Group audited preliminary results

Wednesday 30 November 2005

for the year ended 2nd October, 2005

Highlights

*(before amortisation and impairment of intangible assets and exceptional items; see Group Profit and Loss Account and reconciliation in Note 7).

These results have been reported under applicable UK accounting standards.

Summary

DMGT is pleased to report another record year with an adjusted profit before tax of £253 million, up 8% on the equivalent figure for last year. This improvement was due mainly to strong growth from DMG Information and from Euromoney Institutional Investor. Both newspaper divisions also performed well, increasing their operating profits* despite the reporting period including one fewer week's trading, compared with the prior year, and despite worsening trading conditions.

Statutory profit before tax for the year was £163 million, up 31% on last year’s figure.

Continued growth by the Group’s newer businesses means that 44%+ of this year’s total operating profit* has been generated by its non-newspaper operations, up from 41% last year.

Review of Northcliffe Newspapers

The Board has been conducting a strategic review of the Group’s regional newspaper division, Northcliffe Newspapers. The Aim Higher initiative was announced to the market on 29th June, 2005 and aimed at improving operational efficiency across the division. The Board has now identified the potential for further restructuring of the business. Given the strategic importance of Northcliffe within the regional newspaper industry, it has also decided to explore whether greater shareholder value can be achieved through a sale of the business. The Board has appointed Greenhill & Co. International LLP to assist in this process.

In the event of a sale, the Board intends to return a substantial portion of the net proceeds to shareholders, after allowing for continuing our current acquisition and investment programme and maintaining our current credit rating.

The Group remains fully committed to the continued growth and development of Associated Newspapers. Its titles are at the heart of DMGT and will continue to be so. There remains considerable potential to improve the performance of Northcliffe and any sale will only take place if substantially more value can be achieved for shareholders. DMGT’s business to business divisions, particularly DMGI and Euromoney, continue to grow strongly as the Group continues its strategy of reducing its dependence on UK newspaper advertising.

+including the digital operations of the newspaper divisions.

Outlook

The new financial year has started as the old one ended. We have referred above to the continued progress of our business to business divisions. The advertising markets experienced by the Group's UK newspaper businesses show no sign of recovery yet. Our national newspapers have continued to increase their market shares, despite fierce competitive circulation activity within the national market.

The Group has implemented cost saving programmes in its newspaper divisions and at Teletext, giving significant protection to the profitability of these businesses, despite falling revenues at present. They are all well placed to take full advantage of any recovery in consumer advertising markets, although the trend in newsprint prices is a concern.

Even in the absence of any recovery, the Group's long-standing strategy of reducing its dependence on traditional UK advertising markets leads the Board to look forward to another year of progress.

National newspapers

Associated Newspapers achieved its highest ever profits increasing operating profit* by £4.8 million or 5% to £95.1 million on revenues down 1% to £877 million, despite one less week’s trading than last year. This result was particularly commendable in a year which saw a significant slowdown in the advertising market in the second half and increased newsprint prices.

The Daily Mail and The Mail on Sunday again increased their share of a declining market. The average circulation of the Evening Standard for the six month ABC period to September was up 12%, including the Lite edition, launched in December 2004. Metro continued to show strong growth in profit and return on sale. Ireland on Sunday's circulation fell 9% as we reined in promotional expenditure. Associated Newspapers' overall circulation revenues for the year were 3% below those of last year (1% on a fifty two week basis).

After adjusting for the extra week last year, Associated's total advertising revenues increased marginally as a result of the difficult market conditions in the second half of the year. Display was down 0.7%, Classified was down 6.2%, but Internet-related revenue was up 74% (including Find a property, which was acquired at the start of the financial year). The Daily Mail was down 3.4%, The Mail on Sunday was down 2%, but Metro was up 13.8%. The Evening Standard was down 7.1% mainly due to the continued weakness of its recruitment advertising. Colour advertising was up 7.5%.

On the production front, the project to facilitate colour on every page of its titles is proceeding well and due for completion in the last quarter of 2007. A site for the new plant in Didcot has been purchased, planning permission obtained and presses ordered.

Associated New Ventures (ANV) made good progress in the year, strengthening its position in jobs and expanding into property. Jobsite continued to show strong growth and traded ahead of expectations. During the year it launched three new niche sites for the pharmaceutical and secretarial markets and for jobs in Scotland. ANV acquired Top Consultant and Office Recruit, underlining this expansion into niche online recruitment sectors. Find a property also showed strong growth, trading ahead of expectations and extending its market position in London and the South East.

An exceptional operating charge of £1.2 million resulted from further cost reductions at the Evening Standard, the major benefits of which will flow through in the next financial year.

Regional newspapers

Northcliffe Newspapers achieved operating profits* of £102 million in 2005, £1 million or 1.5% ahead of last year on revenues broadly unchanged at £520 million, despite one less week's trading and notwithstanding an increasingly challenging advertising market.

In aggregate, Northcliffe’s advertising grew by 2%, declining in the second half of the financial year after an encouraging start due to a slowing economy and a decline in public sector spending. Property had another strong year recording growth of 13%. Retail generated growth of 3%, whereas motors declined by a similar amount. Recruitment was down 4% over the year, but down 16% in the last quarter. Despite these figures, Northcliffe is outperforming its regional newspaper peers.

The downturn in advertising affected most of Northcliffe's publishing centres, although Aberdeen saw its profits* rise by 18% on the back of a buoyant local economy and Bristol was up by 10% driven by cost savings.

UK circulation revenues increased by 1.6%, excluding the impact of the extra week last year. Northcliffe’s titles continued to show gentle declines in circulations but, together with its wider portfolio of products and services, Northcliffe maintains the highest reach of any media in its core market places.

Northcliffe’s internet operation moved into profit for the year. Traffic to its sites is now running at 1.7 million unique users and revenues are growing strongly.

An exceptional operating charge of £10 million has been taken as a result of the Aim Higher programme, launched in June, to reduce Northcliffe's cost base, and improve its operational efficiency. Significant progress has been made already so that Northcliffe is now targeting an annual reduction in its costs of at least £30 million by 2007, £10 million more than envisaged at the outset. A further exceptional cost of £10 million is expected in 2005/6, £3 million higher than originally estimated.

Information publishing

DMG Information had an outstanding year with all companies making good progress and operating profit* growing by 41% or £14.9 million to £51.6 million on turnover up 15% to £295 million.

Its business to business companies were once again the main driver of growth, with underlying revenues (excluding the impact of acquisitions) increasing by 11% and underlying operating profits* by 38%. Operating profit* margin improved to 29%.

Risk Management Solutions continued its strong growth trajectory. The increasing appetite of the insurance sector for more sophisticated quantification of risk exposure, together with the trend for closer integration of peril modelling into core underwriting processes, drove demand for RMS products and services.

Environmental Data Resources enjoyed an excellent year in a buoyant U.S. commercial property market. In the U.K., Landmark grew revenues through increasing market penetration for environmental reports despite a depressed home property market. Strong growth was achieved in the commercial property market from sales of both mapping and environmental reports.

Trepp continued its excellent growth trend in a buoyant commercial mortgage-backed securities market and Lewtan’s performance exceeded expectations at the time of its acquisition a year ago.

Within the careers division, the main driver of the growth at Hobsons was the U.S. business, whilst trading remained more difficult in the U.K. and continental Europe. Hobsons Australia had an outstanding year. Study Group performed satisfactorily: the UK had another solid year, the USA continued its encouraging recovery trend, whilst student volumes softened into Australia and New Zealand in line with the market there, a trend which was reversing by the year end.

Financial publishing

Euromoney Institutional Investor increased its operating profit* by £8.4 million or 27% to £39.0 million on turnover up 12% to £196 million. These results reflect the key elements of its strategy for growing profit before tax* towards a target of £50 million by 2008: driving top line growth from both new and existing products; reducing the dependence on advertising by building more robust subscription and repeat revenues; a focus on improving the operating margin; and acquisitions to strengthen the company’s market position in key areas.

With the exception of Adhesion (which did not hold its biennial wine exhibition in 2005), all of Euromoney's event businesses increased profits* through a combination of new products and a continued focus on building high margin, market leading events for their various sectors. Information Management Network was particularly successful in both growing its market-leading securitisation conferences as well as launching new events, and its performance since acquisition has significantly exceeded expectations. The events and training businesses now contribute more than 53% of operating profits* compared to 37% three years ago.

Exhibitions

DMG World Media's operating profit* fell by £1.2 million (7%) to £24.6 million on turnover up 5% to £152 million. 2005 was a low year in its cycle of events with large non-annual events such as the Global Petroleum Show not taking place and no Index Shows reporting. Underlying operating profit* (taking account of this cycle and the effect of foreign exchange) grew by 19% and revenue by 11%.

DMG World Media saw strong performances from its Middle East business, its Surf sector, its Business Media International business and from Ad:tech, acquired in January, which has already outperformed initial revenue projections. Less strong was the consumer home show division, with attendances down around the world, although stand sales held up well.

Much of the division's growth was underpinned by a number of strategic acquisitions and new launches. Once again, it recorded some of its largest ever events, including Big 5 in Dubai, Chemspec in Germany, Surf Expo in Orlando and the Oil Sands Tradeshow held in Canada.

Broadcasting

Operating profit* of DMG Broadcasting fell by £17.6 million to £1.8 million on turnover down 21% to £97 million.

Teletext's revenues fell by 14% as its traditional travel advertisers faced erratic market activity and greater competition, particularly from online retailers, against a background of structural decline in analogue television viewing. As a consequence, adjusted operating profit* fell by £13.4 million and a restructuring of the provision of these services was undertaken which gave rise to an exceptional operating charge of £2.3 million.

Teletext’s new digital services more than doubled audience and revenue in the year. The ‘Teletext on itv’ service was launched in June on Satellite and Freeview. The audience has grown rapidly and the digital services now account for over 25% of Teletext’s total television audience. Teletextholidays.co.uk has enhanced its position as one of the most popular travel websites in the UK with around 3 million monthly users. Its revenues grew by over 70% in the year.

DMG Radio Australia outperformed the market once again, recording revenue growth from continuing operations of 39% and operating profit* growth (excluding new station costs) of over 95%. As expected, its operating profit* fell by £4.2 million to a small loss, following the sale of its regional stations in September 2004 and the launch of new stations during the current year.

In April, the launch of Nova 106.9 in Brisbane completed the national Nova network and, in June, Nova became the Number One station in its targeted Under 40 demographic in every metropolitan market. The second of DMG Radio’s metropolitan FM brands was born in August when Vega 95.3 Sydney and Vega 91.5 Melbourne were launched. Vega complements Nova, targeting people aged 40-60 and airing a combination of talk and music from the past 40 years.

Joint ventures and associates

The Group’s share of net adjusted operating profits* of its joint ventures and associates fell by £1.8 million. The fall was due solely to the change in status of the Group's UK radio investment in May. Whereas DMGT had a 29.9% stake in GWR Group plc and treated it as an associate, the merger with Capital Radio plc reduced the stake to 14.3%. Since then, DMGT has taken in dividends received and not its share of GCap Media's profits. Nearly all of the Group's other interests including GLM, the North American gift exhibition organiser in which the Group increased its stake from 25% to 40% in January, showed improved results.

Other Profit and Loss Items

Income from fixed asset investments fell by £0.8 million to £2.6 million due mainly to a lower distribution from the Press Association, offset by a first dividend from GCap Media.

The fall in net interest payable of £8.2 million was due mainly to swap premia on overseas financing arrangements and to lower average net debt. Interest cover, calculated as the ratio of adjusted profits* before interest and depreciation to net interest payable, rose above seven times and the ratio of net debt to these profits fell slightly to 2.0.

The charge for amortisation of intangible assets fell by £3.5 million to £80.9 million and an impairment charge of £6.4 million was made.

Profits on sale of fixed assets arose mainly from the sale of shares in Reuters Group plc. Profits on disposal of businesses arose mainly from the sale of the Group’s stake in California Market Center, and of Hot 91, a radio station operating on the Sunshine Coast of Australia. These profits were offset by losses on the sale of DMG Broadcasting's Performance channel, Euromoney's Business Traveller and one of dmg world media's French antique shows.

After allowing for the effect of exceptional and other items that are not expected to recur, the underlying tax rate fell to 24.1% from 26.6% due to a higher proportion of profits coming from the United States, where the Group has carried forward losses.

Net debt

Net debt at the end of the financial year was £766 million, a decrease of £13 million. The fall in debt was due to strong trading cash flows, offset by the net cost of acquisitions of £111 million and capital expenditure of £73 million. Gross capital expenditure amounted to £95 million, lower than last year's level reflecting the completion of the 2001-4 press expansion programme in November 2004.

International financial reporting standards ('IFRS')

DMGT is reporting under UK accounting standards for the last time. From its financial year to 1st October, 2006, the Group will be required to report in accordance with International Financial Reporting Standards (IFRS).

A project has been undertaken to restate DMGT's numbers for the year ended 2nd October, 2005 as comparative information for the IFRS-compliant 2006 Accounts. A reconciliation of the adjustments required to convert these 2005 figures from UK accounting standards is set out in an appendix at the bottom of the page. These adjustments, which are still subject to audit, are mainly in respect of employment benefits (pensions), share-based payments, goodwill, dividends and deferred tax. DMGT will be taking advantage of all of the transitional arrangements available under IFRS 1, First-time adoption of IFRS, and, in particular, will not be adopting IAS 39, Financial instruments: recognition and measurement, early; this will be applied from 3rd October, 2005. Overall we expect the impact of IFRS will be to reduce our 2005 adjusted profit* before tax by £17.2 million (8%) to £236.2 million.

Net assets in DMGT's opening balance sheet at 4th October, 2004 are expected to be reduced by £223 million mainly due to the impact of IAS 19, Employee Benefits, principally pensions. There will be no impact on cash flows, although the presentation of the Cash Flow Statement will change; nor should there be any impact on historic net debt.

Dividend

The Board is recommending payment on the issued Ordinary and 'A' Ordinary Non-Voting shares of the Company of a final dividend of 8.25 pence per share for the year ended 2nd October, 2005 (2004 7.55 pence). This will make a total for the year of 12.0 pence (2004 11.0 pence per share). For transferees to receive this dividend, which will be paid on 10th February 2006, transfers must be lodged with the Registrar by 9th December 2005.

The Viscount Rothermere
Chairman

*References to operating profit in the narrative above are to adjusted operating profit (before operating exceptional items and amortisation and impairment of intangible assets); see notes 3 and 4.

Daily Mail and General Trust plc Group Profit and Loss Account for the year ended 2nd October, 2005

Daily Mail and General Trust plc Group Cash Flow Statement for the year ended 2nd October, 2005

Daily Mail and General Trust plc Group Balance Sheet as at 2nd October, 2005

Approved by the Board of Directors on 29th November, 2005.

Daily Mail and General Trust plc. Statement of Group Total Recognised Gains and Losses for the year ended 2nd October, 2005

Reconciliation of Movement in Group Equity Shareholders’ Funds

NOTES

1. Accounting policies
The financial information for the year has been prepared under UK financial reporting standards in accordance with the accounting policies adopted in the Group’s 2004 Annual Report.

2. Turnover

Turnover of regional newspapers is stated after deducting intra-Group turnover of £17.1 million (2004 £17.1 million).

Turnover of broadcasting comprised £63.2 million (2004 £74.9 million) from television and £33.9 million (2004 £47.5 million) from radio.

Turnover of business to business information and careers comprised £173.7 million (2004 £143.3 million) from business to business information and £120.9 million (2004 £113.8 million) from careers.

3. Operating profit

Operating profits of broadcasting comprised £2.2 million (2004 £15.6 million) from television and a loss of £0.4 million (2004 £3.8 million profit) from radio.

Operating profits of business to business information and careers comprised £50.3 million (2004 £34.8 million) from business to business information and £5.2 million (2004 £4.9 million) from careers, offset by unallocated central costs of £3.9 million (2004 £3.0 million).

Exceptional operating costs comprised reorganisation costs of £13.9 million (2004 £Nil) including the closure of a press and the write off of press equipment of £4.4 million (2004 £17.8 million) as follows:

The impairment charge arose as follows:

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

5. Taxation charge
The tax charge for the year amounted to £53.0 million (2004 £57.2 million) which included a charge of £4.8 million (2004 £2.1 million) in respect of overseas tax. 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, exceptional items and significant non-recurring or prior year items, amounted to £61.1 million (2004 £62.2 million), and the resulting rate is 24.1% (2004 26.6%). There was a tax credit of £4.2 million (2004 £3.4 million) relating to exceptional items.

6. Adjusted earnings per share
Adjusted earnings per share are calculated on profit before amortisation and impairment of intangible assets and exceptional items, after charging the taxation and minority interests associated with those profits, of £182.9 million (2004 £165.3 million), as set out in note 7 below, and on the weighted average number of ordinary shares in issue during the period in accordance with FRS 14. The weighted average number of shares amounted to 396.1 million (2004 397.5 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 and impairment of intangible assets and exceptional items)

8. Net cash inflow from operating activities

9. This preliminary announcement was approved by the Board on 29th November, 2005. The financial information set out above does not constitute the statutory accounts of the Company within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 3rd October, 2004, have been delivered to the Registrar of Companies. The Company’s auditors have reported on the accounts for the year end 3rd October, 2004; their report was unqualified and did not contain a statement under section 237 (2) or (3). The Company’s auditors have reported on the statutory accounts for the year ended 2nd October, 2005 and these will be delivered to the Registrar of Companies in due course. Their report was unqualified and did not contain a statement under section 237 (2) or (3).

Highlights of this announcement will be advertised on 30th November, 2005 in the Evening Standard, on the 1st December in the Daily Mail, Metro, Aberdeen Press & Journal, Western Morning News and the Western Daily Press and on the 3rd December in The Mail on Sunday and Ireland on Sunday. It is expected that the Annual Report and Accounts will be posted to shareholders on or around 11th January, 2006.

A webcast of the Preliminary Results presentation to City analysts will be available for viewing from 9.30 am on 30th November, 2005 at http://www.dmgt.co.uk/investorrelations/reportsandpresentations/presentations/

APPENDIX

International financial reporting standards ('IFRS')

Set out below are unaudited reconciliations of the Group’s 2005 figures from UK GAAP to IFRS:

a) Segmental analysis – Reconciliation of Adjusted Group Operating profit from UK GAAP to IFRS (unaudited)

*Includes unallocated retirement benefit costs under IAS 19, Employment Benefits.

b) Reconciliation of Profit for the year under UK GAAP to IFRS (unaudited)

c) Reconciliation of Net Assets under UK GAAP to IFRS (unaudited)

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