International event organiser and publisher Daily Mail and General Trust’s (DMGT) Half Yearly Financial Report for the six months ended 31 March 2020 showed a 5% drop in revenues (to £690m from the comparative 2019 figure of £724m) and operating profit (down 28% to £65m from £90m 2019) under the impact of Covid-19. The Group, nevertheless, described its overall financial performance as ‘solid’ despite the impact on its exhibitions business.
CEO Paul Zwillenberg, CEO, commented: “DMGT delivered a solid performance in the first half of the year, reflecting a strong first five months of trading followed by one month of weakness due to the Covid-19 pandemic. Since February, we have moved quickly to protect our stakeholders and actively support our portfolio of businesses.
“The Group benefits from its balanced portfolio, supported by a strong balance sheet. Our B2B subscription businesses, Insurance Risk, US Property Information and EdTech, continue to trade well, showing growth and resilience. Our Consumer Media, UK Property Information and Events and Exhibitions have been significantly more impacted by the Covid-19 crisis.”
The Events and Exhibitions business has cancelled or postponed all events scheduled from March through to August, as well as the Gastech event previously scheduled for September 2020. It is increasingly likely that the remaining events still scheduled to be held in September and some events scheduled in FY 2021 will be postponed or cancelled. The business is expected to benefit from its insurance cover, though the timing of recognition remains uncertain.
Zwillenberg reported the company had taken action on investments and costs and the strategy remained the same. “We will continue to invest, in a disciplined manner, through the cycle where we are confident of the returns. All of our businesses are market leading and I am highly confident that they will come out of this global crisis stronger and fitter.”
The CEO said no government support had been sought for the business, which had maintained uninterrupted product delivery across the Group, other than the required cancellation of events.
Despite a strong first five months of trading over the period under review, DMGT said the outlook remained unclear due to Covid-19.
Key points of the half-year report included:
- Stable Group underlying revenue
- Covid-19 and planned B2B investment were impacting profit: revenue underlying growth was flat, 0%, and cash operating income down 17% underlying; 11% margin
- Adjusted operating profit down 22% underlying; 9% margin
- Adjusted profit before tax down 20% underlying
- Almost all second half events cancelled or postponed: £8m of accelerated costs recognised in H1 2020
- Adjusted EPS down 33%; reflecting reduced profits, increased tax rate and reduced number of shares
- Statutory revenue £683m, statutory profit before tax £80m and statutory EPS 89.7p
DMGT also reported the disposal of Energy Information (Genscape) and BuildFax during the period and the acquisition of the ‘i’ and OneSearch Direct, as well as increased investment in start-up Cazoo.
The interim dividend increased +3% to 7.5p, reflecting first half trading performance.
The Group reported pro forma net cash £163m and £380m of committed undrawn bank facilities and statutory net cash £206m.
The B2B subscription business remained resilient, the report noted, with Covid-19 pandemic causing challenging market conditions for Consumer Media, UK Property Information and Events & Exhibitions.
The Board said it was confident that DMGT is positioned to withstand the uncertainties of the period ahead.