25 Jul 2019 07:00
25 July 2019
Daily Mail and General Trust plc ('DMGT')
Nine Month Trading Update FY 2019
Trading as expected and outlook for FY 2019 in line with market expectations¹
Group
·; DMGT Group revenue up 1% on an underlying² basis.
·; Underlying growth of 1% from B2B portfolio.
·; Robust performance from Consumer Media, with underlying growth of 2%.
·; Net debt £77m³ as at 30 June 2019, including RCA disposal proceeds of US $89m.
·; Group outlook for FY 2019 unchanged and in line with market expectations.
Revenue Growth v Prior Year 9 Months to June 2019 | Revenue share 9 months FY 2019 | Reported growth | Underlying² growth |
Group revenue | 100% | -2% | +1% |
B2B | 52% | -6% | +1% |
Insurance Risk | 17% | +5% | -1% |
Property Information | 16% | -20% | -2% |
EdTech | 6% | +18% | +15% |
Energy Information | 5% | -14% | -1% |
Events and Exhibitions | 8% | +2% | +2% |
Consumer Media4 | 48% | +3% | +2% |
Business to Business (B2B)
·; Underlying revenue growth of 1%; mixed portfolio performance.
·; Reported revenues down 6%, reflecting disposals, partly offset by stronger US dollar.
·; Full Year B2B guidance maintained: low-single digit underlying revenue growth with adjusted operating profit margin in the mid-teens, around 15%.
Insurance Risk (RMS)
Revenue decreased by 1% on an underlying basis. The performance reflects a mix of favourable contract renewals offset by the impact of industry consolidation as well as historic RMS(one) delivery issues. New products have been released as planned. In June 2019, RMS launched SiteIQ for the Insurance Risk Analytics market and RMS Location Intelligence for the Property Data market, with both products running on RMS's new software platform, Risk Intelligence.
Property Information
Revenue decreased by 2% on an underlying basis. Growth from the US businesses was more than offset by Europe, given continued low transaction volumes in the UK property market. Reported revenue performance reflects the absence of EDR, Xceligent and SiteCompli.
EdTech (Hobsons)
Underlying revenue growth of 15% was driven by continued strong performances from each of Hobsons' three product lines: Naviance, Intersect and Starfish.
Energy Information (Genscape)
Revenue decreased by 1% on an underlying basis, as the continued growth from the core oil and gas sectors was offset by the power sector and rationalisation of product lines. Reported revenue performance reflects the absence of the solar business, Locus Energy, which was merged into AlsoEnergy in September 2018 and is now accounted for as an associate.
Events and Exhibitions (dmg events)
Underlying revenue growth was 2% for the nine months and, as expected, there were no major events held in the third quarter.
Consumer Media (dmg media)
·; Underlying revenue growth of 2% and reported revenue growth of 3%.
·; MailOnline delivered underlying growth of 17%.
·; Full Year Consumer Media guidance: as a result of the strong performance to date, underlying revenues are now expected to be stable, rather than the low-single digit underlying rate of decline previously guided to. The adjusted operating profit margin is expected to benefit from the stronger revenues and to be around 10%, rather than in the high-single digits as previously guided to.
Revenue Growth v Prior Year 9 Months to June 20194 | Reported | Underlying2 |
dmg media | +3% | +2% |
Advertising | +6% | +4% |
Circulation | -2% | -2% |
Circulation revenue declined 2%, with volume reductions partly offset by the cover price increase of the weekday editions of the Daily Mail from 65p to 70p in September 2018. Underlying advertising revenue growth of 4% was achieved across dmg media; a 2% decline in print was more than offset by 13% growth from digital5. The Mail newspaper titles grew their market shares and we remain confident in the future growth opportunities at MailOnline, driven by increasing engagement with the direct audience6.
Net debt³ at 30 June 2019 was £77m, compared to £146m at 31 March 2019, and included the benefit of proceeds from the disposal of DMGT's stake in RCA for US $89m in May 2019.
The Group's c.49% stake in Euromoney and a £200m special dividend were distributed to DMGT's shareholders in April 2019. The sale of On-geo, the German Property Information business, completed in May 2019.
The effective tax rate is expected to be around 21% in FY 2019.
For further information
For analyst and institutional enquiries: |
|
Tim Collier, Chief Financial Officer | +44 20 3615 2902 |
Adam Webster, Head of Investor Relations |
+44 20 3615 2903 |
|
|
For media enquiries: |
|
Doug Campbell / Paul Durman, Teneo | +44 20 7260 2700 |
A conference call will be held with City analysts at 8.00am on 25 July 2019. The dial-in number is +44 (0)20 3059 5869. A recording of the call will be available on DMGT's website at www.dmgt.com.
Next trading update
The Group's next scheduled announcement of financial information will be its results for the year ended 30 September 2019, which will be released on the morning of 5 December 2019.
About DMGT
DMGT manages a portfolio of companies that provide businesses and consumers with compelling information, analysis, insight, events, news and entertainment. The Group takes a long-term approach to investment and has market-leading positions in consumer media, insurance risk, property information, education technology, energy information and events & exhibitions. In total, DMGT generates revenues of around £1.4bn.
Notes
1 Current City analyst expectations for DMGT for FY 2019, as published on DMGT's website (www.dmgt.com), are based on fourteen analysts that have updated their projections since the distribution of Euromoney shares and £200m cash that was announced on 3 March 2019. Expectations range from £1,374m to £1,436m for revenue, from £128m to £144m for adjusted profit before tax and from 35.9p to 39.6p for adjusted basic earnings per share with a consensus of £1,399m, £137m and 37.8p. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, amortisation of intangible assets arising on business combinations, pension finance credits and fair value adjustments.
2 Underlying revenue is revenue on a like-for-like basis, adjusted for constant exchange rates, the exclusion of disposals and closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition. For events, the comparisons are between events held in the year and the same events held the previous time. For Consumer Media, underlying revenues exclude low margin newsprint resale activities.
3 The actual net cash position as at 30 June 2019 was £40m. In March 2019, however, shareholder approval was given to make £117m available to the Group's pension schemes and this is expected to occur in the current financial year. Adjusting for a £117m reduction in cash, the net debt position as at 30 June 2019 would have been £77m. Similarly, the actual net cash position as at 31 March 2019 was £172m but adjusting for the £117m described above and the £200m special dividend approved in March 2019 but paid in April 2019, net debt was £146m.
4 Consumer Media's results are for the thirty nine weeks to Sunday 30 June 2019 and are compared to the same thirty nine week period of the prior year.
5 Underlying advertising growth rates include 2% growth across the Mail titles, with a 10% underlying decline in print advertising being more than offset by 13% underlying digital advertising growth from MailOnline. MailOnline's total revenues grew by an underlying 17%, including the benefit of increased network licensing revenues for DailyMailTV.
6 The Daily Mail's market share of UK retail sales averaged 25.4% in the nine months to 30 June 2019 (9m 2019), an increase from 24.7% in the nine months to 30 June 2018 (9m 2018), and The Mail on Sunday's UK retail market share averaged 22.7%, an increase from 21.8% in 9m 2018. Circulation market share figures are calculated using ABC's National Newspapers Reports, excluding digital subscribers. MailOnline's average global daily unique browsers during 9m 2019, excluding other platforms such as Snapchat and Facebook video, were 12.7 million, down 5% compared to 9m 2018, due to reduced indirect traffic via search and social platforms. The average daily total minutes spent on MailOnline during 9m 2019 was 142 million, down 3% compared to 9m 2018, although minutes spent by the core direct audience continued to grow, reflecting increased engagement.
The average £:$ exchange rate for the nine months was £1:$1.29 (against £1:$1.36 in the same period last year).
This trading update 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 trading update save as would arise under English law. Statements contained in this trading update 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 trading update. 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 trading update. 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.
Daily Mail and General Trust plc
Northcliffe House, 2 Derry Street,
London, W8 5TT
www.dmgt.com
Registered in England and Wales No. 184594