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DMGT releases preliminary results

The Daily Mail & General Trust (DMGT) has released its preliminary results for the year ended 4 October 2009.

Below are extracts. Click here for the full report.

B2B RESILIENCE AND SIGNIFICANT COST SAVINGS

* Continued growth from business to business operations, including currency gains.

* Improvement in profitability* of UK consumer operations since March due to cost initiatives.

* Strong focus on cash generation with net debt down by £178 million since half year.

* Statutory results reflect restructuring actions taken and impairment charges.

* Sale of 50% interest in DMG Radio Australia.

* Final dividend maintained.

Martin Morgan, Chief Executive, said:

"We have actively managed the business to defend profitability during unprecedented trading conditions with a clear focus on fundamentals. Revenue and cost initiatives of £150 million have been delivered and we have taken action on various underperforming assets across the Group. We remain focused on cash generation, debt reduction and cost efficiency.

Our B2B operations have demonstrated their resilience, growing their profits*, including currency gains. Our UK consumer businesses have achieved a sharp improvement in profitability* in the second half of the year reflecting more stable conditions and a lower cost base.

Our strategy of creating a diversified international portfolio of market-leading businesses in both B2B and consumer markets is proving to be effective in the current environment and leaves us well positioned for 2010 and beyond."

Summary and Outlook

Group revenue for the year was £2,118 million compared with £2,312 million for the prior year, a fall of 8%. Operating profit* was 12% lower at £278 million. Adjusted profits* before tax were £201 million, down 23% on the equivalent figure for last year, with all divisions, except Northcliffe Media, maintaining or increasing operating margins*.

The Group's B2B operations increased their overall profit* by 7%, benefiting from a 21% reduction in the average sterling: US dollar exchange rate over the year. The underlying# result was a fall of around 5%. The profits* of A&N Media were significantly lower for the year although the second half saw a large improvement in profitability. As a consequence, 73% of this year's operating profit* was generated from outside the Group's consumer operations, up from 60% last year.

Business to Business

Risk Management Solutions

* solid growth, despite higher than usual level of cancellations.

* now seeing more favourable insurance and related capital market conditions.

DMG Information

* Property businesses hit by significant falls in property transactions, recently seeing limited improvement in the UK.

* Non-property businesses continuing to grow well, with benefit from innovative new product lines.

Euromoney

* resilience of increased subscription revenues, now 47% of total revenues, although weakening into new year;

* partly protected by exposure to better performing emerging markets;

* excellent management of costs and margins*;

* expect tough first quarter, but has stepped up investment to take advantage of recovery when it comes.

DMG World Media

* softer bookings in second half, after good first half;

* more recently, encouraging attendances and booking trends, but yet to convert into revenues.

Business to Consumer

Associated Newspapers

* strength of Daily Mail brand produced maintained profits*, the second highest in its history;

* Sunday and free markets more challenged;

* nearly £80 million of cost savings achieved.

* advertising revenue trends improving in new year, but still down year on year, and with little forward visibility;

* will benefit this year from elimination of loss-making entities over last year and of expected lower newsprint costs.

Northcliffe Media

* suffered from substantial falls in core revenue categories;

* led to complete re-engineering of business, leading to £50 million of cost reductions which are still continuing;

* advertising revenues stable since February/March;

* reducing costs leading to improved profits* and margins.*

DMG Radio Australia

* good increase in profits* despite reduction in market revenue;

* improved revenue share and reduced costs;

* advertising market recently improved, so profit* growth expected for this year.

Net debt and financing

* after significant cash outflow in first half, net debt reduced by £ 178 million in second half;

* small increase in debt over year accounted for by movements in exchange rates;

* net debt ratios comfortably within covenants and £200 million of unused facilities at end of year;

* next maturity of £180 million of facilities not till September 2011;

* continued focus on debt reduction.

Statutory results

* statutory accounts loss of £401 million;

* includes charges for amortisation and impairment of assets (regional media, exhibitions, radio principally) of £443 million;

* also includes other exceptional items (mainly redundancy and reorganisation costs) and a tax credit of £138 million.