Daily Mail & General - Final Results
December 16 1999 - 2:02AM
UK Regulatory
RNS Number:6202C
Daily Mail & General Trust PLC
16 December 1999
Preliminary unaudited consolidated results for the year ended 3rd October,
1999
Highlights
1999 1998
Turnover #1,620.0 m #1,417.8 m
Operating profit
(before amortisation of intangible assets) #232.0 m #213.6 m
Profit before amortisation of
intangible assets, exceptional items and tax #205.0 m #188.6 m
Profit before tax #201.9 m #184.4 m
Dividend per share 29.0 p 26.0 p
Adjusted earnings per share 134.8p 120.3p
( before amortisation of intangible assets and exceptional items )
The Group's unaudited results for the year have been produced in accordance
with FRS 10, concerning goodwill and other intangible assets, which has
necessitated the restatement of last year's results. For the Group's newspaper
divisions, the results include an extra week's trading compared with last
year.
Summary
The DMGT Group had another record year with profit before tax up 9% over last
year. Excluding amortisation of intangible assets and exceptional items, the
underlying profit before taxation rose by 9% from #188.6 million to #205.0
million and underlying adjusted earnings per share by 12% to 134.8p. Profits
would have been higher but for a considerable increase in expenditure on
electronic publishing, start-ups and new product launches.
Dividend
The Directors of the Company are recommending payment on the issued Ordinary
and 'A' Ordinary Non-Voting shares of the Company of a final dividend of 20.0
pence per share for the year to 3rd October, 1999 (1998 18.0 pence per
share).This will make a total for the year of 29.0 pence per share (1998 26.0
pence per share).
For transferees to receive this dividend, which will be paid on 18th February,
2000, transfers must be lodged with the Registrar by 6th January, 2000.
Share Split
The Directors of the Company are recommending that each of the Company's
Ordinary shares of 50p be split into 4 Ordinary shares of 12.5p and each 'A'
Ordinary Non-Voting share be split into 4 Ordinary A Non-Voting shares of
12.5p. A resolution will be put to Ordinary shareholders at the Annual General
Meeting, to be held on Wednesday 16th February, 2000. If approved, this share
split would take place in respect of transfers lodged with the Registrar by
16th February, 2000.
Associated Newspapers
The Group's national newspaper division had another very successful year.
Against the market trend, the average circulation of the Daily Mail rose by
2.8% and that of The Mail on Sunday by 3.3%. With the extra week's sale and
with the Evening Standard achieving an unchanged average sale despite a cover
price increase, overall circulation revenue was up 11% on last year. All the
titles produced a strong advertising performance, up 15% in total, partly due
to the increased availability of colour following the completion of the press
enhancement programme.
In March 1999, Associated launched Metro, a free daily newspaper for London
commuters. It has been well received by readers and its advertising revenues
are growing rapidly. Since the year end, similar papers have been launched in
Manchester, Birmingham and Central Scotland. Despite initial losses from this
venture, Associated produced a substantial increase in operating profit.
Northcliffe Newspapers
Trading conditions for the Group's regional newspapers have been mixed this
year, although with an improvement towards the end of the year. A record
profit resulted from the extra week's trading, stable circulation and
underlying advertising revenues, close control of costs and a contribution
from acquisitions. The largest acquisition in the year, Central Independent
Newspapers, was bought for #45 million at the end of September 1999 and made
no contribution to these results.
DMG New Media
The Group's consumer internet division has grown with the launch of This is
Money and, since the year end, of Charlotte Street, the internet site for
women. A 60% interest in Soccernet was sold in June 1999. While the division
continues to be loss-making, advertising revenues grew over 300% year on year.
Euromoney Institutional Investor
Euromoney Institutional Investor has already announced its results which
showed a reduction in adjusted earnings of 8%, a creditable achievement
considering the upheaval in the emerging markets, the source of much of its
revenues. The equivalent fall at the half year stage was 29%. After the losses
of Internet Securities, bought in February 1999, Euromoney's operating profit
before amortisation of goodwill was down 19%.
Teletext
Teletext's analogue service had another excellent year, with its advertising
revenues up over 20% over last year. The delay in the launch of digital
teletext, originally scheduled for December 1998, but not yet fully achieved
for reasons outside the Group's control, has been disappointing. It did,
however, result in higher profits than expected, due to the postponement of
launch costs. The effects of the launch of this service and of Teletext's
much-expanded internet travel site should now fall into the current year.
DMG Radio
DMG Radio's Australian business produced a modest increase in profit, despite
having to face direct competition in some of its markets for the first time.
5AA, in Adelaide, having had a difficult first half year, recovered well in
the second half. The UK business expanded during the year by the purchase of
stations in Tunbridge Wells and Crawley.
dmg world media
dmg world media (formerly DMG Exhibitions) grew considerably during the year,
both by acquisition and launch. Its operating profit was up 21% on the
previous year, despite two of its largest biennial shows not being held this
year. This increase was largely attributable to acquisitions.
DMG Information
DMG Information also grew during the year with the purchase of e data
resources, the leading supplier of environmental property information in the
US. For its education businesses, it was a year of consolidation and
restructuring. RMS increased its revenues and profits significantly, although
there were anticipated losses from the early stage Dolphin and Landmark
businesses.
Other Profit and Loss Items
The increase in central costs less rental income is due to the sale last year
of the Group's investment properties. Rental income this year was minimal.
Amortisation has been charged in both years on intangible assets held
historically on the Group's balance sheet and in the current year also on
goodwill on acquisitions made during the year.
The two principal contributors to associated companies were GWR and Bristol
United Press ("BUP"). GWR recently announced good results; those of BUP showed
an 8% decline for its half year to September 1999.
Profit on sale of fixed assets arose mainly from the sale of Reuters' shares.
Profit on sale of businesses arose mainly from the sale of 60% of Soccernet,
but also from the sale of a radio station in Sweden and of Euromoney's 100%
Design exhibition.
The underlying tax charge has remained steady at just under 31% of profits.
The stated tax charge represents 22% of profits.
Funding
The Group's net debt rose during the year from #416 million to #608 million,
an increase of #192 million. However, average debt during the year was lower
than last year and this, combined with a lower average interest rate, produced
a 5% reduction in the interest charge. Acquisitions and disposals cost a net
#262 million.
Post Balance Sheet Events
Since the year end, the Group has announced a recommended offer for those
shares in BUP which it did not already own. The offer values BUP at #121
million and the cost to the Group will be #92 million. The offer document is
expected to be posted shortly.
Outlook
The new financial year has started encouragingly, with Euromoney in particular
seeing improving trading conditions. Associated's national titles continue to
perform strongly and the Group's other divisions should increase their
contribution to operating profits.
The Group expects again to increase significantly its expenditure on start-up
and early stage businesses, notably internet-related, but also on Metro and
Digital Teletext. This expenditure will be taken as a charge against earnings
and will therefore restrict reported profit growth.
Daily Mail and General Trust plc
Group Profit and Loss Account
for the year ended 3rd October, 1999
1999 1998
Notes (restated)
#m #m
Turnover
Continuing operations 1,581.2 1,417.8
Acquisitions 38.8 -
2 1,620.0 1,417.8
Operating profit before amortisation
of goodwill and intangible assets
Continuing operations 230.7 213.6
Acquisitions 1.3 -
3 232.0 213.6
Amortisation of goodwill and intangible assets
Continuing operations (13.0) (13.0)
Acquisitions (8.1) -
3 (21.1) (13.0)
Operating profit after amortisation
Continuing operations 217.7 200.6
Acquisitions (6.8) -
3 210.9 200.6
Share of operating profits in associates
and joint ventures 12.9 11.6
Profit on sale of fixed assets 6.4 14.3
Profit on disposal of businesses 14.3 3.7
Income from other fixed asset investments 3.0 3.6
Profit on ordinary activities before interest 247.5 233.8
and finance charges
Net interest payable (40.3) (43.4)
Other finance charges 4 (5.3) (6.0)
Net interest payable and similar charges (45.6) (49.4)
Profit on ordinary activities before taxation 201.9 184.4
Taxation on profit on ordinary activities 5 (44.0) (52.0)
Profit on ordinary activities after taxation 157.9 132.4
Equity interest of minority shareholders (6.8) (10.1)
Group profit for the financial year 151.1 122.3
Dividends (29.0) (26.0)
Retained profit 122.1 96.3
Basic earnings per share 151.3 p 122.3p
Diluted earnings per share 151.0 p 122.0p
Adjusted earnings per share
(before amortisation of intangible assets
and exceptional items) 6 134.8p 120.3p
Daily Mail and General Trust plc
Group Cash Flow Statement for the year ended 3rd October, 1999
1999 1998
#m #m
Net cash inflow from operating activities (Note 8) 283.4 288.3
Dividends received from joint ventures and associates 5.7 12.2
Returns on investments and servicing of finance (41.0) (47.3)
Taxation paid (net) (71.5) (40.2)
Capital expenditure and financial investment (net) (56.7) 46.6
Acquisitions and disposals (261.7) (141.0)
Equity dividends paid (27.0) (24.0)
Management of liquid resources 26.6 (20.8)
Net cash inflow / (outflow) from financing 175.3 (69.9)
Increase in cash 33.1 3.9
Reconciliation of net cash flow to movement in net debt
Increase in cash 33.1 3.9
Cash (inflow) / outflow from change in
debt and lease finance (174.3) 71.2
Cash (inflow) / outflow from change in
liquid resources (26.6) 20.8
Change in net debt from cash flows (167.8) 95.9
Loan notes issued and loans arising from
acquisitions (23.8) (10.7)
Liquid resources acquired with subsidiaries 0.1 1.7
Other non-cash items (1.1) 16.5
(Increase) / decrease in net debt in the year (192.6) 103.4
Net debt at beginning of year (415.7) (519.1)
Net debt at end of year (608.3) (415.7)
Daily Mail and General Trust plc
Group Balance Sheet as at 3rd October, 1999
1999 1998
(restated)
#m #m
Fixed Assets
Intangible assets 390.8 161.5
Tangible assets 398.0 366.8
Investments
Joint ventures:
Share of gross assets 13.3 -
Share of gross liabilities (1.0) -
12.3 -
Associates 37.4 32.7
Own shares (Note 9) 9.9 -
Other investments 118.4 110.8
966.8 671.8
Current Assets
Stocks 25.3 21.9
Debtors 298.9 262.8
Short-term investments 17.8 44.3
Cash at bank and in hand 65.0 35.1
407.0 364.1
Creditors
Amounts falling due within one year (526.3) (457.2)
Net Current Liabilities (119.3) (93.1)
Total Assets less Current Liabilities 847.5 578.7
Creditors
Amounts falling due after more than one year (630.9) (541.1)
Provisions for Liabilities and Charges (43.5) (41.4)
Net Assets / (Liabilities) 173.1 (3.8)
Capital and Reserves
Called up share capital 50.1 50.0
Share premium account 5.7 4.8
Revaluation reserve 96.7 166.9
Profit and loss account 35.9 (210.7)
Equity Shareholders' Funds 188.4 11.0
Equity minority interests (15.3) (14.8)
173.1 (3.8)
NOTES
Accounting policies
1 The financial information for the year has been prepared in accordance with
the accounting policies set out in the Group's 1998 Annual Report, as amended
for the new accounting standards, FRS 10 to FRS 15 which the Group is required
to adopt in its full year accounts to 3rd October, 1999. The Profit and Loss
account and the Balance Sheet have been amended to reflect the adoption of FRS
10, Goodwill and Intangible Assets. The year figures have been restated to
reflect the amortisation over 20 years of the Group's intangible assets (other
than goodwill) from their original dates of acquisition. Goodwill has not been
restated, but is capitalised on new acquisitions made after 28th September,
1998.
The Group has segmented its newspaper businesses separately this year. It has
also segmented its exhibitions and related activities and its education and
information publishing interests which were previously included within other
media.
2 Turnover
1999 1998
By activity: #m #m
National newspapers and related activities 747.1 638.2
Regional newspapers and related activities 362.5 347.2
Euromoney Institutional Investor 168.2 176.9
Broadcasting 105.8 90.5
Exhibitions and related activities 99.0 93.6
Education and information publishing 133.5 67.3
Other activities 3.9 4.1
1,620.0 1,417.8
Turnover of #38.8 million from acquisitions arose #5.2 million in regional
newspapers and related activities, #5.9 million in Euromoney, #1.3 million in
broadcasting, #11.4 million in exhibitions and related activities and #15.0
million in information publishing.
1999 1998
By geographical market: #m #m
UK 1,371.0 1,222.0
Rest of Europe 28.1 24.6
North America 165.4 128.2
Rest of the World 55.5 43.0
1,620.0 1,417.8
3 Operating profit
1999 1998
(restated)
By activity: #m #m
National newspapers and related activities 86.0 75.4
Regional newspapers and related activities 73.4 68.9
Euromoney Institutional Investor 28.4 35.2
Broadcasting 32.4 18.3
Exhibitions and related activities 15.6 12.9
Education and information publishing 6.5 6.4
Unallocated central costs, rental income
and other activities (10.3) (3.5)
232.0 213.6
Less: amortisation of intangible assets (21.1) (13.0)
210.9 200.6
Operating profit of #1.3 million, before amortisation of intangible assets,
from acquisitions arose #0.8 million in regional newspapers and related
activities, a loss of #3.0 million in Euromoney, #3.2 million in exhibitions
and related activities and #0.3 million in education and information
publishing.
1999 1998
(restated)
#m #m
By geographical market:
UK 184.0 169.2
Rest of Europe 5.5 8.4
North America 15.3 18.4
Rest of the World 6.1 4.6
210.9 200.6
4 Other finance charges 1999 1998
#m #m
Premium on repurchase of borrowings (2.3) (3.7)
Finance charge on discounting of
deferred consideration (3.0) (2.3)
(5.3) (6.0)
Premium on repurchase of borrowings comprises the premium on repurchase of
Exchangeable and in the prior year also of the Group's US $ Loan Notes. This
has been treated as an exceptional item.
5 Taxation charge
The tax charge for the year amounted to #44.0 million (1998 #52.0 million).
The charge for taxation has been computed at a rate of 30.5% (1998 31.0%) on
UK taxable profits. The underlying tax on profits before exceptional items
amounted to #62.6 million (1998 #58.0 million) and the resulting rate of tax
is 30.5% (1998 30.8%).
6. Adjusted earnings per share
Adjusted earnings per share (before amortisation of intangible assets and
exceptional items) are calculated on profit before amortisation of intangible
assets and exceptional items, but after charging the taxation and minority
interests associated with those profits, of #134.6 million (1998 #120.3
million), as set out in note 7 below, and on the weighted average of 99.8
million (1998 100.0 million) ordinary shares in issue during the year in
accordance with FRS 14.
7. Profit before amortisation of intangible assets and exceptional items
1999 1998
#m #m
Profit before tax 201.9 184.4
Add back:
Amortisation of intangible assets
in Group operating profit and in joint ventures 21.5 13.0
Reorganisation and redundancy costs - 5.5
Profit on sale of fixed assets (6.4) (14.3)
Profit on sale of businesses (14.3) (3.7)
Premium on repurchase of borrowings 2.3 3.7
Profit before amortisation of intangible assets,
exceptional items and taxation 205.0 188.6
Taxation charge (62.6) (58.0)
Interest of minority shareholders (7.8) (10.3)
Profit before amortisation of intangible assets and
exceptional items, after taxation and minority
interests 134.6 120.3
8. Net cash inflow from operating activities
1999 1998
#m #m
Operating profit 210.9 200.6
Depreciation charge 47.6 41.9
Amortisation of intangible assets 21.1 13.0
Working capital movement 3.8 32.8
Net cash inflow from operating activities 283.4 288.3
9. Investment in own shares
DMGT Trustees Limited, the Trustee of the DMGT Share Trust, has made purchases
of the Company's 'A' Ordinary Non-Voting shares for the purpose of meeting
prospective exercises of options granted under the 1997 Executive Share Option
Scheme. As required by UITF 13, these are included as assets on the Group
balance sheet. The #2.0 million (1998 #1.2 million) cost of buying these
shares in excess of the option exercise price has been charged in arriving at
operating profit.
10. Year 2000
The Group has undertaken a major exercise to ensure Year 2000 compliance. This
exercise is, needless to say, all but completed and the Group believes that it
has done all possible to avoid interruptions, particularly to
business-critical systems. There remains some inevitable uncertainty due to
external factors and particularly where the Group operates in emerging
markets' countries. The cost of the exercise is difficult to assess since most
expenditure involves improvement to existing systems, as well as the
achievement of Year 2000 compliance, but is estimated to be approximately #12
million.
11.The financial information set out above does not constitute the statutory
accounts of the Company within the meaning of s.240 of the Companies Act 1985
but is derived from those accounts. Statutory accounts for the year ended
27th September, 1998 have been delivered to the Registrar of Companies. The
auditors have reported on the accounts for the year ended 27th September,
1998; their report was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985. The auditors have not yet
reported on the accounts for the year ended 3rd October, 1999.
12.Highlights of this announcement will be advertised on 16th December in the
Evening Standard, on 17th December in the Daily Mail, Aberdeen Press & Journal
and the Western Morning News and on 19th December in The Mail on Sunday. It is
expected that the Annual Report and Accounts will be posted to shareholders on
19th January, 2000.
Enquiries:
Peter Williams 0171 938 6631
Nicholas Jennings 0171 938 6629
END
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