DMGT publishes First Quarter Trading Update

Daily Mail and General Trust reports revenue up 2% on an underlying basis in the first three months of FY 2018. Outlook for the year is unchanged and in line with current market expectations, says the company.

DMGT publishes First Quarter Trading Update

As reported by DMGT:

Business to Business (B2B)

* Underlying revenue growth of 4%, with continued growth delivered from Insurance Risk, EdTech, Energy Information and Events and Exhibitions.

* Pro forma reported revenue reduction of 8%, reflecting disposals and the weaker US dollar, which affected each of the B2B divisions.

* Full Year guidance maintained: low-single digit underlying revenue growth with the adjusted operating profit margin in the mid-teens.

Insurance Risk (RMS)

Underlying revenue growth of 5% was delivered. The roll-out of applications on the RMS(one) platform continued, with encouraging response from clients.

Property Information

Revenue was stable on an underlying basis, as growth from the US businesses was offset by reductions in Europe, given low volumes in the UK property market. Active portfolio management continued with the disposal process for EDR, the US business, ongoing. As announced on 14 December 2017, the Board of Xceligent, the loss-making US business, filed to liquidate the company.

EdTech (Hobsons)

Underlying revenue growth of 12% reflected continued strong growth from each of the businesses: Naviance, Intersect and Starfish. Reported revenue performance was impacted by the disposal of the Admissions and Solutions businesses in September and October 2017.

Energy Information (Genscape)

Underlying revenue growth of 4% was delivered with continued growth from the oil, power and gas businesses, partly offset by declining revenue at the solar business.

Events and Exhibitions (dmg events)

Underlying revenue growth of 7% reflected continued growth from the Big 5 Dubai and ADIPEC shows, two of the business’s three large events, which were held in November. Reported revenue performance was affected by the timing of events. As previously indicated, the Full Year revenue growth is expected to be reduced by Gastech, the third large event, due to its cyclical move from Tokyo to Barcelona this year.

Consumer (dmg media)

* Underlying revenue decline of 1%.

* Reported revenue decline of 3%, reflecting the disposal of Elite Daily and closure of 7 Days in the prior year.

* Full Year guidance maintained: mid-single digit underlying decline in revenues with the adjusted operating profit margin around 10%.

Circulation revenue declined 4%, with volume reductions partly offset by the cover price increase of The Mail on Sunday from £1.70 to £1.80 in October 2017. There was underlying advertising revenue growth of 2% across dmg media, with the 3% decline in print being more than offset by 9% growth from digital. The Mail Newspapers titles grew their market share and we remain confident in the future growth opportunities at MailOnline.

Net debt / financing

* Net debt at 31 December 2017 was £529 million compared to £464 million at 30 September 2017, reflecting the usual seasonal outflows.

* In December 2017, Standard & Poor’s revised its corporate credit rating for DMGT from BBB- to BB+, following the reduction in DMGT’s profit margin due to the reduced stake in Euromoney. In January 2018, Fitch reaffirmed DMGT’s BBB- investment grade rating.

DMGT CEO, Paul Zwillenberg said: “The work we have done to reshape our portfolio over the past 18 months is starting to bear fruit, with our B2B businesses increasing their underlying revenues by 4%. This underpinned a solid first quarter performance for DMGT with underlying revenue growth of 2%, in line with our expectations.

“Our outlook for full year 2018 is unchanged and we remain focused on delivering against our Group-wide Performance Improvement Programme.

“On an underlying basis, RMS, our insurance risk modelling business, grew revenues by 5% and continued to roll out the ground-breaking RMS(one) platform to customers.

“Revenues at Hobsons, our educational technology business, grew by 12%, reflecting the new focus on its student success products, and Genscape was up 4%, despite ongoing challenges in the solar energy market.

“Our exhibitions and events business grew underlying revenues by 7%, supported by the Big 5 Dubai and ADIPEC shows in November.

“dmg media delivered another resilient performance and grew underlying advertising revenues by 2%, with a 9% increase from digital more than offsetting a 3% decline in print. The Mail titles continued to increase market share, Metro delivered a strong performance, growing circulation and advertising revenue, and MailOnline delivered against expectations and is well-placed to continue profiting from its huge, highly-engaged audience of more than 200 million unique monthly browsers.”