DMGT.L Regulatory News (DMGT)

DMGT delivers a resilient performance in challenging market conditions

Preliminary Full Year Financial Highlights:

· Stable Group underlying# revenue performance; reported and statutory revenue growth of 4%

· Adjusted operating profit* down underlying 11%; operating margin of 14%

· Resilient performance from B2B; revenue up underlying 1% and adjusted profit down underlying 5%

· dmg media revenue down underlying 2%; adjusted profit down underlying 23%, reflecting increased digital investment alongside a resilient newspaper margin

· Adjusted profit before tax* of £260 million, down 7%; statutory PBT up 14%

· Adjusted earnings per share* down 6% to 56.0p, statutory EPS down 4% to 57.8p; full year dividend increased by 3% to 22.0p

· Net debt reduced by £23 million to £679 million; net debt:EBITDA ratio of 1.8; within preferred range

· DMGT's revised strategy focuses on improving operational execution, increasing the portfolio's focus and enhancing financial flexibility

· £37 million reorganisation and headcount reduction exceptional costs; £55 million total exceptional operating costs

Paul Zwillenberg, Chief Executive, said:

"DMGT's results reflect the ongoing resilience of the portfolio through varying market conditions. Revenues were supported by good organic growth in many of our B2B and consumer digital operations. This was balanced by challenging market conditions for print advertising, property information, energy and financial sectors.

Our focus has been on prudent financial and strategic management of DMGT's diversified portfolio. We have continued to invest in long-term growth opportunities across a variety of organic initiatives whilst making small bolt-on acquisitions, maintaining a strong balance sheet and continuing to deliver real dividend growth for our shareholders.

The significant organic and M&A investments made across the Group over the past few years have started to bear fruit. Alongside this we have been expanding MailOnline while our newspapers continue to outperform the market.

The Group has many strengths. It is a diversified portfolio of businesses that operate in high-potential markets with market-leading content and proprietary data. DMGT attracts and retains entrepreneurs and benefits from having a long-term perspective. There are also opportunities for improvement and DMGT's revised strategy is built around delivering the potential within our existing portfolio. We have established clear priorities to improve our operational execution, increase the portfolio's focus and enhance our financial flexibility. There is plenty to be done and I am confident that, over time, the revised strategy will reinvigorate DMGT's growth."

A presentation of the Preliminary Results will be given to investors and analysts at 9.30am on 1 December 2016, 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 at http://www.dmgt.com/webcastfy16.

Financial reporting calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 26 January 2017.

About DMGT

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

Notes

* Unless otherwise stated, all profit and margin figures in this Preliminary Full Year Results 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 23 to 26. Adjusted revenue includes revenue from discontinued operations, specifically £3 million of revenue in FY 2015 from Evenbase, dmg media's digital recruitment business, which was disposed of.

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

# Underlying adjusted revenue or underlying adjusted operating profit* growth is on a like-for-like basis, adjusted for constant exchange rates, disposals, non-annual events occurring in the current and prior year and acquisitions; see pages 27 and 28. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions, excludes disposals and includes revenues from one-off sales of IP assets, consistent with prior years. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, acquisitions and disposals are excluded and a biennial event that took place during the current year 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 disposals, Wowcher and Evenbase, and include the year-on-year organic growth from acquisitions. dmg media's underlying growth rates also exclude the benefit of an additional 53rd week from the FY 2016 results. Underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities.

^ The FY 2015 statutory highlights are for continuing operations only (excluding discontinued operations, namely 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

Management Report

This management report, on the unaudited preliminary results for the year ended 30 September 2016, 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.

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 4). Reconciliations between the statutory and adjusted results for both FY 2016 and FY 2015, as well as supporting explanations, are set out on pages 23 to 26. 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 margin figures in this Preliminary Full Year Results 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 operating profit and profit before tax to adjusted operating profit and profit before tax and supporting explanations, see pages 23 to 26. Adjusted revenue includes revenue from discontinued operations, specifically £3 million of revenue in FY 2015 from Evenbase, dmg media's digital recruitment business, which was disposed of.

# Underlying adjusted revenue or underlying adjusted operating profit* growth is on a like-for-like basis, adjusted for constant exchange rates, disposals, non-annual events occurring in the current and prior year and acquisitions; see pages 27 and 28. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions, excludes disposals and includes revenues from one-off sales of IP assets, consistent with prior years. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, acquisitions and disposals are excluded and a biennial event that took place during the current year 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 disposals, Wowcher and Evenbase, and include the year-on-year organic growth from acquisitions. dmg media's underlying growth rates also exclude the benefit of an additional 53rd week from the FY 2016 results. 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 year was £1:$1.42 (2015 £1:$1.54). The rate at the year end was $1.30 (2015: $1.51).

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

Summary

Group performance: DMGT has delivered a resilient performance in challenging market conditions. Group revenue for the year was £1,917 million, in line with the prior year on an underlying# basis. Revenue grew by 4% on a reported basis, from £1,845 million, including the benefit of the stronger US dollar relative to sterling and the occurrence of the Gastech event this year. Good underlying growth was delivered in digital advertising and subscriptions, offset by the revenue decline in print advertising. Due to improving revenue performances from Euromoney and dmg media, the Group delivered underlying growth of 1% in the second half of the year, following a 1% decline in the first half.

The revenue performance for our B2B businesses and our consumer business, dmg media, on a reported and underlying basis is summarised below.

Adjusted operating profit* declined by an underlying 11% to £277 million. The reduction was principally due to dmg media, which increased digital investment and suffered an underlying 12% decline in print advertising revenues, and to Euromoney, which saw revenues decline by an underlying 4%. Including the benefit of the stronger US dollar relative to sterling and the occurrence of Gastech, the reported decline in operating profit was 4%. The operating margin was 14%, compared to 16% in the prior year, and was adversely affected by lower margins at dmg media and Euromoney and by the impact of early-stage acquisitions and organic investment at dmg information.

The Group's B2B businesses, including allocated Corporate costs, grew adjusted operating profits by 4% on a reported basis, an underlying decline of 5%. dmg media's operating profits declined 20%, an underlying decrease of 23% and, including allocated Corporate costs, an underlying decline of 29%. B2B businesses generated 78% of this year's adjusted operating profit with 22% generated by consumer businesses, compared to 72% and 28% for the prior year. The shift reflects a continuation of the long-term trend of the growing significance of the B2B businesses. Over half of the Group's operating profits were derived from outside the UK, with 40% coming from North America.

Adjusted profit before tax* declined by 7% to £260 million. This reflects the decline in operating profit described above and a £10 million decline in income from joint ventures and associates, including a £17 million reduction in respect of Local World, following DMGT's disposal of its stake in November 2015. Finance charges, including DMGT's share of associates' interest costs, remained stable at £40 million. Adjusted Group profit after tax and minority interests* was down 8% to £198 million, reflecting the decline in profit before tax. Adjusted earnings per share* decreased by 6% to 56.0p. The full year dividend increased by 3% to 22.0p, in line with our dividend policy of delivering real dividend growth.

The statutory profit before tax for the year was £247 million after £96 million of amortisation and impairment charges in respect of goodwill and acquired intangible assets, £55 million of net exceptional charges, including £37 million of reorganisation costs, and £138m of net gains on disposals, notably Local World and Wowcher. Statutory profit after tax was £214 million and statutory earnings per share decreased from 60.1p to 57.8p.

Net debt: decreased by £23 million to £679 million despite £58 million of adverse debt revaluation, largely due to the US dollar strengthening over the course of the year. At the year end, the Group's net debt comprised £425 million of bonds, £268 million of bank borrowings, £3 million of loan notes and derivatives and a cash balance of £18 million. The Group's ratio of net debt to EBITDA was 1.8 times at the year end, below the Group's preferred upper limit of around 2.0 times and significantly below the requirements of the Group's bank covenants.

Active portfolio management: has continued throughout the year with acquisitions totalling £42 million and disposals totalling £128 million. Consistent with the past few years, the majority of acquisitions and investments were made by dmg information.

In the property information sector, ETSOS, a UK-based provider of conveyancing searches, was acquired in October 2015 and complements dmg information's existing European property information businesses, Landmark and SearchFlow. Codean, a data and cash flow analytics provider in the collateralised loan obligations market, was acquired by Trepp in May 2016. In education, Hobsons acquired PAR Framework, a provider of predictive models that improve student retention and graduation rates in US higher education institutions, in December 2015. Genscape, the energy information business, acquired GP Energy Management, a New York-based provider of energy management services to electricity and gas retailers and generators, in June 2016.

Exhibition Management Services which runs five events in Africa, was acquired by dmg events in March 2016, accelerating the division's expansion into the continent. In August 2016, Euromoney acquired FastMarkets, a business that extends Metal Bulletin's capabilities into real-time data delivery and which is expected to be an integral part of Euromoney's extensive portfolio of digital products. Daily Mail Australia became a wholly owned MailOnline business in February 2016, following the acquisition of the remaining 50% of the business not already owned by the Group.

Zoopla Property Group Plc, in which DMGT holds a c.31% stake, acquired Property Software Group, a provider of property software and workflow solutions to over 8,000 UK agency branches, in June 2016.

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. 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. Also in November 2015, DMGT sold its 39% stake in Local World to Trinity Mirror.

Strategy

DMGT has undertaken significant M&A and disposal activity over the last few years and has also made substantial organic investments in several businesses. The Board and management teams are increasingly focused on delivering the potential within the DMGT portfolio. Following a strategic review, three key priorities have been identified.

Improving operational execution: the first priority will include enhanced performance management, instilling best practice through 'signature moves' and creating a faster, fitter and more agile organisation to improve efficiencies, leverage our scale and to enable faster decision making. Given the challenging market conditions facing certain businesses within the portfolio, reorganisation initiatives have been implemented to increase their resilience.

Increasing portfolio focus: the second priority is to increase the focus within the portfolio over time. There are benefits to spreading risk and DMGT will continue to have a diverse and balanced portfolio. There are advantages, however, to operating in fewer sectors, notably in respect of resource allocation and the implications for market share. We are undertaking a rigorous evaluation of all businesses in order to allocate resources according to individual business growth characteristics and funding requirements.

Enhancing our financial flexibility: the final priority is to enhance DMGT's financial flexibility in order to pursue a range of capital allocation opportunities. Cash flow is expected to progressively improve over time as our operational execution initiatives are implemented and returns on our organic investments are realised. In addition, our actions to increase the focus of the portfolio are likely to improve our financial flexibility. These actions will allow DMGT to invest in its market leading positions, both organically and inorganically, while also delivering increased shareholder returns.

Outlook

Group: we have entered the new financial year with our businesses performing in line with our expectations. Whilst certain of our B2B businesses continue to face challenging market conditions, overall we still expect to deliver underlying revenue growth for the B2B sector as a whole. On the consumer side, revenue progress will be largely dependent on the print advertising environment, balanced against further growth in digital areas, although a continued focus on cost efficiencies should provide margin stability for dmg media.

RMS: will continue to deliver both enhanced and completely new models during the coming year. Client adoption of the first RMS(one) application, Exposure Manager, is expected to increase and Risk Modeler, the second RMS(one) application, is scheduled to be released during the first half of the 2017 calendar year. The business commenced amortising the RMS(one) asset in August 2016 and has ceased capitalising RMS(one) development costs, resulting in a significant increase in operating costs, albeit with no associated cash flow impact. Given the limited incremental revenues from RMS(one) during FY 2017, the impact of client consolidation and the increase in the operating cost base, RMS is expected to deliver underlying revenue growth in the low-single digits and the margin is expected to be in the low-teens in FY 2017.

dmg information: is expected to continue to benefit from product innovation and strong customer demand. There is uncertainty in some of its markets, most notably UK property. Nevertheless, dmg information continues to target sustained growth through delivering on organic initiatives and successfully growing acquired businesses. Underlying revenue growth is expected to accelerate during the year and be in the high-single digits for the full year. The operating margin in FY 2017 is expected to be in the mid-teens, consistent with FY 2016, reflecting the continued investment in organic growth opportunities.

dmg events: is expected to benefit from a larger Gastech event, which will be held in Tokyo in April 2017. The market conditions facing energy events remain challenging, particularly in Canada, but the industry appears to be adjusting to lower, less volatile oil prices. The underlying revenue growth rate is expected to be in the high-single digits in FY 2017 and the operating margin is expected to be around 25%.

Euromoney: In the year ahead, Euromoney will continue to implement its new strategy of investing in its big themes, ensuring an effective operating model and continuing to actively manage the portfolio. The Euromoney Board does not expect markets to improve over the coming year and has built its plans for the business accordingly. As stated at Euromoney's Investor Day, the strategy would not change the trajectory of the business in FY 2016, that, subject to the usual caveats, the business expected to return to growth in FY 2018 and that FY 2017 would be a year of transition. This remains the case.

dmg media: is expected to deliver stable underlying revenues, in the -2% to +2% range, with cover price increases and digital advertising growth helping to offset circulation volume and print advertising declines. Reported results will be affected by the absence of the 53rd week, which contributed £12 million of revenue and £6 million of operating profit in FY 2016. The operating margin is, however, expected to remain broadly in line with the 11% achieved in FY 2016, with cost efficiencies helping to protect profitability.

Corporate costs: are expected to benefit from reorganisation initiatives and to be approximately £35 million, compared to £42 million in FY 2016.

Joint ventures and associates: are expected to benefit from Zoopla Property Group's continued growth but will continue to include losses from early stage businesses. The share of operating profits from joint ventures and associates in FY 2017 is expected to be approximately £25 million.

Net debt: the year end net debt:EBITDA ratio of 1.8 times is below our preferred upper limit of 2.0 times and the Board remains confident in the overall outlook for the Group and its operating cash flows. Net finance costs are expected to be around £40 million in FY 2017, broadly in line with FY 2016.

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.

Revenues from the B2B group totalled £1,212 million, up 1% on the prior year on an underlying basis and up 9% in absolute terms, including the benefit of the stronger US dollar. The underlying revenue growth from dmg information, dmg events and RMS was partially offset by Euromoney, which faced challenging markets. Operating profits, including allocated Group corporate costs, were £215 million and were down 5% on an underlying basis. The overall B2B operating margin declined to 18%, reflecting a reduced margin at Euromoney and the combined impact of the acquisition of early-stage businesses and organic investment on the dmg information margin.

Risk Management Solutions (RMS)

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

RMS's revenues increased by 10% on a reported basis, including the benefit of the stronger US dollar, and by 1% on an underlying basis. The core modelling business experienced continuing demand for its subscription services, including the new high-definition models launched in the year, and overall renewal rates remained comfortably above 90%. This robust performance was achieved despite the continuing adverse impact of some consolidation within RMS's customer base.

There was a reduction in the capitalisation of RMS(one) development costs during the year but this was more than offset by cost savings elsewhere, notably in respect of employment costs. Adjusted operating profit increased by 36%, including the benefit of the stronger US dollar, and by 14% on an underlying basis. The operating margin was 18%, compared to 14% in FY 2015.

RMS continues to innovate in the catastrophe risk modelling market and delivered its broadest range of modelling solutions in FY 2016. RiskLink16 was released in June 2016, including a new Marine Cargo model, updates to the terrorism modelling suite and US flood hazard data. The industry's first data standard for cyber exposure was launched by RMS in February 2016, as part of new suite of cyber risk management tools. RMS released its first three high-definition models, Europe Inland Flood, Japan Typhoon and New Zealand Earthquake during FY 2016, improving the granularity and resolution available and providing higher quality information.

The development of the RMS(one) risk management platform continued during the year, with its first application, Exposure Manager, successfully released to clients in August 2016. The release marked the start of the amortisation of the RMS(one) asset and the cessation of capitalising RMS(one) development costs, although with no associated incremental cash flows. Staged releases of further applications of the RMS(one) suite of products and solutions are on track for FY 2017, namely Risk Modeler and Risk Enterprise. RMS expects clients to begin migrating from RiskLink to RMS(one) in FY 2017, supported by an open and flexible cloud technology framework.

Outlook for RMS

Given the continued consolidation in the re-insurance industry and the limited impact that RMS(one) is expected to have on short-term revenues, underlying revenue growth is expected to be in the low-single digits in FY 2017. There will be approximately £25 million of incremental operating expenses in FY 2017, albeit with no associated cash flow, due to a full year of amortisation of the RMS(one) asset and the cessation of capitalisation of RMS(one) development activities. Consequently the RMS operating margin is expected to be in the low-teens in FY 2017 and to increase in subsequent years.

dmg information

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

dmg information continued to grow during the year with overall underlying revenues up 6%. The energy information business, Genscape, and the education business, Hobsons, both delivered double-digit underlying revenue growth. The property information businesses faced some challenging market conditions, notably in the UK, although overall they delivered a solid revenue performance. Reported revenues, including the benefit of the stronger US dollar, were up 16%. As expected, the operating margin declined to 15% due to organic investment and the impact of low-margin and loss-making acquisitions during 2015.

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 grew underlying revenues by 1%. While there was continued good growth from most of the US businesses, the European businesses, Landmark and SearchFlow, were adversely affected by uncertainty in the UK residential market, particularly during the final quarter when mortgage approvals were 12% lower than the previous year. Landmark benefited from its initiatives to expand the business across the property value chain and continued to grow revenues whereas SearchFlow's revenues are more directly linked to UK property transaction volumes. Total revenues for the European property information businesses declined by 1% although increased by 6% on a reported basis including the benefit of ETSOS, the UK-based provider of conveyancing searches which was acquired in October 2015.

The five US-based property information businesses collectively delivered underlying revenue growth of 5%, despite declining volumes in the US commercial property market. The earlier stage businesses, Xceligent, SiteCompli and BuildFax, grew particularly well during the year. Xceligent, which is one of a small number of providers of fully researched US commercial property and listing information, increased its investment in the continued expansion of its coverage into more US cities, notably New York. Trepp also delivered double-digit underlying revenue growth. EDR's revenues are more closely related to transaction volumes and the business experienced a more challenging year with an underlying decline in revenues.

The combination of difficult market conditions facing the European property businesses and EDR and the increased investment in Xceligent and SiteCompli resulted in an 8% underlying decline in operating profit for the property information businesses as a whole.

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 revenues and operating profit include the disposed of Lewtan business and dmg information's AgRisk business. Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.

Hobsons' revenue of £115 million was up 15% on a reported basis, including the benefit of the stronger US dollar and the adverse impact of disposals, notably of its Australian publishing business in 2015. Underlying revenue growth was 13%, driven in particular by continued good performance from the K-12 business, notably Naviance, the career and college planning platform. There was also encouraging progress from the Starfish product, which helps higher education clients provide personalised support to their students and increase the likelihood of them successfully completing their course.

In December 2015, Hobsons acquired Predictive Analytics Reporting (PAR) Framework, which provides predictive models to US higher education institutions to improve student retention and graduation rates, complementing the Starfish business. In September 2016, Hobsons disposed of its US-based higher education enrolment management services (EMS) business to increase its focus on growth opportunities.

Genscape continued its strong revenue growth trajectory, providing real-time, fundamental production data and analysis in the electricity, oil, gas, solar, biofuels, marine shipping and water markets. Revenues increased by 17% on an underlying basis, with particularly good growth from its solar and natural gas products and by 56% on a reported basis, including the benefit of acquisitions and the stronger US dollar. The electricity, oil and maritime businesses delivered a more muted performance, reflecting the impact of low electricity prices and the challenging market conditions resulting from the low oil price. Genscape continued to pursue its long-term strategy of expanding products and services in existing energy and commodity markets as well as making inroads into new, adjacent sectors. Genscape also continued to invest in organic initiatives as well as seeking strategic bolt-on acquisitions. In June 2016, Genscape acquired GP Energy Management, a New York-based provider of energy management services to electricity and gas retailers and generators.

Operating profit grew by 18% but was adversely affected by disposals, notably Hobsons' US EMS business and, in 2015, its Australian publishing business. The acquisition of early-stage loss making businesses during the second half of the prior year also dampened the reported growth in profits. Excluding the impact of acquisitions and disposals and excluding the benefit of the stronger US dollar, operating profits grew by 70% on an underlying basis, albeit off a low base.

Outlook for dmg information

dmg information expects to continue to benefit from new product initiatives and strong customer demand. There is uncertainty in some of its markets, most notably UK property. Nevertheless, dmg information continues to target sustained growth through delivering on organic initiatives and successfully growing acquired businesses. Underlying revenue growth is expected to accelerate during the year and be in the high-single digits for the full year. The operating margin in FY 2017 is expected to be in the mid-teens, consistent with FY 2016, reflecting the continued investment in organic growth opportunities.

dmg events

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

dmg events had another year of growth despite challenging conditions in the energy market as a consequence of the low oil price, notably for Canadian based events. Revenues increased by 2% on an underlying basis and by 12% in absolute terms. Reported revenue growth benefitted from the occurrence of Gastech, which was previously held in March 2014, and the stronger US dollar but was adversely affected by the disposal of the digital marketing events business, which occurred in September 2015. Across our three largest shows, the Big 5 Dubai construction event performed particularly strongly and, in the energy sector, ADIPEC delivered revenue growth whilst Gastech's revenues were at a similar level to the previous event. The Global Petroleum Show, however, experienced declining revenues reflecting the tough conditions in the Canadian oil and gas sector.

The business continued to launch spin-off events, including the Windows and Doors show in Dubai which helped the Big 5 Dubai event avoid becoming space constrained by its venue. dmg events also continued to geo-clone shows by launching into new locations, notably the East Africa Coatings event in Kenya and the Egypt Petroleum Show. In March 2016, dmg events acquired Exhibition Management Services, a South African based company which ran five events across Africa. The acquisition has accelerated dmg events' expansion into Africa and fifteen shows are scheduled in the continent during 2017.

The operating profit margin improved to 28%, benefiting from the occurrence of Gastech and the absence of the low margin digital marketing events. Operating profits increased 44%, although declined by 6% on an underlying basis, reflecting the challenged Canadian energy events, investment in growing attendance levels and Singapore being a more expensive location for Gastech than South Korea, where the 2014 event was held.

Outlook for dmg events

Despite the Canadian energy market remaining challenging, the oil industry generally appears to be adjusting to lower and less volatile price points. dmg events' underlying revenue growth rate is expected to be in the high-single digits in FY 2017, with particularly strong growth in the second half of the year, driven by the Gastech event which will be held in Tokyo in April 2017. 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. The operating margin for dmg events is expected to be around 25%, reflecting the increased costs from Gastech being held in Tokyo and the ongoing investment in existing events to deliver sustainable long-term growth.

Euromoney Institutional Investor

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

Euromoney released its preliminary results on 24 November. Revenues were in line with the prior year, including the benefit of the stronger US dollar, although declined by 4% on an underlying basis. Euromoney's performance improved during the year, with an underlying decline in revenues of 2% in the second half, compared to 6% in the first half. Market conditions remained challenging for businesses in the banking and finance sector and for commodity events. Subscriptions, which accounted for 58% of revenues, grew by an underlying 1%, including 2% growth during the second half, while delegate and sponsorship revenues declined by an underlying 14% and 2% respectively. The contraction in advertising revenues continued, as expected, with an underlying decline of 11%.

Operating profit declined 12% on an underlying basis and by 6% on a reported basis, including the benefit of the stronger US dollar. The operating margin of 25% was adversely impacted by the high marginal profit on declining advertising and delegate revenues.

In March 2016, Euromoney hosted an Investor Day outlining the new 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.

Euromoney's portfolio management during the year reflected the new strategy. In April, Euromoney completed the sale of its energy publishing businesses Gulf Publishing and Petroleum Economist. In August, the business acquired FastMarkets, extending Metal Bulletin's capabilities into real-time data delivery and extending Euromoney's portfolio of digital pricing products. ReinsuranceSecurity.com was also acquired in August and has broadened Euromoney's specialist finance insurance portfolio into the high-value counterparty risk market.

Outlook for Euromoney

In the year ahead, Euromoney will continue to implement its new strategy of investing in its big themes, ensuring an effective operating model and continuing to actively manage the portfolio. The Euromoney Board does not expect markets to improve over the coming year and has built its plans for the business accordingly. As stated at Euromoney's Investor Day, the strategy would not change the trajectory of the business in FY 2016, that, subject to the usual caveats, the business expected to return to growth in FY 2018 and that FY 2017 would be a year of transition. This remains the case.

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

Revenues declined by an underlying 2% to £706 million. As expected, there was good underlying growth from the digital businesses (+17%) and declines in print advertising (-12%) and circulation revenues (-1%). Reported revenues declined by 3%, as the adverse impact of the disposal of dmg media's online discount business, Wowcher, in November 2015 exceeded the benefit from including an additional 53rd week of newspaper revenues in the financial year.

The tough newspaper advertising market conditions experienced in the second half of FY 2015 continued, with dmg media's print advertising revenues declining by an underlying 12%. The decline was, however, largely offset by an underlying increase in digital advertising revenues across the dmg media portfolio of 17% and total combined advertising revenues declined by an underlying 4% to £326 million. Circulation revenues increased by 1% to £315 million, helped by the 53rd week and cover price increases. These more than offset the adverse impact from the decline in circulation volumes of the Daily Mail and The Mail on Sunday. Excluding the extra week, circulation revenues declined by an underlying 1%.

dmg media's operating profit for the year declined by 20% to £77 million, an underlying reduction of 23%. Newspaper costs were very closely managed, with further headcount reductions and lower production, newsprint and distribution costs. These savings were insufficient to fund all of the increased investment in MailOnline and Elite Daily and to compensate for the decline in advertising revenues. These factors contributed to the decrease in operating margin from 13% to 11%.

Mail businesses

Revenues for the combined Mail newspapers and website businesses (Daily Mail, The Mail on Sunday and MailOnline) grew by 1% to £577 million, including £93 million from MailOnline. Excluding the benefit to the newspapers of the 53rd week, Mail businesses' revenues declined by an underlying 2% with declines of 13% in print advertising and 1% in circulation being largely offset by the underlying 19% growth from MailOnline in the year. This was an acceleration on the 16% underlying growth achieved by MailOnline in FY 2015. Both the Daily Mail and The Mail on Sunday continue to hold significant market shares, averaging 23.2% and 22.0% for the year respectively, compared to 23.2% and 21.8% in the prior year∞, despite the decline in volumes. Revenues benefited from the cover price increases of the Monday to Friday editions of the Daily Mail from 60p to 65p, in February 2016, and of The Mail on Sunday, from £1.50 to £1.60 in April 2015 and from £1.60 to £1.70 in July 2016. The cover price of the Saturday edition was increased from 90p to £1.00 in October 2016.

Total advertising revenues across the Mail businesses of £244 million were in line with the prior year, with a £20 million increase in MailOnline's revenues offsetting a £18 million decline in print advertising. On an underlying basis, total advertising revenues from the Mail titles declined by 3% as the underlying increase of £15 million, 19% in MailOnline's advertising revenues was exceeded by the underlying £23 million, 13% decline in print advertising revenues. In the US, MailOnline's revenues grew by an underlying 28% to £24 million, reflecting increased awareness of the DailyMail.com brand amongst advertising buyers. Daily Mail Australia became a wholly owned MailOnline business in February 2016, following the acquisition of the remaining 50% of the business not already owned by the Group.

MailOnline's audience also continues to grow strongly, with 231 million monthly global unique browsers and 14.8 million average daily global unique browsers in September 2016. During the year there was an 8% increase in the average number of monthly unique browsers, compared to the prior year, and a 6% increase in average daily unique browsers. There were 82 million monthly unique browsers in the US and 4.4 million average daily unique US browsers in September 2016, with average growth during the whole year of 7% and 8% respectively.

Operating profit from the Mail businesses was £69 million, an underlying decline of 17%, reflecting increased investment in MailOnline, including the acquired Australian business, and another resilient performance from the Daily Mail and The Mail on Sunday.

Other dmg media businesses

Revenue at Metro was £65 million, an underlying decline of 9%, although significantly outperforming the UK National Newspaper advertising market. Metro remains the UK's third largest daily newspaper, read every weekday by an average of 3.3 million people. The London circulation was increased by 135,000 copies in October 2016 and Metro will take on four franchises from Trinity Mirror in January 2017. The business continues to manage its cost base carefully to defend its profitability. Metro's operating profit was £15 million, an underlying decline of 12%, reflecting the reduction in revenue.

Elite Daily was acquired in January 2015. Revenues in the year grew by an underlying 44%, to £10 million, but audience retention and revenue growth have been disappointing and losses have exceeded expectations. The carrying value of the business's goodwill and intangible assets in DMGT's balance sheet has been written down completely, resulting in an impairment charge of £25 million.

Low margin sales of newsprint to other publishers account for the majority of other revenues and these are excluded from underlying revenue growth calculations. Elite Daily, 7 Days and other businesses incurred £8 million of losses, an increase compared to £2 million in the prior year, reflecting increased investment in Elite Daily.

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 business. Wowcher generated £1 million of operating profit from £7 million of revenues in the period prior to disposal.

Outlook for dmg media

For FY 2017, dmg media expects to deliver stable underlying revenues, in the -2% to +2% range, with digital advertising growth and the benefit of cover price increases helping to offset circulation volume and print advertising declines. Reported results will not have the benefit of the 53rd week, which contributed £12 million of revenue and £6 million of operating profit in FY 2016. The operating margin is, however, expected to remain broadly in line with the 11% achieved in FY 2016, with cost efficiencies helping to protect profitability. During the eight weeks since the year end, circulation revenues grew by 5% and total advertising revenues grew by an underlying 1%, with digital growth exceeding the decline in print advertising.

Joint ventures and 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 30% to £23 million, reflecting the disposal of DMGT's c.39% stake in Local World in November 2015. The share of operating profits from Zoopla Property Group ('ZPG') increased 53% to £21 million, reflecting the business's particularly strong performance, notably its price comparison services division, following the acquisition of uSwitch in June 2015. ZPG saw the number of its UK property partnerships continue to grow during the year and, in April 2016, acquired the Property Software Group, a provider of property software and workflow solutions to over 8,000 UK agency branches. ZPG released its Preliminary Full Year results on 30 November 2016.

The share of operating profits from other joint ventures and associates was £2 million. These include Euromoney's stake in Dealogic, investments by dmg information in early-stage businesses and dmg media's stake in Excalibur.

Outlook for joint ventures and associates

The share of operating profits from joint ventures and associates is expected to benefit from ZPG's growth but will continue to include losses from early stage businesses. In the absence of any significant acquisitions and disposals, the share of operating profits from joint ventures and associates in FY 2017 is expected to be approximately £25 million.

Net finance costs

Net interest payable and similar charges, including DMGT's share of associates' interest costs of £3 million, was £40 million, in line with the prior year.

The pension finance charge, which is excluded from adjusted results, was £5 million compared to £7 million in the prior 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

In the absence of further bond buy-backs, net finance costs in FY 2017 are expected to be around £40 million, broadly in line with FY 2016.

Other income statement items

· Exceptional items and amortisation

Exceptional operating costs were £55 million compared to £21 million in the prior year. The increase was mainly due to £37 million of reorganisation, redundancy and consultancy costs, an increase on the £20 million in the prior year. Exceptional reorganisation, redundancy and consultancy costs included £15 million in respect of dmg media, £9 million of DMGT central corporate costs and £6 million in respect of dmg information. Reorganisation initiatives included reducing the headcount by over 400 positions, notably within the newspaper businesses, and streamlining central support functions within dmg information businesses, particularly those that have expanded through bolt-on acquisitions.

The increase in exceptional operating costs was also due to £8 million in respect of an additional Euromoney provision for a potential overseas sales tax exposure and £5 million in respect of a supplier to dmg media that went into voluntary administration.

The charge for amortisation of intangible assets arising on business combinations, including the share from joint ventures and associates, increased by £4 million to £52 million. The Group also made an impairment charge against goodwill and acquired intangible assets of £55 million, including £28 million in respect of Euromoney businesses, notably Mining Indaba and Total Derivatives, and £25 million in respect of dmg media's Elite Daily business, since audience and revenue growth has not met expectations.

The Group recorded other net gains on disposal of businesses and investments of £138 million, compared to a net gain of £131 million in the prior year. 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 £37 million is stated after adjusting for the effect of exceptional items and was £4 million less than last year. The adjusted tax rate for the year of 14.4% reduced marginally from 14.8% in FY 2015. Due to the mix of profits, the effective tax rate is expected to increase over the next three years, to around 20%, as the proportion of US-generated profits increases.

The statutory tax charge for the year, excluding £2 million of tax charges in respect of joint ventures and associates, was £33 million, £4 million less than the adjusted tax charge. There were tax credits of £10 million in respect of the amortisation and impairment of intangible fixed assets. There were also £8 million of exceptional tax charges, a combination of tax credits on restructuring charges, recognition of previously unrecognised deferred tax assets and de-recognition of overseas tax losses.

Pensions

The deficit on the Group's defined benefit pension schemes increased from £159 million at the beginning of the year to £246 million at 30 September 2016 (calculated in accordance with IAS 19 (Revised)). Falling discount rates increased the value of defined benefit liabilities. This was partly offset by gains on investments that hedge against inflation and interest rate risk, as well as returns on other investment categories.

The triennial actuarial valuation of the defined benefit schemes as at 31 March 2016 was recently completed and saw a healthy reduction in the size of the deficit. This outcome reflects the liability hedging activity referred to above, better investment performance, increased mortality, and lower inflation than expected at the previous valuation in 2013. Consequently, the Group has agreed to a revised plan of reduced funding payments. The revised funding plan includes payments of approximately £13 million per annum to FY 2019 and £16 million per annum from FY 2020 to FY 2027. This compares favourably to the £34 million funding payments that were made into the main schemes during FY 2016. In addition a contribution equal to 20% of any share buy-backs is contributed to the schemes. Contributions will be discontinued should the schemes' actuary agree the schemes are no longer in deficit. The next formal actuarial valuation is scheduled for 31 March 2019. The defined benefit schemes are closed to new entrants.

Net debt and cash flow

Net debt at the end of the year was £679 million, a decrease of £23 million during the year and a decrease of £40 million since the half year. The Group generated operating cash flows of £200 million, a 72% conversion rate of operating profits*, compared to 90% in the prior year, reflecting the timing of customers paying in advance to attend the Gastech event in October 2015. Operating cash flows included exceptional operating items of £25 million and capital expenditure of £75 million, excluding £13 million of expenditure in respect of RMS(one).

Net proceeds from disposals, including expenditure on acquisitions, were £86 million. Cash out-flows included dividends of £89 million, pension funding of £34 million, interest payments of £35 million and taxation of £29 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 £58 million.

At the year end, the Group's Bond debt was £425 million and comprised £214 million of the 5.75% Bonds, due 2018, £10 million of the 10.0% Bonds, due 2021, and £202 million of the 6.375% Bonds, due 2027. Bond debt constitutes less than half of the debt available to DMGT. At the year end, the committed bank facilities were £624 million, of which £367 million was unutilised, and cash balances were £18 million.

The Group's ratio of year end net debt to adjusted profits before interest, depreciation and amortisation (EBITDA) was 1.8 times, below the Group's preferred upper limit of around 2.0 times, and well within the requirements of the Group's bank covenants. Throughout the year, the Group's corporate credit rating remained at investment grade BBB-.

The Directors have a reasonable expectation that the Group will continue to operate and meet its liabilities as they fall due over the next three years. Accordingly, they continue to adopt the going concern basis in preparing its accounts.

Financing and share buy-back programme

During the year, the Group acquired 3.5 million 'A' Ordinary Non-Voting Shares for £24 million in order to meet obligations to provide shares under its incentive plans and utilised 1.4 million shares out of Treasury and the Employee Benefit Trust, valued at £10 million, to provide shares under various incentive plans. Also during the year, the Group acquired 0.9 million 'A' Ordinary Non-Voting Shares for £6 million under a rolling share buy-back programme announced in November 2015. During the year, the Group cancelled 0.9 million A Ordinary Non-Voting Shares that were previously held in Treasury. As at 30 September 2016, DMGT had 352.2 million shares in issue, including 19.9 million Ordinary Shares, and a further 5.0 million 'A' Ordinary Non-Voting Shares held in Treasury and 4.9 million 'A' Ordinary Non-Voting Shares held by the DMGT Employee Benefit Trust.

Dividend

The Board is recommending the payment on DMGT's issued Ordinary Shares and 'A' Ordinary Non-Voting Shares of a final dividend of 15.3 pence per share for the year ended 30 September 2016 (2015 14.9 pence). This will make a total for the year of 22.0 pence (2015 21.4 pence per share). The final dividend will be paid on 10 February 2017 to shareholders on the register at the close of business on 9 December 2016.

Change of Chief Executive and CFO

The retirement of Chief Executive, Martin Morgan, was announced in January 2016 and he retired from the DMGT Board and the Board of Euromoney Institutional Investor plc with effect from 31 May 2016. Paul Zwillenberg was appointed Chief Executive with effect from 1 June 2016. Paul Zwillenberg was previously Global Leader Media Sector for The Boston Consulting Group, based in London, and has worked closely with DMGT for 20 years.

In September 2016, the resignation of Stephen Daintith, CFO, was announced. The date of his departure is yet to be determined and he continues to provide support to DMGT as CFO pending the appointment of his replacement. The Board is in the process of identifying appropriate candidates.

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 25 and 26 show the adjustments between statutory profit before tax and adjusted profit before tax, by business, for both FY 2016 and FY 2015.

The explanation for each type of adjustment is as follows:

1) Discontinued operations: the adjusted results for FY 2015 include the pre-disposal results of discontinued operations, namely Jobsite, which was the final remaining part of dmg media's digital recruitment business, Evenbase, and was sold in October 2014, 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) Internally generated assets impairment: occasionally the carrying value of an asset in the balance sheet is considered too high 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 when dmg media vacated office space during FY 2015, and this expense is excluded from adjusted results.

4) 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 FY 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 in November 2015 of DMGT's c.39% stake in Local World. 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) Bond redemption premium: the Group's debt includes bonds issued by DMGT in the past, when interest rates were at higher levels than currently. DMGT pays interest on the bonds and the cost is included in both statutory and adjusted results. In October 2014, however, DMGT bought back bonds before their due date and, given the relatively high coupon rates on the bonds, relative to current market rates, paid a premium to do so. The buy-back premium, which is different to the cost of servicing the debt and was a one-off expense, is excluded from FY 2015 adjusted results.

7) 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.

8) Exceptional dividend income: in FY 2015 the Press Association paid DMGT a significantly larger dividend than usual due to proceeds from its disposal of MeteoGroup. The larger dividend resulted from a disposal rather than operating activities and, similar to a gain made by DMGT when disposing of a business, was excluded from FY 2015 adjusted results.

9) 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 - FY 2016

Notes: The figures in the Note column above correspond with explanations of the adjustments given on pages 23 and 24.

¹ E'money = Euromoney, ² Corp. costs = Corporate costs, ³ JV's & Ass. = Joint ventures and Associates, 4 Fin. costs = Financing costs

Reconciliation: Statutory profit to adjusted profit - FY 2015

Notes: The figures in the Note column above correspond with explanations of the adjustments given on pages 23 and 24.

¹ E'money = Euromoney, ² Corp. costs = Corporate costs, ³ JV's & Ass. = Joint ventures and Associates,  Fin. costs = Financing costs

Underlying analysis - Revenues

Notes: M&A adjustments are for disposals (including dmg events' digital marketing businesses, Euromoney's Gulf Publishing business and dmg media's Wowcher) and for acquisitions (including dmg information's Locus Energy). Acquisitions are excluded from Euromoney's underlying results whereas the underlying growth rates for dmg information, dmg events and dmg media include the year-on-year organic growth from acquired entities. 'Other' adjustments include the timing of events, notably Gastech which occurred in FY 2016 but not FY 2015, the gross-up, equivalent to the cost of sales, on the low margin newsprint resale activities and the exclusion of the benefit from the 53rd week of dmg media's print businesses results in FY 2016.

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 -5% and -29% respectively. 'Other' includes adjustments for the timing of events and for Euromoney's CAP scheme; Euromoney's underlying profit growth excludes the benefit in FY 2015 of the release of the accrual, charged in FY 2014, for the CAP incentive plan.

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

Principal risks and uncertainties

DMGT Executive management completed a robust and detailed assessment of the Group's risk management processes and the Group risk register. The Group's risks are categorised as either strategic or operational. Strategic risks are linked to DMGT's strategic priorities and impact the whole Group. Operational risks are those arising from the execution of the business functions and typically impact on one or more of the operating businesses.

Changes to the principal risks during the year

Two principal risks disclosed last year, 'Internal investment' and 'New product launches', have been combined this year due to their overlap. These are now described in a new risk called 'Success of new product launches and internal investments'. In recognition of the results of the recent referendum on the UK membership of the European Union and wider macroeconomic volatility, a new principal risk, 'Economic and geopolitical uncertainty', has been added and the potential impact on DMGT is outlined below. At this early stage, due to the diverse nature of our portfolio, we believe that the impacts will be manageable, however, we will continue to monitor these carefully as they develop and adapt accordingly.

Strategic Risks

Operational risks

Statement of Directors' responsibilities

The Directors are responsible for preparing the full year financial report, in accordance with applicable law and regulations.

The Directors confirm that to the best of their knowledge:

a) the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

b) the management report includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R.

By order of the Board of Directors

The Viscount Rothermere

Chairman

30 November 2016

* Unless otherwise stated, all profit and margin figures in this Preliminary Full Year Results 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 operating profit and profit before tax to adjusted operating profit and profit before tax and supporting explanations, see pages 23 to 26. Adjusted revenue includes revenue from discontinued operations, specifically £3 million of revenue in FY 2015 from Evenbase, dmg media's digital recruitment business, which was disposed of.

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

# Underlying adjusted revenue or underlying adjusted operating profit* growth is on a like-for-like basis, adjusted for constant exchange rates, disposals, non-annual events occurring in the current and prior year and acquisitions; see pages 27 and 28. For dmg information, underlying growth includes the year-on-year organic growth from acquisitions, excludes disposals and includes revenues from one-off sales of IP assets, consistent with prior years. For dmg events, the comparisons are between events held in the year and the same events held the previous time. For Euromoney, acquisitions and disposals are excluded and a biennial event that took place during the current year 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 disposals, Wowcher and Evenbase, and include the year-on-year organic growth from acquisitions. dmg media's underlying growth rates also exclude the benefit of an additional 53rd week from the FY 2016 results. Underlying revenues only include the profit but not the gross-up, equivalent to the cost of sales, from low margin newsprint resale activities.

∞ Daily Mail's 23.2% average market share during FY 2016 was unchanged from 23.2% during FY 2015 and The Mail on Sunday's 22.0% increased from 21.8% in FY 2015. Circulation market share figures are calculated using ABC's National Newspaper Reports for each month from October 2014 to September 2016 inclusive and exclude digital subscribers.

† 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.

The average £: US$ exchange rate for the year was £1:$1.42 (2015 £1:$1.54). The rate at the year end was $1.30 (2015: $1.51).

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

A presentation of the Preliminary Results will be given to investors and analysts at 9.30am on 1 December 2016, 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 at http://www.dmgt.com/webcastfy16.

Financial Reporting Calendar

The Group's next scheduled announcement of financial information is the first quarter trading update on 26 January 2017. 

Reporting of short-term advertising growth rates

Historically, DMGT's results announcements and trading updates have included comments on dmg media's advertising performance since the relevant quarter end. Advertising revenue remains volatile, with significant changes in the year-on-year growth rates from week to week, and DMGT does not consider advertising performance over a short period to be a good indicator for longer term growth rates. Also, the proportion of DMGT's total revenues comprised of consumer advertising revenue has declined in recent years. Consequently, given DMGT's long-term approach to portfolio management and investment decisions, future results announcements and trading updates will only include comments on the period to the quarter end.

Market Abuse Regulation

As with previous financial announcements, the information communicated in this Preliminary Full Year Results Report includes inside information. DMGT has included this statement in this announcement in order to comply with the Market Abuse Regulation, which came into effect on 3 July 2016.

This Preliminary Full Year Results Report ('Report') 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 Report save as would arise under English law. Statements contained in this Report 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 Report. 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 Report. 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.