentive plan costs. The operating margin of 24% was adversely impacted by the high flow-through to profits from the reductions in advertising, event and training revenues.

In March, Euromoney hosted an Investor Day outlining the refreshed strategy for the company, following the appointment of Andrew Rashbass as Chief Executive Officer in November 2015. Euromoney has identified three pillars of strategic activity: firstly, investing around big themes, such as the information and services to support the asset management industry and price discovery; secondly, introducing an effective operating model that marries the best of the company's entrepreneurial culture with a new emphasis on modern marketing techniques, talent management and seeking economies of, and opportunities from, scale; thirdly, to actively manage the portfolio, disinvesting in businesses where the market is weak and the business model structurally challenged and investing where the businesses are structurally strong and there are market tailwinds.

In April, Euromoney sold its energy publishing businesses, Gulf Publishing Company and Petroleum Economist, an example of it executing on its strategy of actively managing its portfolio of assets.

Outlook for Euromoney

The challenging market conditions experienced by Euromoney in the last twelve months continue. Nonetheless, the early signs of progress from the strategic actions being taken, combined with comparatives being less challenging and the benefit of currency movements, mean that the business is expected to deliver a performance during the second half of the financial year similar to the second half of the prior year. The outlook for the Full Year is in line with the Euromoney Board's expectations.

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

Underlying revenues declined by 3% compared to the first half of the prior year. Reported revenues declined by 4%, including the impact of the disposal of dmg media's online discount business, Wowcher, in November 2015.

Print advertising revenues in the six month period declined by £18 million, 13%, including a 15% decline in the second quarter, reflecting a further deterioration in market conditions. Digital advertising revenues grew strongly however, by an underlying 23%, and consequently the underlying decline in total advertising revenues was limited to 4%. Circulation revenues were 3% lower due to the continued decline in the circulation volumes of the Daily Mail and the Mail on Sunday. The price of the Monday to Friday editions of the Daily Mail was increased to 65p in February 2016, the first price rise in 3 years, and circulation revenue growth will benefit during the second half of the year.

Operating profit for the period declined by 30% to £39 million, an underlying reduction of 29%. This reflected the decline in print revenues and continued investment in digital businesses more than offsetting the growth in digital revenues and cost savings in the newspaper businesses. The lower print advertising revenues and related reduction in operating profit contributed to the decline in operating margin from 15% to 11%.

Mail Businesses

Revenue for the combined newspapers and website businesses (Daily Mail, The Mail on Sunday and MailOnline) declined by 3% to £286 million. A £15 million, 16%, decline in print advertising revenue, to £80 million, and the 3% decline in circulation revenue to £153 million, were partly offset by MailOnline, which grew revenues by 24%, or 20% on an underlying basis, to £44 million. Circulation volumes continued to decline, although the strength of the Mail brand enabled a continued increase in the Daily Mail's market share to 23.4% in March 2016, compared to 23.1% in March 2015. The Mail on Sunday also increased market share, to 22.1% in March 2016, compared to 21.9% in March 2015∞. This robust circulation performance was achieved alongside the rise in the cover price of the Monday to Friday editions of the Daily Mail from 60p to 65p in February 2016.

Total advertising revenues across the Mail Businesses were £124 million. This was a decrease of £7 million, 5% on the same period last year as the £15 million, 16% decline in print advertising revenue was partly offset by the £8 million, 24% increase in MailOnline's advertising revenue. In the US, MailOnline's revenues grew by an underlying 36%, reflecting increased awareness of the DailyMail.com brand amongst advertising buyers. Daily Mail Australia became a wholly owned MailOnline business in February, following the acquisition of 50% of the business from Nine Entertainment Company.

MailOnline continued to grow its audience, with 236 million monthly unique browsers and 14.4 million average daily global unique browsers in March 2016. During the period there was an 8% increase in the average number of monthly unique browsers, compared to the same period in the prior year, and a 6% increase in average daily unique browsers.

Other dmg media businesses

Metro delivered a relatively robust performance in the context of the weak UK print advertising market, with revenues declining by 7% to £36 million. The business continues to manage its cost base carefully to defend its profitability.

Elite Daily grew revenues by an underlying 127% in the period, to £5 million, reflecting improved monetisation of the website's audience. Low margin sales of newsprint to other publishers account for the majority of other revenues and these are excluded from underlying revenue growth calculations.

In November 2015, dmg media disposed of its online discount business, Wowcher, to a newly formed company, Excalibur, in which DMGT holds a c.30%† economic interest. Excalibur also acquired the UK and Ireland operations of LivingSocial, which was approximately half the size of Wowcher, and expects to realise synergies from the combined operations and databases. Wowcher generated £1 million of operating profit from £7 million of revenues in the period prior to disposal.

Outlook for dmg media

Compared to the prior year, for the eight weeks to 22 May 2016, dmg media's underlying advertising revenues decreased by 4% and circulation revenues decreased by 2%.

Overall for the Full Year, dmg media expects to deliver stable underlying total revenues, in the -2% to +2% range, with underlying digital advertising growth across the portfolio expected to broadly offset circulation and print advertising declines. Reported revenues will be adversely impacted by the disposals of Wowcher and Evenbase. Given the weak UK print advertising market, the operating margin for the Full Year is expected to be around 10%, similar to the first half but less than the 13% achieved in the prior year and that was guided to in November 2015.

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 decreased by 24% to £11 million, reflecting the disposal of DMGT's c.39% stake in Local World in November. The share of operating profits from Zoopla Property Group ('ZPG') increased due to the acquisition, in June 2015, of uSwitch which performed especially strongly during the period and benefited from higher than normal switching levels as a result of the winter seasonality effect, energy supplier price cuts and a highly competitive environment for broadband deals. ZPG saw the number of its UK property partnerships continue to grow during the period and, since the period end, has acquired the Property Software Group, a provider of property software and workflow solutions to over 8,000 UK agency branches. ZPG released its Half Year results on 25 May 2016.

The share of operating profits and losses from other joint ventures and associates largely offset each other. These include Euromoney's stake in Dealogic, investments by dmg information in early-stage businesses and dmg media's stake in Excalibur.

For the Full Year, the share of operating profits from joint ventures and associates is expected to be in the range of £15 million to £20 million.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs, increased by 5% to £20 million. The increase was due to an increase in Zoopla Property Group's net debt, following its acquisition of uSwitch in June 2015.

The pension finance charge, which is excluded from adjusted results, was £2 million for the period, compared to £4 million for the same period last year and £7 million for the prior Full Year.

Exceptional finance costs in the prior year included a £40 million charge for the premium on the early redemption of bonds in October 2014.

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 £12 million in the period (HY 2015: £14 million). The exceptional operating costs were entirely related to dmg media and included £5 million in respect of a supplier that has gone into voluntary administration and £4 million of severance costs.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, was £23 million, in line with the same period in the prior year. The Group also made an impairment charge against goodwill and acquired intangible assets of £13 million in respect of Euromoney's Mining Indaba business.

The Group recorded other net gains on disposal of businesses and investments of £110 million (HY 2015: £128 million). The gains primarily related to the disposal of DMGT's stake in Local World and the sale of Wowcher to Excalibur, in which DMGT holds a c.30%† economic interest.

· Taxation

The adjusted tax charge of £19 million (HY 2015: £21 million) is stated after adjusting for the effect of exceptional items. The adjusted tax rate for the half year was 14.8%, in line with the 14.8% rate in the Full Year 2015. The effective tax rate is expected to be marginally higher for the Full Year and to increase over the next three years, to in excess of 20%, as the proportion of US-generated profits increases.

The statutory tax charge for the period, excluding £2 million of tax charges in respect of joint ventures and associates, was £8 million. There were tax credits of £6 million in respect of the amortisation and impairment of intangible fixed assets and net tax credits of £3 million in respect of other adjusting items, including a £3 million credit in respect of exceptional severance and consultancy costs and exceptional finance charges.

Pensions

The deficit on the Group's defined benefit pension schemes decreased from £159 million at the beginning of the year to £85 million at the half year (calculated in accordance with IAS 19 (Revised)), with the increase in the value of assets exceeding the increase in the value of the defined benefit obligation. Funding payments into the main schemes during the period were £33 million. The actuarial valuation of the defined benefit schemes as at 31 March 2016 is currently in progress. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Net debt at the end of the period was £719 million, an increase of £17 million since the start of the financial year, and the net debt:EBITDA ratio was 2.0. Cash outflows included dividends of £60 million, pension funding payments of £33 million, interest payments of £16 million, taxation of £16 million and share buy-back purchases of £6 million. Net proceeds from disposals, including expenditure on acquisitions, were £92 million. The Group generated operating cash flows of £48 million in the period. Operating cash flows include exceptional operating items of £9 million and capital expenditure of £35 million, excluding £8 million of expenditure in respect of RMS(one). The strengthening of the US dollar, relative to sterling, also contributed to an increase in net debt due to the revaluation of US dollar denominated debt.

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 further planned investment activity, the ratio of net debt to EBITDA is expected to be 2.0 or less at the year end.

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

Share buy-back programme

In November 2015, DMGT announced a rolling share buy-back programme with the size, frequency and number of purchases being dependent on the portfolio management strategy of the Group, including anticipated acquisition and disposal activity, and on maintaining the preferred gearing ratio. During the period, DMGT acquired 0.9 million 'A' Ordinary Shares for £6 million under the programme.

Financing

During the first half of the year, the Group acquired 2.0 million 'A' Ordinary Shares for £14 million in order to meet obligations to provide shares under its incentive plans and utilised 0.9 million shares out of Treasury and the Employee Benefit Trust, valued at £7 million, to provide shares under various incentive plans. As at 31 March 2016, DMGT had 353.2 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 6.7 pence per Ordinary and 'A' Ordinary Non-Voting share (2015 6.5 pence) which will be paid on 2 July 2016 to shareholders on the register at the close of business on 10 June 2016.

Retirement of Martin Morgan as Chief Executive and appointment of Paul Zwillenberg

As announced on 12 May 2016, Martin Morgan will retire as Chief Executive and from the DMGT Board and the Board of Euromoney Institutional Investor plc with effect from 31 May 2016 and will leave DMGT with effect from 30 June 2016. Martin Morgan will undertake an advisory role for a 12 month period from January 2017. Paul Zwillenberg will be appointed Chief Executive with effect from 1 June 2016. Paul Zwillenberg is currently Global Leader Media Sector for The Boston Consulting Group, based in London, and has worked closely with DMGT for 20 years.

Reconciliation: Adjusted results including and excluding discontinued operations

Notes: The discontinued operations refer to dmg media's digital recruitment business, Evenbase.

Underlying analysis - Revenues

Notes: M&A adjustments are for disposals, including dmg media's Wowcher and Evenbase businesses, and acquisitions. The underlying results of dmg information, dmg events and dmg media include the post-acquisition organic growth from acquired entities. 'Other' includes adjustments for the timing of shows at dmg events and to exclude a biennial event at Euromoney, as well as the gross-up, equivalent to the cost of sales, on the low margin resale of newsprint activities.

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

Underlying analysis - Adjusted operating profit*

Notes: B2B and Consumer underlying figures are stated pre the allocation of Corporate costs. Including Corporate costs, the underlying growth rates for B2B and Consumer were -3% and -33% respectively. 'Other' includes adjustments for the timing of shows at dmg events and to exclude a biennial event at Euromoney, as well as an adjustment to exclude the benefit in FY 2015 from the release of previously accrued CAP costs at Euromoney.

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 2015 Annual Report at www.dmgt.com. These are still considered to be the most relevant risks and uncertainties at this time.

The uncertainty caused by the referendum on the UK's membership of the EU could have a potential impact on a number of these risks, in particular, volatility in advertising revenue, the impact on financial markets, conditions for M&A activity, UK property transaction volumes and key commercial relationships.

Whilst the extent of the referendum's impact is uncertain, the DMGT Risk Committee continues to monitor the associated risks across DMGT's portfolio.

The principal risks and uncertainties that affect the Group 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. The risk of market disruption is most significant in the newspaper and other publishing businesses. Over the last 12 months, UK print advertising has experienced a deterioration with most publishers affected and remains relatively volatile. This is partially offset by growth in the digital advertising market.

· Failure to identify appropriate acquisitions, acquisitions not yielding expected benefits and failure to dispose of businesses at the right time.

· Internal investments failing to drive organic growth.

· New product launches and developments do not achieve customer acceptance and yield expected benefits.

· 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 cyber-attack.

· Reliance on third parties and key commercial relationships (including data centres, cloud software and service providers; IT development support; newsprint, flexographic plate and ink suppliers; newspaper distributors and wholesalers; data providers and events venues).

· Compliance with laws and regulations across multiple jurisdictions, particularly data privacy and data security.

· Pension scheme deficit within the UK newspaper business 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 2015 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

25 May 2016

* 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 a reconciliation of Group profit to adjusted Group profit, see Note 9. These adjusted results, including revenue and operating profit, are for total operations, including those treated as discontinued, namely dmg media's digital recruitment business, Evenbase. Evenbase contributed £1 million of operating profit from £3 million of revenues in FY 2015, all of which occurred in the first half of the year, and these amounts are included in the FY 2015 adjusted results. A reconciliation of adjusted results including discontinued operations to adjusted results excluding discontinued operations is shown on page 17.

# Underlying revenue or profit* is revenue or profit on a like-for-like basis, adjusted for constant exchange rates, disposals, closures, non-annual events occurring in the current and prior year and acquisitions; see pages 18 and 19. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions and excludes disposals. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, disposals are excluded and a biennial event that took place during the period is also excluded. Euromoney's underlying profit excludes the benefit in FY 2015 of the release of the accrual, charged in FY 2014, for the CAP incentive plan. For dmg media, underlying comparisons exclude Evenbase and Wowcher, which were disposed of during the prior and current years. dmg media's underlying growth includes the year-on-year organic growth from acquisitions and underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities.

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

† DMGT owns 30% of Excalibur's loan notes and 24% of its share capital. Including interest on the loan notes, DMGT would be entitled to c.30% of the proceeds in the event of a disposal of Excalibur. DMGT includes 24% of Excalibur's operating profits in its share of profits from associates.

∞ Circulation market share figures are calculated using ABC's March 2016 and March 2015 National Newspapers Reports and excluding digital subscribers.

∂ As at the end of 31 March 2016, there were 5,000,000 'A' Ordinary Shares held in Treasury and 3,845,066 'A' Ordinary Shares held by the DMGT Employee Benefit Trust.

The average £: US$ exchange rate for the first half of the year was £1:$1.48 (against £1:$1.55 last year). The rate at the half year end was $1.44 (2015: $1.48), compared to $1.51 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 26 May 2016, at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. There will also be a live webcast available on our website, www.dmgt.com/webcasthy16.

Next trading update

The Group's next scheduled announcement of financial information is its third quarter trading update on 21 July 2016.

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 interim financial statements

· Our conclusion

We have reviewed Daily Mail and General Trust plc's condensed consolidated interim financial statements (the "interim financial statements") in the half yearly financial report of Daily Mail and General Trust plc for the 6 month period ended 31 March 2016. 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 Rules and Transparency Rules 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 2016;

· 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 Rules and Transparency Rules 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 and Transparency Rules 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 Rules and Transparency Rules 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 condensed consolidated 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

25 May 2016 

Shareholder Information

Financial Calendar (provisional)

2016

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.