Half Yearly Report
- back to Home
- back to Media Centre
- Group News Releases
Thursday 21 May 2009
Half Yearly Financial Report for the six months ended 29th March, 2009
Financial Highlights
| Adjusted results* | Statutory results | ||||
|---|---|---|---|---|---|
| 2009 | 2008 | Change | 2009 | 2008 | |
| Revenue | £1,085m | £1,168m | -7% | £1,085m | £1,168m |
| Operating profit/(loss) | £116m | £166m | -30% | £(152)m | £88m |
| Profit/(loss) before tax | £77m | £144m | -47% | £(239)m | £23m |
| Earnings/(loss) per share | 14.2p | 27.8p | -49% | (46.0)p | 15.3p |
| Dividend per share | 4.80p | 4.80p | |||
| *(before amortisation and impairment of intangible assets and exceptional items; see Consolidated Income Statement and reconciliation in Note 11) | |||||
B2B BUSINESSES GROWING; TOUGH CONDITIONS FOR B2C
- Continued growth from business to business operations, boosted by currency gains.
- UK consumer media profits* reduced by unprecedented advertising conditions, but improved in April and May.
- Revenue and cost initiatives will now improve profitability this year by £150 million.
- Statutory results affected by non-cash impairment charges of £188 million.
- Dividend maintained.
Martin Morgan, Chief Executive, said:
"Our B2B operations have been resilient in the face of the economic crisis, achieving growth, excluding the property businesses, boosted by currency gains in the period. The overall first half result has been badly affected by the impact of the recession on our consumer media advertising revenues. However, the decisive action taken to defend profitability, along with the continued
management of our cost base, will help to offset the effect of continued weak trading conditions in the second half of the year.
Our strategy of creating a diversified international portfolio of market-leading businesses in both business and consumer markets is proving to be effective in the current environment and leaves us well positioned to deliver long-term growth."
Enquiries
| Peter Williams | Tel: 020 7938 6631 |
| Nicholas Jennings | Tel: 020 7938 6625 |
| Andrew Honnor, Tulchan Communications | Tel: 020 7353 4200 |
Contents
- Interim Management Report
- Condensed Consolidated Income Statement
- Condensed Consolidated Statement of Recognised Income and Expenses
- Condensed Consolidated Statement of Changes in Equity
- Condensed Consolidated Balance Sheet
- Condensed Consolidated Cash Flow Statement
- Notes to the Condensed Consolidated Financial Statements
- Independent review report by the external auditors
- Shareholder Information
Interim Management Report
This interim management report focuses on the adjusted numbers to give a more comparable indication of the Group's underlying business performance. A discussion of other items included in the statutory results is set out after the divisional performance review. The adjusted results are summarised below:
| Adjusted results* | 2009 £m | 2008 £m | Change |
|---|---|---|---|
| Revenue | 1,085 | 1,168 | -7% |
| Operating profit | 116 | 166 | -30% |
| Income from joint ventures and associates | (1) | - | N/A |
| Net finance costs | (38) | (22) | - 73% |
| Profit before tax | 77 | 144 | -47% |
| Tax charge | (15) | (28) | 45% |
| Minority interest | (8) | (10) | -17% |
| Group profit | 54 | 106 | - 49% |
| Adjusted earnings per share | 14.2p | 27.8p | -49% |
*Adjusted results are stated before amortisation and impairment of intangible assets and exceptional items. For a reconciliation of Group profit to adjusted Group profit, see Note 11.
#References below to underlying revenue or profit* are to revenue or profit* on a like for like basis, adjusted for acquisitions and disposals made in the current and prior year and at constant exchange rates.
Summary
Group revenue for the six months to 29th March, 2009 was £1,085 million, compared with £1,168 million for the prior year, a fall of 7%. Operating profit * was 30% lower at £116 million. Adjusted profit* before tax was £77 million, down 47% on the equivalent figure for the previous half year. The substantial falls from the first half last year were due mainly to the worsening trading conditions, but also partly to a change in the timing of profits*.
The Group's B2B operations increased their overall profit* by 4%, benefiting from the stronger dollar with the average sterling: US dollar exchange rate reduced by 25% in the period. The underlying# result was a fall of 3%. The profits* of A&N Media were significantly lower due to the unprecedented trading conditions. As a consequence, 79% of this half year's operating profit* was
generated from B2B, up from 53% last year.
The statutory result was a loss before tax for the period of £239 million, after charging £232 million of amortisation charges and impairment losses, and £85 million of exceptional items.
Outlook
We expect to achieve growth overall in the rest of the year from our B2B operations, driven by Risk Management Solutions and the non-property businesses within DMG Information. Whilst revenue growth is slowing in some areas, the strength of our market leading products, coupled with cost containment and operational efficiencies, should provide continued resilience.
Within our UK local media operations, revenues continue to be stable which is encouraging, when combined with increasing cost reductions. Within our national consumer media operations, the positive impact will be felt of the cost reductions made to date and of the sale of the Evening Standard at the end of February. As a consequence, DMGT's operating profits* will be weighted more than last year towards the second half of the year.
Given the difficult trading environment, our focus remains on delivering revenue and cost initiatives which will now be around £150 million. Although there remains little visibility on UK advertising revenue trends, we currently expect the full year result* to be in line with the market consensus.
Divisional Review
Business to business (B2B)
Risk Management Solutions
| 2009 £m | 2008 £m | Movement | |
|---|---|---|---|
| Revenue | 69 | 45 | +51% |
| Operating profit* | 20 | 13 | +58% |
| Operating margin* | 29% | 28% |
Risk Management Solutions (RMS) has been established as a separate division. It continued its growth with an increase in underlying# revenue of 11%. Underlying # operating profit* was up 18%. It benefited significantly from the stronger dollar in which currency all revenues are billed, whilst a portion of its costs are in sterling.
RMS continues to be the world's leading provider of solutions to assist the insurance sector in quantifying and managing catastrophe and other risks. It achieved solid bookings in its core modelling business, offset by some specific licence reductions, including one resulting from a major industry merger. Growth in its earlier stage capital markets business was muted, as relatively less robust capital markets led to fewer new catastrophe bonds issued than had been expected during the period.
In response to a slower growth rate in revenues, RMS is taking actions to contain cost increases, including adopting a slower pace of new hiring with respect to its business initiatives. Overall, the company is continuing to invest in expanding its product range and geographic coverage and expects to achieve underlying# growth in revenue and profits* for the year, albeit at a lower rate than in the first half year.
DMG Information
| 2009 £m | 2008 £m | Movement | |
|---|---|---|---|
| Revenue | 107 | 105 | +2% |
| Operating profit* | 11 | 19 | -41% |
| Operating margin* | 10% | 18% |
DMG Information achieved growth in its non-Property businesses, offset by the impact of weak property markets and revenue recognition timing in Education.
In aggregate, the underlying # operating profits* of DMGI (which now exclude RMS) fell by £8 million (-43%) with underlying # revenues down 10%, driven by the historically low volume of transactions in the real estate markets in the UK and US.
Property Information
As a result of continuing depressed activity levels in the US and UK property markets, underlying # revenues were down £12 million to £42 million (-23%). As a result, underlying # operating profits* were down £6.7 million to £6.7 million (-50%).
Despite the tough markets, our Property Information businesses remain significantly profitable, have all retained or improved their market positions and are well positioned for strong growth when transaction volumes return. These businesses have also taken appropriate action further to improve their cost bases. The majority of this impact will be seen in the second half of the
year and beyond.
Other markets
Underlying# revenues from DMGI's non-property related companies, operating in the Education, Energy, Financial and Geospatial markets, were up 1% to £65 million. Primarily due to revenue recognition timing in Education (Hobsons), underlying profits* were down £2 million to £7 million (-28%).
Hobsons continued to grow revenues strongly. It made a first half loss* due to the timing of recognising revenue, but the quantum of this loss was higher than in the prior year due to the impact of last year's disposal of the European graduate recruitment business. Full year profits* are expected to be higher than last year.
In the Financial market, Trepp continued to achieve strong bookings, although the impact on revenue was partially offset by higher than usual cancellation rates. Lewtan increased its operating profits* through cost reductions.
Genscape, serving the energy information market, increased its revenues and underlying# profits and continues to expand its product range.
Over the full year, we anticipate underlying# revenues to be slightly below last year due to lower revenues from the property division. Overall DMGI's portfolio, operating in attractive markets, continues to perform well and the rate of investment in new products remains encouraging. It is well positioned for near term resilience and long-term growth.
Euromoney Institutional Investor
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Revenue | 161 | 155 | +4% |
| Operating profit* | 36 | 34 | +9% |
| Operating margin* | 23% | 22% |
Euromoney announced its first half results last week which reflect the continued success of its strategy to build a more resilient and better focused global information business. Operating profit* rose by 3% before deducting a charge for its capital appreciation plan, the CAP, £2 million lower than in the prior period.
After a 15% increase in the first quarter, Euromoney's revenues in the second quarter fell by 1%, compared to the same period a year ago, as clients made significant cuts in spend on marketing, training and travel to events, and revenues suffered the full impact of the cuts in headcount across financial markets in 2008. Underlying# revenues for the period fell by 10%.
Subscription revenues, which now account for 47% of total revenues, increased by 35%, an underlying# increase of 9%. This reflects the heavy investment in subscription-based electronic information services. A key driver has been the excellent performance since acquisition of the Metal Bulletin group, including BCA. Revenues from all other streams fell in underlying# terms.
Emerging markets, which account for nearly half of Euromoney's revenues, have also suffered from the global credit crisis with falling demand from their traditional export markets and declining asset values. However, the sharp, cyclical downturn driven by excess leverage and complex financial products that has characterised the credit problems in North America and Europe has not hurt emerging economies to the same degree. Most emerging markets have held up reasonably well.
In response to the exceptionally tough trading conditions, Euromoney has undertaken a restructuring of a number of its businesses, with a view to reducing costs and increasing operating efficiencies.
Forward revenue visibility for the second half is limited, as usual at this time. Euromoney expects revenue trends to deteriorate before they improve, and the focus on reducing costs will continue through the second half.
DMG World Media
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Revenue | 102 | 113 | -10% |
| Operating profit* | 25 | 23 | +6% |
| Operating margin* | 24% | 21% |
DMG World Media's underlying# operating profit* rose by 10% with underlying revenue flat, when adjusted for timing differences and non-annual events. The division has experienced weaker bookings especially for shows in the retail and consumer sectors. As a consequence, it has implemented a number of cost saving initiatives and continues to divest its non-core business lines.
Business to Business (`B2B')
B2B's operating profit* rose by 2% to £15 million on revenues up 10% to £48 million, an underlying# operating profit and revenue increase of 23% and 15%, respectively, when adjusted for timing differences and non-annual events. Growth came mainly in the first quarter from the Dubai exhibitions, primarily Big 5 and Index, and the biennial energy event, ADIPEC.
Business to Retail (`B2R')
B2R's operating profit* fell by 12% to £8 million on revenues down 16% to £23 million. When adjusted for timing and non-annual events, the underlying# revenue and operating profit decrease was 9% and 8%, respectively, primarily driven by declines in the US West Coast gift shows. B2R's premier show, the New York International Gift Fair, was held in January and generated revenue and profit* increases from the prior year show.
Business to Consumer (`B2C')
Following the sale of the North American home shows in the second half of last year and sale of its UK-based antiques publishing business early in the current year, B2C recorded an operating loss* of £1 million, comparable to the prior year, despite revenues declining by £5 million to £16 million. The Ideal Home Show, which was held partly in March, experienced lower revenues, and the UK consumer publishing business experienced sharp declines in its revenues prior to its sale in March.
Consumer media
Associated Newspapers
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Revenue | 455 | 508 | -10% |
| Operating profit* | 18 | 44 | -59% |
| Operating margin* | 4% | 9% |
Associated's results benefited from stable circulation revenues and significant cost reductions, although they were unable wholly to offset a fall in advertising revenues. These were down by 16% on an underlying# basis (quarter 1 - down 8%, quarter 2- down 23%), but April and May have seen an improving trend to be down only 15% to date.
Newspaper operations
Underlying# circulation revenues, which make up nearly half of Associated's print revenues, grew by 0.6% to £181 million. The increase was due to the benefit of cover price rises, which offset lower circulations. While circulation of the Daily Mail fell by 5.8% in the period and that of The Mail on Sunday by 5.6%, broadly in line with the market, much of the fall can be attributed to promotional activity being directed away from CD and DVD giveaways towards a sustained direct marketing campaign to recruit more long term loyal purchasers. This is proving successful, but is a gradual process.
Underlying# advertising revenues were down 15% to £184 million. Display advertising was down by 16% to £150 million. By sector, all categories were lower, but with retail, our largest category, the best performer, falling by just by 7%, boosted by strong advertising by the supermarkets. The Daily Mail's readership remains extremely attractive particularly to retail advertisers, as it has in previous downturns. Classified advertising, which is not dependent on property and jobs, fell by only 13% to £29 million. The last twelve months have seen significant investment for the first time into the titles' companion websites. Revenues from the titles' companion websites, principally Mail Online, increased by 15% to nearly £5 million. London Lite made further progress, increasing its display revenues by 11%, and strengthening its readership figures.
The results include losses* made by the Evening Standard for the first five months of the year, prior to its sale.
Associated Northcliffe Digital
AND's revenues from its core classified portals in jobs (Jobsite), property (Findaproperty and Primelocation) and motors (Motors.co.uk) fell by 14% to £40 million. An operating loss* was made of £1.6 million, a reduction of £3.8 million compared to the first half last year partly due to lower revenues but mainly to the cost of Jobsite's marketing campaign. This campaign has more than doubled the percentage of business users using Jobsite exclusively for their online recruitment and has significantly improved brand awareness.
Teletext's operating loss* was unchanged at £3 million. Its revenues rose by 4% to £18 million due to the extension of its ThisisTravel brand in April 2008 to become a holiday retail operation. Underlying# revenues fell by 17%. Seasonal factors mean that we expect the overall business to move towards profitability* in the second half of the year.
Northcliffe Media
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Revenue | 166 | 216 | -23% |
| Operating profit* | 6 | 40 | -85% |
| Operating margin* | 4% | 18% |
UK
UK operating profits* fell by £33.0 million 91% to £3.2 million. Revenues were down 27% to £142 million, with advertising revenues down by 31% to £103 million (quarter one down 27%, quarter two-down 36%).
By category, notices were up 2%, but all other major categories fell with retail down 24%, recruitment down 47%, property down 54% and motors down by 23%. UK digital revenues for the period were in line with the same period last year with recruitment revenues down 33%, but other categories up 66%. Unique visitor levels to Northcliffe's network of "thisis" websites in March 2009 totalled 4.2 million and were 42% higher than the corresponding period last year.
UK circulation revenues fell by 6% to £35 million. In the July to December 2008 ABC period, our weekly titles outperformed the industry whereas daily titles were slightly below the industry average.
Operating costs were 11% lower than in the previous period (quarter one down 10%, quarter two costs down 12%), despite the impact of the higher average newsprint prices, with lower printing, staff, distribution and promotional costs in particular. The new regional operating structure has been implemented and headcount was reduced by 500 (11%) in the period.
April trading has seen advertising revenues remaining at 36% below last year. Recruitment revenues were down 63% (affected by the later falling of Easter this year). Other categories were at or above previous months, although property was still down 54% and retail down 11% year on year. In total, advertising revenues in the last 15 weeks have remained steady with the exception of recruitment. In addition, operating costs* are now running more than 20% down on last year with further significant reductions occurring since the half year.
Central Europe
The international division's operating profits* fell by £0.8 million (21%) to £ 2.8 million on revenues up 5% to £23 million. Underlying revenues# fell by 3%. After a steady start to the financial year, activity levels fell sharply in the second quarter of the period with underlying print advertising revenues down 26% and digital advertising revenues flat. Underlying# headcount has been reduced by 90 (10%) during the period.
A&N Media
Good progress has been made in achieving the revenue benefits and cost reductions announced in November, designed to protect the profitability of A&N Media. We will exceed the plans announced then.
From 1st January 2009, newsprint prices rose by around 20%, but the effect is being wholly offset by measures taken, including lower grammage paper and strict pagination control. Headcount (excluding the Evening Standard) fell by 750 (7%) in the period, including the closure of two regional printing plants.
DMG Radio Australia
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Revenue | 26 | 26 | 0 % |
| Operating profit* | 2 | - | N/A |
| Operating margin* | 6% | 0% |
DMG Radio Australia increased its profits* and grew its underlying# revenue by 1% despite a 4% decline in the radio advertising market in Australia. In the final listener survey for the half year, the Nova network increased its share in the key 18-39 demographic across Australia. Vega Sydney again increased its market share.
Significant cost measures have been taken to mitigate the impact of anticipated lower revenues, arising from the adverse market conditions, which are aimed at driving profit* growth further in the full year.
Other income statement items
Net finance costs
| 2009 £m | 2008 £m | Movement % | |
|---|---|---|---|
| Net interest payable and similar charges | (39) | (39) | 0% |
| Swap premia income | 1 | 16 | N/A |
| Dividend income | - | 1 | N/A |
| Total | (38) | (22) | -73% |
Net interest payable and similar charges (excluding swap premia but including deemed finance charges and interest receivable) was unchanged at £39 million with the higher value of interest on fixed US$ liabilities and the rise in the sterling value of net debt offset by lower interest rates on floating rate debt.
Income from tax equalisation swap premia fell by £15 million. The tax equalisation swap premia structure includes foreign exchange hedges which generate foreign exchange movements with an equal and opposite movement in the Group's tax position. This resulted in a £27 million exceptional charge to net interest and an equal credit to taxation (2008 £63 million).
- Other items The Group's share of the results* of its joint ventures and associates fell by £1.2 million to a loss of £0.8 million.
The Group has charged £49 million as exceptional operating costs. This charge comprised reorganisation costs principally within Associated and Northcliffe totalling £38 million and of £11 million within Euromoney.
The charge for amortisation of intangible assets fell by £1 million to £44 million. The Group has also made an impairment charge of £179 million, principally relating to assets acquired in recent years by Northcliffe, DMG World Media, Euromoney and DMG Radio.
The Group recorded other net losses of £6 million, compared to net gains of £15 million in the prior period. This comprised write offs of investments, offset partly by exceptional profits on the sale of consumer exhibition businesses, principally the Antiques Trade Gazette.
- Taxation The adjusted tax charge of £15 million (2008 £63 million) is stated after adjusting for the effect of exceptional items. The adjusted tax rate for the half year fell to 20 from 24 in the 2008 full year. The continued low rate reflects tax reductions from tax-efficient financing and tax deductible amortisation in the US that are expected to recur.
There were net exceptional credits of £76 million, being the deferred tax credits on goodwill and intangible assets, the write back of provisions arising from the agreement of certain prior year open issues with tax authorities, including the £27 million credit on exchange differences on intra-Group financing.
Pensions
The deficit on the Group's defined benefit pension schemes rose from £41 million at the beginning of the year to £220 million at the half year (calculated in accordance with IAS 19). This change is primarily due to a fall in the market value of the schemes' assets, partly offset by a reduction in the value attributed to its liabilities because of higher bond yields. The funding agreement concluded with the trustees remains in place to the end of December 2010.
Net debt and cash flow
Net debt at the end of the period was £1,227 million, an increase of £212 million since the year end, £128 million of which arose from the depreciation of sterling against the US dollar. Total acquisition spend was £42 million, capital expenditure £31 million, taxation (including related tax equalisation payments) £50 million, interest £13 million and dividends totalled £44 million. These were offset partly by operating cash flows of £89 million and disposals of £7 million.
Acquisitions were largely pre-contracted earn-out payments and other deferred consideration. Disposals were of properties and businesses, principally the sale of the Antiques Trade Gazette in October 2008.
The Group's ratio of net debt to EBITDA was 3.71 on a rolling 12 month basis and, after appropriate adjustments, is comfortably within the requirements of the Group's bank covenants.
Net debt is usually at its peak around the half year due to the timing of dividend and other annual payments, and this is accentuated this year by the timing of trading profits and the costs of restructuring. A steady reduction in net debt is expected in the second half of the year, and is in line with expectations. However, with increased profit volatility, the Group is looking to reduce debt in both absolute and relative terms. We expect no difficulties in the foreseeable future in meeting our covenants and have adequate committed facilities until at least 2011.
Other financing
The Group utilised 6,455,651 `A' Ordinary Non-Voting shares out of treasury in order to meet obligations to provide shares under various incentive plans valued at £16 million. Following these transfers, DMGT's weighted average number of shares in issue for the full year is currently estimated at 378.3 million (2008 377.6 million).
DMGT took its share of the final dividend from Euromoney in the form of a scrip. This enabled it to mitigate the dilutive effect of the vesting of the second tranche of Euromoney's CAP, thereby maintaining its equity interest at around 66%. It is the Board's current intention also to take Euromoney's forthcoming interim dividend in the form of a scrip.
Dividend
The Board has declared an interim dividend of 4.80 pence per Ordinary and `A' Ordinary Non-Voting share (2008 4.80 pence) which will be paid on 3rd July, 2009 to shareholders on the register at the close of business on 5th June, 2009.
Board Changes
Marius Gray has decided to stand down as a Director of the Company on 31st July, 2009. He was appointed to the Board of Associated Newspapers in 1978 and to the Company in 1985 and has served on various Committees, including as Chairman of the Audit Committee since 1989. Over the last 31 years, he has made a unique contribution to the Group. His advice will be greatly missed.
At its meeting yesterday, the Board appointed David Nelson, aged 46, senior partner at Dixon Wilson, a Director with effect from 1st July, 2009. In addition to his current role on the Finance Committee, he will serve on the Audit and Remuneration Committees. He is an advisor to the Chairman and is not regarded by the Board as independent under the Combined Code. The Board also appointed David Verey, an independent non-executive Director since 2004, to succeed Marius Gray as Chairman of the Audit Committee and on the Risk Committee with effect from 31st July, 2009.
Principal risks and uncertainties
The principal risks and uncertainties that affect the Group on an ongoing basis are described in our 2008 Annual Report at www.dmgt.co.uk. These are still considered to be the most relevant risks and uncertainties at this time. The only risk that is expected to have a specific impact on the Group's performance over the remaining six months of the financial year is "Exposure to changes in the global economy and customer spending patterns." The impact of this risk could cause actual results to differ from expected and historical results.
Where a risk that was disclosed in the Annual Report is unchanged, and is not expected to have a specific impact in the remaining period, a summary of the disclosure given in the Annual Report has been included.
Risks specific to the remaining six month period of the year
Exposure to changes in the global economy and customer spending patterns
The current economic climate, especially in the UK, US and Central and Eastern European economies, continues to represent a significant risk to the Group. A significant (although decreasing) proportion of our revenue is derived from advertising, which has reduced as a result of the downturn in the global economy. A similar effect has been seen in our businesses that rely on non-advertising revenues in the financial and property markets. Despite the difficult trading conditions in these businesses, our long term strategy of diversifying the Group's portfolio, especially into business information and subscription revenue streams, and our commitment to invest in our core brands, puts us in a strong position both now and when growth returns.
Impact of a major outbreak of disease
The recent outbreak of a new strain of H1N1 influenza (Swine Flu) has led the World Health Organisation to increase the pandemic threat level to 5, indicating an imminent pandemic. Whilst it is still not clear how serious any pandemic might be, it could affect the Group's ability to produce and deliver its products, reduce the demand for them, or affect our cost base. Some of our events businesses may be more sensitive to a pandemic as the success of certain events can depend on confidence in global travel.
Business continuity plans including specific pandemic planning measures have been implemented across the Group. We have called upon specific pandemic modelling expertise within RMS to give us the best available insight into the likely spread of this new strain and issued regular communications to senior divisional management and staff members. In addition we were already in the process of implementing a pandemic influenza management scheme that includes provision of anti-viral medication to all staff. Our planning in advance of the recent events and since have allowed our businesses to be well prepared and to respond quickly in the future as new information becomes available to protect our staff, brands and reputation.
Other risks disclosed in the Annual Report
The following is a summary of the other risks and uncertainties that were disclosed in the 2008 Annual Report.
The impact of technological and market changes on our competitive advantage
Our businesses operate in highly competitive environments that can be subject to rapid change. Our products and services, and their means of delivery, are affected by technological innovations, changing legislation, competitor activity or changing customer behaviour. Our strategy of diversification and willingness to take a long-term view helps us react to these challenges and opportunities.
Pension scheme shortfalls
We operate defined benefit schemes in our newspaper divisions and for certain senior executives. Reported earnings may be adversely affected by changes in our pension costs and funding requirements due to lower than expected investment returns, changes in bond yields and changes in demographic, particularly longer life expectancy. Recent turmoil in global investment markets has increased our focus on this risk. The schemes are still neutral in cash flow terms and so do not currently need to sell assets. The next triennial scheme valuation will be completed in March 2010.
Impact of a major disaster
Any disaster, such as a geopolitical event or terrorist attack, which significantly affects the wider environment or infrastructure in a sector where the Group has material operations, could adversely affect the Group. Plans and procedures are in place to manage the impact of such risks.
Reliance on key management and staff
In order to pursue our strategy, we are reliant on key management and staff across all our businesses. We cannot predict with certainty that we will enjoy continued success in our recruitment and retention of high quality management and creative talent. With this in mind we have created the role of Group HR Director and we have a number of measures in place in each division to address this risk.
Price volatility of newsprint
Newsprint represents a significant proportion of our costs within the Newspaper divisions. Newsprint prices are subject to volatility arising from variations in supply and demand. The Group's newsprint requirements on price, volume and quality are monitored by the Newsprint Committee, and where possible, long-term arrangements are agreed with suppliers to limit the potential for volatility. Newsprint prices have been fixed until the end of the 2009 calendar year.
Acquisition and disposal risk
A number of risks are inherent within any strategy to acquire. However, the majority of acquisitions considered are smaller add-on businesses, which reduces the size of the risk of each acquisition to the Group. There are also risks to our ability to achieve optimal value from disposals. These are monitored and managed by each divisional board with oversight from the DMGT Board.
Reliance on IT infrastructure
All of our businesses are dependent on technology to some degree. Information systems are critical for the effective management and provision of services around the Group. Disruption to our information technology infrastructure or failure to implement new systems effectively could result in lost revenue and damage our reputation. Dedicated project management teams are used to manage the risk in any change project and business continuity plans are in place in each division to protect existing systems.
Information security
Like many organisations of our size, we suffered our own information security incident in 2008 and this increased the focus on and attention given to this important issue. Information security risks are managed by divisional management teams however a Group-wide policy has been set.
Climate change
A Group wide review of the impact of climate change was performed in 2008 to identify the key risks and opportunities for the Group presented by future climate change.
Treasury Risk
The Group's financing and treasury operations manage a number of risks including currency exchange rate fluctuations, liquidity risk and interest rate risk. The current problems in global financial markets as a result of the global recession heighten the uncertainty in this area. The Group renegotiated its bank debt prior to the previous financial year end. There is no specific risk to the Group in the second half of the year.
Tax risk
The Group operates within many jurisdictions; our earnings are therefore subject to taxation at differing rates across these jurisdictions and due to an ever more complex international tax environment there will always be a level of uncertainty when provisioning for our tax liabilities. This risk is managed by an in-house team of specialists who work with divisional management and external tax experts to review all tax arrangements in the Group.
Legal and regulatory
DMGT businesses are subject to varying legislation and regulation across several jurisdictions. Changes to this legislation or regulations could affect the results and future trading of the business.
For further details of these risks and mitigating controls which are in place, please refer to the 2008 Annual Report.
Statement of Directors' responsibilities
The Directors are responsible for preparing the half-yearly financial report, in accordance with applicable law and regulations.
The Directors confirm that to the best of their knowledge, this condensed set of financial statements which should be read in conjunction with the annual financial statements for the year ended 28th September, 2008:
a) has been prepared in accordance with IAS 34 `Interim financial reporting' as adopted by the European Union; and
b) includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R.
By order of the Board of Directors
The Viscount Rothermere
Chairman
20th May, 2009
*References to operating profit or loss or share of the results of joint ventures and associates in the narrative above are to adjusted operating profit or loss or adjusted share of the results of joint ventures and associates before amortisation and impairment of intangible assets and exceptional items); see notes 2 and 3.
#Underlying revenue or profit is revenue or profit on a like for like basis, adjusted for acquisitions and disposals made in the current and prior year and at constant exchange rates.
The average £: US$ exchange rate for the half year was £1: $1.51 (against £1: $2.01 for the first half of last year).
~Current City consensus of earnings* for 2009 is £183.7 million and earnings* per share of 32.6 pence. Source: DMGT website.
For further information
For analyst and institutional enquiries:
Peter Williams 020 7938 6631
Nicholas Jennings 020 7938 6625
For media enquiries:
Andrew Honnor, Tulchan Communications 020 7353 4200
Analysts' presentation and webcast
A presentation of the Half Year results will be given to investors and analysts at 9.30 a.m. on 21st May, 2009 at the offices of JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. There will also be a live webcast available on our website: http://www.dmgt.co.uk.
Next trading update
The Group's next scheduled announcement of financial information will be its third quarter interim management statement on 23rd July 2009.
This Interim Management Report (IMR) is prepared for and addressed only to the Group's shareholders as a whole and to no other person. The Group, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom IMR is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this IMR are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Group in this IMR involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this IMR contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Group undertakes no obligation to update these forward-looking statements.
Condensed consolidated income statement
For the period ended 29th March, 2009
| Note | Unaudited Half year ended 29th March, 2009 £m | Unaudited Half year ended 30th March, 2008 £m | Audited Year year ended 28th September, 2008 £m | |
|---|---|---|---|---|
| CONTINUING OPERATIONS | ||||
| Revenue | 3 | 1,085.3 | 1,167.8 | 2,311.7 |
| Operating profit before exceptional operating costs and amortisation and impairment of goodwill and intangible assets | 3 | 116.4 | 166.1 | 316.9 |
| Exceptional operating costs | 4 | (49.2) | (1.8) | (31.8) |
| Amortisation and impairment of goodwill and intangible assets | (219.6) | (76.4) | (258.1) | |
| Operating (loss)/profit before share of results of joint ventures and associates | 3 | (152.4) | 87.9 | 27.0 |
| Share of results of joint ventures and associates | 5 | (4.7) | 5.5 | 3.5 |
| Total operating (loss)/profit | (157.1) | 93.4 | 30.5 | |
| Other gains and losses | 6 | (6.3) | 15.4 | 27.7 |
| (Loss)/profit before net finance costs and tax | (163.4) | 108.8 | 58.2 | |
| Investment revenue | 7 | 0.8 | 1.7 | 3.0 |
| Finance costs | 8 | (76.8) | (87.9) | (129.3) |
| Net finance costs | (76.0) | (86.2) | (126.3) | |
| (Loss)/profit before tax | (239.4) | 22.6 | (68.1) | |
| Tax | 9 | 60.6 | 44.1 | 84.7 |
| (Loss)/profit after tax from continuing operations | (178.8) | 66.7 | 16.6 | |
| DISCONTINUED OPERATIONS | ||||
| Profit from discontinued operations | - | 0.2 | 0.2 | |
| (LOSS)/PROFIT FOR THE PERIOD | (178.8) | 66.9 | 16.8 | |
| Attributable to : | ||||
| Equity shareholders | (172.9) | 58.5 | - | |
| Minority interests | (5.9) | 8.4 | 16.8 | |
| (Loss)/profit for the period | (178.8) | 66.9 | 16.8 | |
| (Loss)/earnings per share | 12 | |||
| From continuing operations | ||||
| Basic | (46.0)p | 15.3p | 0.0p | |
| Diluted | (45.9)p | 15.3p | (0.2)p | |
| From discontinued operations | ||||
| Basic | 0.0p | 0.0p | 0.1p | |
| Diluted | 0.0p | 0.0p | 0.1p | |
| From continuing and discontinued operations | ||||
| Basic | (46.0)p | 15.3p | 0.1p | |
| Diluted | (45.9)p | 15.3p | (0.1)p | |
| Adjusted earnings per share | ||||
| Basic | 14.2p | 27.8p | 47.9p | |
| Diluted | 14.3p | 27.8p | 47.7p | |
Condensed consolidated statement of recognised income and expense
For the period ended 29th March, 2009
| Unaudited Half year ended 29th March, 2009 | Unaudited Half year ended 30th March, 2008 | Audited Year ended 28th September, 2008 | |
| £m | £m | £m | |
| (Loss)/profit for the period | (178.8) | 66.9 | 16.8 |
| Foreign exchange differences on translation of foreign operations | 111.0 | 26.8 | 58.8 |
| Losses on cash flow hedges | (30.6) | (4.9) | (17.5) |
| Change in value of net investment hedges recorded in equity | (119.9) | (24.9) | (45.3) |
| Actuarial (loss)/gain on defined benefit pension schemes | (186.7) | 4.6 | (110.4) |
| Deferred tax on actuarial movement | 52.3 | (1.3) | 30.9 |
| Deferred tax on other items recognised directly in equity | 6.8 | 3.4 | 9.1 |
| Current tax on items recognised in equity | – | – | 1.0 |
| Net (deficit)/income recognised directly in equity | (345.9) | 70.6 | (56.6) |
| Transfers | |||
| Translation reserves recycled to income statement on disposals | – | – | (0.1) |
| Transfer of gain on cash flow hedges from translation reserve to income statement | 1.9 | (2.1) | (2.9) |
| 1.9 | (2.1) | (3.0) | |
| Total recognised income and expense for the period | (344.0) | 68.5 | (59.6) |
| Attributable to : | |||
| Equity shareholders | (339.6) | 60.0 | (75.0) |
| Minority interests | (4.4) | 8.5 | 15.4 |
| (344.0) | 68.5 | (59.6) | |
Condensed reconciliation of movements in equity
For the period ended 29th March, 2009
| Note | Unaudited Half year ended 29th March, 2009 £m |
Unaudited Half year ended 30th March, 2008 £m |
Audited Year ended 28th September, 2008 £m |
|
| Total recognised income and expense for the period | (344.0) | 68.5 | (59.6) | |
| Dividends paid | 10 | (37.1) | (38.4) | (56.3) |
| Initial recording of put options granted to minority interests in subsidiaries | – | – | (0.5) | |
| Exercise of acquisition option commitments | 20.6 | 7.0 | 7.0 | |
| Transactions with minorities | (3.5) | (9.3) | (12.2) | |
| Settlement of exercised share options of subsidiary | (36.0) | (16.5) | (20.2) | |
| Credit to equity for share-based payments | 5.3 | 6.9 | 16.6 | |
| Shares purchased to be held in treasury | – | (88.3) | (88.3) | |
| Own shares released on vesting of share options | 33.1 | 16.8 | 21.0 | |
| Revaluation of previously held interest in associate on acquisition of control | – | 27.0 | 27.0 | |
| Adjustment to equity following increased stake in controlled entity | (4.2) | (7.3) | (6.4) | |
| Total movement in equity for the period | (365.8) | (33.6) | (171.9) | |
| Equity at the beginning of the period | 548.6 | 720.5 | 720.5 | |
| Equity at the end of the period | 182.8 | 686.9 | 548.6 |
Condensed consolidated cash flow statement
For the period ended 29th March, 2009
| Note | Unaudited Half year ended 29th March, 2009 £m |
Unaudited Half year ended 30th March, 2008 £m |
Audited Year ended 28th September, 2008 £m |
|
| Operating (loss)/profit before share of results of joint ventures and associates - continuing | (152.4) | 87.9 | 27.0 | |
| Operating profit - discontinued | – | 0.2 | – | |
| Adjustments for : | ||||
| Share based payments | 5.3 | 6.9 | 16.6 | |
| Depreciation | 32.1 | 31.0 | 63.1 | |
| Impairment of property, plant and equipment | 12.8 | – | 7.4 | |
| Amortisation of intangible assets | 44.2 | 45.2 | 90.3 | |
| Impairment of goodwill and intangible assets | 175.4 | 31.2 | 167.8 | |
| Operating cash flows before movements in working capital | 117.4 | 202.4 | 372.2 | |
| (Increase)/decrease in inventories | (1.5) | (7.0) | 0.6 | |
| Decrease/(increase) in trade and other receivables | 58.5 | (68.4) | (3.9) | |
| (Decrease)/increase in trade and other payables | (91.6) | 43.6 | (6.3) | |
| Increase/(decrease) in provisions | 4.7 | (0.5) | 5.4 | |
| Cash generated by operations | 87.5 | 170.1 | 368.0 | |
| Taxation paid | (20.2) | (18.3) | (24.3) | |
| Taxation received | 6.9 | 7.8 | 11.2 | |
| Net cash from operating activities | 74.2 | 159.6 | 354.9 | |
| Investing activities | ||||
| Interest received | 5.5 | 1.9 | 1.6 | |
| Dividends received from joint ventures and associates | 2.1 | 3.0 | 3.1 | |
| Dividends received from available-for-sale investments | 1.3 | 0.4 | 0.3 | |
| Purchase of property, plant and equipment | (22.6) | (34.9) | (64.5) | |
| Purchase of available-for-sale investments | (1.2) | (19.9) | (15.9) | |
| Proceeds on disposal of property, plant and equipment | 3.3 | 7.9 | 15.4 | |
| Proceeds on disposal of available-for-sale investments | – | – | 55.1 | |
| Purchase of subsidiaries | 19 | (16.6) | (91.8) | (104.3) |
| Purchase of additional interests in controlled entities | (20.4) | (33.4) | (36.3) | |
| Expenditure on internally generated intangible fixed assets | (8.0) | (6.5) | (18.7) | |
| Treasury derivative activities | (68.2) | (1.0) | (37.2) | |
| Investment in joint ventures and associates | (1.5) | (6.2) | (13.5) | |
| Loans to joint ventures and associates repaid | 0.2 | 4.1 | 4.8 | |
| Proceeds on disposal of businesses | 20 | 3.0 | 14.2 | 58.5 |
| Proceeds on disposal of associates | – | – | 7.2 | |
| Net cash used in investing activities | (123.1) | (162.2) | (144.4) | |
| Financing activities | ||||
| Equity dividends paid | (37.1) | (38.4) | (56.3) | |
| Dividends paid to minority interests | (7.1) | (7.5) | (10.3) | |
| Issue of shares by Group companies to minority interests | – | 0.1 | 0.2 | |
| Purchase of own shares | – | (88.3) | (88.3) | |
| Settlement of subsidiary share option plan | (2.9) | – | (0.6) | |
| Interest paid | (20.0) | (14.5) | (64.8) | |
| Loan notes repaid | (8.3) | (20.5) | (26.0) | |
| Increase in bank borrowings | 117.6 | 174.7 | 10.7 | |
| Net cash from/(used in) financing activities | 42.2 | 5.6 | (235.4) | |
| Net (decrease)/increase in cash and cash equivalents | (6.7) | 3.0 | (24.9) | |
| Cash and cash equivalents at beginning of period | 44.3 | 64.0 | 64.0 | |
| Exchange gain on cash and cash equivalents | 7.1 | 2.5 | 5.2 | |
| Net cash and cash equivalents at end of period | 13 | 44.7 | 69.5 | 44.3 |
Condensed consolidated balance sheet
As at 29th March, 2009
| Note | Unaudited Half year ended 29th March, 2009 £m |
Unaudited Half year ended 30th March, 2008 £m |
Audited Year ended 28th September, 2008 £m |
|
| ASSETS | ||||
| Non-current assets | ||||
| Goodwill | 849.0 | 972.0 | 873.5 | |
| Other intangible assets | 641.8 | 674.6 | 630.0 | |
| Property, plant and equipment | 14 | 482.9 | 521.1 | 501.9 |
| Investments | ||||
| Joint ventures | 23.4 | 24.6 | 22.0 | |
| Associates | 7.5 | 14.1 | 10.6 | |
| Available for sale investments | 4.6 | 70.8 | 11.3 | |
| Deferred tax assets | 78.6 | 10.4 | 31.1 | |
| Derivative financial assets | 5.3 | 1.5 | 0.9 | |
| Trade and other receivables | 11.5 | 4.7 | 8.3 | |
| Retirement benefit assets | 21 | 0.6 | 82.7 | 2.5 |
| 2,105.2 | 2,376.5 | 2,092.1 | ||
| Current assets | ||||
| Inventories | 31.6 | 34.7 | 27.6 | |
| Trade and other receivables | 436.4 | 512.9 | 456.9 | |
| Derivative financial assets | 3.3 | 56.3 | 13.6 | |
| Cash and cash equivalents | 45.3 | 79.3 | 45.3 | |
| 516.6 | 683.2 | 543.4 | ||
| Total assets | 2,621.8 | 3,059.7 | 2,635.5 | |
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | (655.1) | (695.5) | (650.2) | |
| Current tax payable | (88.2) | (121.5) | (119.2) | |
| Acquisition put option commitments | 15 | (19.5) | (20.1) | (29.5) |
| Other financial liabilities | 16,17 | (19.0) | (37.3) | (26.0) |
| Derivative financial liabilities | (38.6) | (89.3) | (33.8) | |
| Provisions | (27.5) | (25.9) | (27.4) | |
| (847.9) | (989.6) | (886.1) | ||
| Non-current liabilities | ||||
| Acquisition put option commitments | 15 | (0.4) | (14.2) | (7.6) |
| Other financial liabilities | 16,17 | (1,168.9) | (1,167.1) | (1,004.2) |
| Retirement benefit obligations | 21 | (220.7) | (3.2) | (43.7) |
| Derivative financial liabilities | (140.8) | (26.6) | (38.6) | |
| Provisions | (30.3) | (41.6) | (31.6) | |
| Deferred tax liabilities | (29.0) | (128.9) | (74.0) | |
| Other non-current liabilities | (1.0) | (1.6) | (1.1) | |
| (1,591.1) | (1,383.2) | (1,200.8) | ||
| Total liabilities | (2,439.0) | (2,372.8) | (2,086.9) | |
| Net assets | 182.8 | 686.9 | 548.6 | |
| SHAREHOLDERS' EQUITY | ||||
| As at 29th March, 2009 | ||||
| Called up share capital | 49.1 | 49.1 | 49.1 | |
| Share premium account | 12.4 | 12.4 | 12.4 | |
| Share capital | 18 | 61.5 | 61.5 | 61.5 |
| Capital redemption reserve | 1.1 | 1.1 | 1.1 | |
| Revaluation reserve | 3.6 | 44.5 | 39.5 | |
| Shares held in treasury | (60.4) | (97.7) | (93.5) | |
| Translation reserve | (14.5) | 24.5 | 22.2 | |
| Retained earnings | 154.3 | 623.1 | 479.1 | |
| Equity shareholders' funds | 145.6 | 657.0 | 509.9 | |
| Equity minority interests | 37.2 | 29.9 | 38.7 | |
| 182.8 | 686.9 | 548.6 | ||
| Approved by the Board of Directors on 20th May, 2009 |
NOTES
1 Basis of
preparation
The information for the six months ended 29th March, 2009 and 30th March,
2008 and for the twelve months ended 28th September, 2008 does not
constitute statutory accounts for the purposes of section 240 of the
Companies Act 1985. A copy of the accounts for the year ended 28th
September, 2008 has been delivered to the Registrar of Companies. The
auditors' report on those accounts was not qualified and did not contain
statements under section 237 (2) or (3) of the Companies Act 1985.
The Annual Report and Accounts of DMGT plc are prepared in accordance with
International Financial Reporting Standards as adopted by the European
Union. These condensed financial statements have been prepared in
accordance with International Accounting Standard 34 Interim Financial
Reporting as adopted by the European Union.
The group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the interim
management report. The financial position of the group, its cash flows,
liquidity position and borrowing facilities are described in the condensed
financial statements and notes. After making enquiries, the directors have
a reasonable expectation that the group has adequate resources to continue
in operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the half yearly
financial report.
2 Accounting policies and
presentation
These condensed financial statements have been prepared in accordance with
the accounting policies set out in the 2008 Annual Report and Accounts.
These policies are expected to be followed in the preparation of the full
financial statements for the financial year ending 4th October, 2009.
Impact of new accounting
standards
In the current period the Group has adopted the following interpretations.
The adoption of these interpretations has not had any significant impact on
the Group's financial statements.
IFRIC 12 Service Concession Agreements (effective for periods beginning on
or after 1st January, 2008)
IFRIC 13 Customer Loyalty Programmes (effective for periods beginning on or
after 1st July, 2008)
At the date of authorisation of these financial statements, the following
standards have been issued but not applied to the information in these
financial statements since they do not apply to this reporting period.
Amendment to IAS 1, Presentation of Financial Statements (effective for
periods commencing on or after 1st January, 2009). This amendment
introduces changes to the way in which movements in equity must be
disclosed and requires an entity to disclose each component of other
comprehensive income not recognised in profit or loss. The amendment also
requires disclosure of the amount of income tax relating to each component
of other comprehensive income as well as several other minor disclosure
amendments.
Amendment to IAS 23, Borrowing Costs (effective for periods commencing on
or after 1st January, 2009). This standard requires all borrowing costs
which are directly attributable to an acquisition construction or
production of a qualifying asset to form part of the cost of that asset.
The Group does not expect a significant impact from the adoption of this
standard.
Amendment to IAS 27, Consolidated and Separate Financial Statements
(effective for periods commencing on or after 1st July, 2009). The
amendment introduces changes to the accounting for partial acquisitions and
disposals of subsidiaries, associates and joint ventures. Adoption of these
amendments is not expected to significantly impact the measurement,
presentation or disclosure of future disposals.
Amendments to IAS 32, Puttable financial instruments and obligations
arising on liquidation (effective for periods beginning on or after 1st
January, 2009). The amendments are relevant to entities that have issued
financial instruments that are (i) puttable financial instruments or (ii)
instruments, or components of instruments that impose on the entity an
obligation to deliver to another party a pro-rata share of the net assets
on liquidation only. As a result of the amendments, some financial
instruments that currently meet the definition of a financial liability
will be classified as equity because they represent the residual interest
in the net assets of the entity. The amendments set out extensive detailed
criteria to be met in order to be able to classify these instruments as
equity. The impact of these amendments is restricted to specific cases and
no analogies can be made. The Group does not expect a significant impact
from the adoption of this standard.
Amendments to IAS 39, Financial instruments : Recognition and Measurement
(effective for periods commencing on or after 1st July, 2009). The
amendments clarify treatment of inflation in a financial hedged item and
one-sided risks in a hedged item. The Group does not expect a significant
impact from the adoption of this standard.
Amendment to IFRS 2, Share-based Payment (effective for periods commencing
on or after 1st January, 2009). The amendments clarifies that vesting
conditions are service conditions and performance conditions only. Other
features of a share-based payment are not vesting conditions. It also
specifies that all cancellations, whether by the entity or by other
parties, should receive the same accounting treatment. The Group does not
expect a significant impact from the adoption of this standard.
Amendment to IFRS 3, Business Combinations (effective for periods
commencing on or after 1st July, 2009). The amendment introduces changes
that will require acquisition related costs (including professional fees
previously capitalised) to be expensed and adjustments to contingent
consideration to be recognised in income and will allow the full goodwill
method to be used when accounting for non-controlling interests. This will
result in a change to the Group's accounting policy for purchases of stakes
in controlled entities.
IFRS 8, Operating Segments (effective for periods beginning on or after 1st
January, 2009). IFRS 8 sets out disclosure requirements concerning an
entity's operating segments, products, services, geographical areas in
which it operates and its major customers. IFRS 8 replaces IAS 14,
Segmental Reporting. Adoption of this standard is not expected to change
the disclosures already made in the DMGT Report and Accounts significantly.
2008 Annual Improvements (the majority of changes will affect periods
beginning on or after 1st January, 2009). The standard makes 41 amendments
to 25 IFRSs as part of the first annual improvements project. The
amendments include : restructuring IFRS 1, mainly to remove redundant
transitional provisions; an amendment to bring property under construction
or development for future use as for future use as an investment property
within the scope of IAS 40. Such property currently falls within the scope
of IAS 16; and an amendment to clarify the circumstances in which an entity
can recognise a prepayment asset for advertising or promotional
expenditure. Recognition of an asset would be permitted up to the point at
which the entity has access to the goods purchased or up to the point of
receipt of services. The standard is not expected to have a significant
impact on the Group. In relation to the amendment to IAS 38 regarding
prepayments for advertising or promotional expenditure, the Group will be
required to reassess its accounting approach to reflect the requirements of
the standard.
2 Accounting policies and
presentation, continued
2009 Annual Improvements (the majority of changes will effect periods
beginning on or after 1st January, 2010). The IASB has issued several
improvements to IFRSs - a collection of amendments to twelve International
Financial Reporting Standards - as part of its program of annual
improvements to its standards. The Group does not expect a significant
impact following these changes.
The following interpretations have been issued which are not applicable to
the Group since they are only effective for accounting periods beginning on
or after 29th September, 2008. The adoption of these interpretations is not
expected to have any significant impact on the Group's financial
statements.
IFRIC 14 The Limit on a Defined Benefit Asset Minimum Funding Requirements
and their Interaction (effective for periods beginning on or after 1st
January, 2009)
IFRIC 15, Agreements for the Construction of Real Estate (effective for
periods beginning on or after 1st January, 2009)
IFRIC 16, Hedges of a Net Investment in a Foreign Operation (effective for
periods beginning on or after 1st October, 2008)
IFRIC 17, Distributions of non-cash assets (effective for periods beginning
on or after 1st July, 2009)
IFRIC 18, Transfers of assets from customers (effective for periods
beginning on or after 1st July, 2009)
Changes in accounting policies
Other than noted above the same accounting policies, presentation and
methods of computation are followed for this interim financial information
as applied in the Group's latest annual audited financial statements.
Critical accounting judgements
and key sources of estimation
uncertainty
In addition to the judgement taken by management in selecting and applying
the accounting policies set out above, management has made the following
judgements concerning the amounts recognised in the consolidated financial
statements.
Impairment of goodwill and intangible assets
Determining whether goodwill and intangible assets are impaired requires an
estimation of the value in use of the relevant cash generating units. The
value in use calculation requires management to estimate the future cash
flows expected to arise from the cash generating unit and compare the net
present value of these cash flows using a suitable discount rate to
determine if any impairment has occurred. A key area of judgement is
deciding the long-term growth rate of the applicable businesses and the
discount rate applied to those cash flows. The carrying amount of goodwill
and intangible assets at the balance sheet date was £1,490.8 million (28th
September, 2008 £1,503.5 million) after an impairment loss of £175.4
million (period to 30th March, 2008 £31.2 million) was recognised during
the period.
Acquisitions and intangible assets
The Group's accounting policy on the acquisition of subsidiaries is to
allocate purchase consideration to the fair value of identifiable assets,
liabilities and contingent liabilities acquired with any excess
consideration representing goodwill. In determining the fair value of
assets, liabilities and contingent liabilities acquired significant
estimates and assumptions, including assumptions with respect to cash flows
and unprovided liabilities and commitments, particularly in respect to tax,
are often used. The Group recognises intangible assets acquired as part of
a business combination at fair values at the date of the acquisition. The
determination of these fair values is based upon management's judgement and
includes assumptions on the timing and amount of future cash flows
generated by the assets and the selection of an appropriate discount rate.
Additionally, management must estimate the expected useful economic lives
of intangible assets and charge amortisation on these assets accordingly.
Acquisition option commitments
Written put options to acquire further stakes in subsidiaries, associates
and joint ventures written at the time of business combinations, unless so
deeply in the money that they represent in-substance ownership interests,
are considered financial instruments under IAS 32 and IAS 39. Put options
over a minority stake in a subsidiary give rise to a financial liability
under IAS 32. Put options over an associate are within the scope of IAS 39
and are accounted for as derivatives at fair value through profit and loss.
Where put options over associates have a fair value of nil, no accounting
is required. Written put options are classified within current liabilities
if exercisable within one year.
The Group is party to a number of put and call options over the remaining
minority interests in some of its subsidiaries. IAS 39 requires the fair
value of these acquisition option commitments to be recognised as a
liability on the balance sheet with a corresponding decrease in reserves.
Subsequent changes in the fair value of the liability are reflected in the
income statement. On exercise and settlement of the put option liability,
cumulative amounts are removed from retained earnings along with the
derecognition of the minority interest and recognition of additional
goodwill. Key areas of judgement in calculating the fair value of the
options are the expected future cash flows and earnings of the business and
the discount rate. At 29th March, 2009 the fair value of these acquisition
option commitments is £19.9 million (28th September, 2008 £37.1 million).
Deferred consideration
Estimates are required in respect of the amount of deferred contingent
consideration, which is determined according to formulae agreed at the time
of the business combination, and normally related to the future earnings of
the acquired business. The Directors review the amount of contingent
consideration likely to become payable at each balance date, the major
assumption being the level of future profits of the acquired business. At
29th March, 2009 the Group has outstanding deferred consideration payable
amounting to £31.1 million (28th September, 2008 £37.6 million).
Deferred consideration is discounted to its fair value in accordance with
IFRS 3 and IAS 37. The difference between the fair value of these
liabilities and the actual amounts payable is charged to the income
statement as notional finance costs.
Adjusted profits and exceptional items
The Group presents adjusted earnings by making adjustments for costs and
profits which management believe to be exceptional in nature by virtue of
their size or incidence or have a distortive effect on current year
earnings. Such items would include one off gains and losses on disposal of
businesses, properties and similar items of a non-recurring nature together
with reorganisation costs and similar charges, tax and by adding back
impairment of goodwill and amortisation and impairment of intangible
assets. See note 11 for a reconciliation of profit before tax to adjusted
profit.
2 Accounting policies and
presentation, continued
Share-based payments
The Group makes share-based payments to certain employees. These payments
are measured at their estimated fair value at the date of grant, calculated
using an appropriate option pricing model. The fair value determined at the
grant date is expensed on a straight-line basis over the vesting period,
based on the estimate of the number of shares that will eventually vest.
The key assumptions used in calculating the fair value of the options are
the discount rate, the Group's share price volatility, dividend yield, risk
free rate of return, and expected option lives. Management regularly
perform a true-up of the estimate of the number of shares that are expected
to vest, this is dependent on the anticipated number of leavers.
Taxation
Being a multinational Group with tax affairs in many geographic locations
inherently leads to a highly complex tax structure which makes the degree
of estimation and judgement more challenging. The resolution of issues is
not always within the control of the Group and is often dependent on the
efficiency of legal processes. Such issues can take several years to
resolve. The Group takes a conservative view of unresolved issues, however
the inherent uncertainty regarding these items means that the eventual
resolution could differ significantly from the accounting estimates and
therefore impact the Group's results and future cash flows.
Retirement benefit obligations
The cost of defined benefit pension plans is determined using actuarial
valuations prepared by the Group's actuaries. This involves making certain
assumptions concerning discount rates, expected rates of return on assets,
future salary increases, mortality rates and future pension increases. Due
to the long term nature of these plans, such estimates are subject to
significant uncertainty. The assumptions and the resulting estimates are
reviewed annually and, when appropriate, changes are made which affect the
actuarial valuations and, hence, the amount of retirement benefit expense
recognised in the income statement and the amounts of actuarial gains and
losses recognised in the statement of recognised income and expense. The
carrying amount of the retirement benefit obligation at 29th March, 2009
was a deficit of £220.1 million (28th September, 2008 £41.2 million).
Further details are given in note 21.
3 SEGMENT ANALYSIS
The Group's business activities are split into seven operating divisions -
RMS, business information, Euromoney, exhibitions, national media, local
media and radio. These divisions are the basis on which the Group reports
its primary segment information. Due to the increased significance of RMS
and having regard to the quantitative thresholds within IAS 14, Segment
Reporting, the Group has separately disclosed its financial performance in
the note below. In the prior periods the results of RMS were included
within the business information segment.
Analysis of
revenue by
business segment
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
RMS 69.7 46.8 101.1
Business 106.9 104.7 217.6
information
Euromoney 160.7 154.8 332.0
Exhibitions 101.8 112.7 201.6
National media 487.2 547.4 1,064.7
Local media 166.4 216.8 427.0
Radio 26.3 26.3 54.7
Revenue - total 1,119.0 1,209.5 2,398.7
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
RMS (1.0) (1.4) (3.2)
Business (0.2) (0.1) (0.2)
information
National media (31.9) (39.3) (77.0)
Local media (0.6) (0.9) (6.6)
Revenue - (33.7) (41.7) (87.0)
intersegment
Inter-segment sales are charged at prevailing market prices other than the
sale of newsprint from the national media to the local media division which
is at cost. The amount of newsprint sold during the period amounted to £
13.9 million (2008 £18.6 million).
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
RMS 68.7 45.4 97.9
Business 106.7 104.6 217.4
information
Euromoney 160.7 154.8 332.0
Exhibitions 101.8 112.7 201.6
National media 455.3 508.1 987.7
Local media 165.8 215.9 420.4
Radio 26.3 26.3 54.7
Revenue - 1,085.3 1,167.8 2,311.7
continuing
Analysis of
revenue by
geographic
origin
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
UK 695.4 829.8 1,614.1
Rest of Europe 29.3 36.1 71.3
North America 267.5 233.8 486.5
Australia 28.7 30.0 70.8
Rest of the 64.4 38.1 69.0
World
Revenue - total 1,085.3 1,167.8 2,311.7
consolidated
continuing
operations
3 SEGMENT ANALYSIS, continued
Analysis of operating profit before exceptional operating costs and
amortisation and impairment of goodwill and intangible assets by business
segment
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Note £m £m £m
RMS 19.8 12.5 30.7
Business information 11.2 19.1 44.2
Euromoney 36.3 33.5 76.3
Exhibitions 24.9 23.4 38.3
National media 18.0 44.1 72.6
Local media 6.1 40.0 68.4
Radio 1.6 0.3 2.0
Unallocated central costs (1.5) (6.8) (15.6)
Operating profit before 116.4 166.1 316.9
exceptional operating
costs and amortisation
and impairment of
goodwill and intangible
assets
Less: exceptional 4 (49.2) (1.8) (31.8)
operating costs
Less: amortisation of (44.2) (45.2) (90.3)
intangible assets
Less: impairment of (175.4) (31.2) (167.8)
goodwill and intangible
assets
Operating (loss)/profit (152.4) 87.9 27.0
after exceptional
operating costs and
amortisation and
impairment of goodwill
and intangible assets
Analysis of operating (loss)/profit after exceptional operating costs and
amortisation and impairment of goodwill and intangible assets by business
segment
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
RMS 18.9 11.8 29.3
Business 4.6 14.5 35.2
information
Euromoney (4.2) 25.9 55.8
Exhibitions (44.7) (13.4) (61.2)
National media (33.8) 28.3 16.7
Local media (74.7) 32.2 (25.1)
Radio (18.0) (4.6) (8.1)
Unallocated (0.5) (6.8) (15.6)
central costs
Operating (loss) (152.4) 87.9 27.0
/profit
The Group tests goodwill annually for impairment, or more frequently if
there are indicators that goodwill might be impaired. Intangible assets are
tested separately from goodwill only where impairment indicators exist. The
total impairment charge recognised for the period was £175.4 million (2008
£31.2 million). Of the impairment charge for the period, £21.9 million
relates to Euromoney, mostly in connection with its structured finance
event businesses, £61.2 million relates to the exhibitions division in
relation to their gift sector businesses following a further downturn in
the gift sector markets they serve, £9.4 million relates to the national
media division, £68.3 million relates to the local media division and £14.6
million relates to the radio division following a continued decline in
advertising revenues in these segments. There is a deferred tax credit
amounting to £28.0 million in relation to these impairment charges.
In the prior period Euromoney re-assessed the recoverability of tax losses
acquired with Metal Bulletin and as a result recognised a deferred tax
asset of £1.1 million. In accordance with IAS 12, Income Taxes, the Group
is required to reduce its previously capitalised goodwill to offset this
deferred tax asset.
Additionally in the prior period, included within the gift sector charge is
an amount of £14.4 million relating to George Little Management LLC (GLM).
GLM was an associate on October 3rd, 2004, the Group's transition date to
IFRS. On transition to IFRS, the Group elected not to apply IFRS 3,
Business Combinations, retrospectively to past business combinations and
the carrying value of goodwill, intangible assets and other assets and
liabilities associated with the Group's stakes in its subsidiaries,
associates and joint ventures. As a result of the application of IFRS 3 on
acquiring control of GLM a double count of goodwill in respect of the
Group's acquisition of its initial 25% stake has occurred as under UK GAAP
the majority of this stake was attributed to goodwill and no separately
identifiable assets were recorded. As a result of this double count the
Group has been required to record an impairment charge of £14.4 million
immediately following acquisition of control in 2008 and this is included
in the charge for that period.
The balance of the gift sector charge reflected a downturn in the gift
sector markets they support.
When testing for impairment, the recoverable amounts for all the Group's
cash-generating units (CGUs) are measured at their value in use by
discounting future expected cash flows. These calculations use cash flow
projections based on management approved budgets and projections which
reflect management's current experience and future expectations of the
markets in which the CGU operates. Risk adjusted discount rates used by the
Group in its impairment tests range from 9.6% to 11.1%, the choice of rates
depending on the market and maturity of the CGU; the medium term growth
rates used in the projections range between 0% and 5% and vary with
management's view of the CGU's market position and maturity of the relevant
market. Any perpetuity factor does not exceed 3% or the long term average
growth rate for the market in which it operates.
4 EXCEPTIONAL
OPERATING
(COSTS)/GAINS
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Business (0.6) - -
information
Euromoney (10.5) 0.7 -
Exhibitions (1.3) - (4.5)
National media (29.3) (1.1) (18.7)
Local media (8.4) (1.4) (8.6)
Radio (0.1) - -
Group operations 1.0 - -
Total (49.2) (1.8) (31.8)
The Group's exceptional operating costs comprise reorganisation and
restructuring costs together with charges relating to a rationalisation of
the Group's property portfolio. Exceptional gains within Group operations
represent curtailment gains of £1.3 million net of professional fees of £
0.3 million. There is a related current tax credit of £6.4 million and a
related deferred tax credit of £0.5 million associated with the total
exceptional operating costs.
In the prior period the Group's exceptional operating costs comprised
reorganisation and restructuring within the national and local media
divisions of £2.5 million and a related tax credit of £0.7 million.
Euromoney successfully surrendered a lease on a vacant building previously
utilised by Metal Bulletin and released other reorganisation and
restructuring provisions, set up following the acquisition of Metal
Bulletin, which are no longer required. This resulted in an exceptional
credit to the Group of £0.7 million and a related tax charge of £0.2
million.
5 SHARE OF RESULTS OF
JOINT VENTURES AND
ASSOCIATES
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Note £m £m £m
Share of (losses)/ (0.5) 0.4 0.5
profits from
operations of joint
ventures
Share of losses from (0.1) (0.1) (0.3)
operations of
associates
Share of associates' (i) - 9.8 9.8
other gains and
losses
Before amortisation, (0.6) 10.1 10.0
impairment of
goodwill, interest
and tax
Share of (0.4) (0.4) (0.6)
amortisation of
intangibles of joint
ventures
Share of associates' (0.2) - 0.2
interest (payable)/
receivable
Share of joint - (0.3) (0.8)
ventures' tax
Share of associates' (0.2) (0.1) (0.5)
tax
Impairment of (ii) (3.3) (3.8) (4.8)
carrying value of
associate
(4.7) 5.5 3.5
Share of results (0.9) (0.3) (0.9)
from operations of
joint ventures
Share of results (0.5) 9.6 9.2
from operations of
associates
Impairment of (3.3) (3.8) (4.8)
carrying value of
associate
(4.7) 5.5 3.5
(i) In the prior year this represents the Group's share of Centurion Holiday
Group Limited's (formerly Indigo Holiday Limited) profit on disposal of
Hotels4u.com
(ii) Represents a write down in the carrying value of the Group's investment in
ITN and Inview Interactive Limited. In the prior year Centurion Holidays
Group Limited was liquidated following the period end. The Group's carrying
value was written down to the proceeds received on liquidation.
6 OTHER GAINS AND
LOSSES
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Note £m £m £m
Profit on sale of 0.1 - 7.6
available-for-sale
investments
Impairment of (i) (8.8) (1.5) (10.1)
available-for-sale
assets
Profit on sale of - 5.3 6.8
property, plant and
equipment
Profit on sale of (ii) 4.8 11.7 23.4
businesses
Loss on deemed part (2.4) - -
disposal of
Euromoney
Institutional
Investor plc
Loss on sale and - (0.1) -
deemed disposal of
joint ventures and
associates
(6.3) 15.4 27.7
(i) The impairment of available-for-sale assets represents a further impairment
charge for the Group's investment in Spot Runner Inc., an advertising
services company, in light of its current trading performance.
(ii) The profit on sale of businesses mainly comprises a £2.7 million
curtailment gain within the national media division associated with the
Group's sale of a 75.1% interest in the Evening Standard together with
profits within the exhibitions division in relation to the sale of
Metropress. There is a deferred tax charge of £0.8 million in relation to
the curtailment gain.
Since the Group has no Board representation and no influence over the day
to day management of the Evening Standard, nor any obligation to provide
further funding the Group's 24.9% interest in the Evening Standard has been
accounted for as an available for sale asset (note 20).
In the prior year the profit on sale of businesses mainly comprises the
sale of Dolphin Software Inc., a provider of information on hazardous
chemicals within the business information division.
7 INVESTMENT REVENUE
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Dividend income
GCap Media plc - 0.4 0.3
Interest receivable
Short-term deposits 0.8 1.3 2.7
0.8 1.7 3.0
8 FINANCE COSTS
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Note £m £m £m
Interest, (39.4) (38.9) (78.3)
arrangement and
commitment fees
payable on bonds,
bank loans and loan
notes
Loss on derivatives, (26.1) (46.9) (45.6)
or portions thereof,
not designated for
hedge accounting
Finance charge on (i) (0.8) (1.3) (2.4)
discounting of
deferred
consideration
Other (10.5) (0.8) (3.0)
(76.8) (87.9) (129.3)
Analysed as follows
:
Interest, (39.4) (38.9) (78.3)
arrangement and
commitment fees
payable on bonds,
bank loans and loan
notes
Finance charge on (0.8) (1.3) (2.4)
discounting of
deferred
consideration
Change in fair value - 1.4 2.6
of non designated
portion of
derivatives
designated as net
investment hedges
Change in fair value (0.4) (1.2) (0.2)
of interest rate
caps not designated
for hedge accounting
Change in fair value 6.8 2.5 1.1
of derivative hedge
of bond
Change in fair value (6.8) (2.5) (1.1)
of hedged portion of
bond
(40.6) (40.0) (78.3)
Tax equalisation 0.9 8.7 14.5
swap income
Non foreign exchange 0.5 7.4 5.3
gain on tax
equalisation options
(ii) 1.4 16.1 19.8
Foreign exchange (27.1) (63.2) (67.8)
loss on tax
equalisation
arrangements
Foreign exchange (iii) (7.3) - -
loss on restructured
hedging arrangements
Change in fair value (3.2) (0.8) (3.0)
of acquisition put
options
(37.6) (64.0) (70.8)
(76.8) (87.9) (129.3)
(i) The finance charge on the discounting of deferred consideration arises from
the requirement under IFRS 3, Business Combinations to discount deferred
consideration back to current values.
(ii) Tax equalisation swap income and the gain from tax equalisation options
totalling £1.4 million (2008 £16.1 million) arises from the economic
hedging of tax on foreign exchange movements. The foreign exchange loss on
tax equalisation arrangements of £27.1 million (2008 £63.2 million) is
excluded from adjusted profit since it is equal to a reduced tax charge
(see note 9). In addition, the foreign exchange loss on intra group
financing, premium on repurchase of bonds, on restructured hedging
arrangements and the change in fair value of acquisition put options are
also excluded from adjusted profits.
(iii) The foreign exchange losses on restructured hedging arrangements of £7.3
million (2008 £nil) arise from forward contracts classified as ineffective
under IAS 39, Financial instruments, following the directors' review of the
Group's US dollar revenue capacity in its UK based businesses.
9 TAX
Corporation tax for the interim period is charged at 28% (2008 29%),
representing the best estimate of the weighted average annual corporation
tax rate expected for the full financial year. The credit/(charge) on the
(loss)/profit for the period consists of :
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Note £m £m £m
UK
Corporation tax at - 36.2 18.0
28% (2008 29%)
Adjustments in (i) 14.1 0.6 28.2
respect of prior
year
14.1 36.8 46.2
Overseas taxation
Corporation taxes 11.6 (9.3) (18.4)
Adjustments in (0.3) (0.7) (0.8)
respect of prior
year
Total current 25.4 26.8 27.0
taxation
Deferred tax
Origination and 35.3 17.8 60.6
reversals of timing
differences
Adjustments in (0.1) (0.5) (2.9)
respect of prior
year
60.6 44.1 84.7
(i) The net prior year credit of £14.1 million (2008 £0.6 million) arose
largely from the agreement of certain prior year open issues with tax
authorities and a reassessment of the level of tax provisions required.
Adjusted tax on profits before amortisation and impairment of intangible
assets, restructuring costs and non-recurring items (adjusted tax charge)
amounted to £15.5 million (2008 £28.4 million) and the resulting rate is
20.0 % (2008 19.7 %). The differences between the tax credit and the
adjusted tax charge are shown in the reconciliation below :
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Total tax credit on 60.6 44.1 84.7
the profit for the
year
Deferred tax on (30.4) (9.0) (37.2)
intangible assets
and goodwill
Current tax on (27.1) (63.2) (67.8)
foreign exchange on
tax equalisation
contracts
Agreement of open (13.7) - (23.8)
issues with tax
authorities
Tax on other (4.9) (0.3) (18.7)
exceptional items
Adjusted tax charge (15.5) (28.4) (62.8)
on the profit for
the period
In calculating the adjusted tax rate, the Group excludes the potential
future deferred tax effects of intangible assets and goodwill as it prefers
to give the readers of its accounts a view of the tax charge based on the
current status of such items.
A credit of £27.1 million relating to tax on foreign exchange losses (2008
£63.2 million) has been treated as exceptional as it matches foreign
exchange losses of £27.1 million (2008 £63.2 million) on tax equalisation
swaps included within finance costs (see note 8).
10 DIVIDENDS PAID
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Amounts recognisable
as distributions to
equity holders in
the period
Ordinary shares - 2.0 - -
final dividend for
the year ended 28th
September, 2008
`A' Ordinary Non-Voting shares - 35.1 - -
final dividend for the year ended
28th September, 2008
Ordinary shares - - 2.0 2.0
final dividend for
the year ended 30th
September, 2007
`A' Ordinary Non-Voting shares - - 36.4 36.4
final dividend for the year ended
30th September, 2007
37.1 38.4 38.4
Ordinary shares - - - 1.0
interim dividend for
the year ended 28th
September, 2008
`A' Ordinary Non-Voting shares - - - 16.9
interim dividend for the year
ended 28th September, 2008
- - 17.9
37.1 38.4 56.3
The Board has declared an interim dividend of 4.80 p per 'A' Ordinary
Non-Voting share (2008 4.80 p) which will absorb an estimated £18.3 million
of shareholders' funds which has not been recognised in these financial
statements. It will be paid on 3rd July, 2009 to shareholders on the
register at the close of business on 5th June, 2009. This dividend was
approved by the Board on 20th May, 2009 and has not been included as a
liability as at 29th March, 2009.
11 ADJUSTED PROFIT (BEFORE EXCEPTIONAL OPERATING COSTS AND AMORTISATION AND
IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS, OTHER GAINS AND LOSSES AND
EXCEPTIONAL FINANCING COSTS, AFTER TAXATION AND MINORITY INTERESTS)
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
(Loss)/profit before tax - (239.4) 22.6 (68.1)
continuing operations
Profit before tax - discontinued - 0.2 0.2
operations
Add back :
Amortisation of intangible assets 44.6 45.6 90.9
in Group profit from operations
and in joint ventures and
associates
Impairment of goodwill and 175.4 31.2 167.8
intangible assets
Exceptional 49.2 1.8 31.8
operating costs
Share of - (9.8) (9.8)
associates'
other gains
Impairment of carrying value of 3.3 3.8 4.8
associate
Other gains and
losses :
Profit on sale of (0.1) - (7.6)
available-for-sale investments
Profit on sale of property, - (5.3) (6.8)
plant and equipment
Profit on sale of businesses (4.8) (11.7) (23.4)
Impairment of available-for-sale 8.8 1.5 10.1
assets
Loss on deemed part disposal of 2.4 - -
Euromoney Institutional Investor
plc
Loss on sale and deemed disposal - 0.1 -
of joint ventures and associates
Profit on sale of discontinued - - (0.2)
operations
Finance costs :
Foreign exchange loss on tax 27.1 63.2 67.8
equalisation arrangements
Foreign exchange loss on 7.3 - -
restructured hedging arrangements
Change in fair value of 3.2 0.8 3.0
acquisition put options
Tax :
Share of tax in joint ventures 0.2 0.4 1.3
and associates
Profit before exceptional 77.2 144.4 261.8
operating costs, amortisation and
impairment of goodwill and
intangible assets, other gains
and losses and exceptional
financing costs, taxation and
minority interests
Total tax credit 60.6 44.1 84.7
on the profit
for the period
Adjust for :
Deferred tax on intangible (30.4) (9.0) (37.2)
assets and goodwill
Current tax on foreign exchange (27.1) (63.2) (67.8)
on tax equalisation arrangements
Agreed open issues with tax (13.7) - (23.8)
authorities
Tax on other exceptional items (4.9) (0.3) (18.7)
Interest of minority (8.2) (9.9) (18.1)
shareholders
Adjusted profit before 53.5 106.1 180.9
exceptional operating costs,
amortisation and impairment of
goodwill and intangible assets,
other gains and losses and
exceptional financing costs after
taxation and minority interests
The adjusted minority share of profits for the year of £8.2 million (2008 £
9.9 million) is stated after eliminating a credit of £14.1 million (2008 £
1.5 million), being the minority share of exceptional items.
12 EARNINGS/(LOSS) PER SHARE
Basic loss per share of 46.0 p (2008 earnings 15.3 p) and diluted loss per
share of 45.9 p (2008 earnings 15.3 p) are calculated, in accordance with
IAS 33, Earnings per share, on Group loss for the period of £172.9 million
(2008 profit £58.5 million) and on the weighted average number of ordinary
shares in issue during the year, as set out below.
As in previous years, adjusted earnings per share have also been disclosed
since the Directors consider that this alternative measure gives a more
comparable indication of the Group's underlying trading performance.
Adjusted earnings per share of 14.2 p (2008 27.8 p) are calculated on
profit before exceptional operating costs, amortisation and impairment of
goodwill and intangible assets, after charging the taxation and minority
interests associated with those profits, of £53.5 million (2008 £106.1
million), as set out in Note 11 above, and on the basic weighted average
number of ordinary shares in issue during the period.
Basic (loss)/earnings per
share
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Pence Pence Pence
per share per share per share
(Loss)/earnings per share from (46.0) 15.3 -
continuing operations
Adjustment to exclude earnings of - - 0.1
discontinued operations
Basic (loss)/earnings per share (46.0) 15.3 0.1
from continuing and discontinued
operations
Add back:
Amortisation of intangible assets 11.9 11.9 24.1
in Group profit from operations
and in joint ventures and
associates
Impairment of goodwill and 46.7 8.2 44.4
intangible assets
Exceptional 13.1 0.5 8.4
operating costs
Share of - (2.6) (2.6)
associates'
other gains
Impairment of 0.9 1.0 1.3
carrying value
of associate
Other gains and
losses :
Profit on sale of - - (2.0)
available-for-sale investments
Profit on sale of property, - (1.4) (1.8)
plant and equipment
Profit on sale of businesses (1.3) (3.1) (6.2)
Impairment of available-for-sale 2.3 0.4 2.7
assets
Loss on deemed part disposal of 0.6 - -
Euromoney Institutional Investor
plc
Profit on sale of discontinued - - (0.1)
operations
Finance costs :
Foreign exchange loss on tax 7.2 16.7 18.0
equalisation arrangements
Foreign exchange loss on 1.9 - -
restructured hedging arrangements
Change in fair value of 0.9 0.2 0.8
acquisition put options
Tax :
Share of tax in joint ventures 0.1 0.1 0.3
and associates
Profit before exceptional 38.3 47.2 87.4
operating costs, amortisation and
impairment of goodwill and
intangible assets, other gains
and losses and exceptional
financing costs, taxation and
minority interests
Adjust for:
Deferred tax on intangible assets (8.1) (2.4) (9.9)
and goodwill
Current tax on foreign exchange (7.2) (16.7) (18.0)
on tax equalisation arrangements
Agreed open issues with tax (3.6) - (6.3)
authorities
Tax on other exceptional items (1.3) - (5.0)
Interest of minority shareholders (3.9) (0.3) (0.3)
Adjusted earnings per share 14.2 27.8 47.9
(before exceptional operating
costs, amortisation and
impairment of goodwill and
intangible assets, other gains
and losses and exceptional
financing costs after taxation
and minority interests)
12 EARNINGS/(LOSS)
PER SHARE,
continued
Diluted earnings
per share
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
Pence Pence Pence
per share per share per share
(Loss)/earnings per share from (45.9) 15.3 (0.2)
continuing operations
Adjustment to exclude earnings of - - 0.1
discontinued operations
Basic (loss)/earnings per share (45.9) 15.3 (0.1)
from continuing and discontinued
operations
Add back:
Amortisation of intangible assets 11.9 11.9 24.1
in Group profit from operations
and in joint ventures and
associates
Impairment of goodwill and 46.7 8.2 44.4
intangible assets
Exceptional 13.1 0.5 8.4
operating costs
Share of - (2.6) (2.6)
associates'
other gains
Impairment of carrying value of 0.9 1.0 1.3
associate
Other gains and
losses :
Profit on sale of - - (2.0)
available-for-sale investments
Profit on sale of property, - (1.4) (1.8)
plant and equipment
Profit on sale of businesses (1.3) (3.1) (6.2)
Impairment of available-for-sale 2.3 0.4 2.7
assets
Loss on deemed part disposal of 0.6 - -
Euromoney Institutional Investor
plc
Profit on sale of discontinued - - (0.1)
operations
Finance costs :
Foreign exchange loss on tax 7.2 16.7 18.0
equalisation arrangements
Foreign exchange loss on 1.9 - -
restructured hedging arrangements
Change in fair value of 0.9 0.2 0.8
acquisition put options
Tax :
Share of tax in joint ventures 0.1 0.1 0.3
and associates
Profit before exceptional 38.4 47.2 87.2
operating costs, amortisation and
impairment of goodwill and
intangible assets, other gains
and losses and exceptional
financing costs, taxation and
minority interests
Adjust for:
Deferred tax on intangible (8.1) (2.4) (9.9)
assets and goodwill
Current tax on foreign exchange (7.2) (16.7) (18.0)
on tax equalisation arrangements
Agreed open issues with tax (3.6) - (6.3)
authorities
Tax on other exceptional items (1.3) - (5.0)
Interest of (3.9) (0.3) (0.3)
minority
shareholders
Adjusted earnings per share 14.3 27.8 47.7
(before exceptional operating
costs, amortisation and
impairment of goodwill and
intangible assets, other gains
and losses and exceptional
financing costs after taxation
and minority interests)
The weighted average number of ordinary shares
in issue during the period for the purpose of
these calculations is as follows :
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
No. No. Mo.
million million million
Number of ordinary shares in 391.3 402.6 395.3
issue
Shares held in treasury (15.6) (20.9) (17.7)
Basic earnings per share 375.7 381.7 377.6
denominator
Effect of - - -
dilutive share
options
Dilutive earnings per share 375.7 381.7 377.6
denominator
13 ANALYSIS OF NET
DEBT
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Net debt at (984.9) (950.4) (955.5)
start
Cash flow (122.3) (150.8) (9.6)
Issued on acquisition of - (10.8) -
subsidiaries
Arising with (0.5) - -
acquisitions
Foreign exchange (34.9) (7.6) 4.8
movements
Other non-cash - (5.5) (24.6)
movements
Net debt at (1,142.6) (1,125.1) (984.9)
period end
Analysed as :
Cash and cash 45.3 79.3 45.3
equivalents
Unsecured bank (0.6) (9.8) (1.0)
overdrafts
Cash and cash equivalents in the 44.7 69.5 44.3
cash flow statement
Debt due within (0.6) - -
one year
Bonds (845.2) (840.6) (838.9)
Loan notes (17.8) (27.5) (25.0)
Loans (323.7) (326.5) (165.3)
Net debt at (1,142.6) (1,125.1) (984.9)
period end
Effect of derivatives on bank (84.2) (16.3) (29.7)
loans
Net debt (1,226.8) (1,141.4) (1,014.6)
including
derivatives
14 PROPERTY, PLANT
AND EQUIPMENT
During the period the Group spent £22.6 million (2008 £34.9 million) on
property, plant and equipment.
The Group also disposed of certain of its property, plant and equipment
with a carrying value of £4.0 million (2008 £2.6 million) for proceeds of £
3.3 million (2008 £7.9 million).
15 ACQUISITION PUT
OPTION
COMMITMENTS
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Current 19.5 20.1 29.5
Non-current 0.4 14.2 7.6
19.9 34.3 37.1
16 OTHER FINANCIAL
LIABILITIES
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Current
liabilities
Bank overdrafts 0.6 9.8 1.0
Bank loans 0.6 - -
Loan notes 17.8 27.5 25.0
19.0 37.3 26.0
Non-current
liabilities
Bank loans 323.7 326.5 165.3
Bonds 845.2 840.6 838.9
1,168.9 1,167.1 1,004.2
17 BANK LOANS
The Group's bank facilities are all unsecured and bear interest based on
LIBOR plus a margin based on the Group's ratio of net debt to EBITDA ratio.
Additionally each facility contains a covenant based on a minimum interest
cover ratio.
The Group's facilities and their maturity dates are as follows :
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Expiring in one 70.0 210.0 -
year or less
Expiring in more than one year - - 70.0
but not more than two years
Expiring in more than two years 180.0 300.0 180.0
but not more than three years
Expiring in more than four years 240.0 - 240.0
but not more than five years
Total bank 490.0 510.0 490.0
facilities
The following undrawn committed bank facilities were available to the Group
as at 29th March, 2009 in respect of which all conditions precedent had
been met :
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
£m £m £m
Expiring in one 3.1 65.0 -
year or less
Expiring in more than one year - 69.1 5.7
but not more than two years
Expiring in more than two years - - 84.5
but not more than three years
Expiring in more than four years 46.1 - 157.3
but not more than five years
Expiring in more than five years 43.6 - -
but not more than six years
Total undrawn committed bank 92.8 134.1 247.5
facilities
18 SHARE CAPITAL
AND RESERVES
Share capital as at 29th March, 2009 amounted to £49.1 million, which was
unchanged during the period.
The Company disposed of 6,455,651 treasury shares, representing 1.73 % of
the called up 'A' Ordinary Non-Voting share capital, in order to satisfy
incentive schemes.
At 29th March, 2009 options were outstanding under the terms of the
Company's 1997 and 2006 Executive Share Option Schemes over a total of
6,543,567 (2008 6,977,459) 'A' Ordinary Non-Voting shares.
During the period the Group identified an amount of £35.9 million within
the revaluation reserve that related primarily to the interest previously
held in GCAP Media plc. As these assets are no longer held this amount in
the revaluation reserve has been reclassified to retained earnings.
19 SUMMARY OF THE
EFFECTS OF
ACQUISITIONS
Acquisitions completed during the period, the percentage of voting rights
acquired and the dates of acquisition were as follows :
Name of
acquisition
Segment
% voting rights
Business Consideration Intangible Goodwill
Date of acquired description fixed acquired
acquisition assets
acquired
£m £m £m
Metropix Supplier of 4.3 2.5 2.4
Business floor-plan
information 100% drawing services
December 2008
Reflex Event organiser 1.7 - 1.7
Publishing and publisher in
Exhibitions 100% the energy
sector
November 2008
Broadbean Multiple job 7.6 4.8 4.1
Technology posting and
National media application
100% tracking
solutions
October 2008
Provisional fair
value of net
assets acquired:
Book value Fair Fair value
value
adjustments
£m £m £m
Goodwill - 8.2 8.2
Intangible - 7.3 7.3
assets
Property, plant 0.2 - 0.2
and equipment
Prepaid show 0.1 - 0.1
expenses
Trade and other 1.6 - 1.6
receivables
Cash and cash 0.9 - 0.9
equivalents
Trade and other (2.5) - (2.5)
payables
Deferred - (2.2) (2.2)
taxation
Total net assets 0.3 13.3 13.6
acquired
Cost of
acquisition
Non-cash Cash paid Total
in
current
period
£m £m £m
Deferred 6.0 - 6.0
consideration
Cash - 7.4 7.4
Consideration at 6.0 7.4 13.4
fair value
Directly - 0.2 0.2
attributable
costs
Total cost of 6.0 7.6 13.6
acquisition
If all acquisitions had been completed on the first day of the financial
period, Group revenues for the period would have been £1,083.0 million and
Group loss attributable to equity holders of the parent would have been £
172.8 million. This information takes into account the amortisation of
acquired intangible assets for a full year, together with related income
tax effects but excludes any pre-acquisition finance costs and should not
be viewed as indicative of the results of operations that would have
occurred if the acquisitions had actually been completed on the first day
of the financial year.
Total profit attributable to equity holders of the parent since the date of
acquisition for companies acquired during the period amounted to £0.3
million.
Goodwill arising on the acquisitions is principally attributable to the
anticipated profitability relating to the distribution of the Group's
products in new and existing markets and anticipated operating synergies
from the business combinations.
Reconciliation to purchase of subsidiaries as shown in the cash flow
statement
£m
Cash consideration including 7.6
acquisition expenses
Cash paid in respect of 9.9
consideration deferred from prior
years
Cash and cash equivalents (0.9)
acquired with subsidiaries
Cash movements on purchase of 16.6
subsidiaries
20 DISPOSALS OF
SUBSIDIARIES AND
BUSINESSES
On 21st January 2009, the national media division sold a 75.1% interest in
the Evening Standard for cash proceeds of £8.3 million. Following disposal
the Group has no Board representation and no influence over the day to day
management of the title nor any obligation to provide further funding. The
remaining 24.9% investment has therefore been treated as a long term
available-for-sale investment.
The impact of the disposal on
business net assets was as follows :
£m
Property, plant 0.7
and equipment
Total net assets 0.7
disposed
Loss on sale of (0.7)
businesses
-
Satisfied by :
Cash received 8.3
Directly (2.7)
attributable
costs
Cash reinvested (8.3)
Pension 2.7
curtailment gain
-
During the period the Evening Standard absorbed £0.3 million of the Group's
net operating cashflows, paid £nil in respect of investing activities and
paid £nil in respect of financing activities.
The other principal disposal completed during the period, the proceeds
received and date of disposal was as follows :
Name of disposal Date of disposal Disposal
Segment proceeds
£m
Metro Press October 2008 6.9
Exhibitions
The impact of
disposals of
businesses on
net assets was :
£m
Intangible 0.6
assets
Property, plant 0.4
and equipment
Trade and other 0.9
receivables
Trade and other (1.0)
payables
Total net assets 0.9
disposed
Profit on sale 5.5
of businesses
6.4
Satisfied by :
Cash received 6.8
Loan notes 0.7
Directly (1.1)
attributable
costs
6.4
The disposals were made at the start of the period and have no impact on
the Group's cash flows.
As the above disposal occurred on the first day of the period the
subsidiary did not contribute any cash flows to the Group during the
period.
Reconciliation to disposal of businesses as shown in the cash flow
statement
£m
Cash 15.1
consideration
Directly (3.8)
attributable
costs
Cash reinvested (8.3)
Proceeds on 3.0
disposal of
businesses
21 RETIREMENT
BENEFIT SCHEMES
Defined benefit
schemes
The newspaper divisions of the Group operate a number of pension schemes
covering most major UK group companies under which contributions are paid
by the employer and employees.
The schemes for most employees are funded defined benefit pension
arrangements, providing service-related benefits, based on final
pensionable salary. In addition, a number of defined contribution pension
plans are operated by certain divisions of the Group where this type of
pension provision aligns with the business model. The assets of all the
schemes are held independently from the Group's finances and in the UK are
administered by trustees or trustee companies.
The total net pension costs of the Group's defined benefit schemes for the
period were £9.2 million (2008 £5.2 million).
The defined benefit obligation is calculated on a year-to-date basis, using
the latest actuarial valuation as at 29th March, 2009. The assumptions used
in the valuation are summarised below:
Unaudited Unaudited Audited Year
Half year Half year ended 28th
ended 29th ended 30th September, 2008
March, 2009 March, 2008
% pa % pa % pa
Price inflation 3.0 3.6 3.7
Salary increases 3.5 4.9 4.2
Pensions 3.0 3.6 3.7
increases
Discount rate for scheme 6.8 6.9 7.0
liabilities
Expected overall rate of return N/A N/A 7.5
on assets
During the period the Group recognised pension curtailment gains arising
from the remeasurement of pension liabilities of £2.7 million in relation
to the disposal of the Evening Standard (note 6) and £1.3m in relation to
the Group's reorganisation and restructuring programmes (note 4).
22 CONTINGENT LIABILITIES
There have been no material changes in contingent liabilities since 28th
September, 2008.
The Group has issued stand by letters of credit in favour of the Trustees
of the Group's defined benefit pension fund amounting to £66.1 million
(2008 £40.0 million).
The Group is exposed to libel claims in the ordinary course of business and
vigorously defends against claims received. The Group makes provision for
the estimated costs to defend such claims when incurred and provides for
any settlement costs when such an outcome is judged probable.
Four writs claiming damages for libel have been issued in Malaysia against
Euromoney Institutional Investor and three of its employees in respect of
an article published in one of Euromoney's magazines, International
Commercial Litigation, in November 1995. The writs were served on Euromoney
on 22nd October, 1996. Two of these writs have been discontinued. The total
outstanding amount claimed on the two remaining writs is 82.0 million
Malaysian ringgits (£15.7 million). No provision has been made in these
accounts since the Directors do not believe that Euromoney has any material
liability in respect of these writs.
23 ULTIMATE HOLDING COMPANY
The Company's ultimate holding company and immediate parent company is
Rothermere Continuation Limited, a company incorporated in Bermuda.
24 RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in
this note. The transactions between the Group and its joint ventures and
associates are disclosed below.
The following transactions and arrangements are those which are considered
to have had a material effect on the financial performance and position of
the Group for the period.
Ultimate
Controlling
Party
The Company's ultimate controlling party is the Viscount Rothermere, the
Company's Chairman.
Transactions
with Directors
Other than remuneration there were no material transactions with Directors
of the Company during the period.
For the purposes of IAS 24, Related Party Disclosures, Executives below the
level of the Company's Board are not regarded as related parties.
Transactions with joint ventures and associates
Associated Newspapers Limited (ANL) has a 45% shareholding in Fortune Green
Limited. During the year the Group received revenue for newsprint, computer
and office services of £0.4 million (2008 £0.3 million). Amounts due from
Fortune Green Limited at 29th March, 2009 were £16,000 (2008 £44,000).
ANL has a 20% share in the Newspapers Licensing Agency (NLA) from which
royalty revenue of £1.8 million was received (2008 £1.6 million).
Commissions paid on this revenue total £0.2 million (2008 £0.3 million).
The amount due to the NLA on 29th March, 2009 was £0.2 million (2008 £0.2
million).
Daily Mail and General Holdings Limited (DMGH) has a 15.8% share holding in
The Press Association. During the year the Group received services
amounting to £0.8 million (2008 £0.6 million) and the net amount due from
the Press Association as at 29th March, 2009 was £82,000 (2008 £23,000).
During the period, ANL received services from companies in which directors
have an interest totalling £3.3 million (2008 £3.9 million) and received
revenue of £0.3 million (2008 £0.2 million). The net amount owed by these
companies at 29 March 2009 was £0.1 million (2008 £0.5 million).
DMGH has a 24.9% holding in Evening Standard Limited (ESL) which it
purchased during the period. A loan of £6.3 million due to DMGH from ESL
has been provided for in full in the period.
During the period, DMG Radio Australia Pty Ltd invoiced DMG Radio Perth Pty
Ltd AU$1.7 million (2008 AU$1.3 million). Amounts due from DMG Radio Perth
at 29th March, 2009 amounted to AU$0.2 million (2008 AU$0.1 million).
Other related party disclosures
The most significant change in the period with respect to related party
transactions concerns arrangements with Lebedev Holdings Limited, the
majority owner of the Evening Standard following the Group's disposal of
75.1% of the business in January 2009.
Following the sale of the 75.1% interest in the Evening Standard, ANL
entered into an on going services agreement with ESL to provide on going
services at a market rate. During the period the Group invoiced ESL £1.8
million net and the amount due from ESL as at 29th March, 2009 amounted to
£1.3 million.
At 29th March, 2009, the Group owed £1.2 million (2008 £2.1 million) to the
pension schemes which it operates. This amount comprised employees' and
employer's contributions in respect of March 2009 payrolls which were paid
to the pension schemes in April 2009.
The Group recharges its principal pension schemes with costs of investment
management fees. The total amount recharged during the period was £0.2
million (2008 £0.3 million).
Independent review report to Daily Mail and General Trust plc
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 29th March, 2009 which comprise the income statement, the balance sheet, the statement of recognised income and expense, the reconciliation of movements in equity, the cash flow statement and related notes 1 to 24. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 29th March, 2009 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditors
20th May, 2009
London
United Kingdom
Shareholder Information
Financial Calendar (provisional)
2009
| 21st May | Half Yearly Financial Report published |
| 3rd June | Interim ex-dividend date |
| 5th June | Interim record date |
| 3rd July | Payment of interim dividend |
| 23rd July | Interim management statement |
| 28th September | Pre-close trading update |
| 30th September | Payment of interest on loan notes |
| 4th October | Year end |
| 26th November | Annual results and final dividend announced |
| 2nd December | Ex-dividend date |
| 4th December | Record date |
2010
| 14th January | Annual Report published |
| 10th February | Interim management statement |
| 10th February | Annual General Meeting |
| 12th February | Payment of final dividend |
| 31st March | Payment of interest on loan notes |
| 4th April | Half year end |
| 27th May | Half Yearly Financial Report published |
Contacts
Daily Mail and General Trust plc
Northcliffe House
2 Derry Street,
London
W8 5TT
Telephone: 020 7938 6000 Email: investor.relations@dmgt.co.uk
Auditors
Deloitte LLP
2 New Street Square
London
EC4A 3BZ
Stockbrokers
JPMorgan Cazenove Limited
20 Moorgate
London
EC2R 6DA
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Further investor information and contacts
Copies of this Half Yearly Financial Report are available electronically from this website or from the Secretary upon request .
Highlights of the announcement of this Report will be advertised on 21st May, 2009 in London Lite, on 22nd May, 2009 in the Daily Mail, Metro, Western Morning News and the Western Daily Press and on 24th May, 2009 in The Mail on Sunday.