Trading Update

Text size:

Wednesday 15 September 2004

This statement updates investors on the Group’s progress in the current year, ahead of its year end on 3rd October, 2004. For the newspaper divisions, the reporting period will include an additional fifty-third week's results, compared to last year. There has been no real change from the position reported at the interim stage in June in that national advertising is strong year on year; regional advertising remains strong; there are signs of improving financial advertising and the radio, exhibitions and information publishing divisions are all doing well.

National Newspapers

The Daily Mail and The Mail on Sunday have again outperformed a declining national newspaper market, by maintaining strong sales. Their six month ABC average circulations to August of 2,410,000 and 2,363,000 respectively were only slightly down on the same period last year. The circulation of the Evening Standard fell by 8% year on year. Metro, with the launch of two new franchises in the East Midlands and Bristol and the West, increased distribution by 8% to an average 947,000, making it the fourth highest circulation Monday to Friday national newspaper.

Associated Newspapers' display advertising revenues have increased by 8.5% for the eleven months to the end of August, compared to the same period last year. The third quarter to June saw particularly good year-on-year growth against weak comparatives. In August and September, the market has remained good, but year-on-year growth will be lower. Each major advertising category has enjoyed year on year increases with the exception of travel which fell slightly. By title, display advertising at Metro is up 25%, the Evening Standard up 13% and there have been increases of around 6% at both the Daily Mail and The Mail on Sunday.

Overall classified advertising revenues to the end of August were up 2.9%, or 8.9% when the revenues of Jobsite, which has exceeded all expectations since its acquisition in March, are included.

Regional Newspapers

Northcliffe Newspapers has continued to perform well. Circulation revenues for the eleven months to August were 2% ahead of the same period last year. ABC figures for January to June 2004 show a decline of 1.9% on morning titles and of 4.2% for evening titles, partly due to the reduction in bulk sales to comply with revised ABC rules. The performance of daily titles continues to be better than the regional newspaper industry average.

Northcliffe's advertising revenues for the eleven months to August were 5.8% ahead of the same period last year, with continued strong performances from recruitment and property. Motors and retail/display revenues remain flat.

Other divisions

At DMG Broadcasting*, Teletext has experienced a better second half year than first, so that total revenues for the full year are expected to be at a similar level to last year. The launch costs and early stage losses of Teletext Holidays TV and of the new Channel 4 services on digital, plus a charge for reorganisation costs following the closure of unprofitable services, will result in operating profit around 15% lower than last year. DMG Radio continues to see strong growth in revenues from its metropolitan stations, up over 30% year on year. The Nova stations in Sydney, Melbourne and Perth are now all number one in their key 18-34 demographic, and Nova 919 in Adelaide was launched on 31 August. The regional stations, whose sale to Macquarie for A$193.5 million completed last Friday, have performed well this year. DMG Radio's operating profit (before amortisation) for the full year will be more than double that of last year.

DMG World Media continues to perform well overall. The home interest sector has remained strong, both in the US and the UK, with another successful Daily Mail Ideal Home Show in London. The gift and art & antiques sectors are trading ahead of last year and the biennial Global Petroleum Show was an outstanding success.

DMG Information's business to business division continues to generate strong revenue growth at both Risk Management Solutions and the property information businesses, with total revenues for the year expected to be up around 20%. Within the careers division, Hobsons' trading continues to improve, but Study Group is seeing the impact of tighter student visa procedures for entry to both the UK and Australia.

  • The comments above on DMG Broadcasting were released previously to the market on 8 September, ahead of a presentation on that division.

Exceptional items

The expansion and replacement of presses at Harmsworth Quays will be completed by the end of 2004 and remains on time and to budget. It will entail the decommissioning of some equipment which will result in an exceptional operating charge this year. This is likely to be offset partly by exceptional gains arising on the sale of listed investments and businesses, including DMG Regional Radio.

Summary

In summary, the Group expects to report a good trading performance for the full year in line with market expectations as a result of a continued improved contribution from its newer businesses and organic growth from all divisions.

Enquiries:
Peter Williams 020-7938-6631
Nicholas Jennings 020-7938-6625
Andrew Honnor, Tulchan Communications, 020 7353 4200