Preliminary Audited Consolidated Results

Thursday 13 December 2001

*for the year ended 30th September, 2001 *

Highlights

Summary

The Group made an adjusted profit before tax of £178 million, a fall of 7% compared with the equivalent figure for last year of £192 million, on turnover up 6% to £1.96 billion.

Trading*

Associated Newspapers, the Group's national newspaper division, had another successful year. Its operating profit rose 13%, despite a difficult advertising market in the second half of the year. Circulations continued to increase, outperforming the market despite cover price increases during the year. The Daily Mail's average circulation rose 2.1% to 2,431,000 and that of The Mail on Sunday by 2.7% to 2,359,000. The Evening Standard's average circulation fell 2.5% to 430,000 due to falls earlier in the year, but its September sale reached a 10 year record high.

Advertising revenues have suffered from difficult market conditions in the second half of the financial year. As described in the Group's trading statement in September, display advertising was recovering in July and August, but fell sharply after 11th September. Classified advertising had a strong first half year, but the recruitment category in the Evening Standard weakened appreciably in the second half. In total, advertising revenues for the year were up 1.6% with the Daily Mail showing a 2.8% increase, The Mail on Sunday a 2.5% decrease led by financial advertising, the Evening Standard down less than 1% due to the continuing strength of property advertising, and Metro up an excellent 26%.

Newsprint costs rose due to higher circulations and to an average 12% increase in price from 1st January, 2001. Employment and other costs have been kept under tight control.

Northcliffe Newspapers, the Group's regional newspaper division, increased its operating profit by 5% to £97 million. The average circulation of Northcliffe's daily titles slipped by 4%, although its weekly titles continued to show overall growth.

Recruitment advertising revenues showed strong, albeit slowing, growth throughout the year and, for the year as a whole, were up by an underlying 18% on last year. Even in September 2001, year on year growth was 11%. Among other categories, property was up 5% for the year but motors down 3%. In total, advertising revenue was up 5%.

Profits from contract printing fell as other publishers acquired new printing capacity and brought the printing of their own titles in-house. Losses from internet activities increased due to expenditure on the introduction of a new software platform. The new "This is…." sites are now being rolled out and will lead to reduced costs both in the internet and traditional publishing areas.

Euromoney Institutional Investor has already announced its results, which showed a decrease in operating profit from £32.5 million to £28.1 million. The financial advertising markets were already weak before 11th September, but Euromoney's results were immediately affected by the impact of the terrorist attacks.

Within DMG Broadcasting, Teletext had another good year, although its operating profit was lower than the previous year due to higher marketing and new project costs. Its advertising revenue grew by 6% with strong growth from the overseas holiday market partly offset by lower UK holiday advertising, depressed by the effects of the foot and mouth outbreak. Teletext's new services are making good progress, with satellite television and SMS messaging services being launched during the year.

DMG Radio Australia's regional stations have suffered difficult trading conditions, being affected by the introduction last year of a new sales tax. Nova 969, our new Sydney FM station, was successfully launched in April 2001 and has to date performed well beyond expectations. A new station in Brisbane, in which DMG Radio has a 50% interest, launched in October and our new Melbourne station, Nova 100, launched last week.

dmg world media, the Group's exhibition division, has had a very busy year. It has established itself as the world leader in its three chosen sectors: art and antiques, home interest and the gift trade. In each sector, significant acquisitions were made and the focus is now on their integration and on organic growth. In terms of trading, art and antiques had a difficult year, but the other two sectors performed largely as expected. Our businesses in the Middle East and Australasia have thrived, although the Latin American market has been tough. We were unsuccessful in selling the business media division amid deteriorating trading conditions and this business has now been substantially restructured.

DMG Information again grew strongly. Hobsons continued to expand in Europe with the acquisition of a business in France to add to its growing international network. However, the economic decline has resulted in challenging market conditions for its graduate recruitment business in recent months. Study Group International grew its operating profit by 34% with improving margins, and a particularly strong performance in Australia. The property information publishers, EDR in the United States and EDR Landmark in the UK, were the division's star performers, both increasing operating profits strongly and growing their market shares. Risk Management Solutions grew its revenues by 28%, whilst continuing successfully to develop new business opportunities through internal investment. Sanborn grew rapidly through acquisition and contributed a small operating profit.

Associates

This line shows substantial change from last year. The figures for 2000 included Bristol United Press for four months. This year's figures include contributions from dmg world media's acquisitions of 25% interests in George Little Management and Western Exhibitors, and the losses from a number of partly owned early stage businesses such as Zoom, Fish4 and Whereoware. These all performed broadly as expected.

The contribution consolidated in these figures from GWR Group, in which the Group has a 27% interest, fell from £7.1 million to £5.7 million (before amortisation and exceptional items), as GWR suffered from a weak radio advertising market.

Other Items

The profit on sale of fixed assets represents mainly the net profit on properties sold during the year. Loss on sale of businesses is the book loss on the sale or closure of businesses within Euromoney and within dmg world media's business media division, partly offset by a profit on the disposal in August 2001 of Johansens, the hotel guides publisher.

Net interest is higher than last year due to a higher average level of debt. Other financing charges fell due to lower deferred consideration outstanding and a lack this year of premia on redemption of debt.

Funding

Net debt at the end of the financial year was £875 million, an increase of £90 million over last year. This increase was due to net expenditure of £185 million on acquisitions. During the year, the Group extended the term of two of its debt facilities and now has committed facilities in place for a minimum of four years.

Trading since the year end

The terrorist attacks of 11th September and their impact on the world economy have had a marked effect on various parts of the Group. Associated Newspapers is enjoying very strong circulation figures and has raised another of its cover prices without any impact on circulation. On the other hand, advertising has fallen sharply and is around 16% down year on year for October and November with the Evening Standard's recruitment advertising particularly suffering.

Increased circulation revenue from the effect of cover price increases on the Daily Mail and The Mail on Sunday and their strong circulation, coupled with rigorous control of costs and an expected fall in newsprint prices, make Associated Newspapers confident that they can produce a strong profit performance, despite the extremely difficult advertising market.

Northcliffe is seeing a deteriorating trend for recruitment advertising, which was around 1% up in October, but 4% down in November. However, total advertising revenues were still around 2% up in both months. Euromoney is seeing weak market conditions, particularly in the United States, and has decreased its cost base accordingly. Teletext has seen some softness in holiday advertising, but its important revenue months will come in the new year. Teletext has recently accepted the terms of a further 10 year licence from the Independent Television Commission.

dmg world media's exhibitions are performing quite well. Its two major shows in Dubai, Index and Big5, were held successfully during October, and attendances at North American home shows are encouraging. In radio, Nova in Sydney is performing very well and the regional stations are seeing improving local revenues. Within DMG Information, Study Group's US business is well down on the prior year, but the other businesses of Study Group and of DMGI are performing a little ahead of expectations.

Outlook

Many of the Group's businesses are dealing with difficult market conditions. We have planned for such conditions to persist for much of the next calendar year. However, nearly all the Group's titles and businesses lead their markets. This, combined with the high level of investment which DMGT has always made in its businesses, puts them in a position to produce a good result and, particularly for the Group's national newspaper titles, to benefit from any improvement in economic conditions.

Dividend

The Board is recommending payment on the issued Ordinary and 'A' Ordinary Non-Voting shares of the Company of a final dividend of 5.85 pence per share for the year ended 30th September, 2001 (2000 5.5 pence). This will make a total for the year of 8.6 pence (2000 8.0 pence per share).

Board Changes

At its meeting on 12th December, 2001, the Board appointed Mr Charles Dunstone, chairman and chief executive of the Carphone Warehouse Group plc, a non-executive director of the Company. Shareholders will be asked to confirm the appointment at the Annual General Meeting on 13th February, 2002. Mr Pierre Côté, a non-executive director of the Company since 1994, has decided to stand down from the Board after the Annual General Meeting.

Daily Mail and General Trust plc Group Profit and Loss Account for the year ended 30th September, 2001

Daily Mail and General Trust plc Group Cash Flow Statement for the year ended 30th Septmber, 2001

Daily Mail and General Trust plc Group Balance Sheet as at 30th Septmber, 2001

Daily Mail and General Trust plc Statement of Group Total Recognised Gains and Losses as at 30th Septmber, 2001

*Reconciliation of Movement in shareholders' funds
as at 30th Septmber, 2001*

NOTES

1 Accounting policies

The financial information for the year has been prepared in accordance with the accounting policies adopted in the Group's 2000 Annual Report, as amended, where applicable, for the new accounting standards, FRS 18, Accounting Policies, and FRS 19, Deferred Taxation, which the Group has adopted in its full year accounts to 30th September, 2001. The effect of the change of policy in respect of FRS 19 is to increase the prior year Balance Sheet by £7.7 million, being the restatment of intangible assets of £2.0 million and of deferred taxation of £5.7 million. The prior year tax charge has been increased by £2.8 million.

2 Turnover

Turnover of £15 million from acquisitions arose from acquisitions mainly within education and information publishing.

The amounts from the UK and North America have been re-analysed on a more consistent basis.

3 Operating profit

Operating profit of £0.1 million, before amortisation and impairment of intangible assets, arose from acquisitions. Exceptional operating costs of £10.2 million arose £5.7 million in regional newspapers and related activities and £4.5 million in exhibitions and related activities. The charge for amortisation and impairment of intangible assets comprised amortisation of £47.1 million and impairment of £16.9 million.

The amounts from the UK and North America have been re-analysed on a more consistent basis.

4 Share of operating profits and losses of joint ventures and associates

5 Taxation charge

The tax charge for the year amounted to £37.2 million (2000 £60.8 million as restated). The charge for taxation has been computed at a rate of 30.0% on UK taxable profits. The underlying tax on profits before amortisation and impairment of intangible assets and exceptional items amounted to £54.1 million (2000 £61.6 million as restated) and the resulting rate is 30.5% (2000 32.2% as restated). There was a tax credit of £16.9 million (2000 £0.8 million) relating to exceptional items in the current and prior years.

6 Adjusted earnings per share

Adjusted earnings per share are calculated on profit before amortisation and impairment of intangible assets and exceptional items, but after charging the taxation and minority interests associated with those profits, of £117.3 million (2000 £120.4 million as restated), as set out in note 7 below, and on the weighted average ordinary shares in issue during the period in accordance with FRS 14. The weighted number of shares amounted to 398.3 million (2000 399.3 million). As in previous years, adjusted earnings per share have been disclosed since the Directors consider that this alternative measure gives a more comparable indication of the Group's underlying trading performance.

7 Adjusted profit (before amortisation of intangible assets and exceptional items)

8 Net cash inflow from operating activities

This preliminary announcement was approved by the Board on 12th December, 2001. 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. Statutory accounts for the year ended 1st October, 2000, have been delivered to the Registrar of Companies. The Company's previous auditors, PricewaterhouseCoopers, have reported on the accounts for the year end 1st October, 2000; their report was unqualified and did not contain a statement under section 237 (2). The Company's new auditors Deloitte & Touche have reported on the statutory accounts for the year ended 30th September, 2001 and these will be delivered to the Registrar of Companies in due course.

Highlights of this announcement will be advertised on 13th December, 2001 in the Evening Standard, on the 14th December in the Daily Mail, Metro, Aberdeen Press & Journal, Western Morning News and the Western Daily Press and on the 16th December in The Mail on Sunday. It is expected that the Annual Report and Accounts will be posted to shareholders on 16th January, 2002.

Enquiries: Peter Williams 020 7938 6631
Nicholas Jennings 020 7938 6629

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