TIDMDMGT
RNS Number : 9631Z
Daily Mail & General Trust PLC
27 May 2021
27 May 2021
Daily Mail and General Trust plc ('DMGT')
Half Yearly Financial Report for the six months ended 31 March
2021
Performance as expected given market conditions; realisation of
value through portfolio activity
-- Group operating performance reflects B2B Information Services
growth offset by B2B Events & Exhibitions and Consumer
Media:
o Revenue down 12% underlying
o Cash operating income(2) down 13% underlying; 11% margin
o Adjusted(3) operating profit down 19% underlying; 9%
margin
o Adjusted profit before tax down 20% underlying
o Adjusted EPS up 12%
-- Interim dividend increased +1% to 7.6p
-- Statutory(4) : revenue GBP547m; profit before tax GBP42m, down 45%; EPS 111.3p, up 24%
-- Active portfolio management strategy delivering value creation:
o Increased investment in Cazoo in October 2020; proposed
transaction values stake at c.US$1.35bn(5) vs GBP117m total
investment
o Disposal of EdTech (Hobsons) for c.US$410m in March 2021
o Acquisition of New Scientist for GBP67m in March 2021
-- Strong financial position maintained: pro forma net cash
GBP293m(6) and GBP362m of committed undrawn bank facilities;
statutory net cash GBP199m
-- Outlook:
o B2B Information Services: positioned for continued growth
o Events & Exhibitions: physical events scheduled for H2 but
risk of further postponements or cancellations
o Consumer Media: advertising depends on business confidence and
remains unpredictable
Adjusted Results(3) Statutory Results(4)
(from continuing and discontinued
operations)
Half Year Half Year Change Half Year Half Year
2021 2020 2021 2020
---------- ---------- ------------------------- ----------- ----------
Reported Underlying(1)
---------- ---------- --------- -------------- ----------- ----------
Revenue GBP580m GBP690m -16% -12% GBP547m GBP642m
---------- ---------- --------- -------------- ----------- ----------
Cash operating income GBP66m GBP75m -11% -13%
---------- ---------- --------- -------------- -----------------------
Operating profit GBP55m GBP65m -17% -19% GBP44m GBP35m
---------- ---------- --------- -------------- ----------- ----------
Profit before tax GBP47m GBP56m -17% -20% GBP42m GBP77m
---------- ---------- --------- -------------- ----------- ----------
Earnings per share 16.8p 15.0p +12% 111.3p 89.7p
---------- ---------- --------- -------------- ----------- ----------
Dividend per share 7.6p 7.5p
----------- ----------
Paul Zwillenberg, CEO, commented:
"We created significant value for our shareholders during the
first half, through active management of the portfolio and
continued strong operational execution.
We achieved an attractive price of c.US$410m for the disposal of
Hobsons, our EdTech business. This equated to over 50x operating
profit, clearly demonstrating the rewards of our approach to
organic investment in our businesses and our focus on improved
operational performance.
Our financial flexibility enabled us to continue to invest in
Cazoo through multiple funding rounds. Despite the near-term
economic uncertainty, we had conviction in its opportunity to
transform the used car market. Cazoo continues to go from strength
to strength and its proposed SPAC combination on the New York Stock
Exchange would value our stake at US$1.35bn, a return of eight
times on our capital.
I am also delighted to welcome New Scientist to our
market-leading Consumer Media division. It is a high-quality,
subscriptions-led business with great people and will further
improve the quality of our revenues.
From a financial and operational perspective, DMGT delivered a
solid performance in the first half of the year. We achieved strong
underlying growth in revenue and profits from our B2B Information
Services businesses, where Property Information was a highlight.
Within Consumer Media, there was good revenue and profit growth
from MailOnline and a solid performance from the Mail print titles
driving profit growth for the Mail businesses whilst,
unsurprisingly, Metro and our Events business continued to be
impacted by the pandemic.
Five years into my tenure as CEO, I am incredibly proud of the
hard work, creativity and commitment everyone at DMGT has
demonstrated and what has been achieved as a result. I am excited
and confident about our future as we continue to invest in our
market-leading businesses and remain well placed to consider
acquisitions to drive growth and create long-term value for
shareholders."
Half Year 2021 Financial Results Summary
Segmental performance:
Adjusted(3) results Statutory(4)
(from continuing and discontinued results
operations)
Half Half Change Half Half
Year Year Year Year
2021 2020 2021 2020
GBPm GBPm GBPm GBPm
------ ------ ------------------------- ------- ------
Reported Underlying(1)
------ ------ --------- -------------- ------- ------
Revenue:
B2B: Information
Services 266 268 -1% +9% 232 219
B2B: Events & Exhibitions 4 77 -95% -92% 4 77
Consumer Media 311 345 -10% -13% 311 345
------ ------ --------- -------------- ------- ------
DMGT Group 580 690 -16% -12% 547 642
------ ------ --------- -------------- ------- ------
Cash operating income(2):
B2B: Information
Services 47 40 +17% +36%
B2B: Events & Exhibitions - 5 -107% N/A*
Consumer Media 39 48 -19% -21%
Corporate costs (20) (18) +10% +12%
------ ------ --------- --------------
DMGT Group 66 75 -11% -13%
------ ------ --------- -------------- ------- ------
Operating profit:
B2B: Information
Services 41 35 +19% +40% 37 28
B2B: Events & Exhibitions (1) 5 -110% N/A* (2) (1)
Consumer Media 34 44 -23% -25% 32 39
Corporate costs (20) (18) +9% +10% (22) (21)
------ ------ --------- -------------- ------- ------
DMGT Group(u) 55 65 -17% -19% 45 45
------ ------ --------- -------------- ------- ------
Amounts are stated rounded to the nearest million pounds,
consequently totals may not equal the sum of the component
integers.
* Events & Exhibitions' cash OI and adjusted operating
profit both reduced by an underlying GBP9m.
u The DMGT Group statutory operating profit shown above excludes
the share of operating profits from joint ventures and
associates.
-- Adjusted revenue of GBP580m; underlying decrease -12%: B2B
Information Services growth, driven by Property Information, was
more than offset by decreases in Events & Exhibitions and
Consumer Media.
-- Cash operating income (Cash OI)(2) GBP66m; underlying
decrease -13%: reduction due to the impact of Covid-19 on Events
& Exhibitions and Consumer Media's Metro newspaper more than
offsetting growth from B2B Information Services. Includes GBP10m of
insurance benefit in respect of cancelled or postponed events.
-- Adjusted operating profit GBP55m; underlying decrease -19%:
reflecting the same operating dynamics as Cash OI.
-- Statutory operating profit GBP44m: compared to GBP35m in the prior year.
-- Losses from JVs and associates GBP1m: compared to a loss of GBP7m in the prior year.
-- Adjusted profit before tax (PBT) GBP47m: down an underlying
-20%, including GBP4m increase in net finance costs due to impact
of lower interest rates on interest income. Statutory PBT GBP42m
(H1 2020 GBP77m).
-- Tax: adjusted tax charge GBP8m (H1 2020 GBP22m); with the
adjusted tax rate reducing to 18%. The statutory tax credit was
GBP36m and there was also a statutory tax charge of GBP58m on
discontinued operations, giving a total net tax charge of
GBP22m.
-- Earnings per share: adjusted EPS up +12% to 16.8p (H1 2020
15.0p). Statutory EPS was 111.3p (H1 2020 89.7p) including the
profit on disposal of the EdTech business.
-- Pro forma net cash(6) was GBP293m as at 31 March 2021,
adjusted to exclude GBP95m of lease liabilities recognised
following the adoption of IFRS 16. The net cash:EBITDA ratio was
2.6 on this basis. The statutory net cash as at 31 March 2021 was
GBP199m.
-- Portfolio activity: there were several transactions in the
period. The disposal of Hobsons, the EdTech business, in March 2021
realised c.US$410m of proceeds. New Scientist, one of the world's
leading science publishing titles, was acquired for GBP67m in March
2021, adding a growing subscription-based business to the Consumer
Media portfolio. In October 2020, three printing plants were
acquired for GBP10m and DMGT invested a further GBP34m in Cazoo,
bringing the total investment to GBP117m. In March 2021, Cazoo
announced its intention of combining with AJAX I, the US-listed
SPAC, valuing DMGT's stake at c.US$1.35bn(5) .
-- Outlook: the financial performance during the second half of
the financial year is expected to reflect varying levels of impact
on our businesses from the Covid-19 pandemic.
o B2B Information Services: Insurance Risk and the Property
Information businesses are expected to deliver underlying revenue
growth.
o Events & Exhibitions: despite the planned occurrence of
two major physical events in September 2021, trading conditions are
likely to remain very challenging.
o Consumer Media: advertising is difficult to predict as usual,
with circulation revenues expected to be resilient, helped by the
Daily Mail cover price increase.
o Organic investment will continue through the cycle and will
subdue margins, notably for Property Information as we build our
businesses for the long-term.
Enquiries
Investors:
Tim Collier, Group CFO +44 20 3615 2902
Adam Webster, Head of Investor Relations +44 20 3615 2903
Media:
Doug Campbell, Teneo +44 7753 136628
Tim Burt, Teneo +44 7583 413254
Half Year Results presentation and Q&A conference call
A virtual presentation of the Half Year Results will be given at
9.30am on 27 May 2021 and will be followed by a question and answer
session for City analysts and investors. The presentation will be
available on our website at www.dmgt.com/webcasthy21 and the
dial-in number for questions is +44 (0)330 336 9434, confirmation
code 7516756.
Next trading update
The Group's next scheduled announcement of financial information
will be its nine month trading update on 22 July 2021.
About DMGT
DMGT manages a portfolio of companies that provide businesses
and consumers with compelling information, analysis, insight,
events, news and entertainment. The Group takes a long-term
approach to investment and has market-leading positions in consumer
media, insurance risk, property information and events &
exhibitions. In total, DMGT generates revenues of around
GBP1.2bn.
Notes
1 Underlying growth rates are on a like-for-like basis, see
pages 28 to 30. Underlying revenues, cash operating income(2) and
operating profits are adjusted for constant exchange rates, the
exclusion of disposals and closures, the inclusion of the
year-on-year organic growth from acquisitions and for the
consistent timing of revenue recognition. For Consumer Media ,
underlying revenues exclude low margin newsprint resale activities.
For events, the comparisons are between events scheduled to be held
in the six-month period and the same events held, or that were
scheduled to be held, the previous time. Consequently, underlying
growth rates include all costs for events that were originally
scheduled in the six months to March 2021 and that were cancelled
or postponed. Similarly, the prior year comparatives include all
revenues and costs for the previously scheduled occurrence of the
same event, whether it occurred or not. Underlying growth rates
include the negative impact of events held in H1 2020 that are
usually annual but which are not expected to be held in FY 2021.
Due to cancellations or postponements, the reported results in both
periods include costs recognised in advance of the scheduled
occurrence of an event; but for the calculation of underlying
growth rates, the costs are recognised when the event was scheduled
to be held.
2 Cash operating income (Cash OI) is calculated by adding back
depreciation and amortisation expenses, which are non-cash items,
to adjusted operating profit and then deducting capital
expenditure. The depreciation charge on the additional right-of-use
assets, which has resulted since 1 October 2019 from the adoption
of IFRS 16, the lease accounting standard, is not added back when
calculating Cash OI.
3 Unless otherwise stated, all profit and profit margin figures
in this Interim Financial Report refer to adjusted results and not
statutory results. The Board and management team use adjusted
results, rather than statutory results, to give greater insight to
the financial performance of the Group and the way that it is
managed. Similarly, adjusted results are used in setting management
remuneration. Adjusted results are stated before exceptional items,
other gains and losses, impairment of goodwill and intangible
assets, amortisation of intangible assets arising on business
combinations, pension finance credits and fair value adjustments .
For reconciliations of statutory profit before tax to adjusted
profit before tax and supporting explanations, see pages 23 to
25.
4 The statutory results are IFRS figures before any adjustments.
Other than earnings per share, they exclude discontinued
operations, namely the Energy Information business, Genscape, and
the EdTech business, Hobsons, which was disposed of in March 2021.
The H1 2020 statutory results have been reclassified
accordingly.
5 On 29 March 2021, Cazoo announced a definitive business
combination agreement with AJAX I, a publicly traded special
purpose acquisition company (SPAC) listed on the New York Stock
Exchange. The transaction values the combined company at a pro
forma equity value of approximately US$8.1bn at US$10.00 per share.
The combined value in cash proceeds and shares in the listed Cazoo,
valued at US$10.00 per share as per the committed private
investment in public equity (PIPE), that DMGT will receive on
closing is expected to be approximately US$1.35bn.
6 The actual net cash position as at 31 March 2021 was GBP199m
including GBP95m of lease liabilities in respect of the adoption of
IFRS 16, the lease accounting standard, and the net cash:EBITDA
ratio was 1.5. The lease liabilities largely reflect the future
operating costs of renting office space and are not considered a
component of net debt when the Board reviews the Group's available
capital. Consequently, both the escrow and lease liabilities are
excluded from pro forma net cash. The pro forma net cash and pro
forma net cash:EBITDA ratio as at 31 March 2021 were GBP293m and
2.6 respectively.
The pro forma net cash of GBP293m includes gross cash of
GBP496m, GBP202m of bond debt and GBP1m net debt in respect of
derivatives and collateral. Gross cash includes cash, cash
equivalents and short-term deposits, net of overdrafts.
Percentages are calculated on actual numbers to one decimal
place.
The average GBP: US$ exchange rate for the first half of the
year was GBP1:$1.35 (against GBP1:$1.28 last year). The rate at the
Half Year end was $1.38 (2020: $1.24), compared to $1.29 at the
September 2020 year end.
Daily Mail and General Trust plc
Northcliffe House, 2 Derry Street,
London, W8 5TT
www.dmgt.co.uk
Registered in England and Wales No. 184594
Group Review Half Year 2021
The first half of FY 2021 was a busy period for DMGT. It is
pleasing to report that our businesses are performing in line with
our expectations and our strategy is creating value, despite the
significant challenges that the Covid-19 pandemic has presented.
Our companies have continued to invest in people, product and
technology and have served their customers with exceptional
professionalism throughout.
In recent years, DMGT has streamlined its portfolio to focus on
assets with the potential to deliver compelling returns through
strong cash flow generation and/or growth in capital value. In the
first half of FY 2021 there was further value realisation:
-- Hobsons disposal: in 2017, the EdTech business was restructured to focus on the higher growth opportunities in Student Success. Since then, consistent with DMGT's strategy, the business has invested organically and focussed on improving operational execution to support sustainable profit growth. Whilst DMGT viewed the long-term opportunity favourably, the value of Hobsons was recognised by its acquirers and the business was sold in March 2021 for c.US$410m, compared to a total acquisition cost of US$46m, and a valuation multiple of 3.8x FY 2020 revenue and over 50x FY 2020 adjusted operating profit.
-- Cazoo investment and planned public listing: DMGT, through
its venture capital arm, dmg ventures, has invested a total of
GBP117m in Cazoo through four funding rounds starting in November
2018. DMGT's financial flexibility, understanding of the
opportunity and conviction in the business model enabled dmg
ventures to increase its stake in April 2020, when many investors
were wary of committing capital due to the pandemic, and again in
October 2020. As a result of a proposed business combination with
AJAX I, Cazoo is expected to be listed on the New York Stock
Exchange later this financial year and DMGT's stake would be valued
at approximately $1.35bn(5) at an issue price of US$10.00 per
share.
DMGT also continued to make good progress in the first half
against the three strategic priorities which have served it well in
its transformation to date:
-- Increasing portfolio focus: through the disposal of Hobsons,
we exited the EdTech sector and our B2B Information Services now
consists of Insurance Risk and Property Information. In Consumer
Media, DMGT acquired the New Scientist, a business with a strong
subscription base that will improve the quality of consumer revenue
streams. Importantly, the DMGT portfolio remains diversified by
sector, business model and across our three portfolio roles:
'Predictable performers', 'Growing and delivering', and 'Businesses
for the future'.
-- Improving operational execution: excellent operational
execution is embedded in DMGT's culture and is a continuous
process. Our businesses have continued to show exceptional
operational agility during the first half as the Covid-19 situation
and market conditions evolve. We are particularly pleased with the
continued operational progress in RMS, Landmark, Trepp and Consumer
Media in the first half, where recent investments have enabled
successful product launches, increased customer demand and enhanced
market share gains.
-- Maintaining financial flexibility: pro forma net cash
increased to GBP293m at the period end. The balance sheet gives us
the financial strength to support our strategy of organic
investment to build on the portfolio's market-leading positions and
pursue acquisition opportunities at attractive valuations.
In February 2021, we held our first virtual Investor Briefing,
featuring Landmark and Trepp, our Property Information businesses,
providing deep insight into their products, market position and
exciting opportunities for growth.
Capital allocation
The Group takes a long-term approach to capital management and
DMGT's capital allocation framework remains unchanged. Organic
investment is DMGT's top priority and the Group continues to invest
through the cycle, avoiding a focus on short-term EPS growth. The
dividend is the primary mechanism for returning capital to
shareholders and DMGT remains committed to its policy of delivering
dividend per share growth in excess of inflation.
DMGT adopts a balanced and flexible approach to uses of capital
across the two remaining categories: acquisitions and shareholder
returns. The Group has capacity for meaningful acquisitions and
remains highly disciplined in its use of capital. We will
prioritise the allocation of capital towards opportunities that
build on our skills, combining proprietary content, data science
and sophisticated analytics, across both B2B and Consumer Media.
Currently, valuations are relatively more attractive in the
Consumer Media sector and our most recent acquisitions reflect the
opportunity we see here to invest and deliver compelling financial
returns.
As a portfolio manager with a long-term perspective, the
valuations of acquisitions and disposals are particularly important
to DMGT and the Group will continue to take an opportunistic
approach, as demonstrated by the acquisition of New Scientist and
disposal of Hobsons.
Sustainability
DMGT takes sustainability seriously and we are pleased to have
published our first Sustainability Report in March 2021, available
on www.dmgt.com . The Board is proud of the wide range of
initiatives undertaken across DMGT's businesses in consideration of
Environmental, Social and Governance (ESG) factors, which we
continue to develop for all our stakeholders' long-term
benefit.
Group Financial Review Half Year 2021
This interim management report focuses on the adjusted results
to give a more comparable indication of the Group's business
performance. The adjusted results are summarised below:
Adjusted results(2) Half Year Half Year Change Full Year
(from continuing and discontinued 2021 2020 2020
operations) GBPm GBPm GBPm
Reported Underlying(1)
Revenue 580 690 -16% -12% 1,211
Cash operating income(2) 66 75 -11% -13% 110
Operating profit 55 65 -17% -19% 90
Losses from JVs and associates (1) (7) -81% -81% (8)
Net finance costs (7) (2) +179% +179% (10)
---------- ---------- --------- -------------- ----------
Profit before tax 47 56 -17% -20% 72
Tax charge and minority
interests (8) (22) -62% (13)
Group profit 38 34 +11% 59
Adjusted earnings per share 16.8p 15.0p +12% 26.1p
---------- ---------- --------- -------------- ----------
Amounts are stated rounded to the nearest million pounds,
consequently totals may not equal the sum of the component
integers.
Revenue
Group adjusted revenue for the six months to 31 March 2021,
including discontinued operations, was GBP580m, a decrease of 16%,
despite strong growth from Property Information. The performance
reflected the varied market conditions resulting from the Covid-19
pandemic, as well as the effect of disposals and a weaker US
dollar. On an underlying(1) basis, revenue was down an underlying
12%. Underlying growth was delivered in subscriptions, digital
advertising and transactions but was offset by the expected decline
in events, print advertising and circulation.
Cash operating income(2)
Cash operating income ('cash OI') of GBP66m decreased 11% in
absolute terms and 13% on an underlying basis. Cash OI is
considered by the Board to be a good indicator of the underlying
cash generation of the businesses and it is included as a core
element of the incentive plans for all senior management teams. The
underlying decrease reflects the impact that the Covid-19 pandemic
has had on Events & Exhibitions and Consumer Media's Metro
newspaper, where reductions more than offset growth in B2B
Information Services. The Group cash OI margin was 11%, in line
with the first half of the prior year.
Operating profit
Adjusted operating profit of GBP55m decreased 17% in absolute
terms and by 19% on an underlying basis, due to the operational
trends described above. The adjusted operating margin was 9%, in
line with the first half of the prior year.
Profit before tax and EPS
Adjusted profit before tax was GBP47m, a decrease of 17% in
absolute terms and 20% on an underlying basis. There was a GBP6m
reduction in the share of operating losses from joint ventures and
associates which was largely offset by a GBP4m increase in net
finance costs due to the adverse impact of lower interest rates on
interest income. The adjusted tax charge was GBP8m, a 61% reduction
on last year due to the combination of lower adjusted profit before
tax and a lower effective tax rate of 18%. Adjusted basic earnings
per share increased by 12% to 16.8p.
The statutory profit before tax for the period was GBP42m, a
reduction of GBP35m on the prior year, which benefitted from the
profit on disposal of Property Information businesses. Statutory
basic earnings per share were 111.3p, an increase of 24% including
the benefit of the profit on disposal discontinued operations,
namely Hobsons, the EdTech business.
The table below sets out the reconciliation from statutory
profit before tax to adjusted profit before tax. More detail and
explanations are provided on pages 23 to 25.
Half Year Half Year Explanation
2021 2020 (as per page
GBPm GBPm (23)
Statutory profit before tax 42 77
Discontinued operations 233 150 1
Exceptional operating costs /
(credit) 6 (8) 2
Intangible impairment and amortisation 7 18 3
Profit on sale of assets (241) (179) 4
Pension finance credit (1) (2) 5
Adjusted profit before tax 47 56
Amounts are stated rounded to the nearest million pounds,
consequently totals may not equal the sum of the component
integers.
Full Year Outlook
Several of the markets our businesses operate in continue to be
impacted by the Covid-19 pandemic and it remains difficult to
predict one likely outcome for the Group in FY 2021. DMGT remains
alert to the range of possible upside and downside scenarios, and
we will continue to adjust our behaviour and actions as
circumstances evolve. It is prudent to not provide formal Group
guidance for FY 2021; however, we are able to provide some
commentary on the outlook for our businesses based on existing
market and operational trends.
Group: the underlying financial performance in FY 2021, for the
Group as a whole, will depend on the dynamics of the individual
businesses, as described below.
B2B Information Services: there will be continued significant
organic investment in the second half of the financial year,
particularly for our Property Information businesses, Landmark and
Trepp. At a business level, we are anticipating the following
dynamics:
-- Insurance Risk : RMS is expected to deliver modest revenue
growth in FY 2021, driven by recent sales bookings, before a
gradual acceleration as the new products and services gain further
traction with customers.
-- Property Information : following a strong H1 2021
performance, market conditions are expected to remain favourable
for Landmark in the UK in the third quarter. Volumes are likely to
be weaker in the final quarter, following expected stamp duty
increases at the end of June 2021. Trepp is expected to continue to
grow sales and benefit from strong demand from its customers.
Investment to drive long-term growth in both businesses will
continue, which will impact margins in the second half of the
financial year.
B2B Events and Exhibitions : vaccination programmes are
progressing, but exhibitors' and delegates' ability and willingness
to travel internationally remain uncertain. Big 5 Dubai and
Gastech, two of the business's three largest events, are currently
scheduled to be held in September 2021. They are expected to
deliver significantly less revenue and profit than usual. The
business is, however, expected to recognise US$7m of insurance
benefit in the second half of the financial year.
Consumer Media : the advertising market inherently lacks
visibility and conditions are likely to remain challenging until
economic confidence returns. The expected easing of lockdown
restrictions is likely to benefit circulation volumes, particularly
for Metro. Circulation revenues will benefit from the cover price
increase of the Monday to Friday editions of the Daily Mail, from
70p to 80p, which was implemented on 29 March 2021. The cash
operating income margin and operating margin will reflect the
revenue dynamics, the inclusion of New Scientist, the benefit of
continued cost efficiencies within the newspapers, and organic
investment in digital products.
JVs and associates: are primarily early-stage businesses that
DMGT invests in to generate long-term capital value. DMGT neither
controls them, nor is operationally involved, unlike subsidiary
businesses. The current expectation is that the JVs and associates
are likely to generate cumulative net losses this financial
year.
Net finance costs: are expected to be higher than the prior year
as a result of significantly reduced interest income on DMGT's
gross cash deposits, due to lower interest rates.
Taxation: the adjusted tax rate will depend on the impact of the
Covid-19 pandemic, including on the geographical mix of profits.
The FY 2021 rate is currently expected to be around 20%.
Business Review
Business to Business (B2B) Information Services
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue 266 268 (1)% +9% 527
Cash operating income(2) 47 40 +17% +36% 75
Adjusted(3) operating
profit 41 35 +19% +40% 65
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin 18% 15% 14%
Adjusted(3) operating
margin 15% 13% 12%
---------- ---------- -------- -------------- ----------
The B2B division has been separated into B2B Information
Services and B2B Events and Exhibitions to help investors
understand the drivers of revenue, profitability and valuation.
B2B Information Services comprise the Group's Insurance Risk and
Property Information businesses, following the disposal of the
EdTech business, Hobsons, in March 2021 and the Energy Information
business, Genscape, in November 2019. B2B Information Services
revenues totalled GBP266m, up 9% on an underlying basis. There was
strong growth from Property Information and a stable performance
from Insurance Risk. Revenues decreased by 1% in absolute terms
including the adverse impact of disposals and the weaker US
dollar.
B2B Information Services cash operating income grew by an
underlying 36% to GBP47m and the margin increased to 18%.
Similarly, B2B Information Services operating profits grew an
underlying 40% and the operating margin increased to 15%. There was
underlying growth across both Insurance Risk and Property
Information, whilst the margin improvement was driven by Property
Information revenue growth.
Outlook: all three B2B Information Services companies are well
positioned to deliver revenue growth in the second half of the
year. Particularly strong year-on-year growth is expected from the
UK Property Information business, Landmark, in the third quarter,
driven by higher residential property transaction volumes. The
Insurance Risk and US Property Information businesses are largely
subscription based with high renewal rates and both are expected to
deliver revenue growth during the second half of the year.
Insurance Risk: RMS
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue 117 123 -5% 0% 248
Cash operating income(2) 20 22 -5% +4% 35
Adjusted(3) operating
profit 18 19 -4% +7% 34
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin 17% 17% 14%
Adjusted(3) operating
margin 16% 16% 14%
---------- ---------- -------- -------------- ----------
The Insurance Risk business, RMS, provides solutions that help
insurers, reinsurers, brokers, financial markets and public
agencies evaluate and manage catastrophe risks throughout the
world. Revenues were stable on an underlying basis, with growth in
the second quarter. The benefit of growth from product
subscriptions and continuing high renewal rates was offset by a
reduction in consulting services. Customer budgets remained under
pressure, with a longer sales cycle due to market uncertainty about
the magnitude and timing of losses that will result from the
pandemic, estimated to be at least US$80 billion. Reported revenues
decreased 5% to GBP117m, reflecting the adverse impact of the
weaker US dollar.
Investment to deliver the product roadmap continued in the
period as expected. Cash operating income grew an underlying 4% and
adjusted operating profit grew an underlying 7%, although margins
remained stable at 17% and 16% respectively due to the adverse
impact of foreign exchange rate movements. RMS's revenues are US
dollar denominated whereas a portion of the cost base is
denominated in pounds sterling.
In May 2021, RMS held the second virtual version of Exceedance,
its annual customer conference, to address more than 2,700
customers and industry participants. At the conference, RMS
highlighted the considerable progress made with customers who have
migrated successfully, deploying Risk Modeler 2.0, the software as
a service (SaaS) application for risk modelling, on the Risk
Intelligence platform. During the period, RMS supported a range of
customers from each segment of the market, including insurers,
reinsurers and brokers, and from all major geographical regions, as
they successfully deployed applications and IQ analytics on Risk
Intelligence. It is a truly unified model and analytics platform
and customer migration to the cloud is expected to be an important
enabler of RMS's future revenue growth.
At Exceedance, the expected June 2021 release of an enhanced
version of ExposureIQ, including new capabilities for catastrophe
event response, was also announced. TreatyIQ, which harnesses Risk
Intelligence's scale and architecture, was made available in
January 2021 and is an important step forward in better equipping
treaty underwriters with flexible analytics for complex reinsurance
portfolios.
RMS also continues to invest in model development and, in June
2021, will release the first climate change models to the industry.
These will support customers as they gain a deeper understanding of
the impact of climate change on their businesses and portfolios, in
the near and long term, and as they comply with increasing
regulatory reporting requirements. RMS will also release three new
models for the Asia Pacific region, including a new China flood
model, as well as an upgraded version of the North Atlantic
hurricane model. Additional new and upgraded natural catastrophe
models are expected to be released later in 2021.
Outlook: feedback on the Risk Intelligence platform and related
products remains encouraging as customers continue to migrate to a
cloud-based service. Recent bookings have been encouraging and the
business is still expected to deliver modest revenue growth in FY
2021, before a gradual acceleration as the new products and
services gain traction.
Property Information
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue 115 96 +20% +20% 187
Cash operating income(2) 24 14 +80% +83% 29
Adjusted(3) operating
profit 22 12 +86% +89% 24
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin 21% 14% 16%
Adjusted(3) operating
margin 19% 12% 13%
---------- ---------- -------- -------------- ----------
The Property Information portfolio is comprised of two
businesses: Landmark Information Group (Landmark), which operates
in the UK, and Trepp in the US. Revenues grew by 20% on an
underlying basis, with particularly strong growth from Landmark,
which accounts for approximately three quarters of Property
Information revenues.
Landmark benefitted from high transaction volumes in the UK
residential property market in the first half and delivered
underlying revenue growth of 24%. Higher transaction volumes were
supported by reductions in stamp duty, introduced in July 2020, and
by pent up demand following particularly low levels of activity in
March to June 2020, caused by the first UK lockdown. Landmark made
encouraging strategic and operational progress in the period,
strengthening its product lines and market position. At DMGT's
Investor Briefing event on 10 February 2021, investors had the
opportunity to learn about the end-to-end ecosystem that Landmark
has built through organic investment and acquisitions. The
development of an open platform to increase the speed and
transparency of the transaction process in the UK residential
property market presents exciting opportunities for Landmark to
expand its scale and profitability. In April 2021, Landmark
disposed of its Irish operations to focus entirely on the UK.
Trepp's underlying revenue growth of 11% reflects increased
demand as customers sought to further understand their portfolio
risk exposure using Trepp's tools, analytics, data and models.
There was strong growth from the Commercial Real Estate and Banking
businesses which have benefitted from organic investment in product
and technology initiatives. Trepp's compelling long-term growth
potential, supported by its strong core business position and
strategy to enter adjacent market segments, was presented at DMGT's
February Investor Briefing event.
Cash operating income was GBP24m with the margin increasing from
14% to 21% in the period, whilst the adjusted operating margin
increased from 12% to 19%, benefitting from the strong revenue
growth.
Outlook: Landmark is expected to deliver particularly strong
year-on-year revenue growth during the third quarter, reflecting
soft comparisons in the prior year and the continued benefit from
reduced levels of stamp duty. At the end of June, stamp duty is
expected to increase to prior levels, other than a tapered
extension to the end of September for properties costing less than
GBP250,000. Consequently, transaction volumes in the final quarter
of the year are likely to be weaker.
In the US, Trepp is well positioned to deliver growing
subscription revenues with strong customer demand.
Landmark and Trepp are investing organically in their businesses
to drive future revenue growth, and this will reduce margins in the
short-term. A substantial portion of Landmark's cost base is
variable and consequently the operational gearing effect on margins
from changes in revenue is relatively limited.
EdTech: Hobsons
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue 34 42 -20% N/A 85
Cash operating income(2) 2 4 -35% N/A 10
Adjusted(3) operating
profit 1 2 -55% N/A 6
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin 7% 9% 12%
Adjusted(3) operating
margin 3% 5% 7%
---------- ---------- -------- -------------- ----------
DMGT no longer operates in the EdTech sector, following the
disposal of Hobsons for approximately US$410m in total from two
separate transactions that completed on 3 March 2021. Naviance, the
K-12 college and career readiness solution, and Intersect, the
higher education student match and fit business were sold to
US-based PowerSchool, a leading provider of K-12 education
technology solutions, for approximately US$320m. Starfish, the
higher education student retention and success platform, was sold
to EAB, a US-based education company, for approximately US$90m.
The highly attractive valuations achieved in these two
transactions reflected the significant progress made since Hobsons
was restructured in 2017 to increase its focus on the businesses
with most potential for value creation. Over the past four years,
Hobsons invested organically in technology and improved its
operational execution, creating a firm foundation for long-term
profitable growth.
Revenues decreased 20% in absolute terms due to the disposal in
early March and the weaker US dollar. As expected, investment in
modernising the core product platforms resulted in a reduction in
margins.
Outlook: Hobsons ceased being a DMGT business in March 2021.
Energy Information: Genscape
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
----------- ---------- -------- --------------
Revenue - 7 -81% N/A 7
Cash operating income(2) - 1 -61% N/A 1
Adjusted(3) operating
profit - 2 -54% N/A 2
-------------------------- ----------- ---------- -------- -------------- ----------
Cash operating income(2)
margin N/A 20% 20%
Adjusted(3) operating
margin N/A 23% 23%
----------- ---------- -------- -------------- ----------
DMGT no longer operates an Energy Information division,
following the disposal of Genscape for US$364m in November
2019.
Business to Business (B2B) Events and Exhibitions: dmg
events
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue 4 77 -95% -92% 79
Cash operating income(2) 0 5 -107% N/A* 4
Adjusted(3) operating
profit (1) 5 -110% N/A* 4
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin (8)% 6% 5%
Adjusted(3) operating
margin (13)% 6% 5%
---------- ---------- -------- -------------- ----------
* Cash operating income and adjusted operating profit both
reduced by an underlying GBP9m.
dmg events is an organiser of B2B exhibitions and conferences
with industry-leading events in the energy, construction,
interiors, hotel, hospitality and leisure sectors.
Two of the business's largest events are usually held in the
first half of the financial year, in November, but following the
onset of Covid-19, Big 5 Dubai was postponed to September 2021 and
the ADIPEC exhibition, our largest event, was cancelled. A virtual
version of ADIPEC was held, which received positive customer
feedback, and three small physical events occurred in the period in
Singapore, China and Vietnam. Revenue decreased 92% on an
underlying basis and, including the impact of Big 5 Dubai, by 95%
on a reported basis to GBP4m.
dmg events recognised GBP2m of costs relating to cancelled or
postponed events, compared to GBP11m in H1 2020 and GBP18m in FY
2020. The business does, however, have insurance cover for
communicable diseases, of up to US$20m per financial year until
September 2022 and US$13m (GBP10m) was recognised in the period. In
FY 2020, the full benefit of US$20m (GBP16m) was recognised in the
second half of the year. Including the benefit from insurance, the
cash operating income was break even and there was an adjusted
operating loss of GBP1m in the period.
Outlook: the business is expected to recognise US$7m of
insurance benefit in the second half of the financial year due to
cancelled and postponed events. Sales bookings for our scheduled
larger events are encouraging and consistent with the expectation
that these events will be smaller in size than in a normal year.
The vaccination programmes in Singapore and Dubai, where Gastech
and Big 5 Dubai are planned to be held in September 2021, are
progressing well, but exhibitors' and delegates' ability and
willingness to travel internationally in the near future remain
uncertain. Consequently, each event scheduled to be held in FY 2021
is expected to deliver significantly less revenue and profit than
usual and there have also been some cancellations and postponements
of smaller events in the portfolio.
Based on the current schedule, dmg events is expected to deliver
a small adjusted operating profit in the current year. If Gastech
is not held, the adjusted operating loss is likely to be
approximately GBP5m. In the extreme, if no major shows are held
this year and approximately GBP2m of costs are written off in
respect of cancelled or postponed events currently scheduled to be
held in FY 2022, the loss would be expected to be approximately
GBP15m.
DMGT firmly believes that the longer-term outlook for dmg
events' portfolio of market-leading trade shows is strong,
reflecting the importance of face-to-face events in a digitising
world.
Consumer Media: dmg media
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Revenue:
Daily Mail / The Mail
on Sunday 176 196 -10% -10% 356
MailOnline 85 79 +8% +9% 144
DailyMailTV 3 4 -6% 0% 8
-------------------------- ---------- ---------- -------- -------------- ----------
Mail Businesses 264 278 -5% -5% 508
Metro 12 41 -72% -72% 47
The 'i' 16 12 +34% -10% 27
Newsprint and other 19 14 +35% -17% 22
-------------------------- ---------- ---------- -------- -------------- ----------
Total Revenue 311 345 -10% -13% 604
Cash operating income(2) 39 48 -19% -21% 64
Adjusted(3) operating
profit 34 44 -23% -25% 56
-------------------------- ---------- ---------- -------- -------------- ----------
Cash operating income(2)
margin 12% 14% 11%
Adjusted(3) operating
margin 11% 13% 9%
---------- ---------- -------- -------------- ----------
Amounts are stated rounded to the nearest million pounds,
consequently totals may not equal the sum of the component
integers.
The Consumer Media portfolio includes two of the UK's most read
paid-for newspapers, Daily Mail and The Mail on Sunday; Metro, the
UK's highest circulation weekday newspaper pre Covid-19;
MailOnline, one of the world's leading English language newspaper
websites; the 'i', the UK national newspaper and website; and New
Scientist, one of the world's leading science publishing titles and
acquired by DMGT in March 2021.
Consumer Media revenues decreased by an underlying 13% to
GBP311m in the period. The second and third nationwide UK Covid-19
lockdowns resulted in reduced newspaper circulation volumes and a
particularly weak print advertising market.
Underlying growth from MailOnline of 9% was more than offset by
a 38% decrease in print advertising revenues, reflecting
particularly challenging market conditions for Metro and resulting
in total advertising revenues decreasing by an underlying 17% to
GBP148m. Circulation revenues, including subscriptions, decreased
an underlying 7% to GBP139m. There was strong growth in
subscriptions, notably for 'The Digital Edition', a paid-for
enhanced digital version of the Mail newspaper. Excluding
subscriptions, circulation revenues decreased an underlying 11%.
The decline in newspaper volumes was partly offset by a cover price
increase of 10p to GBP1.10 for the Daily Mail Saturday edition in
January 2020. The Mail brand remains strong, which is reflected in
the large and growing UK retail market shares held by the Daily
Mail and The Mail on Sunday, which are estimated to be 27% and 24%
respectively(7) . The estimated UK retail market share of the 'i'
remains 4%(7) .
Digital revenues continued to grow, up an underlying 11%, and
accounted for 32% of the combined revenues from our news brands in
the period, compared to 26% in the first half of the prior
year.
Reported revenues decreased 10% in absolute terms, including the
benefit of the acquisition of three printing plants in October 2020
and the full six-month benefit of the acquisition of the 'i' in
November 2019.
The cash operating income margin decreased to 12% and the
adjusted operating margin decreased to 11% from 13%. Cash operating
income and adjusted operating profit decreased by an underlying 21%
and 25% respectively, entirely due to Metro making a loss in the
period. Excluding Metro, Consumer Media cash OI and adjusted
operating profit grew, driven by continued profit growth and margin
improvement from MailOnline.
Mail businesses
Revenues for the combined Mail newspaper, website and TV
businesses (Daily Mail, The Mail on Sunday, MailOnline and
DailyMailTV) decreased by an underlying 5% to GBP264m, of which
GBP85m was generated by MailOnline. Total advertising across the
Mail businesses decreased by an underlying 1% to GBP132m, including
9% growth from MailOnline and a 16% decline in print advertising
revenues. Digital advertising accounted for 66% of total
advertising across the combined Mail businesses. The decline in
print advertising reflects the continued structural and competitive
challenges facing the UK national newspaper advertising market,
exacerbated by Covid-19 related uncertainty.
MailOnline continues to focus on attracting traffic directly to
its homepages and apps on desktop and mobile. Following
particularly high traffic levels in the early months of 2020,
driven in part by the Covid-19 pandemic, total minutes spent on the
site, excluding time viewing videos, decreased by 4% to a daily
average of 140m in the period. The direct audience accounted for
81% of minutes spent, an increase from 78% during H1 2020,
reflecting continued high levels of engagement with these valuable
and loyal customers. The total average daily global unique
browsers, excluding other platforms such as Snapchat and Facebook
video, decreased by 7% to 15.7m, due to lower levels of indirect
traffic. DailyMailTV continues to raise awareness in the US of
MailOnline, with the business's revenues of GBP3m stable on an
underlying basis. In April 2021, dmg media filed an anti-trust
lawsuit in New York, alleging anti-competitive behaviour by Google
in respect of the manipulation of digital advertising auctions and
bias in search results.
Metro and the 'i'
Metro revenues decreased by GBP29m or 72% to GBP12m, due to the
combination of low commuter volumes, causing fewer copies to be
distributed, and the weak print advertising market. This resulted
in Metro making a loss in the period, as the majority of the
revenue reduction flowed through to cash OI and operating losses.
Revenues from the 'i' were GBP16m, an underlying decrease of 10%,
reflecting lower circulation revenues partly offset by advertising
growth following the successful integration of the sales team.
New Scientist
In early March 2021, dmg media acquired New Scientist for
GBP67m. New Scientist's high-quality editorial content attracts a
large and growing international readership and we believe there are
significant digital growth opportunities to be achieved. The
acquisition improves the quality of dmg media's revenue streams, as
approximately 75% of revenues are derived from subscriptions. The
business is expected to generate cash OI and operating profit of
approximately GBP7m in the first full year of ownership, from
revenues in excess of GBP20m, and is well positioned for
growth.
In October 2020, dmg media acquired three printing plants for
GBP10m, strategically strengthening its position in the newspaper
production market and consistent with DMGT's long-term approach.
Printing publications for third-parties generated GBP5m of
low-margin revenues in the period.
As well as being acquisitive, dmg media is investing organically
in digital opportunities. The portfolio of digital subscription
products was expanded in April 2021 with the launch of The
Knowledge, a concise, curated digest of online news for busy
professionals. In addition, the business will be investing in
technology to deliver content-led performance marketing, to
generate revenues from helping to inform consumers' buying
decisions.
Outlook: in the seven months to April 2021, total Consumer Media
revenues decreased by an underlying 10%, including year-on-year
growth in April compared to a particularly weak performance in
April 2020. The advertising market inherently lacks visibility and
conditions are likely to remain challenging until economic
confidence returns. The expected easing of lockdown restrictions is
likely to benefit circulation volumes, particularly for Metro.
Circulation revenues will benefit from the cover price increase of
the Monday to Friday editions of the Daily Mail, from 70p to 80p,
which was implemented on 29 March 2021. The cash operating income
margin and operating margin will reflect the revenue dynamics, the
inclusion of New Scientist, the benefit of continued cost
efficiencies within the newspapers, and organic investment in
digital products.
Corporate costs
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Cash operating costs(2) (20) (18) +10% +12% (34)
Adjusted operating costs(3) (20) (18) +9% +10% (35)
---------- ---------- -------- -------------- ----------
As expected, Corporate operating costs increased by an
underlying 10% in the period and Corporate cash operating costs
increased by an underlying 12% to GBP20m, reflecting particularly
low incentive plan costs in the prior period.
Joint Ventures, associates and investments
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Share of pre-tax operating
losses(3) (1) (7) -81% -81% (8)
---------- ---------- -------- -------------- ----------
Amounts are stated rounded to the nearest million pounds,
consequently totals may not equal the sum of the component
integers.
DMGT holds minority stakes in early-stage businesses, primarily
through its dmg ventures arm. The Group's share of adjusted
operating losses from joint ventures and associates was GBP1m,
compared to GBP7m in the prior year. Yopa, the UK hybrid estate
agent in which DMGT owns a c.45% stake, delivered strong revenue
growth in the period and made further progress on the path to
profitability.
In addition to joint ventures and associates, DMGT also invests
in and develops early-stage businesses in which the Group holds
smaller stakes. As the percentage holdings are too small or DMGT's
level of influence insufficient for the companies to be associates,
the Group does not recognise a share of profits or losses from
these investments. The most notable is Cazoo, the UK's leading
online car retailer, which aims to transform the car buying
experience for consumers across Europe.
In October 2020, DMGT participated in a further Cazoo funding
round and invested GBP34m, increasing DMGT's total investment in
Cazoo to GBP117m. In March 2021, Cazoo announced its intention to
become publicly listed on the New York Stock Exchange (NYSE)
through a business combination with AJAX I (AJAX), a
publicly-traded special purpose acquisition company (SPAC) which is
already listed on the NYSE. If the proposed transaction proceeds
and DMGT's holding in the listed Cazoo is valued at the US$10.00
per share issue price, the combined value in net cash proceeds and
shares in the listed Cazoo that DMGT will receive on closing is
expected to be approximately US$1.35 billion. The closing share
price of AJAX on 26 May 2021 was US$9.91.
It is likely that DMGT will receive some cash proceeds on
closing, but the amount will depend on a number of factors,
including redemptions by AJAX shareholders, if any, as well as
DMGT's election and those of other shareholders with respect to
receipt of cash consideration. The split between cash and shares in
the listed Cazoo entity remains uncertain. For illustrative
purposes, however, if DMGT were to participate on a pro rata basis
and there were no redemptions by AJAX's shareholders, DMGT would
receive approximately US$90m net cash on closing and would hold a
stake equivalent to approximately 16% of the common stock of the
listed Cazoo, on a fully diluted basis.
The transaction requires the approval of the shareholders of
AJAX and Cazoo and is subject to other customary closing
conditions. It is expected to close in the final quarter of the
current financial year. Lock-up restrictions are expected to apply
for five to six months after the transaction closes. Additional
information about the proposed transaction is available on Cazoo's
website at www.cazoo.co.uk/investors .
In January 2021, Taboola, the content discovery platform,
announced its intention to list on the New York Stock Exchange
through a merger with a SPAC. The proposed transaction values dmg
ventures' stake at GBP6m, compared to a cost of GBP2m in 2015.
Outlook: DMGT's joint ventures and associates are primarily
investment-stage businesses and DMGT does not fully control them,
unlike subsidiaries. The current expectation is that they are
likely to generate cumulative net losses this financial year.
Net finance costs
Half Year Half Year Change Underlying(1) Full Year
2021 2020 Change 2020
GBPm GBPm GBPm
---------- ---------- -------- --------------
Net interest payable and
similar charges(3) (7) (2) +179% +179% (10)
---------- ---------- -------- -------------- ----------
Net interest payable and similar charges, including DMGT's share
of associates' interest costs, were GBP7m. The increase on the
prior year was primarily due to reduced interest income on DMGT's
gross cash deposits due to lower interest rates.
The pension finance credit, which is excluded from adjusted
results, was GBP1m for the period, reflecting the pension surplus
on an accounting basis. This compared to a GBP2m credit for the
same period last year and GBP4m for the prior Full Year.
Other income statement items
-- Exceptional items and amortisation
Exceptional operating costs remained at low levels in the first
half and, including GBP5m from discontinued operations, totalled
GBP6m (H1 2020 GBP8m credit). There were no impairment charges in
the period (H1 2020 GBP12m).
The charge for amortisation of intangible assets arising on
business combinations was GBP7m (H1 2020 GBP6m). The Group recorded
other net gains on disposal of businesses and investments,
including discontinued operations, of GBP241m, primarily in respect
of the disposal of Hobsons, the EdTech business (H1 2020 gain
GBP179m).
-- Taxation
The adjusted tax charge of GBP8m (H1 2020 GBP22m) is stated
after adjusting for the effect of exceptional items. The adjusted
tax rate for the half year was 18%, a reduction on 39% in H1 2020
and consistent with the FY 2020 rate of 18%.
The statutory tax credit for the period was GBP36m, including
exceptional credits of GBP44m in respect of the recognition of
previously unrecognised US deferred tax assets following the
disposal of Hobsons. There was also a statutory tax charge of
GBP58m on discontinued operations, notably an exceptional charge of
GBP59m on the gain on the disposal of Hobsons, giving a total net
tax charge of GBP22m. There were GBP14m of net exceptional tax
charges in total.
Outlook: the adjusted tax rate will depend on the impact of the
Covid-19 pandemic, including on the geographical mix of profits.
The FY 2021 rate is currently expected to be around 20%, slightly
less than previously expected.
Pensions
The net surplus on the Group's defined benefit pension schemes
increased from pro forma GBP240m at the start of the year to pro
forma GBP287m at the half year, calculated in accordance with IAS
19 (Revised). The pro forma surplus includes GBP121m in escrow,
held for the benefit of the pension schemes but classified as an
'other financial asset' on DMGT's balance sheet, as well as the
statutory net surplus of GBP166m. At the start of the year, the pro
forma surplus included GBP117m that had been made available to the
pension schemes and that was paid into escrow in the period. During
the period, the decrease in the value of the defined benefit
obligation exceeded the decrease in the value of the assets.
During the period, funding payments into the main schemes were
GBP14m and payments into escrow totalled GBP121m, including the
GBP117m referenced above. The funding plan agreed with the Trustees
is that from FY 2022 to FY 2025 inclusive, payments of GBP11m p.a.
will be made directly into the schemes and, in addition, payments
of GBP7m p.a. will be paid into escrow. The defined benefit schemes
are closed to new entrants and the next actuarial valuation is
scheduled for 31 March 2022.
Net cash and cash flow
Pro forma net cash(6) at the end of the period was GBP293m, an
increase of GBP125m since the start of the financial year,
reflecting GBP300m of disposal proceeds partly offset by the usual
seasonal cash outflows and GBP117m spent on acquisitions and
investments. Pro forma net cash is stated after adjusting to
exclude GBP95m of lease liabilities that are included in statutory
net cash following the adoption of IFRS 16, the lease accounting
standard. The lease liabilities largely reflect the future
operating cost of renting office space and are not considered a
component of net debt when the Board reviews the Group's available
capital. Consequently, they are excluded from pro forma net
cash.
The Group's cash operating income of GBP66m is stated after
GBP6m of capital expenditure. Other operating cash net outflows
totalled GBP45m including the usual seasonal outflows, notably
incentive plan payments. Group operating cash flow was GBP21m in
the period, a 39% conversion rate of operating profits to operating
cash flow, a reduction on 69% in H1 2020 reflecting the maturing of
a significant long-term incentive plan during the period.
Disposal proceeds included GBP294m from the disposal of Hobsons,
the EdTech business. Expenditure on acquisitions and investments
included GBP67m to acquire New Scientist, the science publishing
title, GBP34m of investment in Cazoo, the online used car business,
and GBP10m to acquire printing plants.
Payments in the period included dividends of GBP38m, pro forma
pension funding payments of GBP18m and taxation of GBP2m. Total
pension funding payments, including GBP117m previously made
available to the pension schemes and excluded from pro forma net
cash as at 30 September 2020, were GBP135m.
The Group's cash, cash equivalents and short-term deposits, net
of overdrafts, totalled GBP496m at the period end. Bond debt was
GBP202m, comprised of GBP201m of the 6.375% bonds, due 2027 and
less than GBP1m of the 10.0% bonds that matured in April 2021.
There was also GBP1m of net debt in respect of collateral, loan
notes and derivatives. The Group's committed bank facilities, which
mature in March 2023, were GBP362m and were completely
unutilised.
In December 2020, Standard and Poor's reaffirmed DMGT's BB
credit rating, and in May 2021, Fitch reaffirmed DMGT's BBB-
investment grade rating. The Group's preferred upper limit for
gearing remains a net debt to adjusted earnings before interest,
tax, depreciation and amortisation (EBITDA) ratio of 2.0, below the
requirements of the Group's bank covenants.
The Directors have a reasonable expectation that the Group will
continue to operate and meet its liabilities as they fall due for
at least one year. Accordingly, they are satisfied that it is
appropriate to continue to adopt the going concern basis in
preparing DMGT's accounts.
Financing and shares
During the first half of the year, the Group acquired 0.1m 'A'
Ordinary Shares for GBP1m in order to meet obligations to provide
shares under its incentive plans. It utilised 0.5m shares, valued
at GBP3m, and a further 1.4m shares from the Employee Benefit
Trust, valued at GBP10m, to provide shares under various incentive
plans. As at 31 March 2021, DMGT had 228.4m shares in issue,
including 19.9 million Ordinary Shares, and a further 6.4m 'A'
Ordinary Shares held in Treasury and the Employee Benefit Trust(8)
.
Dividend
The dividend policy is to grow the dividend in real terms and,
in the medium term, to distribute about one-third of the Group's
adjusted earnings. The policy aims to deliver a reliable and
predictable dividend growth trajectory, unaffected by fluctuations
in earnings or capital gains, while also being sufficiently prudent
to make significant investments in the long-term future growth of
the business.
The Board has declared an interim dividend of 7.6 pence per
Ordinary and 'A' Ordinary Non-Voting share (H1 2020 7.5 pence)
which will be paid on 2 July 2021 to shareholders on the register
at the close of business on 11 June 2021.
Adjusted results: statutory profit before tax (PBT)
reconciliation to adjusted PBT
The Board and management team use adjusted results, rather than
statutory results, as the primary basis for providing insight into
the financial performance of the Group and the way it is managed.
Similarly, adjusted results are used in setting management
remuneration. Adjusted results exclude certain items which, if
included, could distort the understanding of the comparative
performance of the business during the period.
The tables on pages 24 and 25 show the adjustments between
statutory profit before tax and adjusted profit before tax, by
business, for both the first half of FY 2021 (H1 2021) and H1
2020.
The explanation for each type of adjustment is as follows:
1) Discontinued operations: the adjusted results include the
pre-disposal results of discontinued operations, namely Genscape,
the Energy Information business, and Hobsons, the EdTech business,
whereas statutory results only include continuing operations. The
gains on the disposal of Genscape in FY 2020 and Hobsons in FY 2021
are excluded from both statutory and adjusted profit before
tax.
2) Exceptional operating costs: businesses occasionally incur
exceptional costs, including severance and consultancy fees, in
respect of a reorganisation that is incremental to normal
operations. These are excluded from adjusted results.
3) Intangible impairment and amortisation: when acquiring
businesses, the premium paid relative to the net assets on the
balance sheet of the acquired business is classified as either
goodwill or as an intangible asset arising on a business
combination and is recognised on DMGT's balance sheet. This differs
to organically developed businesses where assets such as employee
talent and customer relationships are not recognised on the balance
sheet. Impairment and amortisation of intangible assets and
goodwill arising on acquisitions are excluded from adjusted results
as they relate to historical M&A activity and future
expectations rather than the trading performance of the business
during the period. Software, including products, is also recognised
as an intangible asset on the balance sheet but the ongoing
amortisation of software is similar to the depreciation of tangible
assets and is an everyday cost of doing business, so is included in
both statutory and adjusted results.
4) Gain on sale or purchase of assets: the Group makes gains or
losses when disposing of businesses, for example on the disposal of
BuildFax, the US Property Information business, in H1 2020. These
items are excluded from adjusted results as they reflect the value
created since the business was formed or acquired rather than the
operating performance of the business during the period. Similarly,
the gains or losses made by joint ventures or associates when
disposing of businesses are excluded from adjusted results. Rarely,
the Group may make a gain when acquiring a business where the value
of identifiable net assets is more than the consideration paid, as
with the purchase of three printing plants in October 2020. The
gain is excluded from adjusted results as it is unrelated to the
operating performance during the period.
5) Pension finance credit: the finance credit on defined benefit
schemes is a formulaic calculation that does not necessarily
reflect the underlying economics associated with the relevant
pension assets and liabilities. It is effectively a notional credit
and is excluded from adjusted results.
Reconciliation: Statutory profit to adjusted profit - Half Year
2021
GBP millions Note IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) JV&A(H) DMGT Group
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- -----------
Statutory operating profit 18 19 - - (2) 32 (22) (1) 44
Discontinued operations 1 - - 1 (5) - - - - (4)
Exceptional operating costs 2 - - - 5 - - 2 - 6
Intangible impairment and
amortisation 3 - 3 - - 2 2 - - 7
Exclude JV's & Associates (1) 1
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -----------
Adjusted operating profit 18 22 1 - (1) 34 (20) 55
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- -----------
GBP millions Note IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) JV&A(H) FC(I) DMGT
Group
------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- ------ -------
Statutory PBT 18 19 - - (2) 35 (20) (1) (5) 42
Discontinued
operations(1) 1 - - 237 (5) - - - - - 233
Gain on sale or
purchase of
assets(1) 4 - - (237) - - (3) (1) - - (241)
Operating profit
adjustments 2,
( above) 3 - 3 - 5 2 2 2 - - 13 Total
Pension finance
credit 5 - - - - - - - - (1) (1)
Adjusted PBT 18 22 1 - (1) 34 (20) (1) (7) 47
------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- ------ -------
Notes: The figures in the Note column above correspond with explanations of the adjustments given
on page 23.
* A IR = Insurance Risk, B PI = Property Information, C
ET = EdTech, D EI = Energy Information, E E&E =
Events and Exhibitions, F CM = Consumer Media, G CC =
Corporate costs, H JV&A = Joint ventures and
Associates, I FC = Finance costs
* 1. Discontinued operations and profit on sale of
assets both include the GBP237m profit on disposal of
discontinued operations (EdTech).
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum
of the component integers.
Reconciliation: Statutory profit to adjusted profit - Half Year
2020
GBP millions Note IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) JV&A(H) DMGT Group
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- -----------
Statutory operating profit 19 9 - - (1) 39 (21) (10) 35
Discontinued operations 1 - - 2 13 - - - - 15
Exceptional operating
(credit)
/ costs 2 - - - (11) - 1 4 - (8)
Intangible impairment and
amortisation 3 - 3 - - 6 5 - 4 17
Exclude JV's & Associates (6) 6
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -----------
Adjusted operating profit 19 12 2 2 5 44 (18) 65
----------------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- -----------
GBP millions Note IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) JV&A(H) FC(I) DMGT
Group
------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- ------ -------
Statutory PBT 19 46 - - (1) 45 (21) (10) - 77
Discontinued
operations(1) 1 - - 2 147 - - - - - 150
Gain on sale or
purchase of
assets(1) 4 - (37) (1) (134) - (6) (1) - - (179)
Operating profit
adjustments 2,
( above) 3 - 3 - (11) 6 5 3 4 - 10 Total
Pension finance
credit 5 - - - - - - - - (2) (2)
Adjusted PBT 19 12 2 2 5 44 (18) (7) (2) 56
------------------- ----- ------ ------ ------ ------ ------- ------ ------ -------- ------ -------
Notes: The figures in the Note column above correspond with explanations of the adjustments given
on page 23.
* A IR = Insurance Risk, B PI = Property Information, C
ET = EdTech, D EI = Energy Information, E E&E =
Events and Exhibitions, F CM = Consumer Media, G CC =
Corporate costs, H JV&A = Joint ventures and
Associates, I FC = Finance costs
* 1. Discontinued operations and profit on sale of
assets both include the GBP134m profit on disposal of
discontinued operations (Energy Information).
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum
of the component integers.
Reconciliation: Adjusted results including and excluding
discontinued operations
Half Year 2021 Half Year 2020
GBP million Adjusted Adjusted Adjusted Adjusted
results results results results
including excluding including excluding
discontinued Discontinued discontinued discontinued Discontinued discontinued
operations operations operations operations operations operations
--------------- --------------- --------------- --------------- --------------- --------------- --------------
Revenues
Continuing
operations 547 - 547 642 - 642
Discontinued
operations 34 34 - 49 49 -
--------------- --------------- --------------- --------------- --------------- --------------- --------------
Total Revenue 580 34 547 690 49 642
--------------- --------------- --------------- --------------- --------------- --------------- --------------
Operating
Profit
Continuing
operations 54 - 54 62 - 62
Discontinued
operations 1 1 - 4 4 -
--------------- --------------- --------------- --------------- --------------- --------------- --------------
Total
Operating
Profit 55 1 54 65 4 62
--------------- --------------- --------------- --------------- --------------- --------------- --------------
Operating
margin % 9% 3% 10% 9% 8% 10%
Notes: The discontinued operations refer to Genscape, the Energy Information business that was sold
in November 2019, and Hobsons, the Energy Information business that was sold in March 2021.
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal
the sum of the component integers.
Cash operating income(2)
Half Year 2021
GBP millions IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) DMGT Group
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Adjusted operating profit 18 22 1 - (1) 34 (20) 55
Depreciation of tangible fixed assets* 2 1 - - - 7 - 11
Amortisation of intangible assets** - 2 3 - - - 1 7
Purchase of tangible fixed assets - - - - - (3) - (4)
Expenditure on intangible fixed assets** - - (2) - - - - (2)
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Cash operating income 20 24 2 - - 39 (20) 66
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Half Year 2020
GBP millions IR(A) PI(B) ET(C) EI(D) E&E(E) CM(F) CC(G) DMGT Group
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Adjusted operating profit 19 12 2 2 5 44 (18) 65
Depreciation of tangible fixed assets* 3 1 - - - 7 - 11
Amortisation of intangible assets** - 2 4 - - 1 1 8
Purchase of tangible fixed assets - - - - - (5) - (7)
Expenditure on intangible fixed assets** - (1) (2) - - - - (3)
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Cash operating income 22 14 4 1 5 48 (18) 75
------------------------------------------ ------ ------ ------ ------ ------- ------ ------ -----------
Notes: * The depreciation charge on the additional right-of-use assets, which has resulted since
1 October 2019 from the adoption of IFRS 16, the lease accounting standard, is not added
back when calculating Cash OI.
** Amortisation of intangible assets and expenditure on intangible assets refers to products
and software, not assets acquired as part of business combinations.
A IR = Insurance Risk, B PI = Property Information, C ET = EdTech, D EI = Energy Information,
E E&E = Events and Exhibitions, F CM = Consumer Media, G CC = Corporate costs
Amounts are stated rounded to the nearest million pounds, consequently totals may not
equal the sum of the component integers.
Underlying(1) analysis - Revenues
Half Year 2021 Half Year 2020
------------- ----- ------------------------------------- ------------------------------------------------
GBP millions % Underlying M&A Other Reported Underlying M&A Exchange Other Reported
------------- ----- ----------- ----- ------ --------- ----------- ----- --------- ------ ---------
Insurance
Risk 0% 117 - - 117 117 - (6) - 123
Property
Information +20% 115 - - 115 96 1 (1) - 96
EdTech N/A - (34) - 34 - (42) - - 42
Energy
Information N/A - - - - - (7) - - 7
----- ----------- ----- ------ --------- ----------- ----- --------- ------ ---------
B2B
Information
Services +9% 232 (34) - 266 212 (48) (8) - 268
B2B Events
and
Exhibitions -92% 4 - - 4 49 4 (4) (28) 77
Consumer
Media -13% 310 10 (11) 311 357 26 (1) (13) 345
DMGT Group -12% 545 (24) (11) 580 619 (18) (13) (40) 690
------------- ----- ----------- ----- ------ --------- ----------- ----- ---------
Notes: M&A adjustments are for disposals and acquisitions. The underlying results include the post-acquisition
organic growth from acquired entities. 'Other' includes adjustments for the timing of shows at
Events and Exhibitions, for the consistent timing of revenue recognition and for the gross-up,
equivalent to the cost of sales, on the low margin resale of newsprint activities.
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the
sum of the component integers.
Underlying(1) analysis - Adjusted(3) operating profit and profit
before tax
Half Year 2021 Half Year 2020
--------------------- ------------------------------------ -----------------------------------------------
GBP millions % Underlying M&A Other Reported Underlying M&A Exchange Other Reported
-------------- ------ --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Insurance
Risk +7% 18 - - 18 17 - (2) - 19
Property
Information +89% 22 - - 22 12 - - - 12
EdTech N/A - (1) - 1 - (2) - - 2
Energy
Information N/A - - - - - (2) - - 2
------ --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
B2B
Information
Services +40% 40 (1) - 41 29 (4) (2) - 35
B2B Events
and
Exhibitions N/A (5) - (5) (1) 4 1 (1) (2) 5
Consumer
Media -25% 36 2 - 34 48 4 - - 44
Corporate
costs +10% (20) - - (20) (18) - - - (18)
------ --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Adjusted
operating
profit -19% 50 1 (5) 55 62 1 (3) (2) 65
Losses from
JVs and
associates -81% (1) - - (1) (7) - - - (7)
Net finance
costs +179% (7) - - (7) (2) - - - (2)
------ --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Adjusted
profit
before
tax -20% 42 1 (5) 47 53 1 (3) (2) 56
------ --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Notes: M&A adjustments are for disposals and acquisitions. The underlying results include the post-acquisition
organic growth from acquired entities. 'Other' includes adjustments for the consistent timing of revenue
recognition as well as the timing of shows at Events and Exhibitions. 'Other' also includes an adjustment
to remove the impact of GBP8m of costs recognised in Half Year 2020 that related to events that were
scheduled for the second half of FY 2020 but which were cancelled or postponed and GBP1m of costs
recognised in Half Year 2021 that related to events that were scheduled for the second half of FY
2021 but which were cancelled or postponed. The underlying Half Year 2021 performance also includes
GBP6m of costs that were recognised in the second half of FY 2020 but which relate to events that
were scheduled to be held in Half Year 2021 and were then cancelled or postponed.
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum
of the component integers.
Underlying(1) analysis - Cash operating income(2)
Half Year 2021 Half Year 2020
-------------------- ------------------------------------ -----------------------------------------------
GBP millions % Underlying M&A Other Reported Underlying M&A Exchange Other Reported
-------------- ----- --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Insurance
Risk +4% 20 - - 20 20 - (2) - 22
Property
Information +83% 24 - - 24 13 - - - 14
EdTech N/A - (2) - 2 - (4) - - 4
Energy
Information N/A - - - - - (1) - - 1
----- --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
B2B
Information
Services +36% 45 (2) - 47 33 (5) (2) - 40
B2B Events
and
Exhibitions N/A (5) - (5) 0 3 1 (1) (2) 5
Consumer
Media -21% 40 2 - 39 51 4 (1) - 48
Corporate
cash
operating
costs +12% (20) - - (20) (17) - - - (18)
----- --------------- ---- ------ --------- ----------- ---- --------- ------ ---------
Group cash
operating
income -13% 60 (1) (5) 66 69 (1) (3) (2) 75
-----
Notes: M&A adjustments are for disposals and acquisitions. The underlying results include the post-acquisition
organic growth from acquired entities. 'Other' includes adjustments for the consistent timing of revenue
recognition as well as the timing of shows at Events and Exhibitions. 'Other' also includes an adjustment
to remove the impact of GBP8m of costs recognised in Half Year 2020 that relate to events that were
scheduled for the second half of FY 2020 but which have been cancelled or postponed and GBP1m of costs
recognised in Half Year 2021 that relate to events that were scheduled for the second half of FY 2021
but which have been cancelled or postponed. The underlying Half Year 2021 performance also includes
GBP6m of costs that were recognised in the second half of FY 2020 but which relate to events that
were scheduled to be held in Half Year 2021 and were then cancelled or postponed.
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum
of the component integers.
Principal risks and uncertainties
The principal risks and uncertainties that affect the Group on
an ongoing basis are described in our most recent Annual Report (FY
2020). These are still considered to be relevant risks and
uncertainties for the Group at this time and are summarised
below.
Strategic Risks
-- Market disruption creates opportunities as well as risks.
Disruption enables us to move into new markets and geographies and
encourages us to innovate to grow the business. Failure to
anticipate and respond to market disruption may affect demand for
our products and services and our ability to drive long-term
growth.
-- A lack of innovation or failure to successfully evolve our
products and services may compromise their appeal. Some may fail to
achieve customer acceptance and yield expected benefits. This could
result in lower than expected revenue and/or impairment losses.
Uncertainty also results from expansion into new and emerging
markets.
-- Portfolio changes not delivering expected benefits, failure
to deliver acquisition or operating targets, and/or delay or
delinquency in divesting from non-core businesses at the right
time.
-- Group performance could be adversely impacted by factors
beyond our control such as the economic conditions in key markets
and sectors and political uncertainty.
-- Failure to identify, attract, retain and develop the right
people for senior and business-critical roles.
Operational Risks
-- A pandemic, epidemic or disaster, whether natural or
man-made, could cause significant disruption. This could affect
DMGT's operating companies, customers, suppliers and/or end
markets.
-- An information security breach, including a failure to
prevent or detect a malicious cyber attack, could cause
reputational damage and financial loss.
-- A failure of one of our critical third parties may cause
disruption to business operations, impact our ability to deliver
products and services and result in financial loss.
-- The Group not complying with all applicable laws and
regulations across all of the jurisdictions in which it operates
could result in financial penalties and reputational damage.
-- The funding of the pension scheme deficit could be greater than expected.
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:
a) this Condensed set of Financial Statements which should be
read in conjunction with the annual financial statements for the
year ended 30 September 2020 and has been prepared in accordance
with IAS 34 'Interim Financial Reporting' as adopted by the
European Union; and
b) the Interim Management Report includes a fair review of the
information required by the Financial Conduct Authority's
Disclosure and Transparency Rules 4.2.7R and 4.2.8R.
By order of the Board of Directors
The Viscount Rothermere
Chairman
26 May 2021
Notes
1 Underlying growth rates are on a like-for-like basis, see
pages 28 to 30. Underlying revenues, cash operating income(2) and
operating profits are adjusted for constant exchange rates, the
exclusion of disposals and closures, the inclusion of the
year-on-year organic growth from acquisitions and for the
consistent timing of revenue recognition. For Consumer Media ,
underlying revenues exclude low margin newsprint resale activities.
For events, the comparisons are between events scheduled to be held
in the six-month period and the same events held, or that were
scheduled to be held, the previous time. Consequently, underlying
growth rates include all costs for events that were originally
scheduled in the six months to March 2021 and that were cancelled
or postponed. Similarly, the prior year comparatives include all
revenues and costs for the previously scheduled occurrence of the
same event, whether it occurred or not. Underlying growth rates
include the negative impact of events held in H1 2020 that are
usually annual but which are not expected to be held in FY 2021.
Due to cancellations or postponements, the reported results in both
periods include costs recognised in advance of the scheduled
occurrence of an event; but for the calculation of underlying
growth rates, the costs are recognised when the event was scheduled
to be held.
2 Cash operating income (Cash OI) is calculated by adding back
depreciation and amortisation expenses, which are non-cash items,
to adjusted operating profit and then deducting capital
expenditure. The depreciation charge on the additional right-of-use
assets, which has resulted since 1 October 2019 from the adoption
of IFRS 16, the lease accounting standard, is not added back when
calculating Cash OI.
3 Unless otherwise stated, all profit and profit margin figures
in this Interim Financial Report refer to adjusted results and not
statutory results. The Board and management team use adjusted
results, rather than statutory results, to give greater insight to
the financial performance of the Group and the way that it is
managed. Similarly, adjusted results are used in setting management
remuneration. Adjusted results are stated before exceptional items,
other gains and losses, impairment of goodwill and intangible
assets, amortisation of intangible assets arising on business
combinations, pension finance credits and fair value adjustments .
For reconciliations of statutory profit before tax to adjusted
profit before tax and supporting explanations, see pages 23 to
25.
4 The statutory results are IFRS figures before any adjustments.
Other than earnings per share, they exclude discontinued
operations, namely the Energy Information business, Genscape, and
the EdTech business, Hobsons, which was disposed of in March 2021.
The H1 2020 statutory results have been reclassified
accordingly.
5 On 29 March 2021, Cazoo announced a definitive business
combination agreement with AJAX I, a publicly traded special
purpose acquisition company (SPAC) listed on the New York Stock
Exchange. The transaction values the combined company at a pro
forma equity value of approximately US$8.1bn at US$10.00 per share.
The combined value in cash proceeds and shares in the listed Cazoo,
valued at US$10.00 per share as per the committed private
investment in public equity (PIPE), that DMGT will receive on
closing is expected to be approximately US$1.35bn.
6 The actual net cash position as at 31 March 2021 was GBP199m
including GBP95m of lease liabilities in respect of the adoption of
IFRS 16, the lease accounting standard, and the net cash:EBITDA
ratio was 1.5. The lease liabilities largely reflect the future
operating costs of renting office space and are not considered a
component of net debt when the Board reviews the Group's available
capital. Consequently, lease liabilities are excluded from pro
forma net cash. The pro forma net cash and pro forma net
cash:EBITDA ratio as at 31 March 2021 were GBP293m and 2.6
respectively.
The pro forma net cash of GBP293m includes gross cash of
GBP496m, GBP202m of bond debt and GBP1m net debt in respect of
derivatives and collateral. Gross cash includes cash, cash
equivalents and short-term deposits, net of overdrafts.
7 During the 27 weeks to 4 April 2021 (H1 2021), the Daily
Mail's market share of UK retail print sales averaged an estimated
27.2%, an increase from 26.1% in the 25 weeks to 22 March 2020 (H1
2020). The Mail on Sunday's UK retail print market share averaged
an estimated 24.3% in H1 2021, an increase from 23.4% in H1 2020.
The estimated UK retail print market share of the 'i' in H1 2021
was 4.0%, broadly consistent with 4.1% in H1 2020. Circulation
market share figures are calculated using ABC's National Newspapers
Reports, excluding digital editions. ABC's public figures no longer
include The Sun, The Times, The Sunday Times, The Daily Telegraph
or The Sunday Telegraph and DMGT's estimates are used for
calculating the circulation volumes of these titles.
In addition, subscriptions to the Mail's digital editions
averaged 89,000 in H1 2021, compared to 42,000 in H1 2020. These
figures include subscriptions sold as part of a print and digital
package. Digital-only subscriptions to the digital editions of the
Mail and 'i' averaged a total of 82,000 in H1 2021, compared to
43,000 in H1 2020.
8 As at the end of 31 March 2021, there were 4,115,021 'A'
Ordinary Shares held in Treasury and 2,319,963 'A' Ordinary Shares
held by the DMGT Employee Benefit Trust.
Percentages are calculated on actual numbers to one decimal
place.
The average GBP: US$ exchange rate for the first half of the
year was GBP1:$1.35 (against GBP1:$1.28 last year). The rate at the
Half Year end was $1.38 (2020: $1.24), compared to $1.29 at the
September 2020 year end.
All references to profit or margin in this Interim Management
Report are to adjusted profit or margin, except where reference is
made to statutory profit.
For further information
Investors:
Tim Collier, Group CFO +44 20 3615 2902
Adam Webster, Head of Investor Relations +44 20 3615 2903
Media:
Doug Campbell, Teneo +44 7753 136628
Tim Burt, Teneo +44 7583 413254
Half Year Results presentation and Q&A conference call
A presentation of the Half Year Results will be given at 9.30am
on 27 May 2021 and will be followed by a question and answer
session for City analysts and investors. The presentation will be
available on our website at www.dmgt.com/webcasthy21 and the
dial-in number for questions is +44 (0)330 336 9434, confirmation
code 7516756.
Next trading update
The Group's next scheduled announcement of financial information
will be its nine month trading update on 22 July 2021.
Person responsible for arranging the release of this announcement:
Fran Sallas, Company Secretary +44 20 3615 2904
Additional information in respect of Cazoo and AJAX I and where
to find it
This communication relates to a proposed business combination
among Cazoo Holdings Limited ("Cazoo"), AJAX I and Capri Listco
("Listco") . In connection with the proposed business combination,
Listco filed a registration statement on Form F-4 that includes a
proxy statement of AJAX I in connection with AJAX I's solicitation
of proxies for the vote by AJAX I's shareholders with respect to
the proposed business combination and a prospectus of Listco, which
has not yet become effective. The proxy statement/prospectus will
be sent to all AJAX I shareholders and Listco and AJAX I will also
file other documents regarding the proposed business combination
with the SEC. This communication does not contain all the
information that should be considered concerning the proposed
business combination and is not intended to form the basis of any
investment decision or any other decision in respect of the
business combination. Before making any voting or investment
decision, investors and security holders are urged to read the
registration statement, the proxy statement/prospectus and all
other relevant documents filed or that will be filed with the SEC
in connection with the proposed business combination as they become
available because they will contain important information about the
proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, proxy statement/prospectus
and all other relevant documents filed or that will be filed with
the SEC by AJAX I and Listco through the website maintained by the
SEC at www.sec.gov. In addition, the documents filed by AJAX I may
be obtained free of charge from AJAX I's website at
https://ajaxcap.com or by written request to AJAX I at 667 Madison
Avenue, New York, NY 10065, United States of America and documents
filed by DMGT may be obtained free of charge by written request to
DMGT at Northcliffe House, 2 Derry Street, London W8 5TT.
This Half Yearly Financial Report ('Report') is prepared for and
addressed only to the Company's shareholders as a whole and to no
other person. The Company, its Directors, employees, agents and
advisers accept and assume no liability or responsibility to any
person in respect of this Report save as would arise under English
law. Statements contained in this Report are based on the knowledge
and information available to the Group's Directors at the date it
was prepared and therefore facts stated and views expressed may
change after that date.
This document and any materials distributed in connection with
it may include forward-looking statements, beliefs, opinions or
statements concerning risks and uncertainties, including statements
with respect to the Group's business, its current goals and
expectations, financial condition, strategy, objectives and results
of operations. Those statements can be identified by the fact that
they do not relate only to historical or current facts. Those
forward-looking statements and statements which contain the words
"anticipate", "believe", "intend", "estimate", "expect" and words
of similar meaning, reflect the Group's Directors' beliefs and
expectations and involve risk and uncertainty because they relate
to events and depend on circumstances that will occur in the future
and which may cause results and developments to differ materially
from those expressed or implied by those statements and forecasts.
DMGT believes factors that could cause actual financial condition,
performance or other indicated results to differ materially from
those indicated in forward-looking statements in this document
include, without limitation, the ongoing effects of the Covid-19
pandemic; the policies and actions of governmental and regulatory
authorities in the jurisdictions in which DMGT operates; the
political, legal and economic ramifications of the UK's withdrawal
from the European Union; economic, political, social or other
developments in jurisdictions and markets in which DMGT operates;
the impact of competition, and other changes in trading conditions.
Therefore, no representation is made that any of those statements
or forecasts will come to pass or that any forecast results will be
achieved. You are cautioned not to place any reliance on such
statements or forecasts. Those f orward-looking and other
statements speak only as at the date of this Report. The Group
undertakes no obligation to release any update of, or revisions to,
any forward-looking statements, opinions (which are subject to
change without notice) or any other information or statement
contained in this Report . Furthermore, past performance of the
Group cannot be relied on as a guide to future performance.
No statement in this document is intended as a profit forecast
or a profit estimate and no statement in this document should be
interpreted to mean that earnings per DMGT share for the current or
future financial years would necessarily match or exceed the
historical published earnings per DMGT share.
Nothing in this document is intended to constitute an invitation
or inducement to engage in investment activity. This document does
not constitute or form part of any offer for sale or subscription
of, or any solicitation of any offer to purchase or subscribe for,
any securities nor shall it or any part of it nor the fact of its
distribution form the basis of, or be relied on in connection with,
any contract, commitment or investment decision in relation
thereto. This document does not constitute a recommendation
regarding any securities.
Independent review report to Daily Mail and General Trust
plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Daily Mail and General Trust plc's condensed
consolidated interim financial statements (the "interim financial
statements") in the Half Yearly Financial Report of Daily Mail and
General Trust plc for the 6 month period ended 31 March 2021 (the
"period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the Condensed Consolidated Statement of Financial Position as at 31 March 2021;
-- the Condensed Consolidated Income Statement and Condensed
Consolidated Statement of Comprehensive Income for the period then
ended;
-- the Condensed Consolidated Cash Flow Statement for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Yearly
Financial Report of Daily Mail and General Trust plc have been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and
the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom's Financial Conduct Authority.
As disclosed in note 1 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the Directors
The Half Yearly Financial Report, including the interim
financial statements, 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 Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the Half Yearly Financial Report based on
our review. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
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 enquiries, 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,
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.
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 interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
26 May 2021
Shareholder Information
Financial Calendar (provisional)
2021
27 May Half yearly financial report released
10 June Interim ex-dividend date
11 June Interim record date
21 June Payment of interest on bonds
2 July Payment of interim dividend
22 July Nine month trading update
30 September Year end
18 November Announcement of Full Year 2021 results
25 November Ex-dividend date
26 November Record date
Contacts
Daily Mail and General Trust Auditor
plc PricewaterhouseCoopers LLP
Northcliffe House 1 Embankment Place
2 Derry Street London
London WC2N 6RH
W8 5TT
Email: adam.webster@dmgt.com
Stockbrokers Registrars
Credit Suisse International Equiniti
One Cabot Square Aspect House
London Spencer Road
E14 4QJ Lancing
West Sussex
BN99 6DA
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
For further investor information and contacts, please visit the
Company's website at
www.dmgt.com .
Condensed Consolidated Income Statement
For the 6 months ended 31 March 2021
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
============================================= ======= ========== ========== ==============
CONTINUING OPERATIONS
============================================= ======= ========== ========== ==============
Revenue 3 546.8 641.5 1,118.5
--------------------------------------------- ------- ---------- ---------- --------------
Adjusted operating profit 3, (i) 53.5 61.6 82.4
============================================= ======= ========== ========== ==============
Exceptional operating costs, impairment
of internally generated and acquired
computer software 3 (1.7) (3.5) (36.6)
--------------------------------------------- ------- ---------- ---------- --------------
Amortisation and impairment of acquired
intangible assets arising on business
combinations and impairment of goodwill 3 (6.6) (13.3) (24.7)
--------------------------------------------- ------- ---------- ---------- --------------
Operating profit before share of results
of joint ventures and associates 45.2 44.8 21.1
============================================= ======= ========== ========== ==============
Share of results of joint ventures and
associates 4 (1.4) (10.1) (11.4)
--------------------------------------------- ------- ---------- ---------- --------------
Total operating profit 43.8 34.7 9.7
============================================= ======= ========== ========== ==============
Other gains and losses 5 4.0 43.4 42.1
--------------------------------------------- ------- ---------- ---------- --------------
Profit before investment revenue, net
finance costs and tax 47.8 78.1 51.8
============================================= ======= ========== ========== ==============
Investment revenue 6 1.8 5.1 7.4
--------------------------------------------- ------- ---------- ---------- --------------
Finance expense 7 (8.9) (8.4) (17.6)
--------------------------------------------- ------- ---------- ---------- --------------
Finance income 7 1.7 2.2 4.4
--------------------------------------------- ------- ---------- ---------- --------------
Net finance costs (7.2) (6.2) (13.2)
============================================= ======= ========== ========== ==============
Profit before tax 42.4 77.0 46.0
============================================= ======= ========== ========== ==============
Tax 8 35.6 (4.3) 0.1
--------------------------------------------- ------- ---------- ---------- --------------
Profit after tax from continuing operations 78.0 72.7 46.1
============================================= ======= ========== ========== ==============
DISCONTINUED OPERATIONS 16
============================================= ======= ========== ========== ==============
Profit from discontinued operations 175.3 132.3 142.9
--------------------------------------------- ------- ---------- ---------- --------------
PROFIT FOR THE PERIOD 253.3 205.0 189.0
============================================= ======= ========== ========== ==============
Attributable to:
============================================= ======= ========== ========== ==============
Owners of the Company 253.5 205.0 189.3
--------------------------------------------- ------- ---------- ---------- --------------
Non-controlling interests* (0.2) - (0.3)
--------------------------------------------- ------- ---------- ---------- --------------
Profit for the period 253.3 205.0 189.0
============================================= ======= ========== ========== ==============
Earnings per share 11
============================================= ======= ========== ========== ==============
From continuing operations
--------------------------------------------- ------- ---------- ---------- --------------
Basic 34.3p 31.8p 20.4p
--------------------------------------------- ------- ---------- ---------- --------------
Diluted 33.4p 31.4p 19.9p
--------------------------------------------- ------- ---------- ---------- --------------
From discontinued operations
--------------------------------------------- ------- ---------- ---------- --------------
Basic 77.0p 57.9p 62.7p
--------------------------------------------- ------- ---------- ---------- --------------
Diluted 74.9p 57.1p 61.3p
--------------------------------------------- ------- ---------- ---------- --------------
From continuing and discontinued operations
--------------------------------------------- ------- ---------- ---------- --------------
Basic 111.3p 89.7p 83.1p
--------------------------------------------- ------- ---------- ---------- --------------
Diluted 108.3p 88.5p 81.2p
--------------------------------------------- ------- ---------- ---------- --------------
Adjusted earnings per share from continuing
and discontinued operations
--------------------------------------------- ------- ---------- ---------- --------------
Basic 16.8p 15.0p 26.1p
--------------------------------------------- ------- ---------- ---------- --------------
Diluted 16.3p 14.8p 25.5p
--------------------------------------------- ------- ---------- ---------- --------------
* All attributable to continuing operations.
(i) Adjusted operating profit is defined as total operating
profit from continuing operations before share of results of joint
ventures and associates, exceptional operating costs, impairment of
goodwill and intangible assets, amortisation of acquired intangible
assets arising on business combinations and impairment of property,
plant and equipment.
Condensed Consolidated Statement of Comprehensive Income
For the 6 months ended 31 March 2021
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
GBPm GBPm GBPm
===================================================== ========== ========== ==============
Profit for the period 253.3 205.0 189.0
===================================================== ========== ========== ==============
Items that will not be reclassified to Consolidated
Income Statement
===================================================== ========== ========== ==============
Actuarial gain/(loss) on defined benefit pension
schemes 27.9 118.8 (112.1)
===================================================== ========== ========== ==============
Tax relating to items that will not be reclassified
to Consolidated Income Statement (5.3) (26.5) 17.5
===================================================== ========== ========== ==============
Fair value movement of financial assets through
Other Comprehensive Income 397.6 65.0 295.0
===================================================== ========== ========== ==============
Total items that will not be reclassified to
Consolidated Income Statement 420.2 157.3 200.4
===================================================== ========== ========== ==============
Items that may be reclassified subsequently
to Consolidated Income Statement
===================================================== ========== ========== ==============
Gain/(loss) on hedges of net investments in
foreign operations 10.0 (6.3) 0.8
===================================================== ========== ========== ==============
Costs of hedging (0.2) 0.6 0.5
===================================================== ========== ========== ==============
Translation reserves recycled to Consolidated
Income Statement on disposals 1.5 10.2 10.6
===================================================== ========== ========== ==============
Foreign exchange differences on translation
of foreign operations (26.4) 7.4 2.1
===================================================== ========== ========== ==============
Total items that may be reclassified subsequently
to Consolidated Income Statement (15.1) 11.9 14.0
===================================================== ========== ========== ==============
Other comprehensive income for the period 405.1 169.2 214.4
===================================================== ========== ========== ==============
Total comprehensive income for the period 658.4 374.2 403.4
===================================================== ========== ========== ==============
Attributable to:
===================================================== ========== ========== ==============
Owners of the Company 658.7 374.2 403.7
===================================================== ========== ========== ==============
Non-controlling interests (0.3) - (0.3)
===================================================== ========== ========== ==============
658.4 374.2 403.4
===================================================== ========== ========== ==============
Continuing operations 483.2 236.9 244.0
===================================================== ========== ========== ==============
Discontinued operations 175.2 137.3 159.4
===================================================== ========== ========== ==============
658.4 374.2 403.4
===================================================== ========== ========== ==============
Total comprehensive income for the period from
continuing operations attributable to:
===================================================== ========== ========== ==============
Owners of the Company 483.5 236.9 244.3
===================================================== ========== ========== ==============
Non-controlling interests (0.3) - (0.3)
===================================================== ========== ========== ==============
483.2 236.9 244.0
===================================================== ========== ========== ==============
Condensed Consolidated Statement of Changes in Equity
For the 6 months ended 31 March 2021
Equity Non-controlling
attributable interests
Called-up Share Capital to owners
share premium redemption Own Translation Retained of Total
capital account reserve shares reserve earnings the Company equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Audited at 30
September
2019 29.3 17.8 21.0 (49.1) 52.5 702.8 774.3 - 774.3
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Adjustment for
transition
to IFRS 16 - - - - - 1.1 1.1 - 1.1
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Restated at 1
October
2019 29.3 17.8 21.0 (49.1) 52.5 703.9 775.4 - 775.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Profit for the
period - - - - - 205.0 205.0 - 205.0
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Other
comprehensive
income
for the period - - - - 11.9 157.3 169.2 - 169.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Total
comprehensive
income
for the period - - - - 11.9 362.3 374.2 - 374.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Dividends 9 - - - - - (37.9) (37.9) - (37.9)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
acquired in
the period 25 - - - (1.8) - - (1.8) - (1.8)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Financial
liability for
closed period
purchases - - - (20.0) - - (20.0) - (20.0)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
released on
exercise of
share options - - - 9.2 - - 9.2 - 9.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Credit to equity
for share-based
payments - - - - - 9.2 9.2 - 9.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Settlement of
exercised
share options of
subsidiaries - - - - - (10.3) (10.3) - (10.3)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Deferred tax on
other
items recognised
in equity - - - - - 0.6 0.6 - 0.6
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Unaudited at 31
March
2020 29.3 17.8 21.0 (61.7) 64.4 1,027.8 1,098.6 - 1,098.6
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Audited at 30
September
2019 29.3 17.8 21.0 (49.1) 52.5 702.8 774.3 - 774.3
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Adjustment for
transition
to IFRS 16 - - - - - 1.1 1.1 - 1.1
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Restated at 1
October
2019 29.3 17.8 21.0 (49.1) 52.5 703.9 775.4 - 775.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Profit/(loss) for
the
period - - - - - 189.3 189.3 (0.3) 189.0
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Other
comprehensive
income
for the period - - - - 14.0 200.4 214.4 - 214.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Total
comprehensive
income/(expense)
for the period - - - - 14.0 389.7 403.7 (0.3) 403.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Dividends 9 - - - - - (54.9) (54.9) - (54.9)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
acquired in
the period 25 - - - (19.7) - - (19.7) - (19.7)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
released on
exercise of
share options - - - 9.5 - - 9.5 - 9.5
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Credit to equity
for share-based
payments - - - - - 42.2 42.2 - 42.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Settlement of
exercised
share options of
subsidiaries - - - - - (10.4) (10.4) - (10.4)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Non-controlling
interest
recognised on
acquisition - - - - - - - 1.3 1.3
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Deferred tax on
other
items recognised
in equity - - - - - (0.6) (0.6) - (0.6)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Audited at 30
September
2020 29.3 17.8 21.0 (59.3) 66.5 1,069.9 1,145.2 1.0 1,146.2
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Profit/(loss) for
the
period - - - - - 253.5 253.5 (0.2) 253.3
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Other
comprehensive
income/(expense)
for the period - - - - (15.0) 420.2 405.2 (0.1) 405.1
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Total
comprehensive
income/(expense)
for the period - - - - (15.0) 673.7 658.7 (0.3) 658.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Dividends 9 - - - - - (37.6) (37.6) - (37.6)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
acquired in
the period 25 - - - (1.0) - - (1.0) - (1.0)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Own shares
released on
exercise of
share options - - - 13.8 - - 13.8 - 13.8
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Adjustment to
equity following
increased stake
in controlled
entity - - - - - (0.5) (0.5) 0.1 (0.4)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Credit to equity
for share-based
payments - - - - - 14.1 14.1 - 14.1
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Settlement of
exercised
share options of
subsidiaries - - - - - (39.0) (39.0) - (39.0)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Deferred tax on
other
items recognised
in equity - - - - - (0.1) (0.1) - (0.1)
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Unaudited at 31
March
2021 29.3 17.8 21.0 (46.5) 51.5 1,680.5 1,753.6 0.8 1,754.4
================= ==== ========= ======= ========== ====== =========== ======== ============ =============== =======
Condensed Consolidated Statement of Financial Position
At 31 March 2021
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
======================================== ===== ========== ========== ===========
ASSETS
======================================== ===== ========== ========== ===========
Non-current assets
======================================== ===== ========== ========== ===========
Goodwill 18 231.1 244.6 255.4
---------------------------------------- ----- ---------- ---------- -----------
Other intangible assets 18 98.5 110.6 94.9
---------------------------------------- ----- ---------- ---------- -----------
Property, plant and equipment 19 67.4 69.6 63.0
---------------------------------------- ----- ---------- ---------- -----------
Right of use assets 20 85.7 62.3 89.8
---------------------------------------- ----- ---------- ---------- -----------
Investments in joint ventures 1.4 8.0 8.6
---------------------------------------- ----- ---------- ---------- -----------
Investments in associates 49.1 55.6 48.4
---------------------------------------- ----- ---------- ---------- -----------
Financial assets at fair value through
other comprehensive income 21 844.0 171.4 410.7
---------------------------------------- ----- ---------- ---------- -----------
Trade and other receivables 6.2 17.1 10.5
---------------------------------------- ----- ---------- ---------- -----------
Other financial assets 23 136.2 13.1 14.2
---------------------------------------- ----- ---------- ---------- -----------
Derivative financial assets 1.9 3.8 3.2
---------------------------------------- ----- ---------- ---------- -----------
Retirement benefit asset 26 176.0 362.9 136.7
---------------------------------------- ----- ---------- ---------- -----------
Deferred tax assets 67.8 19.6 70.3
---------------------------------------- ----- ---------- ---------- -----------
1,765.3 1,138.6 1,205.7
---------------------------------------- ----- ---------- ---------- -----------
Current assets
======================================== ===== ========== ========== ===========
Inventories 19.1 13.7 12.4
---------------------------------------- ----- ---------- ---------- -----------
Trade and other receivables 252.1 276.1 247.3
---------------------------------------- ----- ---------- ---------- -----------
Current tax receivable 0.5 1.5 0.4
---------------------------------------- ----- ---------- ---------- -----------
Other financial assets 23 7.8 21.9 21.7
---------------------------------------- ----- ---------- ---------- -----------
Derivative financial assets 0.6 - 0.6
---------------------------------------- ----- ---------- ---------- -----------
Cash and cash equivalents 13 513.9 489.2 500.3
---------------------------------------- ----- ---------- ---------- -----------
Total assets of businesses held for
sale 17 8.1 4.3 4.1
---------------------------------------- ----- ---------- ---------- -----------
802.1 806.7 786.8
---------------------------------------- ----- ---------- ---------- -----------
Total assets 2,567.4 1,945.3 1,992.5
======================================== ===== ========== ========== ===========
LIABILITIES
======================================== ===== ========== ========== ===========
Current liabilities
======================================== ===== ========== ========== ===========
Trade and other payables (376.0) (419.4) (406.7)
---------------------------------------- ----- ---------- ---------- -----------
Current tax payable (33.7) (6.7) (5.3)
---------------------------------------- ----- ---------- ---------- -----------
Borrowings 22 (18.7) (10.8) (21.2)
---------------------------------------- ----- ---------- ---------- -----------
Lease liabilities 22 (20.8) (23.3) (22.7)
---------------------------------------- ----- ---------- ---------- -----------
Derivative financial liabilities - (16.2) -
---------------------------------------- ----- ---------- ---------- -----------
Provisions (38.5) (63.7) (46.6)
---------------------------------------- ----- ---------- ---------- -----------
Total liabilities of businesses held
for sale 17 (23.9) (20.5) (19.7)
---------------------------------------- ----- ---------- ---------- -----------
(511.6) (560.6) (522.2)
---------------------------------------- ----- ---------- ---------- -----------
Non-current liabilities
======================================== ===== ========== ========== ===========
Trade and other payables - (1.5) (1.5)
---------------------------------------- ----- ---------- ---------- -----------
Borrowings 22 (201.0) (203.4) (202.7)
---------------------------------------- ----- ---------- ---------- -----------
Lease liabilities 22 (73.0) (50.4) (77.1)
---------------------------------------- ----- ---------- ---------- -----------
Derivative financial liabilities (13.3) (13.9) (23.1)
---------------------------------------- ----- ---------- ---------- -----------
Retirement benefit deficit 26 (9.5) (10.8) (13.5)
---------------------------------------- ----- ---------- ---------- -----------
Provisions (4.2) (5.6) (5.9)
---------------------------------------- ----- ---------- ---------- -----------
Deferred tax liabilities (0.4) (0.5) (0.3)
---------------------------------------- ----- ---------- ---------- -----------
(301.4) (286.1) (324.1)
---------------------------------------- ----- ---------- ---------- -----------
Total liabilities (813.0) (846.7) (846.3)
======================================== ===== ========== ========== ===========
Net assets 1,754.4 1,098.6 1,146.2
======================================== ===== ========== ========== ===========
At 31 March 2021
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
====================================== ===== ========== ========== ===========
SHAREHOLDERS' EQUITY
====================================== ===== ========== ========== ===========
Called-up share capital 25 29.3 29.3 29.3
-------------------------------------- ----- ---------- ---------- -----------
Share premium account 17.8 17.8 17.8
-------------------------------------- ----- ---------- ---------- -----------
Share capital 47.1 47.1 47.1
====================================== ===== ========== ========== ===========
Capital redemption reserve 21.0 21.0 21.0
-------------------------------------- ----- ---------- ---------- -----------
Own shares (46.5) (61.7) (59.3)
-------------------------------------- ----- ---------- ---------- -----------
Translation reserve 51.5 64.4 66.5
-------------------------------------- ----- ---------- ---------- -----------
Retained earnings 1,680.5 1,027.8 1,069.9
-------------------------------------- ----- ---------- ---------- -----------
Equity attributable to owners of the
Company 1,753.6 1,098.6 1,145.2
====================================== ===== ========== ========== ===========
Non-controlling interests 0.8 - 1.0
====================================== ===== ========== ========== ===========
1,754.4 1,098.6 1,146.2
====================================== ===== ========== ========== ===========
Approved by the Board on 26 May 2021 .
Condensed Consolidated Cash Flow Statement
For the 6 months ended 31 March 2021
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
============================================== ===== ========== ========== ==============
Cash generated by operations 12 44.3 54.1 150.3
============================================== ===== ========== ========== ==============
Taxation paid (2.6) (10.7) (12.5)
---------------------------------------------- ----- ---------- ---------- --------------
Taxation received 0.6 0.3 4.7
---------------------------------------------- ----- ---------- ---------- --------------
Net cash generated from operating activities 42.3 43.7 142.5
============================================== ===== ========== ========== ==============
Investing activities
============================================== ===== ========== ========== ==============
Interest received 0.6 7.8 8.7
---------------------------------------------- ----- ---------- ---------- --------------
Dividends received from joint ventures
and associates 0.5 0.5 0.7
---------------------------------------------- ----- ---------- ---------- --------------
Purchase of property, plant and equipment 19 (4.0) (6.6) (12.2)
---------------------------------------------- ----- ---------- ---------- --------------
Expenditure on internally generated
intangible fixed assets 18 (0.6) (2.7) (4.2)
---------------------------------------------- ----- ---------- ---------- --------------
Expenditure on other intangible assets 18 (1.7) (0.5) (1.5)
---------------------------------------------- ----- ---------- ---------- --------------
Purchase of financial assets held at
fair value through other comprehensive
income 21 (34.3) (37.7) (48.0)
---------------------------------------------- ----- ---------- ---------- --------------
Proceeds on disposal of property and
plant and equipment 19 0.1 - -
---------------------------------------------- ----- ---------- ---------- --------------
Purchase of businesses and subsidiary
undertakings 14 (77.3) (57.3) (69.8)
---------------------------------------------- ----- ---------- ---------- --------------
Settlements and collateral payments
on treasury derivatives 13.6 (8.9) (8.7)
---------------------------------------------- ----- ---------- ---------- --------------
Investment in joint ventures and associates (5.0) (0.5) (2.5)
---------------------------------------------- ----- ---------- ---------- --------------
Loans to joint ventures and associates
repaid - - 0.1
---------------------------------------------- ----- ---------- ---------- --------------
Proceeds on disposal of businesses and
subsidiary undertakings 15 297.6 303.4 301.1
---------------------------------------------- ----- ---------- ---------- --------------
Proceeds on disposal of joint ventures
and associates 5 5.7 0.1 9.5
---------------------------------------------- ----- ---------- ---------- --------------
Payment into escrow 23 (120.7) - -
---------------------------------------------- ----- ---------- ---------- --------------
Net cash generated from investing activities 74.5 197.6 173.2
============================================== ===== ========== ========== ==============
Financing activities
============================================== ===== ========== ========== ==============
Equity dividends paid 9 (37.6) (37.9) (54.9)
---------------------------------------------- ----- ---------- ---------- --------------
Purchase of own shares 25 (1.0) (1.8) (19.7)
---------------------------------------------- ----- ---------- ---------- --------------
Net payment on settlement of share options (25.3) (1.0) (0.8)
---------------------------------------------- ----- ---------- ---------- --------------
Interest paid on borrowings (0.7) (0.9) (14.9)
---------------------------------------------- ----- ---------- ---------- --------------
Amounts received on sublease receivable 1.9 2.0 3.8
---------------------------------------------- ----- ---------- ---------- --------------
Loan notes repaid - (1.6) (1.6)
---------------------------------------------- ----- ---------- ---------- --------------
Interest paid on lease liabilities (1.7) (1.0) (2.5)
---------------------------------------------- ----- ---------- ---------- --------------
Repayment of lease liabilities (10.7) (12.0) (23.5)
---------------------------------------------- ----- ---------- ---------- --------------
Net cash used in financing activities (75.1) (54.2) (114.1)
============================================== ===== ========== ========== ==============
Net increase in cash and cash equivalents 13 41.7 187.1 201.6
============================================== ===== ========== ========== ==============
Cash and cash equivalents at beginning
of period 479.9 289.2 289.2
---------------------------------------------- ----- ---------- ---------- --------------
Exchange (loss)/gain on cash and cash
equivalents 13 (25.3) 2.1 (10.9)
---------------------------------------------- ----- ---------- ---------- --------------
Net cash and cash equivalents at end
of period 13 496.3 478.4 479.9
============================================== ===== ========== ========== ==============
Notes to the accounts
1 Basis of preparation
The information for the 6 months ended 31 March 2021 and 31
March 2020 and for the year ended 30 September 2020 does not
constitute statutory accounts for the purposes of section 435 of
the Companies Act 2006. A copy of the accounts for the year ended
30 September 2020 has been delivered to the Registrar of Companies.
The auditor's report on those accounts was not qualified and did
not contain statements under section 498 (2) or (3) of the
Companies Act 2006.
The Group's business activities are split into four continuing
operating divisions: Insurance Risk, Property Information, Events
and Exhibitions and Consumer Media. These divisions are the basis
on which information is reported to the Group's Chief Operating
Decision Maker, which has been determined to be the Group Board.
The segment result is the measure used for the purposes of resource
allocation and assessment and represents profit earned by each
segment, including share of results from joint ventures and
associates but before exceptional operating costs, amortisation of
acquired intangible assets arising on business combinations,
impairment charges, other gains and losses, net finance costs and
taxation.
Other than the Daily Mail, The Mail on Sunday, Metro and the 'i'
businesses, the Group prepares accounts for a 6-month period ending
on 31 March. The Daily Mail, The Mail on Sunday, Metro and 'i'
businesses prepare financial statements for a 26 or 27 week
financial period ending on a Sunday near to the end of March. These
businesses do not prepare additional financial statements
corresponding to the Group's financial period for consolidation
purposes as it would be impracticable to do so. The Group considers
whether there have been any significant transactions or events
between the end of the financial period of these businesses and the
end of the Group's financial period and makes any material
adjustments as appropriate.
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 Consolidated
Financial Statements and notes.
The Company has long-term financing in the form of bonds and
meets its day-to-day working capital requirements through surplus
cash balances and committed bank facilities which expire in March
2023. The Board's forecasts and projections, after taking account
of reasonably possible changes in trading performance, show that
the Group is expected to operate within the terms of its current
facilities.
In light of the continuing Covid-19 pandemic the Directors have
performed a detailed going concern review. This included the
preparation of a five-year forecast which was re-modelled to
incorporate a severe but plausible scenario for the period through
to 30 September 2022. In addition, the Directors considered the
availability of the Group's committed but undrawn bank facilities
of GBP362.2 million which expire in March 2023.
The Directors' severe but plausible scenario model for the
period to 30 September 2022 included the impact of cancellations in
the Events and Exhibitions segment, the UK residential housing
market to operate at volumes at the floor of a functioning market
in the Property Information segment together with a reduction in
print advertising revenues and increases in newsprint prices in the
Consumer Media segment.
In this severe but plausible scenario the Group does not
forecast a draw down on its bank facilities nor does it forecast a
breach of its banking covenants.
After due consideration the Directors have concluded that there
is a reasonable expectation that the Group has adequate resources
to continue in operational existence for at least 12 months from
the date of this report.
For this reason the Directors continue to adopt the going
concern basis in preparing the condensed interim financial
information for the six months ended 31 March 2021 .
The Annual Report and Accounts of DMGT plc will be prepared in
accordance with International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board in
conformity with the requirements of the Companies Act 2006 and
international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union.
These Condensed Consolidated Financial Statements have been
prepared in accordance with International Accounting Standard 34
Interim Financial Reporting as adopted by the European Union.
Although not required by IAS 34, comparative figures for the
Condensed Consolidated Income Statement for the year ended 30
September 2020 and the Condensed Consolidated Statement of
Financial Position at 31 March 2020 have been included on a
voluntary basis.
Prior period amounts have been re-presented to conform to the
current period's presentation, as prescribed by IFRS 5, Non-current
Assets Held for Sale and Discontinued Operations.
These Condensed Consolidated Financial Statements have been
prepared in accordance with the accounting policies set out in the
2020 Annual Report and Accounts, as amended, where appropriate by
the application of certain new or amended accounting standards in
the period, described below, with the exception of changes in
estimates that are required in determining the interim provision
for income taxes. These policies are expected to be followed in the
preparation of the full financial statements for the financial year
ending 30 September 2021 .
2 Significant accounting policies
The Group has not yet adopted certain new standards, amendments
and interpretations to existing standards, which have been
published but are not yet effective. These new pronouncements are
listed below:
-- Amendments to IAS 1 and IFRS Practice Statement 2 - effective 1 October 2023.
-- Definition of Accounting Estimates (Amendments to IAS 8) - effective 1 October 2023.
-- Covid-19 Related Rent Concessions beyond 30 June 2021
(Amendment to IFRS 16) - effective 1 October 2021.
The above amendments will not have a significant impact on the
Group's Consolidated Financial Statements.
There have been no new IFRSs adopted during the year.
Early adoption of amendments to existing standards
With effect from 1 October 2020, the Group early adopted
amendments to IFRS 9, IAS 39 and IFRS 7, Interest rate benchmark
reform - Phase 2. The Phase 2 amendments address issues arising
during interest rate benchmark reform, including specifying when
the Phase 1 amendments adopted on 1 October 2019 will cease to
apply, when hedge designations and documentation should be updated,
and when hedges of the alternative benchmark rate as the hedged
risk are permitted. These amendments have been adopted
retrospectively to hedging relationships. There is no impact on the
consolidated financial statements from the early adoption of these
amendments.
The Group has adopted the following hedge accounting reliefs
provided by Phase 2 of the amendments:
(i) Hedge designation - When the Phase 1 amendments cease to
apply, the Group will amend its fair value hedge designation to
reflect changes which are required by IBOR reform, but only to make
one or more of these changes:
-- Designating an alternative benchmark rate (contractually or
non-contractually specified) as a hedged risk (i.e. SONIA, which
will replace GBP LIBOR);
-- Amending the description of the hedged item, including the
designated portion of fair value being hedged; or
-- Amending the description of the hedging instrument.
The Group will update its hedge documentation to reflect these
changes by the end of the reporting period in which the changes are
made. The amendments to hedge documentation do not require the
Group to discontinue the fair value hedge relationship. The Group
has not made any amendments to its hedge documentation relating to
IBOR reform in the period to 31 March 2021.
(ii) Risk components - The Group is permitted to designate an
alternative benchmark rate as a non-contractually specified risk
component, even if it is not separately identifiable at the date
when it is designated, provided that the Group reasonably expects
that it will meet the requirements within 24 months of the first
designation and the risk component is reliably measurable. The
Group has not designated any alternative benchmark rates as risk
components in any hedge relationships during the period.
Effect of IBOR reform
During 2020, the Directors considered the Group's exposures to
IBOR, including an assessment of the impact on the following:
-- The Group's revolving credit facilities maturing March 2023;
-- Outstanding derivative financial instruments including
interest rate swaps designated in fair value hedge relationships
and interest rate CAPs;
-- A review of contracts including insurance and leases;
-- A review of intercompany loan agreements; and
-- Treasury systems and processes.
The assessment highlighted the need to amend language in the
revolving credit facilities and derivative contracts which all
reference IBOR, in order that they reference alternative risk-free
rates (ARFR) once the relevant IBOR is discontinued. The need to
update systems and processes to be able to use the ARFR, including
day-count and compounding conventions was also identified.
Accordingly, the Group has engaged with its banking partners and
external advisors during the period to agree a timetable to amend
IBOR language within revolving credit facilities and derivative
contracts; and has commenced a partial implementation of system
changes. These discussions and system changes are expected to
complete during the second half of the financial year to 30
September 2021. The assessment identified no impact relating to
intercompany loan agreements or other contracts.
The following tables contain details of all the financial
instruments that the Group holds at 31 March 2021 which reference
an IBOR and have not yet transitioned to an alternative interest
rate benchmark:
Derivative assets exposed to GBP LIBOR
Carrying
value
at 31
March
2021 Notional
GBPm GBPm
================================================ ====== ========= =========
Derivative instruments in designated hedge
accounting relationships (i) 1.4 53.1
================================================ ====== ========= =========
Derivative instruments not in designated hedge
accounting relationships (ii) 0.4 85.0
================================================ ====== ========= =========
Total derivative assets exposed to GBP LIBOR 1.8 138.1
======================================================== ========= =========
Derivative assets exposed to USD LIBOR
Carrying
value
at 31
March
2021 Notional
GBPm US$m
================================================ ====== ========= =========
Derivative instruments not in designated hedge
accounting relationships (ii) 0.1 20.0
================================================ ====== ========= =========
Total derivative assets exposed to USD LIBOR 0.1 20.0
======================================================== ========= =========
(i) The Group has the following interest rate swaps designated
in fair value hedging relationships which have not yet transitioned
to an alternative interest rate benchmark:
-- GBP20.0 million fixed to floating interest rate swap,
maturing April 2021 which references 12-month GBP LIBOR.
-- GBP53.1 million fixed to floating interest rate swap,
maturing June 2027 which references 3-month GBP LIBOR.
The Phase 2 reliefs will only apply to the GBP53.1 million swap
maturing June 2027 as the Phase 1 reliefs will cease to apply to
the GBP20.0 million swap when it matures in April 2021. The GBP20.0
million swap, maturing April 2021 has therefore been excluded from
the table as it matures prior to transitioning to an alternative
benchmark rate.
(ii) Relates to GBP85.0 million notional and US$20.0 million
notional interest rate CAPs. The Group also has GBP20.0 million
notional and US$75.0 million notional interest rate CAPs with a
carrying value of GBPnil which are excluded from the table as they
mature prior to transitioning to an alternative benchmark rate.
In addition to the financial instruments included in the tables
above the Group has undrawn committed bank facilities (see Note 22)
which reference the IBOR of the drawn currency. These are excluded
from the tables as the Group has no drawn bank debt at 31 March
2021.
Critical accounting judgements and key sources of estimation
uncertainty
In addition to the judgement taken by the Directors in selecting
and applying the accounting policies set out above, the Directors
have made the following judgements concerning the amounts
recognised in these Condensed Consolidated Financial
Statements:
Adjusted measures
The Directors believe that the adjusted profit and adjusted
earnings per share measures provide additional useful information
to users of the Condensed Consolidated Financial Statements to
better understand the performance of the business. Accordingly the
Group presents adjusted operating profit and adjusted profit before
tax by adjusting for costs and profits which the Directors judge to
be significant by virtue of their size, nature or incidence or
which have a distortive effect on current period earnings.
In the Directors' judgement such items would include, but are
not limited to, costs associated with business combinations, gains
and losses on the disposal of businesses and subsidiary
undertakings, finance costs relating to premium on bond buy backs,
fair value movements, exceptional operating costs, impairment of
goodwill and amortisation and impairment of intangible assets
arising on business combinations.
Exceptional operating costs include items of a significant and a
non-recurring nature. In addition, the Group presents an adjusted
profit after tax measure by making adjustments for certain tax
charges and credits which the Directors judge to be significant by
virtue of their size, nature or incidence or which have a
distortive effect. The Group uses these adjusted measures to
evaluate performance and as a method to provide shareholders with
clear and consistent reporting.
See Note 10 for a reconciliation of profit before tax to
adjusted profit before and after tax.
The Group also presents a measure of net cash. In the judgement
of the Directors, this measure should include the currency gain or
loss on derivatives entered into with the intention of economically
converting the currency borrowings into an alternative currency.
See Note 13 for further detail.
Retirement benefits
When a surplus on a defined benefit pension scheme arises, the
Directors are required to consider the rights of the Trustees in
preventing the Group from obtaining a refund of that surplus in the
future. Where the Trustees are able to exercise this right the
Group would be required to restrict the amount of surplus
recognised.
After considering the principles set out in IFRIC 14, the
Directors have judged it appropriate to recognise a surplus of
GBP176.0 million (31 March 2020 GBP362.9 million , 30 September
2020 GBP136.7 million ) and report a net surplus on its pension
schemes amounting to GBP166.5 million (31 March 2020 GBP352.1
million ,
30 September 2020 GBP123.2 million ).
Investment in Cazoo Holdings Ltd (Cazoo)
The Group has a 21.0% equity stake (19.4% on a fully diluted
basis) in Cazoo and 20.0% Board representation.
In accordance with IAS 28, Investments in Associates and Joint
Ventures, equity holdings of 20% or more of voting power (directly
or through subsidiaries) indicates significant influence and result
in equity accounting - unless it can be clearly demonstrated that
significant influence does not exist.
The Group can participate in Cazoo Board discussions but cannot
veto any Cazoo Board decisions - which are based on a simple Board
majority, due to the current composition of the other seats on the
Board and has no other means that give it the ability to
participate in the financial and operating policy decisions of
Cazoo. The Group provides no essential technical information to
develop the Cazoo business and there is no interchange of
managerial personnel between the Group and Cazoo. Therefore, the
Directors have concluded that the Group does not possess the
ability to exert significant influence over Cazoo and accordingly
the Group has not equity accounted for its interest.
Cazoo has been recognised as an equity investment and measured
at fair value through Other Comprehensive Income (OCI).
Mail Force Charitable Incorporated Organisation (CIO)
The Group established the Mail Force CIO during the prior year.
The Group has assessed its relationship with the charity in
accordance with IFRS 10, Consolidated Financial Statements and
concluded that it does not have the power to affect returns to the
Group from the Charity's activities and does not control Mail
Force. Accordingly Mail Force's accounts have not been consolidated
within the Group's financial statements.
The following represent key sources of estimation uncertainty
that have the most significant effect on the amounts recognised in
these Condensed Consolidated Financial Statements:
Forecasting
The Group prepares medium-term forecasts based on Board-approved
budgets and four-year outlooks. These are used to support estimates
made in the preparation of the Group's financial statements
including the recognition of deferred tax assets in different
jurisdictions, the Group's going concern assessment and for the
purposes of impairment reviews. Longer-term forecasts use long-term
growth rates applicable to the relevant businesses.
Impairment of goodwill and intangible assets
Determining whether goodwill and intangible or other assets are
impaired or whether a reversal of an impairment should be recorded
requires a comparison of the balance sheet carrying value with the
recoverable amount of the asset or cash-generating unit (CGU). The
recoverable amount is the higher of the value in use and fair value
less costs to sell.
The value in use calculation requires the Directors to estimate
the future cash flows expected to arise from the asset or CGU and
calculate the net present value of these cash flows using a
suitable discount rate. A key area of estimation is deciding the
long-term growth rate and the operating cash flows of the
applicable businesses and the discount rate applied to those cash
flows. The carrying amount of goodwill and intangible assets at 31
March 2021 was GBP329.6 million (31 March 2020 GBP355.2 million ,
30 September 2020 GBP350.3 million ).
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.
Determining the fair value of assets, liabilities and contingent
liabilities acquired requires significant estimates and
assumptions, including assumptions with respect to cash flows and
unprovided liabilities and commitments, including in respect to
tax, to be used. The Group recognises intangible assets acquired as
part of a business combination at fair value at the date of
acquisition. The determination of these fair values is based upon
the Directors' estimate 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, the
Directors must estimate the expected useful economic lives of
intangible assets and charge amortisation on these assets
accordingly.
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 more challenging. The resolution of
issues is not always within the control of the Group and actual tax
liabilities or refunds may differ from those anticipated due to
changes in tax legislation, differing interpretations of tax
legislation and uncertainties surrounding the application of tax
legislation. Such issues can take several years to resolve.
The Group accounts for unresolved issues based on its best
estimate of the final outcome, 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. In situations
where uncertainties exist, provision is made for contingent tax
liabilities and assets when it is more likely than not that there
will be a cash impact. These provisions are made for each
uncertainty individually based on the Directors' estimates
following consideration of the available relevant information. The
measurement basis adopted represents the best predictor of the
resolution of the uncertainty which is usually based on the most
likely cash outflow. The Company reviews the adequacy of these
provisions at the end of each reporting period and adjusts them
based on changing facts and circumstances.
In addition, the Group makes estimates regarding the
recoverability of deferred tax assets relating to losses based on
forecasts of future taxable profits which are, by their nature,
uncertain.
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,
future salary increases and mortality rates. 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 Consolidated Income
Statement and the amounts of actuarial gains and losses recognised
in the Consolidated Statement of Changes in Equity.
The fair value of the Group's pension scheme assets include
quoted and unquoted investments. The value of unquoted investments
are estimated as their values are not directly observable.
Accordingly the assumptions used in valuing unquoted investments
are affected by current market conditions and trends which could
result in changes in their fair value after the measurement date. A
1.0% movement in the value of unquoted pension scheme assets is
estimated to change the value of the Group's pension scheme assets
by GBP21.3 million (31 March 2020
GBP23.2 million , 30 September 2020 GBP23.0 million ).
The carrying amount of the retirement benefit obligation at 31
March 2021 was a net surplus of GBP 166.5 million (31 March 2020
GBP 352.1 million, 30 September 2020 GBP 123.2 million). The
assumptions used can be found in Note 26 .
Legal claim provision
DMGT and certain of its subsidiaries are involved in various
lawsuits and claims which arise in the course of business. The
Group records a provision for these matters when it is probable
that a liability will be incurred and the amount of the loss can be
reasonably estimated.
The amounts accrued for legal contingencies often result from
complex judgements about future events and uncertainties that rely
heavily on estimates and assumptions.
As disclosed in Note 16 discontinued operations, Genscape has
been involved in a dispute with the US Environmental Protection
Agency (EPA) since 2016. In 2017 Genscape voluntarily paid a 2.0%
liability cap associated with invalid Renewable Identification
Numbers (RINs) at a cost of US$1.3 million, based on the
then-prevailing market rates, subject to a reservation of rights.
However, during 2019 the EPA ordered Genscape to replace 69.2
million additional RINs it had verified.
DMGT continues to cooperate with the EPA and settlement
discussions are ongoing but considering the uncertainties involved,
the length of time involved and taking note of the order from the
EPA, the Group, without admitting any wrongdoing, made a provision
for the total cost of replacing RINs as at 30 September 2019.
At each period end IAS 37 requires DMGT to review this provision
and make appropriate adjustments to reflect the current status of
the claim. The Group's closing provision includes the cost of
replacement RINs, estimated purchase costs, associated legal fees
and currency fluctuations. The final settlement amount may be
different than the provision made, however, it is not possible for
the Group to predict with any certainty the potential impact of
this litigation or to quantify the ultimate cost of a verdict or
resolution. Accordingly, the provision could change substantially
over time as the dispute progresses and new facts emerge.
RINs trade in a volatile range averaging 68 cents over the
previous 18-month period compared to the period end price of
US$1.23. The Group estimates that using the period end price rather
than the 18-month average price would increase the provision by
approximately US$25.2 million (GBP18.3 million).
Investment in Cazoo
The Group currently owns a 21.0% equity stake (19.4% on a fully
diluted basis) in Cazoo.
In March 2021 Cazoo announced a definitive business combination
agreement with AJAX I (AJAX), a publicly traded special purpose
acquisition company (SPAC) listed on the New York Stock Exchange
(NYSE). Upon closing of the proposed transaction, the combined
company will be named Cazoo and be listed on the NYSE.
This transaction values the combined company at a pro forma
enterprise value of approximately US$7.0 billion and a pro forma
equity value of approximately US$8.1 billion. The transaction
includes up to US$805.0 million AJAX cash in trust, assuming no
redemptions by AJAX shareholders, and an US$800.0 million fully
committed private investment in public equity (PIPE) at US$10.00
per share, led by the AJAX sponsors and D1 Capital Partners, and
including new and existing investors.
On closing of the transaction, which is expected in the third
quarter of the current calendar year, and assuming no redemptions
by AJAX shareholders, the combined value in cash proceeds and
shares in the listed Cazoo, valued at the US$10.00 per share issue
price, that the Group will receive on closing is expected to be
approximately US$1.35 billion. It is likely that the Group will
receive some cash proceeds on closing, but the amount will depend
on a number of factors, including redemptions by AJAX shareholders,
if any, as well as the Group's election and those of other
shareholders with respect to receipt of cash consideration. Lock-up
restrictions are expected to apply for five to six months after the
transaction closes.
Whilst the Directors believe the transaction is likely to
complete, these Condensed Consolidated Financial Statements are
required to include an estimate of fair value of the Group's
interest in Cazoo as at 31 March 2021 using the principles of IFRS
9, Financial Instruments based on facts and circumstances which
existed at that date.
Accordingly, in these Condensed Consolidated Financial
Statements the Directors have not relied solely on the anticipated
closing of the transaction nor the expected future valuation of the
listed Cazoo entity since these are not known with certainty at the
period end. The transaction remains subject to the satisfaction of
conditions precedent.
To assess the fair value of the Group's interest in Cazoo using
the principles of IFRS 9, the Directors have applied a probability
weighted expected returns assessment based on the facts and
circumstances which existed as at 31 March 2021. This has included
consideration of the following key transaction risks:
-- a large level of redemptions by AJAX shareholders;
-- AJAX shareholders not approving the transaction; and
-- PIPE commitments not being fulfilled.
The IFRS 9 fair value has been estimated using a probability
weighting of two valuation scenarios:
-- A valuation based on the expected value to be derived from
the proposed SPAC transaction (the SPAC scenario); and
-- A valuation based on an alternative stay private outcome
should the future SPAC transaction not proceed due to any of the
aforementioned risks (the Stay Private scenario)
The two scenarios have been weighted based on the Directors'
assessment of the likelihood of each scenario occurring. Using
information available at 31 March 2021, following the principles of
IFRS 9, the Directors have attributed a weighting of approximately
86% to the SPAC scenario valuation, leaving a 14% weighting to the
Stay Private scenario.
In both scenarios, the valuations of DMGT's interest reflect
discounts for marketability, based on DMGT's minority holding in an
unlisted private company at 31 March 2021 which would inherently be
less liquid than shares listed on the NYSE. To assess a
marketability discount the Directors have considered the historic
share price volatility of companies in the same sector which was
estimated to be 80% together with expectations of Cazoo's future
trading performance.
Based on this assessment the Group has increased the fair value
of its investment in Cazoo as at 31 March 2021 by GBP392.9 million
which has been recognised in Other Comprehensive Income.
A 10% increase or decrease in the fair value of Cazoo would
increase or decrease the fair value of the Group's investment in
Cazoo by GBP80.2 million which would be recognised in Other
Comprehensive Income.
Investment in Taboola.com Ltd (Taboola)
The Group currently owns a 0.4% stake in Taboola. In January
2021, Taboola announced a definitive business combination agreement
with ION Acquisition Corp. 1 Ltd (ION), a publicly traded special
purpose acquisition company (SPAC) listed on the New York Stock
Exchange (NYSE). Upon closing of the proposed transaction, which is
expected to complete in July 2021, the combined company will be
named Taboola and be listed on the NYSE under the new symbol
"TBLA".
This transaction values the combined company at a pro forma
valuation of approximately US$2.6 billion. The transaction includes
up to US$259.0 million ION cash in trust, assuming no redemptions
by ION shareholders, and an US$285.0 million fully committed
private investment in public equity (PIPE) at US$10.00 per share,
led by the ION sponsors and Phoenix Insurance, and including new
and existing investors.
On closing of the transaction, which is expected in the coming
months the value in listed Taboola shares that the Group will
receive, at the US$10.00 per share issue price, is expected to be
approximately US$7.8 million. The Group will not receive cash
proceeds on closing. Lock-up restrictions are expected to apply for
five to six months after the transaction closes.
Whilst the Directors believe the transaction is likely to
complete, these Condensed Consolidated Financial Statements are
required to include an estimate of fair value of the Group's
interest in Taboola as at 31 March 2021 using the principles of
IFRS 9, Financial Instruments based on facts and circumstances
which existed at that date.
Accordingly, in these Condensed Consolidated Financial
Statements the Directors have not relied solely on the anticipated
closing of the transaction nor the expected future valuation of the
listed Taboola entity since these are not known with certainty at
the period end. The transaction remains subject to the satisfaction
of conditions precedent.
To assess the fair value of the Group's interest in Taboola
using the principles of IFRS 9, the Directors have applied a
probability weighted expected returns assessment based on the facts
and circumstances which existed as at 31 March 2021. This has
included consideration of the following key risks:
-- a large level of redemptions by ION shareholders;
-- ION shareholders not approving the transaction; and
-- PIPE commitments not being fulfilled.
The IFRS 9 fair value has been estimated using a probability
weighting of two valuation scenarios:
-- A valuation based on the expected value to be derived from
the proposed SPAC transaction (the SPAC scenario); and
-- A valuation based on an alternative stay private outcome
should the future SPAC transaction not proceed due to any of the
aforementioned risks (the Stay Private scenario)
The two scenarios have been weighted based on the Directors'
assessment of the likelihood of each scenario occurring. Using
information available at 31 March 2021, following the principles of
IFRS 9, the Directors have attributed a weighting of approximately
77% to the SPAC scenario valuation, leaving a 23% weighting to the
Stay Private scenario.
In both scenarios, the valuations of DMGT's interest reflect
discounts for marketability, based on DMGT's minority holding in an
unlisted private company at 31 March 2021 which would inherently be
less liquid than shares listed on the NYSE. To assess a
marketability discount the Directors have considered the historic
share price volatility of companies in the same sector which was
estimated to be 100% together with expectations of Taboola's future
trading performance.
Based on this assessment the Group has increased the fair value
of its investment in Taboola as at 31 March 2021 by GBP1.4 million
which has been recognised in Other Comprehensive Income.
A 10% increase or decrease in the fair value of Taboola would
increase or decrease the fair value of the Group's investment in
Taboola by GBP0.4 million which would be recognised in Other
Comprehensive Income.
3 Segment analysis
The Group's business activities are split into four continuing
operating divisions: Insurance Risk, Property Information, Events
and Exhibitions and Consumer Media. These divisions are the basis
on which information is reported to the Group's Chief Operating
Decision Maker, which has been determined to be the Group Board.
The segment result is the measure used for the purposes of resource
allocation and assessment and represents profit earned by each
segment, including share of results from joint ventures and
associates but before exceptional operating costs, amortisation of
acquired intangible assets arising on business combinations,
impairment charges, other gains and losses, net finance costs and
taxation.
The results from the Group's Events and Exhibitions segment are
impacted by the seasonality of exhibitions and conferences held in
each accounting period. The impact of this seasonality and details
of the types of products and services from which each segment
derives its revenues are included within the business review.
The accounting policies applied in preparing the management
information for each of the reportable segments are the same as the
Group's accounting policies described in Notes 1 and 2 .
Less operating
(loss)/profit
Total Segment of joint Adjusted
Unaudited 6 months ended 31 March and external operating ventures operating
2021 revenue profit/(loss) and associates profit/(loss)
Note GBPm GBPm GBPm GBPm
------------------------------------------- ----- -------------- --------------- ---------------- ---------------
Insurance Risk 117.1 18.3 - 18.3
=========================================== ===== ============== =============== ================ ===============
Property Information 114.9 22.4 0.6 21.8
=========================================== ===== ============== =============== ================ ===============
EdTech 33.5 1.0 - 1.0
=========================================== ===== ============== =============== ================ ===============
Events and Exhibitions 3.8 (0.5) - (0.5)
=========================================== ===== ============== =============== ================ ===============
Consumer Media 311.0 34.0 - 34.0
=========================================== ===== ============== =============== ================ ===============
580.3 75.2 0.6 74.6
=========================================== ===== ============== =============== ================ ===============
Corporate costs - (22.1) (2.0) (20.1)
=========================================== ===== ============== =============== ================ ===============
Discontinued operations 16 (33.5) (1.0) - (1.0)
=========================================== ===== ============== =============== ================ ===============
546.8
=========================================== ===== ============== =============== ================ ===============
Adjusted operating profit 12 53.5
=========================================== ===== ============== =============== ================ ===============
Exceptional operating costs (1.7)
=========================================== ===== ============== =============== ================ ===============
Amortisation of acquired intangible
assets arising on business combinations (6.6)
=========================================== ===== ============== =============== ================ ===============
Operating profit before share of
results of joint ventures and associates 45.2
=========================================== ===== ============== =============== ================ ===============
Share of results of joint ventures
and associates 4 (1.4)
=========================================== ===== ============== =============== ================ ===============
Total operating profit 43.8
=========================================== ===== ============== =============== ================ ===============
Other gains and losses 5 4.0
=========================================== ===== ============== =============== ================ ===============
Profit before investment revenue,
net finance costs and tax 47.8
=========================================== ===== ============== =============== ================ ===============
Investment revenue 6 1.8
=========================================== ===== ============== =============== ================ ===============
Finance expense 7 (8.9)
=========================================== ===== ============== =============== ================ ===============
Finance income 7 1.7
=========================================== ===== ============== =============== ================ ===============
Profit before tax 42.4
=========================================== ===== ============== =============== ================ ===============
Tax 8 35.6
=========================================== ===== ============== =============== ================ ===============
Profit from discontinued operations 16 175.3
=========================================== ===== ============== =============== ================ ===============
Profit for the period 253.3
=========================================== ===== ============== =============== ================ ===============
An analysis of the amortisation of intangible assets and
exceptional operating costs by segment is as follows:
Unaudited 6 months ended 31 March 2021 Amortisation Amortisation
of intangible of intangible
assets assets
not arising arising Exceptional
on business on business operating
combinations combinations costs
(Note 18) (Note 18)
Note GBPm GBPm GBPm
======================================= ==== ============== ============== ===========
Insurance Risk (0.1) - -
======================================= ==== ============== ============== ===========
Property Information (2.4) (3.1) -
======================================= ==== ============== ============== ===========
EdTech (3.0) (0.2) -
======================================= ==== ============== ============== ===========
Events and Exhibitions (0.1) (1.6) -
======================================= ==== ============== ============== ===========
Energy Information - - (4.7)
======================================= ==== ============== ============== ===========
Consumer Media (0.4) (1.9) (0.2)
======================================= ==== ============== ============== ===========
(6.0) (6.8) (4.9)
======================================= ==== ============== ============== ===========
Corporate costs (0.6) - (1.5)
======================================= ==== ============== ============== ===========
(6.6) (6.8) (6.4)
======================================= ==== ============== ============== ===========
Relating to discontinued operations 16 3.0 0.2 4.7
======================================= ==== ============== ============== ===========
Continuing operations (3.6) (6.6) (1.7)
======================================= ==== ============== ============== ===========
The Group's exceptional operating costs are analysed as
follows:
Unaudited 6 months ended 31 March 2021 Legal fees
LTIP and claims Total
(i)
Note GBPm GBPm GBPm
======================================= ==== ====== =========== ======
Energy Information - (4.7) (4.7)
======================================= ==== ====== =========== ======
Consumer Media (0.2) - (0.2)
======================================= ==== ====== =========== ======
(0.2) (4.7) (4.9)
======================================= ==== ====== =========== ======
Corporate costs (1.5) - (1.5)
======================================= ==== ====== =========== ======
(1.7) (4.7) (6.4)
======================================= ==== ====== =========== ======
Relating to discontinued operations 16 - 4.7 4.7
======================================= ==== ====== =========== ======
Continuing operations (1.7) - (1.7)
======================================= ==== ====== =========== ======
(i) During the year ended 30 September 2018 the Group sold its
investment in ZPG Plc (ZPG) resulting in a profit on sale of
GBP508.4 million and during the year ended 30 September 2019 the
Group disposed of its investment in Euromoney Institutional
Investor PLC (Euromoney). As a direct consequence of these
disposals, the charge relating to the DMGT Long Term Incentive
Plans (LTIPs) is estimated to have increased by GBP23.3 million. As
the LTIPs include a service period condition, IFRS 2, Share-based
Payment requires the LTIP charge to be spread over the service
period until the award vests. The LTIP charge recognised in the
period which relates to the disposals of ZPG and Euromoney amounts
to GBP1.7 million. Since the profit on sale of ZPG and the capital
benefit of the Euromoney disposal were excluded from the adjusted
profit measure, the incremental increase in the LTIP charge has
been treated as an adjusting item and will continue to be so until
the awards vest.
The Group's tax charge includes a credit of GBP3.6 million in
relation to these exceptional operating costs of which GBP0.9
million tax credit relates to discontinued operations.
An analysis of the depreciation of right of use assets and
property, plant and equipment, research costs, other gains and
losses, investment revenue, and finance income and expense by
segment is as follows:
Unaudited 6 Depreciation Depreciation
months ended of right of property,
31 March 2021 of use plant and Research Other gains Investment Finance Finance
assets equipment costs and losses revenue income expense
(Note 20) (Note 19) (Note 5) (Note 6) (Note 7) (Note 7)
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================== ==== ============ ============= ======== =========== ========== ======== ========
Insurance Risk (3.1) (2.3) (16.6) - 0.1 - (1.0)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Property Information (1.0) (0.8) - 0.4 - - (0.2)
===================== ==== ============ ============= ======== =========== ========== ======== ========
EdTech (0.5) (0.1) - 236.5 - - (0.1)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Events and
Exhibitions (0.4) (0.1) - (0.3) - - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Energy Information - - - 0.1 - - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Consumer Media (5.5) (7.5) - 2.7 - 1.0 (0.4)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(10.5) (10.8) (16.6) 239.4 0.1 1.0 (1.7)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Corporate costs - (0.3) - 1.2 1.7 0.7 (7.3)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(10.5) (11.1) (16.6) 240.6 1.8 1.7 (9.0)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Relating to
discontinued
operations 16 0.5 0.1 - (236.6) - - 0.1
===================== ==== ============ ============= ======== =========== ========== ======== ========
Continuing
operations (10.0) (11.0) (16.6) 4.0 1.8 1.7 (8.9)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Unaudited 6 months ended 31 March Less operating
2020 Total and Segment loss of Adjusted
external operating joint ventures operating
revenue profit/(loss) and associates profit/(loss)
Note GBPm GBPm GBPm GBPm
========================================== ==== ========= ============== =============== ==============
Insurance Risk 123.1 18.5 (0.6) 19.1
========================================== ==== ========= ============== =============== ==============
Property Information 96.0 11.6 (0.1) 11.7
========================================== ==== ========= ============== =============== ==============
EdTech 41.8 2.2 - 2.2
========================================== ==== ========= ============== =============== ==============
Events and Exhibitions 77.1 5.0 - 5.0
========================================== ==== ========= ============== =============== ==============
Energy Information 7.1 1.6 - 1.6
========================================== ==== ========= ============== =============== ==============
Consumer Media 345.3 44.2 - 44.2
========================================== ==== ========= ============== =============== ==============
690.4 83.1 (0.7) 83.8
========================================== ==== ========= ============== =============== ==============
Corporate costs - (24.5) (6.1) (18.4)
========================================== ==== ========= ============== =============== ==============
Discontinued operations 16 (48.9) (3.8) - (3.8)
========================================== ==== ========= ============== =============== ==============
641.5
========================================== ==== ========= ============== =============== ==============
Adjusted operating profit 12 61.6
========================================== ==== ========= ============== =============== ==============
Exceptional operating costs (3.5)
========================================== ==== ========= ============== =============== ==============
Impairment of goodwill and acquired
intangible assets arising on business
combinations (8.2)
========================================== ==== ========= ============== =============== ==============
Amortisation of acquired intangible
assets arising on business combinations (5.1)
========================================== ==== ========= ============== =============== ==============
Operating profit before share of
results of joint ventures and associates 44.8
========================================== ==== ========= ============== =============== ==============
Share of results of joint ventures
and associates 4 (10.1)
========================================== ==== ========= ============== =============== ==============
Total operating profit 34.7
========================================== ==== ========= ============== =============== ==============
Other gains and losses 5 43.4
========================================== ==== ========= ============== =============== ==============
Profit before investment revenue,
net finance costs and tax 78.1
========================================== ==== ========= ============== =============== ==============
Investment revenue 6 5.1
========================================== ==== ========= ============== =============== ==============
Finance expense 7 (8.4)
========================================== ==== ========= ============== =============== ==============
Finance income 7 2.2
========================================== ==== ========= ============== =============== ==============
Profit before tax 77.0
========================================== ==== ========= ============== =============== ==============
Tax 8 (4.3)
========================================== ==== ========= ============== =============== ==============
Profit from discontinued operations 16 132.3
========================================== ==== ========= ============== =============== ==============
Profit for the period 205.0
========================================== ==== ========= ============== =============== ==============
An analysis of the amortisation and impairment of goodwill and
intangible assets and exceptional operating costs by segment is as
follows:
Unaudited 6 months ended 31 March Impairment
2020 Amortisation Amortisation of goodwill
of intangible of intangible and intangible
assets assets assets
not arising arising arising Exceptional
on business on business on business operating
combinations combinations combinations (costs)/income
(Note 18) (Note 18) (Note 18)
Note GBPm GBPm GBPm GBPm
==================================== ==== ============== ============== =============== ===============
Property Information (2.4) (2.9) - -
==================================== ==== ============== ============== =============== ===============
EdTech (3.7) (0.4) - -
==================================== ==== ============== ============== =============== ===============
Events and Exhibitions - (0.6) (5.3) -
==================================== ==== ============== ============== =============== ===============
Energy Information - - - 11.4
==================================== ==== ============== ============== =============== ===============
Consumer Media (1.1) (1.6) (2.9) (0.5)
==================================== ==== ============== ============== =============== ===============
(7.2) (5.5) (8.2) 10.9
==================================== ==== ============== ============== =============== ===============
Corporate costs (0.7) - - (3.0)
==================================== ==== ============== ============== =============== ===============
(7.9) (5.5) (8.2) 7.9
==================================== ==== ============== ============== =============== ===============
Relating to discontinued operations 16 3.7 0.4 - (11.4)
==================================== ==== ============== ============== =============== ===============
Continuing operations (4.2) (5.1) (8.2) (3.5)
==================================== ==== ============== ============== =============== ===============
The Group's exceptional operating (costs)/income is analysed as
follows:
Unaudited 6 months ended 31 March 2020 Legal fees
Note LTIP and claims Total
(i)
GBPm GBPm GBPm
======================================= ==== ====== =========== =======
Energy Information - 11.4 11.4
======================================= ==== ====== =========== =======
Consumer Media (0.5) - (0.5)
======================================= ==== ====== =========== =======
(0.5) 11.4 10.9
======================================= ==== ====== =========== =======
Corporate costs (3.0) - (3.0)
======================================= ==== ====== =========== =======
(3.5) 11.4 7.9
======================================= ==== ====== =========== =======
Relating to discontinued operations 16 - (11.4) (11.4)
======================================= ==== ====== =========== =======
Continuing operations (3.5) - (3.5)
======================================= ==== ====== =========== =======
(i) During the year ended 30 September 2018 the Group sold its
investment in ZPG Plc (ZPG) resulting in a profit on sale of
GBP508.4 million and during the year ended 30 September 2019 the
Group disposed of its investment in Euromoney Institutional
Investor PLC (Euromoney). As a direct consequence of these
disposals, the charge relating to the DMGT Long Term Incentive
Plans (LTIPs) is estimated to have increased by GBP23.2 million. As
the LTIPs include a service period condition, IFRS 2, Share-based
Payment requires the LTIP charge to be spread over the service
period until the award vests. The LTIP charge recognised in the
period which relates to the disposals of ZPG and Euromoney amounts
to GBP3.5 million. Since the profit on sale of ZPG and the capital
benefit of the Euromoney disposal are excluded from the adjusted
profit measure, the incremental increase in the LTIP charge has
been treated as an adjusting item and will continue to be so until
the awards vest.
The Group's tax charge includes charges of GBP1.6 million in
relation to these exceptional operating costs of which GBP2.4
million tax charge relates to discontinued operations.
An analysis of the depreciation of right of use assets and
property, plant and equipment, research costs, other gains and
losses, investment revenue, and net finance costs by segment is as
follows:
Unaudited 6 Depreciation Depreciation
months ended of right of property,
31 March 2020 of use plant and Research Other gains Investment Finance Finance
assets equipment costs and losses revenue income expense
(Note 20) (Note 19) (Note 5) (Note 6) (Note 7) (Note 7)
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================== ==== ============ ============= ======== =========== ========== ======== ========
Insurance Risk (2.6) (2.7) (19.4) - 0.2 - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Property Information (1.0) (1.0) - 37.0 - - (0.3)
===================== ==== ============ ============= ======== =========== ========== ======== ========
EdTech (0.6) (0.2) - 0.5 0.9 - (0.1)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Events and
Exhibitions (0.3) (0.1) - (0.1) - - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Energy Information - - (0.5) 134.3 - - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Consumer Media (5.3) (6.9) - 5.6 - 1.6 (0.6)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(9.8) (10.9) (19.9) 177.3 1.1 1.6 (1.0)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Corporate costs - (0.2) - 0.9 4.9 0.6 (7.5)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(9.8) (11.1) (19.9) 178.2 6.0 2.2 (8.5)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Relating to
discontinued
operations 16 0.6 0.2 0.5 (134.8) (0.9) - 0.1
===================== ==== ============ ============= ======== =========== ========== ======== ========
Continuing
operations (9.2) (10.9) (19.4) 43.4 5.1 2.2 (8.4)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Audited Year ended 30 September 2020 Less operating
profit/(loss)
Total and Segment of joint Adjusted
external operating ventures operating
revenue profit/(loss) and associates profit/(loss)
Note GBPm GBPm GBPm GBPm
========================================== ==== ========= ============== =============== ==============
Insurance Risk 248.3 33.0 (0.7) 33.7
========================================== ==== ========= ============== =============== ==============
Property Information 186.6 25.0 1.0 24.0
========================================== ==== ========= ============== =============== ==============
EdTech 84.9 5.9 - 5.9
========================================== ==== ========= ============== =============== ==============
Events and Exhibitions 79.2 3.8 - 3.8
========================================== ==== ========= ============== =============== ==============
Energy Information 7.1 1.6 - 1.6
========================================== ==== ========= ============== =============== ==============
Consumer Media 604.4 55.8 - 55.8
========================================== ==== ========= ============== =============== ==============
1,210.5 125.1 0.3 124.8
========================================== ==== ========= ============== =============== ==============
Corporate costs - (40.5) (5.6) (34.9)
========================================== ==== ========= ============== =============== ==============
Discontinued operations 16 (92.0) (7.5) - (7.5)
========================================== ==== ========= ============== =============== ==============
1,118.5
========================================== ==== ========= ============== =============== ==============
Adjusted operating profit 12 82.4
========================================== ==== ========= ============== =============== ==============
Exceptional operating costs, impairment
of internally generated and acquired
computer software (36.6)
========================================== ==== ========= ============== =============== ==============
Impairment of goodwill and acquired
intangible assets arising on business
combinations (14.1)
========================================== ==== ========= ============== =============== ==============
Amortisation of acquired intangible
assets arising on business combinations (10.6)
========================================== ==== ========= ============== =============== ==============
Operating profit before share of
results of joint ventures and associates 21.1
========================================== ==== ========= ============== =============== ==============
Share of results of joint ventures
and associates 4 (11.4)
========================================== ==== ========= ============== =============== ==============
Total operating profit 9.7
========================================== ==== ========= ============== =============== ==============
Other gains and losses 5 42.1
========================================== ==== ========= ============== =============== ==============
Profit before investment revenue,
net finance costs and tax 51.8
========================================== ==== ========= ============== =============== ==============
Investment revenue 6 7.4
========================================== ==== ========= ============== =============== ==============
Finance expense 7 (17.6)
========================================== ==== ========= ============== =============== ==============
Finance income 7 4.4
========================================== ==== ========= ============== =============== ==============
Profit before tax 46.0
========================================== ==== ========= ============== =============== ==============
Tax 8 0.1
========================================== ==== ========= ============== =============== ==============
Loss from discontinued operations 16 142.9
========================================== ==== ========= ============== =============== ==============
Profit for the year 189.0
========================================== ==== ========= ============== =============== ==============
An analysis of the amortisation and impairment of goodwill and
intangible assets and exceptional operating costs by segment is as
follows:
Audited Year ended 30 Impairment
September Amortisation Amortisation of goodwill Impairment
2020 of intangible of intangible and intangible of internally
assets assets assets generated
not arising arising arising and acquired Exceptional
on business on business on business computer operating
combinations combinations combinations software (costs)/income
(Note (Note (Note (Note
18) 18) 18) 18)
Note GBPm GBPm GBPm GBPm GBPm
============================== ==== ============== ============== =============== ============== ===============
Insurance Risk (0.1) - - - (20.4)
============================== ==== ============== ============== =============== ============== ===============
Property Information (4.9) (6.1) - (1.5) (1.0)
============================== ==== ============== ============== =============== ============== ===============
EdTech (7.3) (0.7) - - -
============================== ==== ============== ============== =============== ============== ===============
Events and Exhibitions (0.1) (1.3) (11.2) - (1.5)
============================== ==== ============== ============== =============== ============== ===============
Energy Information - - - - 11.4
============================== ==== ============== ============== =============== ============== ===============
Consumer Media (1.6) (3.2) (2.9) - (7.2)
============================== ==== ============== ============== =============== ============== ===============
(14.0) (11.3) (14.1) (1.5) (18.7)
============================== ==== ============== ============== =============== ============== ===============
Corporate costs (1.4) - - - (5.0)
============================== ==== ============== ============== =============== ============== ===============
(15.4) (11.3) (14.1) (1.5) (23.7)
============================== ==== ============== ============== =============== ============== ===============
Relating to discontinued
operations 16 7.3 0.7 - - (11.4)
============================== ==== ============== ============== =============== ============== ===============
Continuing operations (8.1) (10.6) (14.1) (1.5) (35.1)
============================== ==== ============== ============== =============== ============== ===============
The Group's exceptional operating (costs)/income is analysed as
follows:
Audited Year ended 30 Severance
September 2020 and other Option
closure modification Legal fees
costs LTIP charge and claims Total
(i) (ii) (iii)
Note GBPm GBPm GBPm GBPm GBPm
========================= ==== ========== ====== ============= =========== =======
Insurance Risk - - (20.4) - (20.4)
========================= ==== ========== ====== ============= =========== =======
Property Information (1.0) - - - (1.0)
========================= ==== ========== ====== ============= =========== =======
Events and Exhibitions (1.5) - - - (1.5)
========================= ==== ========== ====== ============= =========== =======
Energy Information - - - 11.4 11.4
========================= ==== ========== ====== ============= =========== =======
Consumer Media (6.1) (1.1) - - (7.2)
========================= ==== ========== ====== ============= =========== =======
(8.6) (1.1) (20.4) 11.4 (18.7)
========================= ==== ========== ====== ============= =========== =======
Corporate costs - (5.0) - - (5.0)
========================= ==== ========== ====== ============= =========== =======
(8.6) (6.1) (20.4) 11.4 (23.7)
========================= ==== ========== ====== ============= =========== =======
Relating to discontinued
operations 16 - - - (11.4) (11.4)
========================= ==== ========== ====== ============= =========== =======
Continuing operations (8.6) (6.1) (20.4) - (35.1)
========================= ==== ========== ====== ============= =========== =======
(i) Headcount was reduced in the Property Information, Events
and Exhibitions and Consumer Media segments to enhance the future
profitability of individual product lines and support the margins
of these businesses.
(ii) During the year ended 30 September 2018, the Group sold its
investment in ZPG Plc (ZPG) resulting in a profit on sale of
GBP508.4 million and during the year ended 30 September 2019 the
Group disposed of its investment in Euromoney Institutional
Investor PLC (Euromoney). As a direct consequence of these
disposals the charge relating to the DMGT Long Term Incentive Plans
(LTIPs) is estimated to have increased by GBP22.5 million. As the
LTIPs include a service period condition, IFRS 2, Share-based
Payment requires the LTIP charge to be spread over the service
period until the award vests. The LTIP charge recognised in the
period, which relates to the disposals of ZPG and Euromoney amounts
to GBP6.1 million. Since the profit on sale of ZPG and the capital
benefit of the Euromoney disposal are excluded from the adjusted
profit measure, the incremental increase in the LTIP charge as an
adjusting item and will continue to be so until these awards
vest.
(iii) Options granted under the 2015 RMS Equity Incentive Plan
(2015 Plan) originally required satisfying two conditions in order
to vest - a service period and the occurrence of an initial public
offering (IPO) of RMS or an event in which the Group ceased to hold
at least 50.0% of the voting rights of RMS. Since the possibility
of an IPO or change in control was considered improbable, in
accordance with IFRS 2, Share-based Payment, the Group had not
booked a charge to the Consolidated Income Statement for this 2015
Plan.
On 20 July 2020, the Group modified the 2015 Plan such that
vesting now occurs only on the satisfaction of a service period,
which causes vesting to be considered probable. Following this
modification and in accordance with IFRS 2, the Group is required
to recognise a charge of GBP20.4 million (US$26.2 million) for the
cumulative service rendered by participants from grant to
modification. Due to the materiality and non-recurring nature of
this charge, the Group has classified the modification charge as an
adjusting item.
The charge in the Consolidated Income Statement for the period
post modification to the period end amounts to GBP2.0 million
(US$2.6 million) which has been charged against the Group's
adjusted operating profit.
The Group's tax charge includes a credit of GBP4.7 million in
relation to these exceptional operating costs of which a charge of
GBP2.4 million relates to discontinued operations.
An analysis of the depreciation of right of use assets and
property, plant and equipment, research costs, other gains and
losses, investment revenue and finance income and expense by
segment is as follows:
Audited Year Depreciation Depreciation
ended 30 September of right of property,
2020 of use plant and Research Other gains Investment Finance Finance
assets equipment costs and losses revenue income expense
(Note (Note 7)
20) (Note 19) (Note 5) (Note 6) (Note 7)
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================== ==== ============ ============= ======== =========== ========== ======== ========
Insurance Risk (6.0) (5.3) (41.7) - 0.4 - (0.7)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Property Information (2.0) (1.9) - 33.7 - - (0.5)
===================== ==== ============ ============= ======== =========== ========== ======== ========
EdTech (1.3) (0.3) - 0.5 0.9 - (0.2)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Events and
Exhibitions (0.6) (0.2) - (0.2) - - (0.1)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Energy Information - - (0.5) 133.8 - - -
===================== ==== ============ ============= ======== =========== ========== ======== ========
Consumer Media (11.0) (14.2) - 5.6 - 3.2 (1.1)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(20.9) (21.9) (42.2) 173.4 1.3 3.2 (2.6)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Corporate costs - (0.6) - 3.0 7.0 1.2 (15.2)
===================== ==== ============ ============= ======== =========== ========== ======== ========
(20.9) (22.5) (42.2) 176.4 8.3 4.4 (17.8)
===================== ==== ============ ============= ======== =========== ========== ======== ========
Relating to
discontinued
operations 16 1.3 0.3 0.5 (134.3) (0.9) - 0.2
===================== ==== ============ ============= ======== =========== ========== ======== ========
Continuing
operations (19.6) (22.2) (41.7) 42.1 7.4 4.4 (17.6)
===================== ==== ============ ============= ======== =========== ========== ======== ========
The Group's revenue comprises sales excluding value added tax,
less discounts and commission where applicable and is analysed as
follows:
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2021 2021 2021 2021 2021 2021 2021 2021 2021
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Print
advertising 59.2 59.2 - - - - 59.2 59.2 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Digital
advertising 88.8 5.1 83.7 - - - 88.8 5.1 83.7
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Circulation 130.0 130.0 - - - - 130.0 130.0 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Subscriptions
and recurring
licenses 180.5 1.7 178.8 31.1 - 31.1 149.4 1.7 147.7
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Events,
conferences
and training 3.7 3.7 - - - - 3.7 3.7 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Transactions
and other 118.1 110.1 8.0 2.4 2.4 - 115.7 107.7 8.0
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
580.3 309.8 270.5 33.5 2.4 31.1 546.8 307.4 239.4
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Print
advertising 97.0 97.0 - - - - 97.0 97.0 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Digital
advertising 82.0 0.9 81.1 - - - 82.0 0.9 81.1
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Circulation 144.8 144.8 - - - - 144.8 144.8 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Subscriptions
and recurring
licenses 188.8 0.5 188.3 44.5 0.3 44.2 144.3 0.2 144.1
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Events,
conferences
and training 76.5 76.5 - - - - 76.5 76.5 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Transactions
and other 101.3 97.1 4.2 4.4 4.4 - 96.9 92.7 4.2
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
690.4 416.8 273.6 48.9 4.7 44.2 641.5 412.1 229.4
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Audited Audited Audited Audited Audited Audited
Year Year Year Audited Audited Audited Year Year Year
ended ended ended Year Year Year ended ended ended
30 30 30 ended ended ended 30 30 30
September September September 30 September 30 September 30 September September September September
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Print
advertising 131.7 131.7 - - - - 131.7 131.7 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Digital
advertising 151.8 8.8 143.0 - - - 151.8 8.8 143.0
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Circulation 284.5 280.5 4.0 - - - 284.5 280.5 4.0
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Subscriptions
and recurring
licenses 373.1 0.6 372.5 82.5 0.3 82.2 290.6 0.3 290.3
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Events,
conferences
and training 78.7 78.7 - - - - 78.7 78.7 -
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
Transactions
and other 190.7 185.7 5.0 9.5 9.5 - 181.2 176.2 5.0
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
1,210.5 686.0 524.5 92.0 9.8 82.2 1,118.5 676.2 442.3
=============== ========== ========== ========== ============= ============= ============= =========== =========== ===========
By geographic area
The majority of the Group's operations are located in the United
Kingdom and North America. The analysis of the Group's revenue
below is based on the location of group companies in these
regions.
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2021 2021 2021 2021 2021 2021 2021 2021 2021
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 389.3 292.2 97.1 - - - 389.3 292.2 97.1
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 180.3 13.0 167.3 33.5 2.4 31.1 146.8 10.6 136.2
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 10.7 4.6 6.1 - - - 10.7 4.6 6.1
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
580.3 309.8 270.5 33.5 2.4 31.1 546.8 307.4 239.4
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 406.2 327.1 79.1 - - - 406.2 327.1 79.1
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 202.0 13.0 189.0 48.4 4.7 43.7 153.6 8.3 145.3
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 82.2 76.7 5.5 0.5 - 0.5 81.7 76.7 5.0
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
690.4 416.8 273.6 48.9 4.7 44.2 641.5 412.1 229.4
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Audited Audited Audited Audited Audited Audited
Year Year Year Audited Audited Audited Year Year Year
ended ended ended Year Year Year ended ended ended
30 30 30 ended ended ended 30 30 30
September September September 30 September 30 September 30 September September September September
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 718.8 569.9 148.9 - - - 718.8 569.9 148.9
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 402.1 36.7 365.4 91.5 9.8 81.7 310.6 26.9 283.7
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 89.6 79.4 10.2 0.5 - 0.5 89.1 79.4 9.7
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
1,210.5 686.0 524.5 92.0 9.8 82.2 1,118.5 676.2 442.3
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
The analysis of the Group's revenue below is based on the
geographic location of customers in these regions.
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2021 2021 2021 2021 2021 2021 2021 2021 2021
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 349.2 285.8 63.4 0.1 - 0.1 349.1 285.8 63.3
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 168.4 11.0 157.4 33.4 2.4 31.0 135.0 8.6 126.4
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 62.7 13.0 49.7 - - - 62.7 13.0 49.7
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
580.3 309.8 270.5 33.5 2.4 31.1 546.8 307.4 239.4
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended ended
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 378.0 321.9 56.1 0.5 - 0.5 377.5 321.9 55.6
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 180.5 13.1 167.4 47.3 4.7 42.6 133.2 8.4 124.8
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 131.9 81.8 50.1 1.1 - 1.1 130.8 81.8 49.0
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
690.4 416.8 273.6 48.9 4.7 44.2 641.5 412.1 229.4
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Audited Audited Audited Audited Audited Audited
Year Year Year Audited Audited Audited Year Year Year
ended ended ended Year Year Year ended ended ended
30 30 30 ended ended ended 30 30 30
September September September 30 September 30 September 30 September September September September
2020 2020 2020 2020 2020 2020 2020 2020 2020
Discontinued Discontinued Continuing Continuing
Total Total Discontinued operations operations Continuing operations operations
Point Over operations Point Over operations Point Over
Total in time time Total in time time Total in time time
(Note (Note (Note
16) 16) 16)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
UK 685.7 560.3 125.4 0.5 - 0.5 685.2 560.3 124.9
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
North
America 338.5 34.7 303.8 90.3 9.8 80.5 248.2 24.9 223.3
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
Rest of
the
World 186.3 91.0 95.3 1.2 - 1.2 185.1 91.0 94.1
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
1,210.5 686.0 524.5 92.0 9.8 82.2 1,118.5 676.2 442.3
========= ========== ========== ========== ============= ============= ============= =========== =========== ===========
4 Share of results of joint ventures and associates
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
================================================ ====== ========== ========== ==============
Share of adjusted operating profits from
operations of joint ventures 0.7 - 1.2
------------------------------------------------ ------ ---------- ---------- --------------
Share of adjusted operating losses from
operations of associates (2.0) (6.8) (9.0)
================================================ ====== ========== ========== ==============
Share of adjusted operating losses from
joint ventures and associates (1.3) (6.8) (7.8)
------------------------------------------------ ------ ---------- ---------- --------------
Share of associates' other gains 10 0.1 0.4 0.4
------------------------------------------------ ------ ---------- ---------- --------------
Share of amortisation of intangibles arising (0.1) - -
on business combinations of associates
------------------------------------------------ ------ ---------- ---------- --------------
Share of associates' interest payable - - (0.7)
------------------------------------------------ ------ ---------- ---------- --------------
Share of joint ventures' tax 8, 10 (0.1) - (0.1)
------------------------------------------------ ------ ---------- ---------- --------------
Share of associates' tax 8, 10 - - 0.6
------------------------------------------------ ------ ---------- ---------- --------------
Impairment of carrying value of joint
ventures 10 - - (0.1)
------------------------------------------------ ------ ---------- ---------- --------------
10,
Impairment of carrying value of associates (i) - (3.7) (3.7)
------------------------------------------------ ------ ---------- ---------- --------------
(1.4) (10.1) (11.4)
================================================ ====== ========== ========== ==============
Share of results from operations of joint
ventures 0.6 - 1.1
------------------------------------------------ ------ ---------- ---------- --------------
Share of results from operations of associates (2.0) (6.4) (8.7)
------------------------------------------------ ------ ---------- ---------- --------------
Impairment of carrying value of joint
ventures - - (0.1)
------------------------------------------------ ------ ---------- ---------- --------------
Impairment of carrying value of associates - (3.7) (3.7)
------------------------------------------------ ------ ---------- ---------- --------------
(1.4) (10.1) (11.4)
================================================ ====== ========== ========== ==============
(i) In the prior periods ended 31 March 2020 and 30 September
2020 , represents a GBP0.1 million write-down in the carrying value
of Global Events Partners Ltd in the Events and Exhibitions segment
and a
GBP3.6 million write-down in the carrying value of Also Energy Holdings, Inc. held centrally .
5 Other gains and losses
Unaudited Unaudited
6 months 6 months
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
============================================== ======= ========== ========== ==============
Loss on disposal of financial assets held (i) - (0.1) -
at fair value through other comprehensive
income
---------------------------------------------- ------- ---------- ---------- --------------
Profit on disposal and closure of businesses (ii) 0.5 40.6 38.4
---------------------------------------------- ------- ---------- ---------- --------------
Recycled cumulative translation differences (iii) - 1.2 0.7
---------------------------------------------- ------- ---------- ---------- --------------
Gain from bargain purchase 14, 2.7 - -
(iv)
---------------------------------------------- ------- ---------- ---------- --------------
Profit on change in control (v) - 1.6 1.6
---------------------------------------------- ------- ---------- ---------- --------------
Profit on disposal of joint ventures and
associates (vi) 0.8 0.1 1.4
---------------------------------------------- ------- ---------- ---------- --------------
4.0 43.4 42.1
====================================================== ========== ========== ==============
There is a tax charge of GBP1.1 million (period ended 31 March
2020 GBP0.7 million , year ended 30 September
2020 GBP1.6 million ) in relation to these other gains and losses.
(i) In the prior period ended 31 March 2020 this relates to a
loss of GBP0.1 million on the disposal of Laundrapp Ltd (formerly
known as Zipjet Ltd).
(ii) In the prior period ended 31 March 2020 this principally
relates to a profit of GBP24.7 million on the disposal of
Inframation AG and a profit of GBP15.6 million on the disposal of
BuildFax, Inc. both in the Property Information segment.
In the prior year ended 30 September 2020 this principally
relates to a profit of GBP24.8 million relating to the disposal of
Inframation AG and a profit of GBP15.7 million relating to the
disposal of BuildFax, Inc. both in the Property Information
segment.
(iii) Represents cumulative translation differences required to
be recycled through the Consolidated Income Statement on
disposals.
(iv) On 18 October 2020, dmg media acquired JPI Media's print
operations at Dinnington, Portsmouth and Carn in Northern Ireland
for total consideration of GBP10.0 million. The consideration paid
was less than the value of the identifiable net assets acquired and
accordingly the gain on this acquisition has been recognised in the
Consolidated Income Statement in accordance with IFRS 3, Business
Combinations.
(v) In the prior periods ended 31 March 2020 and 30 September
2020 , this relates to a reduction in the Group's interest in Cazoo
Holdings Ltd (Cazoo), when classified as an associate held
centrally. In accordance with IFRS 3, Business Combinations, the
difference of GBP1.6 million between the fair value of the
investment retained and the carrying value is treated as a gain on
change in control.
(vi) In the current period this represents a profit on disposal
of TreppPort, LLC in the Property Information segment.
In the prior period ended 31 March 2020 this represents a refund
of expenses incurred in a prior period in relation to the disposal
of SiteCompli in the Property Information segment.
In the prior year ended 30 September 2020 this principally
represents a profit of GBP1.2 million on the sale of Also Energy
Holdings, Inc. held centrally and a GBP0.1 million refund of
expenses incurred in a prior period in relation to the disposal of
SiteCompli in the Property Information segment.
6 Investment revenue
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
GBPm GBPm GBPm
============================================== ========== ========== ==============
Interest receivable from short-term deposits 0.5 3.9 5.0
----------------------------------------------- ---------- ---------- --------------
Interest receivable on loan notes 1.3 1.2 2.4
----------------------------------------------- ---------- ---------- --------------
1.8 5.1 7.4
============================================== ========== ========== ==============
7 Net finance costs
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
============================================= ===== ========== ========== ==============
Interest, arrangement and commitment
fees payable on bonds, bank loans and
loan notes (7.3) (7.3) (15.0)
--------------------------------------------- ----- ---------- ---------- --------------
Finance charge on lease liabilities (1.6) (0.9) (2.3)
--------------------------------------------- ----- ---------- ---------- --------------
Loss on derivatives, or portions thereof,
not designated for hedge accounting - (0.2) (0.3)
--------------------------------------------- ----- ---------- ---------- --------------
Change in fair value of derivative hedge
of bond (1.7) 0.5 0.5
--------------------------------------------- ----- ---------- ---------- --------------
Change in fair value of hedged portion
of bond 1.7 (0.5) (0.5)
--------------------------------------------- ----- ---------- ---------- --------------
Finance expense (8.9) (8.4) (17.6)
============================================= ===== ========== ========== ==============
Profit on derivatives, or portions thereof, 0.4 - -
not designated for hedge accounting
--------------------------------------------- ----- ---------- ---------- --------------
Finance income on sublease receivable 0.1 0.1 0.2
--------------------------------------------- ----- ---------- ---------- --------------
Finance income on defined benefit pension
schemes 10 1.2 2.1 4.2
--------------------------------------------- ----- ---------- ---------- --------------
Finance income 1.7 2.2 4.4
============================================= ===== ========== ========== ==============
Net finance costs (7.2) (6.2) (13.2)
============================================= ===== ========== ========== ==============
8 Tax
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
============================================ ===== ========== ========== ==============
The charge on the profit for the period
consists of:
-------------------------------------------- ----- ---------- ---------- --------------
UK tax
============================================ ===== ========== ========== ==============
Corporation tax at 19.0% (2020 19.0%) - - 0.3
-------------------------------------------- ----- ---------- ---------- --------------
Adjustments in respect of prior periods - 0.1 -
-------------------------------------------- ----- ---------- ---------- --------------
- 0.1 0.3
============================================ ===== ========== ========== ==============
Overseas tax
============================================ ===== ========== ========== ==============
Corporation tax (31.8) (13.1) (14.4)
-------------------------------------------- ----- ---------- ---------- --------------
Adjustments in respect of prior years 0.5 - 4.0
-------------------------------------------- ----- ---------- ---------- --------------
(31.3) (13.1) (10.4)
============================================ ===== ========== ========== ==============
Total current tax (31.3) (13.0) (10.1)
============================================ ===== ========== ========== ==============
Deferred tax
============================================ ===== ========== ========== ==============
Origination and reversals of temporary
differences 9.4 (9.4) (2.1)
-------------------------------------------- ----- ---------- ---------- --------------
Adjustments in respect of prior years 0.2 - 2.0
-------------------------------------------- ----- ---------- ---------- --------------
Total deferred tax 9.6 (9.4) (0.1)
============================================ ===== ========== ========== ==============
Total tax charge (21.7) (22.4) (10.2)
============================================ ===== ========== ========== ==============
Tax charge relating to discontinued
operations 16 57.3 18.1 10.3
-------------------------------------------- ----- ---------- ---------- --------------
Tax credit/(charge) relating to continuing
operations 35.6 (4.3) 0.1
============================================ ===== ========== ========== ==============
Adjusted tax on profit before amortisation and impairment of
intangible assets, restructuring costs and non-recurring items
(adjusted tax charge) amounted to a charge of GBP8.4 million (31
March 2020 GBP21.8 million , 30 September 2020 GBP12.7 million )
and the resulting effective rate is 18.0% (31 March 2020 39.0% , 30
September 2020 17.6% ). The differences between the tax charge and
the adjusted tax charge are shown in the reconciliation below:
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
=============================================== ====== ========== ========== ==============
Total tax charge on the profit for the
period - continuing and discontinued
operations (21.7) (22.4) (10.2)
----------------------------------------------- ------ ---------- ---------- --------------
Share of tax in joint ventures and associates 4 (0.1) - 0.5
----------------------------------------------- ------ ---------- ---------- --------------
Deferred tax on amortisation and impairment
of acquired intangible assets (i) (0.6) (0.4) (1.0)
----------------------------------------------- ------ ---------- ---------- --------------
Reassessment of temporary differences (ii) (43.8) - 11.1
----------------------------------------------- ------ ---------- ---------- --------------
Tax on other gains and losses (iii) 59.1 7.4 1.6
----------------------------------------------- ------ ---------- ---------- --------------
Tax on exceptional operating costs (3.6) 1.6 (4.7)
----------------------------------------------- ------ ---------- ---------- --------------
Impact of UK Corporation Tax rate change - (8.6) (8.6)
----------------------------------------------- ------ ---------- ---------- --------------
Prior year impact of US Foreign-Derived
Intangible Income regime - - (3.2)
----------------------------------------------- ------ ---------- ---------- --------------
Tax on other adjusting items 2.3 0.6 1.8
----------------------------------------------- ------ ---------- ---------- --------------
Adjusted tax charge on the profit for
the period 10 (8.4) (21.8) (12.7)
=============================================== ====== ========== ========== ==============
(i) In calculating the adjusted tax rate, the Group excludes the
deferred tax effects of the amortisation and impairment of acquired
intangible assets (other than internally generated and acquired
computer software), as the Group prefers to give users of its
accounts a view of the tax charge based on the current status of
such items. Any additional deferred tax effects (in relation to
acquired intangible assets) would only crystallise on the disposal
of a business, which being an exceptional item, would result in an
exceptional deferred tax impact.
(ii) Reassessment of temporary differences includes a tax credit
in relation to the recognition of previously unrecognised deferred
tax assets in respect of US deferred interest of GBP40.8 million
(31 March 2020 GBPnil, 30 September 2020 GBP37.0 million) and UK
tax losses of GBP3.0 million (31 March 2020 GBPnil, 30 September
2020 GBPnil). A significant portion of the current period credit of
GBP40.8 million arises due to the sale of the EdTech business
accelerating the use of US deferred interest. Reassessment of
temporary differences also includes a tax charge in relation to the
derecognition of previously recognised deferred tax assets in
respect of UK tax losses and deferred interest of GBPnil (31 March
2020 GBPnil, 30 September 2020 GBP39.5 million) and US state
R&D tax credits of GBPnil (31 March 2020 GBPnil, 30 September
2020 GBP8.6 million).
(iii) Tax on other gains and losses during the 6 months ended 31
March 2021 includes a tax charge of GBP58.0 million on the sale of
the EdTech segment. Tax on other gains and losses during the 6
months ended 31 March 2020 includes a tax charge of GBP6.7 million
on the sale of the Energy Information segment.
In April 2019 the EU Commission released its final decision on
the State Aid investigation into the Group Financing Exemption
(GFE) included within the UK's controlled foreign company (CFC)
rules. The Commission ruled that the GFE constituted State Aid to
the extent that non-trade finance profits of a CFC arose as a
result of Significant People Functions (SPFs) in the UK. Up until
2018 the Group financed its US operations through a Luxembourg
resident finance company which had received clearance from HM
Revenue & Customs (HMRC) that it benefitted from the GFE. It
was previously considered that, if the State Aid investigation were
to ultimately lead to a reversal of the benefits that the Group has
accrued through the GFE, the tax cost to the Group would be in the
range from GBPnil to GBP7.4 million. However, the Directors
considered that an appeal against the Commission's decision would,
more likely than not, be successful. Accordingly, no provision was
made in the financial statements. Following the Group's provision
of information in relation to the issue, HMRC confirmed in writing
in March 2021 that it does not consider the Group to be a
beneficiary of State Aid under the EU Commission decision and that
it regards the matter closed without adjustment.
In March 2021, draft legislation was published in the UK to
increase the corporation tax rate to 25.0% from 1 April 2023.
However, the draft legislation was not enacted as at 31 March 2021
and its effect has therefore been excluded from the preparation of
the numbers included in these Financial Statements. The Group
estimates that the impact of the change in rate is that the Group's
net deferred tax assets will increase by GBP2.3 million during the
year ending 30 September 2021, with a net credit of GBP8.4 million
being taken to the Income Statement and a net debit of GBP6.1
million being taken to the Statement of Comprehensive Income.
9 Dividends paid
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months year year
ended ended ended ended ended ended
31 March 31 March 31 March 31 March 30 September 30 September
2021 2021 2020 2020 2020 2020
Pence Pence Pence
per per per
share GBPm share GBPm share GBPm
=================================== ========== ========== ========== ========== ============== ==============
Amounts recognisable as
distributions
to equity holders in the period
=================================== ========== ========== ========== ========== ============== ==============
Ordinary Shares - final dividend
for the year ended 30 September
2020 16.6 3.3 - - - -
==================================== ========== ========== ========== ========== ============== ==============
A Ordinary Non-Voting Shares
- final dividend for the year
ended 30 September 2020 16.6 34.3 - - - -
==================================== ========== ========== ========== ========== ============== ==============
Ordinary Shares - final dividend
for the year ended 30 September
2019 - - 16.6 3.3 16.6 3.3
==================================== ========== ========== ========== ========== ============== ==============
A Ordinary Non-Voting Shares
- final dividend for the year
ended 30 September 2019 - - 16.6 34.6 16.6 34.6
==================================== ========== ========== ========== ========== ============== ==============
- 37.6 - 37.9 - 37.9
=================================== ========== ========== ========== ========== ============== ==============
Ordinary Shares - interim dividend
for the year ended 30 September
2020 - - - - 7.5 1.5
==================================== ========== ========== ========== ========== ============== ==============
A Ordinary Non-Voting Shares
- interim dividend for the
year ended 30 September 2020 - - - - 7.5 15.5
==================================== ========== ========== ========== ========== ============== ==============
- - - - - 17.0
=================================== ========== ========== ========== ========== ============== ==============
- 37.6 - 37.9 - 54.9
=================================== ========== ========== ========== ========== ============== ==============
The Board has declared an interim dividend of 7.6 pence per
Ordinary/A Ordinary Non-Voting Share (31 March 2020 interim
dividend of 7.5 pence, 30 September 2020 final dividend of 16.6
pence) which will absorb an estimated GBP17.4 million (31 March
2020 GBP17.2 million , 30 September 2020 GBP37.6 million ) of
shareholders' equity for which no liability has been recognised in
these Condensed Consolidated Financial Statements. It will be paid
on 2 July 2021 to shareholders on the register at the close of
business on 11 June 2021 .
10 Adjusted profit
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
===================================================== ====== ========== ========== ==============
Profit before tax - continuing operations 3 42.4 77.0 46.0
----------------------------------------------------- ------ ---------- ---------- --------------
(Loss)/profit before tax - discontinued
operations 16 (3.9) 16.1 19.4
----------------------------------------------------- ------ ---------- ---------- --------------
Profit on disposal of discontinued operations
including recycled cumulative translation
differences 16 236.5 134.3 133.8
----------------------------------------------------- ------ ---------- ---------- --------------
Adjust for:
===================================================== ====== ========== ========== ==============
Amortisation of intangible assets in Group
profit, including joint ventures and associates,
arising on business combinations 3, 4 6.9 5.5 11.3
----------------------------------------------------- ------ ---------- ---------- --------------
Impairment of goodwill and intangible
assets arising on business combinations 3 - 8.2 14.1
----------------------------------------------------- ------ ---------- ---------- --------------
Exceptional operating costs/(income),
impairment of internally generated and
acquired computer software 3 6.4 (7.9) 25.2
----------------------------------------------------- ------ ---------- ---------- --------------
Share of associates' other gains 4 (0.1) (0.4) (0.4)
----------------------------------------------------- ------ ---------- ---------- --------------
Impairment of carrying value of joint
ventures and associates 4 - 3.7 3.8
----------------------------------------------------- ------ ---------- ---------- --------------
Other gains and losses:
===================================================== ====== ========== ========== ==============
Loss on disposal of other financial assets
held at fair value through other comprehensive
income 5 - 0.1 -
----------------------------------------------------- ------ ---------- ---------- --------------
Profit on disposal of businesses, joint
ventures, associates, change of control
and recycled cumulative translation differences 5, 16 (4.1) (44.0) (42.6)
----------------------------------------------------- ------ ---------- ---------- --------------
Profit on disposal of discontinued operations
including recycled cumulative translation
differences 16 (236.5) (134.3) (133.8)
----------------------------------------------------- ------ ---------- ---------- --------------
Finance costs:
===================================================== ====== ========== ========== ==============
Finance income on defined benefit pension
schemes 7 (1.2) (2.1) (4.2)
----------------------------------------------------- ------ ---------- ---------- --------------
Tax:
===================================================== ====== ========== ========== ==============
Share of tax in joint ventures and associates 4, 8 0.1 - (0.5)
----------------------------------------------------- ------ ---------- ---------- --------------
Adjusted profit before tax and non-controlling
interests 46.5 56.2 72.1
===================================================== ====== ========== ========== ==============
Adjusted tax charge 8 (8.4) (21.8) (12.7)
----------------------------------------------------- ------ ---------- ---------- --------------
Non-controlling interests (i) 0.1 - -
----------------------------------------------------- ------ ---------- ---------- --------------
Adjusted profit after taxation and non-controlling
interests 38.2 34.4 59.4
===================================================== ====== ========== ========== ==============
(i) The adjusted non-controlling interests' share of losses for
the period of GBP0.1 million (31 March 2020 GBPnil , 30 September
2020 GBPnil ) is stated after eliminating a credit of GBP0.2
million (31 March 2020 GBPnil , 30 September 2020 GBPnil ), being
the non-controlling interests' share of adjusting items.
11 Earnings per share
Basic earnings per share of 111.3 pence (31 March 2020 89.7
pence, 30 September 2020 83.1 pence) and diluted earnings per share
of 108.3 pence (31 March 2020 88.5 pence, 30 September 2020 81.2
pence) are calculated, in accordance with IAS 33, Earnings Per
Share, on Group profit for the financial period of GBP 253.5
million (31 March 2020 GBP 205.0 million, 30 September 2020 GBP
189.3 million) as adjusted for the effect of dilutive Ordinary
Shares of GBP nil (31 March 2020 GBP nil , 30 September 2020 GBP
nil ) and profits from discontinued operations of GBP175.3 million
(31 March 2020 GBP132.3 million , 30 September 2020 GBP142.9
million ) on the weighted average number of Ordinary Shares in
issue during the period, 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 16.8
pence (31 March 2020 15.0 pence, 30 September 2020 26.1 pence) are
calculated on profit for continuing and discontinued operations
before exceptional operating costs, impairment of goodwill and
intangible assets, amortisation of intangible assets arising on
business combinations, other gains and losses and exceptional
financing costs after taxation and non-controlling interests
associated with those profits, of GBP 38.2 million (31 March 2020
GBP 34.4 million, 30 September 2020 GBP 59.4 million), as set out
in Note 10 and on the basic weighted average number of Ordinary
Shares in issue during the period.
Basic and diluted earnings per share:
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months 6 months year 6 months 6 months year
ended ended ended ended ended ended
31 March 31 March 30 September 31 March 31 March 30 September
2021 2020 2020 2021 2020 2020
Diluted Diluted Diluted Basic Basic Basic
earnings earnings earnings earnings earnings earnings
Note GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ===== ========== ========== ============== ========== ========== ==============
Earnings from continuing
operations 78.2 72.7 46.4 78.2 72.7 46.4
=============================== ===== ========== ========== ============== ========== ========== ==============
Effect of dilutive Ordinary
Shares - - - - - -
=============================== ===== ========== ========== ============== ========== ========== ==============
Earnings from discontinued
operations 175.3 132.3 142.9 175.3 132.3 142.9
=============================== ===== ========== ========== ============== ========== ========== ==============
253.5 205.0 189.3 253.5 205.0 189.3
=============================== ===== ========== ========== ============== ========== ========== ==============
Adjusted earnings from
continuing
and discontinued operations 10 38.2 34.4 59.4 38.2 34.4 59.4
=============================== ===== ========== ========== ============== ========== ========== ==============
Effect of dilutive Ordinary
Shares - - - - - -
=============================== ===== ========== ========== ============== ========== ========== ==============
38.2 34.4 59.4 38.2 34.4 59.4
=============================== ===== ========== ========== ============== ========== ========== ==============
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months 6 months year 6 months 6 months year
ended ended ended ended ended ended
31 March 31 March 30 September 31 March 31 March 30 September
2021 2020 2020 2021 2020 2020
Diluted Diluted Diluted Basic Basic Basic
pence pence pence pence pence pence
per per per per per per
share share share share share share
=================================== ========== ========== ============== ========== ========== ==============
Earnings per share from continuing
operations 33.4 31.4 19.9 34.3 31.8 20.4
==================================== ========== ========== ============== ========== ========== ==============
Effect of dilutive Ordinary
Shares - - - - - -
=================================== ========== ========== ============== ========== ========== ==============
Earnings per share from
discontinued
operations 74.9 57.1 61.3 77.0 57.9 62.7
==================================== ========== ========== ============== ========== ========== ==============
Earnings per share from continuing
operations and discontinued
operations 108.3 88.5 81.2 111.3 89.7 83.1
==================================== ========== ========== ============== ========== ========== ==============
Adjusted earnings per share
from continuing and discontinued
operations 16.3 14.8 25.5 16.8 15.0 26.1
==================================== ========== ========== ============== ========== ========== ==============
Effect of dilutive Ordinary
Shares - - - - - -
=================================== ========== ========== ============== ========== ========== ==============
Adjusted earnings per share
from continuing operations
and discontinued operations 16.3 14.8 25.5 16.8 15.0 26.1
==================================== ========== ========== ============== ========== ========== ==============
The weighted average number of Ordinary Shares in issue during
the year for the purpose of these calculations is as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 Number 2020 Number 2020 Number
m m m
========================================= ============= ============= =============
Number of Ordinary Shares in issue 234.5 234.8 234.8
========================================= ============= ============= =============
Own shares held (6.8) (6.2) (7.0)
========================================= ============= ============= =============
Basic earnings per share denominator 227.7 228.6 227.8
========================================= ============= ============= =============
Effect of dilutive share options 6.4 3.2 5.2
========================================= ============= ============= =============
Dilutive earnings per share denominator 234.1 231.8 233.0
========================================= ============= ============= =============
12 EBITDA and cash generated by operations
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
=============================================== ===== ========== ========== ==============
Continuing operations
=============================================== ===== ========== ========== ==============
Adjusted operating profit 3 53.5 61.6 82.4
----------------------------------------------- ----- ---------- ---------- --------------
Non-exceptional depreciation charge
on property, plant and equipment 3 11.0 10.9 22.2
----------------------------------------------- ----- ---------- ---------- --------------
Non-exceptional depreciation charge
on right of use assets 3 10.0 9.2 19.6
----------------------------------------------- ----- ---------- ---------- --------------
Amortisation of internally generated
and acquired computer software not arising
on business combinations 3 3.6 4.2 8.1
----------------------------------------------- ----- ---------- ---------- --------------
Operating losses from joint ventures
and associates 4 (1.3) (6.8) (7.8)
----------------------------------------------- ----- ---------- ---------- --------------
Share of charge of depreciation and
amortisation of internally generated
and acquired computer software not arising
on business combinations of joint ventures
and associates 0.1 1.0 1.6
----------------------------------------------- ----- ---------- ---------- --------------
Discontinued operations
=============================================== ===== ========== ========== ==============
Adjusted operating profit 16 1.0 3.8 7.5
----------------------------------------------- ----- ---------- ---------- --------------
Non-exceptional depreciation charge 16 0.1 0.2 0.3
----------------------------------------------- ----- ---------- ---------- --------------
Non-exceptional depreciation charge
on right of use assets 16 0.5 0.6 1.3
----------------------------------------------- ----- ---------- ---------- --------------
Amortisation of internally generated
and acquired computer software not arising
on business combinations 16 3.0 3.7 7.3
----------------------------------------------- ----- ---------- ---------- --------------
EBITDA 81.5 88.4 142.5
=============================================== ===== ========== ========== ==============
Adjustments for:
=============================================== ===== ========== ========== ==============
Share-based payments 14.1 9.2 42.2
----------------------------------------------- ----- ---------- ---------- --------------
Profit on disposal of property, plant
and equipment 19 (0.1) - -
----------------------------------------------- ----- ---------- ---------- --------------
Share of losses from joint ventures
and associates 4 1.3 6.8 7.8
----------------------------------------------- ----- ---------- ---------- --------------
Exceptional operating (costs)/income 3 (6.4) 7.9 (23.7)
----------------------------------------------- ----- ---------- ---------- --------------
Share of charge of depreciation and
amortisation of internally generated
and acquired computer software not arising
on business combinations of joint ventures
and associates (0.1) (1.0) (1.6)
----------------------------------------------- ----- ---------- ---------- --------------
(Increase)/decrease in inventories (5.8) 12.5 14.5
----------------------------------------------- ----- ---------- ---------- --------------
(Increase)/decrease in trade and other
receivables (22.1) 0.2 30.6
----------------------------------------------- ----- ---------- ---------- --------------
Decrease in trade and other payables (1.3) (37.9) (31.5)
----------------------------------------------- ----- ---------- ---------- --------------
Decrease in provisions (2.7) (15.8) (14.4)
----------------------------------------------- ----- ---------- ---------- --------------
Additional payments into pension schemes (14.1) (16.2) (16.1)
----------------------------------------------- ----- ---------- ---------- --------------
Cash generated by operations 44.3 54.1 150.3
=============================================== ===== ========== ========== ==============
13 Analysis of net cash
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
=============================================== ===== ========== ========== ===========
Net cash at start of period before effects
of derivatives and collateral 176.6 84.8 84.8
----------------------------------------------- ----- ---------- ---------- -----------
Adjustment for transition to IFRS 16 - (92.0) (92.0)
----------------------------------------------- ----- ---------- ---------- -----------
Restated at 1 October 2019 (7.2) (7.2)
=============================================== ===== ========== ========== ===========
Cash flow 54.2 201.7 227.6
----------------------------------------------- ----- ---------- ---------- -----------
On acquisition of subsidiaries 14 (3.8) (0.2) (0.2)
----------------------------------------------- ----- ---------- ---------- -----------
On disposal of subsidiaries 15 4.5 8.5 10.1
----------------------------------------------- ----- ---------- ---------- -----------
Fair value hedging arrangements 1.7 (0.5) (0.5)
----------------------------------------------- ----- ---------- ---------- -----------
Foreign exchange on cash and cash equivalents (25.3) 2.1 (10.9)
----------------------------------------------- ----- ---------- ---------- -----------
Foreign exchange on lease liabilities 4.1 0.9 2.2
----------------------------------------------- ----- ---------- ---------- -----------
Non-cash movements on lease liabilities (12.0) (4.0) (44.5)
----------------------------------------------- ----- ---------- ---------- -----------
Net cash at period end before effects
of derivatives and collateral 200.0 201.3 176.6
=============================================== ===== ========== ========== ===========
Analysed as:
=============================================== ===== ========== ========== ===========
Cash and cash equivalents 513.9 489.2 500.3
----------------------------------------------- ----- ---------- ---------- -----------
Classified as held for sale 17 0.3 - -
----------------------------------------------- ----- ---------- ---------- -----------
514.2 489.2 500.3
----------------------------------------------- ----- ---------- ---------- -----------
Bank overdrafts 22 (17.9) (10.8) (20.4)
----------------------------------------------- ----- ---------- ---------- -----------
Cash and cash equivalents in the Condensed
Consolidated Cash Flow Statement 496.3 478.4 479.9
=============================================== ===== ========== ========== ===========
Debt due within one year:
=============================================== ===== ========== ========== ===========
Bonds 22 (0.8) - (0.8)
----------------------------------------------- ----- ---------- ---------- -----------
Lease liabilities 22 (21.5) (23.3) (22.7)
----------------------------------------------- ----- ---------- ---------- -----------
Debt due in more than one year:
=============================================== ===== ========== ========== ===========
Bonds 22 (201.0) (203.4) (202.7)
----------------------------------------------- ----- ---------- ---------- -----------
Lease liabilities 22 (73.0) (50.4) (77.1)
----------------------------------------------- ----- ---------- ---------- -----------
Net cash at period end before effects
of derivatives and collateral 200.0 201.3 176.6
=============================================== ===== ========== ========== ===========
Effect of derivatives on bank loans (9.3) (17.0) (13.4)
----------------------------------------------- ----- ---------- ---------- -----------
Collateral deposits 23 7.8 21.9 21.7
----------------------------------------------- ----- ---------- ---------- -----------
Net cash including derivatives and collateral
excluding pension escrow at closing
exchange rate 198.5 206.2 184.9
=============================================== ===== ========== ========== ===========
Net cash including derivatives and collateral
excluding pension escrow at average
exchange rate 205.7 200.8 186.5
=============================================== ===== ========== ========== ===========
The net increase in cash and cash equivalents in the period of
GBP41.7 million (31 March 2020 increase of GBP187.1 million , 30
September 2020 increase of GBP201.6 million ) includes a cash
outflow of GBP1.2 million (31 March 2020 inflow of GBPnil , 30
September 2020 outflow of GBP2.9 million ) in respect of operating
exceptional items.
14 Summary of the effects of acquisitions
On 18 October 2020, the Consumer Media segment acquired the
entire ordinary share capital of JPI Media's print operations at
Dinnington, Portsmouth and Carn in Northern Ireland, subsequently
renamed Associated Printing, for total consideration of GBP10.0
million . The fair value of net assets acquired amounted to GBP12.7
million which resulted in a negative goodwill adjustment of GBP2.7
million. This gain has been recognised in the Consolidated Income
Statement in accordance with IFRS 3, Business Combinations.
Associated Printing contributed GBP4.6 million to the Group's
revenue, reduced the Group's operating profit by GBP1.8 million and
reduced the Group's profit after tax by GBP1.4 million , excluding
the gain from bargain purchase ( Note 5 ), for the period between
the date of acquisition and 31 March 2021 .
If the acquisition had been completed on the first day of the
financial period, Associated Printing would have contributed GBP5.3
million to the Group's revenue, reduced the Group's operating
profit by GBP1.9 million and reduced the Group's profit after tax
by GBP1.5 million , excluding the gain from bargain purchase ( Note
5 ).
On 2 March 2021, the Consumer Media segment acquired the entire
ordinary share capital of New Scientist for total consideration of
GBP74.5 million . The New Scientist is a popular weekly science and
technology publication.
The New Scientist contributed GBP1.9 million to the Group's
revenue, GBP0.5 million to the Group's operating profit and GBP0.4
million to the Group's profit after tax for the period between the
date of acquisition and 31 March 2021 .
If the acquisition had been completed on the first day of the
financial period, the New Scientist would have contributed GBP10.9
million to the Group's revenue, GBP2.1 million to the Group's
operating profit and contributed GBP0.8 million to the Group's
profit after tax.
Provisional fair value of net assets acquired with all
acquisitions:
Associated
Printing New Scientist Total
Note GBPm GBPm GBPm
==================================== ===== =========== ============== ========
18,
Goodwill (i) - 50.4 50.4
==================================== ===== =========== ============== ========
Intangible assets 18 - 30.3 30.3
==================================== ===== =========== ============== ========
Property, plant and equipment 19 12.8 0.1 12.9
==================================== ===== =========== ============== ========
Right of use assets 20 - 3.5 3.5
==================================== ===== =========== ============== ========
Inventories 1.3 - 1.3
==================================== ===== =========== ============== ========
Trade and other receivables 1.4 1.8 3.2
==================================== ===== =========== ============== ========
Cash and cash equivalents - 7.6 7.6
==================================== ===== =========== ============== ========
Trade and other payables (1.9) (11.7) (13.6)
==================================== ===== =========== ============== ========
Lease liabilities 13 (0.4) (3.4) (3.8)
==================================== ===== =========== ============== ========
Corporation tax - (0.3) (0.3)
==================================== ===== =========== ============== ========
Deferred tax (0.5) (3.8) (4.3)
==================================== ===== =========== ============== ========
Group share of net assets acquired 12.7 74.5 87.2
==================================== ===== =========== ============== ========
Cost of acquisitions:
Associated
Printing New Scientist Total
Note GBPm GBPm GBPm
=================================== ===== =========== ============== ======
Cash paid in current year 9.5 74.5 84.0
=================================== ===== =========== ============== ======
Working capital adjustment 0.5 - 0.5
=================================== ===== =========== ============== ======
Negative goodwill 5 2.7 - 2.7
=================================== ===== =========== ============== ======
Total consideration at fair value 12.7 74.5 87.2
=================================== ===== =========== ============== ======
(i) The amount of goodwill which is deductible for the purposes
of calculating the Group's tax charge is GBPnil .
Goodwill arising on these 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.
All of the companies acquired during the period contributed
GBP6.5 million to the Group's revenue and reduced the Group's
profit after tax by GBP1.0 million , excluding the gain from
bargain purchase ( Note 5 ) , for the period between the date of
acquisition and 31 March 2021 .
Acquisition-related costs, amounting to GBP2.0 million , have
been charged against profits for the period in the Consolidated
Income Statement.
If all acquisitions had been completed on the first day of the
period, Group revenues for the period would have been GBP556.4
million and Group profit attributable to equity holders of the
parent would have been a profit of GBP253.6 million , excluding the
gain from bargain purchase ( Note 5 ) . This information takes into
account the amortisation of acquired intangible assets together
with related corporation 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 period.
Reconciliation to purchase of businesses and subsidiary
undertakings as shown in the Condensed Consolidated Cash Flow
Statement:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
============================================== ===== ========== ========== ===========
Cash consideration 84.0 56.9 70.7
---------------------------------------------- ----- ---------- ---------- -----------
Cash paid to settle contingent consideration 24,
in respect of acquisitions (i) 0.9 0.4 0.4
---------------------------------------------- ----- ---------- ---------- -----------
Cash and cash equivalents acquired with
subsidiaries (7.6) (0.6) (1.9)
---------------------------------------------- ----- ---------- ---------- -----------
Bank overdrafts acquired with subsidiaries - 0.6 0.6
---------------------------------------------- ----- ---------- ---------- -----------
Purchase of businesses and subsidiary
undertakings 77.3 57.3 69.8
============================================== ===== ========== ========== ===========
(i) Cash paid to settle contingent consideration in respect of
acquisitions includes GBP0.8 million (31 March 2020 GBP0.3 million
, 30 September 2020 GBP0.3 million ) within the Property
Information segment, GBP0.1 million (31 March 2020 GBPnil , 30
September 2020 GBPnil ) within the Consumer Media segment and
GBPnil (31 March 2020 GBP0.1 million , 30 September 2020 GBP0.1
million ) within the Events and Exhibitions segment.
15 Summary of the effects of disposals
On 2 March 2021 the Group sold its EdTech segment for net
proceeds of GBP294.4 million .
The impact of the disposal of businesses completed during the
period on net assets is as follows:
EdTech Other Total
Note GBPm GBPm GBPm
============================================= ====== ======== ======= ========
Goodwill 18 68.6 0.3 68.9
============================================= ====== ======== ======= ========
Intangible assets 18 13.9 - 13.9
============================================= ====== ======== ======= ========
Property, plant and equipment 19 0.6 - 0.6
============================================= ====== ======== ======= ========
Right of use assets 20 3.3 - 3.3
============================================= ====== ======== ======= ========
Trade and other receivables 17.3 - 17.3
============================================= ====== ======== ======= ========
Trade and other payables (40.1) - (40.1)
============================================= ====== ======== ======= ========
Lease liabilities 13 (4.5) - (4.5)
============================================= ====== ======== ======= ========
Current tax payable (0.1) - (0.1)
============================================= ====== ======== ======= ========
Deferred tax liabilities (2.3) - (2.3)
============================================= ====== ======== ======= ========
Net assets disposed 56.7 0.3 57.0
============================================= ====== ======== ======= ========
Profit on sale of businesses including
recycled cumulative exchange differences 5, 16 236.2 0.5 236.7
============================================= ====== ======== ======= ========
292.9 0.8 293.7
============================================= ====== ======== ======= ========
Satisfied by:
============================================= ====== ======== ======= ========
Cash received 299.3 0.2 299.5
============================================= ====== ======== ======= ========
Directly attributable costs paid (1.2) (0.7) (1.9)
============================================= ====== ======== ======= ========
Directly attributable costs payable (3.7) - (3.7)
============================================= ====== ======== ======= ========
Working capital adjustment - 1.3 1.3
============================================= ====== ======== ======= ========
Recycled cumulative translation differences 16 (1.5) - (1.5)
============================================= ====== ======== ======= ========
292.9 0.8 293.7
============================================= ====== ======== ======= ========
Reconciliation to disposal of businesses and subsidiary
undertakings as shown in the Consolidated Cash Flow Statement:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
GBPm GBPm GBPm
====================================================== ========== ========== ===========
Cash consideration net of disposal costs (0.5) (1.0) (2.9)
====================================================== ========== ========== ===========
Cash consideration net of disposal costs -
discontinued operations 298.1 290.7 290.4
====================================================== ========== ========== ===========
Working capital adjustment cash paid - discontinued
operations - (1.7) (1.8)
====================================================== ========== ========== ===========
Cash consideration received in the current
year relating to businesses sold in the prior
year - 15.6 15.6
====================================================== ========== ========== ===========
Cash and cash equivalents disposed with subsidiaries - (0.2) (0.2)
====================================================== ========== ========== ===========
Proceeds on disposal of businesses and subsidiary
undertakings 297.6 303.4 301.1
====================================================== ========== ========== ===========
All of the businesses disposed of during the period absorbed
GBP4.2 million of the Group's net operating cash flows, contributed
GBP296.1 million in investing activities and paid GBP0.7 million in
financing activities.
The Group's tax charge includes GBP59.1 million in relation to
these disposals of which GBP58.0 million relates to discontinued
operations.
16 Discontinued operations
On 26 August 2019, the Group announced the sale of its Energy
Information segment to Verisk Analytics, Inc. which completed on 5
November 2019 following the completion of customary closing
conditions. On 18 February 2021, the Group announced the sale of
its EdTech segment to PowerSchool and EAB. The results of the
Energy Information and EdTech segments for the period are included
in discontinued operations for the current and prior periods.
The Group's Consolidated Income Statement includes the following
results from discontinued operations:
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
================================================== ======= ========== ========== ==============
Revenue 3 33.5 48.9 92.0
================================================== ======= ========== ========== ==============
Expenses (28.9) (40.6) (75.6)
-------------------------------------------------- ------- ---------- ---------- --------------
Depreciation 3 (0.6) (0.8) (1.6)
-------------------------------------------------- ------- ---------- ---------- --------------
Amortisation of intangible assets not
arising on business combinations 3 (3.0) (3.7) (7.3)
-------------------------------------------------- ------- ---------- ---------- --------------
Adjusted operating profit 3 1.0 3.8 7.5
================================================== ======= ========== ========== ==============
3, 10,
Exceptional operating (costs)/income (i) (4.7) 11.4 11.4
-------------------------------------------------- ------- ---------- ---------- --------------
Amortisation of intangible assets arising
on business combinations 3, 10 (0.2) (0.4) (0.7)
-------------------------------------------------- ------- ---------- ---------- --------------
Operating (loss)/profit (3.9) 14.8 18.2
================================================== ======= ========== ========== ==============
Other gains and losses 3, 10 0.1 0.5 0.5
-------------------------------------------------- ------- ---------- ---------- --------------
(Loss)/profit before net finance costs
and tax (3.8) 15.3 18.7
================================================== ======= ========== ========== ==============
Investment revenue 3 - 0.9 0.9
-------------------------------------------------- ------- ---------- ---------- --------------
Finance costs 3 (0.1) (0.1) (0.2)
-------------------------------------------------- ------- ---------- ---------- --------------
(Loss)/profit before tax 10 (3.9) 16.1 19.4
================================================== ======= ========== ========== ==============
Tax credit/(charge) 8 0.7 (4.7) (2.6)
================================================== ======= ========== ========== ==============
(Loss)/profit after tax attributable
to discontinued operations (3.2) 11.4 16.8
-------------------------------------------------- ------- ---------- ---------- --------------
3, 10,
Profit on disposal of discontinued operations 15 238.0 145.7 145.1
================================================== ======= ========== ========== ==============
Recycled cumulative translation differences 3, 10,
on disposal of discontinued operations 15 (1.5) (11.4) (11.3)
-------------------------------------------------- ------- ---------- ---------- --------------
Tax charge on profit on disposal of discontinued
operations 8 (58.0) (13.4) (7.7)
-------------------------------------------------- ------- ---------- ---------- --------------
Profit attributable to discontinued operations 3 175.3 132.3 142.9
================================================== ======= ========== ========== ==============
(i) The Group's Energy Information business (Genscape) provided
a third-party auditor service verifying Renewable Identification
Numbers (RINs) for renewable fuel production activities in the US,
as part of the Renewable Fuel Standard Quality Assurance Program
(Program), a regulatory program administered by the US
Environmental Protection Agency (EPA).
Following discovery and self-reporting to the EPA by Genscape of
potential fraudulent RINs generated by two companies unconnected
with DMGT but verified by Genscape between 2013 and 2014 under the
Program, the EPA issued a notice of intent to revoke the ability of
Genscape to verify RINs as a third-party auditor on 4 January 2017.
Following the EPA investigation of the two companies in April 2016,
the two companies pleaded guilty of fraud in connection with the
broader scheme to generate RINs.
EPA regulations for the audit Program set a liability cap on
replacement of invalid RINs of 2.0% of the RINs. In April 2017
Genscape voluntarily paid the 2.0% liability cap associated with
the invalid RINs at a cost of US$1.3 million, based on the
then-prevailing market rates, subject to a reservation of rights.
The EPA regulations allow for situations where the cap does not
apply - including fraud, auditor error and negligence.
The EPA had not formally alleged any fraud or intentional
wrongdoing by Genscape, but in its May 2019 final determination
letter, EPA did find grounds for auditor error and negligence by
Genscape and ordered Genscape to replace 69.2 million additional
RINs it had verified.
In July 2019, Genscape filed a petition for review with the
Sixth Circuit Court of Appeals and a motion to stay the EPA's order
to replace the 69.2 million RINs which was accepted for the
duration of Genscape's petition for review.
Notwithstanding the sale of Genscape to Verisk, DMGT is
responsible for any costs, claims or awards and all settlement
negotiations with the EPA.
Since RINs trade in a volatile range, averaging approximately 68
cents over the previous 18-month period, replacing the maximum 69.2
million RINs claimed by the EPA would equate to a potential maximum
claim of approximately US$47.0 million. Using the period end price
of US$1.23 replacing the maximum 69.2 million RINs claimed by the
EPA would equate to a potential maximum claim of US$85.0
million.
DMGT continues to cooperate with the EPA and settlement
discussions are ongoing but considering the uncertainties involved,
the length of time involved and taking note of the order from the
EPA, the Group, without admitting any wrongdoing, made a provision
for the total cost of replacing RINs as at 30 September 2019.
At each period end IAS 37 requires DMGT to review this provision
and make appropriate adjustments to reflect the current status of
the claim. The Group's closing provision includes the cost of
replacement RINs, estimated purchase costs, associated legal fees
and currency fluctuations. The final settlement amount may be
different than the provision made, however, it is not possible for
the Group to predict with any certainty the potential impact of
this litigation or to quantify the ultimate cost of a verdict or
resolution. Accordingly, the provision could change substantially
over time as the dispute progresses and new facts emerge. Any
change to this provision will continue to be disclosed as an
exceptional operating item within discontinued operations.
A deferred tax asset of US$6.5 million (GBP4.7 million) arises
on this provision (31 March 2020 US$5.3 million (GBP4.3 million),
30 September 2020 US$5.3 million (GBP4.1 million)).
Cash flows associated with discontinued operations comprise
operating cash outflows of GBP4.2 million (31 March 2020 GBP11.4
million inflow , 30 September 2020 GBP33.6 million inflow ),
investing cash inflows of GBP 296.1 million (31 March 2020 GBP237.4
million , 30 September 2020 GBP235.6 million ) and financing cash
outflows of GBP0.7 million (31 March 2020 GBP2.5 million , 30
September 2020 GBP3.3 million ).
17 Total assets and liabilities of businesses held for sale
The main classes of assets and liabilities comprising the
operations classified as held for sale are set out in the table
below.
At 31 March 2021, the assets and liabilities held for sale
relate to the Group's Energy Information segment, together with
Rochford Brady Legal Services Ltd (Rochford) and Lawlink (UK) Ltd
(Lawlink) which were included in the Property Information segment.
The proceeds of disposal less costs to sell exceed the net carrying
amount of the relevant assets and liabilities of Rochford and
Lawlink, and, accordingly, no impairment loss was recognised on the
classification of these operations as held for sale.
At 31 March 2020 and 30 September 2020, the assets and
liabilities held for sale relate to the Group's Energy Information
segment.
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
============================================== ===== ========== ========== ===========
Goodwill 18 1.4 - -
---------------------------------------------- ----- ---------- ---------- -----------
Intangible assets 18 0.4 - -
---------------------------------------------- ----- ---------- ---------- -----------
Deferred tax 16 4.7 4.3 4.1
---------------------------------------------- ----- ---------- ---------- -----------
Right of use assets 20 0.5 - -
---------------------------------------------- ----- ---------- ---------- -----------
Trade and other receivables:
---------------------------------------------- ----- ---------- ---------- -----------
Trade receivables 0.7 - -
---------------------------------------------- ----- ---------- ---------- -----------
Expected credit losses (0.1) - -
---------------------------------------------- ----- ---------- ---------- -----------
Prepayments 0.1 - -
---------------------------------------------- ----- ---------- ---------- -----------
Other receivables 0.1 - -
---------------------------------------------- ----- ---------- ---------- -----------
Cash and cash equivalents 13 0.3 - -
---------------------------------------------- ----- ---------- ---------- -----------
Total assets associated with businesses
held for sale 8.1 4.3 4.1
============================================== ===== ========== ========== ===========
Trade and other payables (0.5) - -
---------------------------------------------- ----- ---------- ---------- -----------
Lease liabilities 22 (0.7) - -
---------------------------------------------- ----- ---------- ---------- -----------
Provisions (22.7) (20.5) (19.7)
---------------------------------------------- ----- ---------- ---------- -----------
Total liabilities associated with businesses
held for sale (23.9) (20.5) (19.7)
============================================== ===== ========== ========== ===========
Net liabilities of the disposal group (15.8) (16.2) (15.6)
============================================== ===== ========== ========== ===========
18 Goodwill and other intangible assets
Other
Goodwill Intangibles
Note GBPm GBPm
==================================================== ===== ========= =============
Cost
==================================================== ===== ========= =============
Audited at 30 September 2019 279.6 503.3
==================================================== ===== ========= =============
Additions from business combinations 4.1 52.2
==================================================== ===== ========= =============
Other additions - 0.5
==================================================== ===== ========= =============
Internally generated - 2.7
==================================================== ===== ========= =============
Disposals (2.8) (1.7)
==================================================== ===== ========= =============
Exchange adjustment (0.5) (2.7)
==================================================== ===== ========= =============
Unaudited at 31 March 2020 280.4 554.3
==================================================== ===== ========= =============
Audited at 30 September 2019 279.6 503.3
==================================================== ===== ========= =============
Additions from business combinations 22.0 50.4
==================================================== ===== ========= =============
Other additions - 2.3
==================================================== ===== ========= =============
Internally generated - 4.2
==================================================== ===== ========= =============
Adjustment to previous year estimate of contingent (0.2) -
consideration
==================================================== ===== ========= =============
Disposals (3.2) (5.1)
==================================================== ===== ========= =============
Transfer from property, plant and equipment - 0.7
==================================================== ===== ========= =============
Exchange adjustment (3.7) (14.1)
==================================================== ===== ========= =============
Audited at 30 September 2020 294.5 541.7
==================================================== ===== ========= =============
Additions from business combinations 14 50.4 30.3
==================================================== ===== ========= =============
Other additions - 1.7
==================================================== ===== ========= =============
Internally generated - 0.6
==================================================== ===== ========= =============
Adjustment to previous year estimate of contingent (0.1) -
consideration
==================================================== ===== ========= =============
Disposals 15 (70.3) (76.2)
==================================================== ===== ========= =============
Classified as held for sale 17 (1.4) (1.4)
==================================================== ===== ========= =============
Reclassifications (0.7) (0.4)
==================================================== ===== ========= =============
Exchange adjustment (3.8) (17.2)
==================================================== ===== ========= =============
Unaudited at 31 March 2021 268.6 479.1
==================================================== ===== ========= =============
Accumulated amortisation and impairment
==================================================== ===== ========= =============
Audited at 30 September 2019 28.4 433.4
==================================================== ===== ========= =============
Amortisation 3 - 13.4
==================================================== ===== ========= =============
Impairment 3 8.1 0.1
==================================================== ===== ========= =============
Disposals - (1.1)
==================================================== ===== ========= =============
Exchange adjustment (0.7) (2.1)
==================================================== ===== ========= =============
Unaudited at 31 March 2020 35.8 443.7
==================================================== ===== ========= =============
Audited at 30 September 2019 28.4 433.4
==================================================== ===== ========= =============
Amortisation 3 - 26.7
==================================================== ===== ========= =============
Impairment 3 11.8 3.8
==================================================== ===== ========= =============
Disposals - (4.5)
==================================================== ===== ========= =============
Transfer from property, plant and equipment - 0.2
==================================================== ===== ========= =============
Exchange adjustment (1.1) (12.8)
==================================================== ===== ========= =============
Audited at 30 September 2020 39.1 446.8
==================================================== ===== ========= =============
Amortisation 3 - 13.4
==================================================== ===== ========= =============
Disposals 15 (1.4) (62.3)
==================================================== ===== ========= =============
Classified as held for sale 17 - (1.0)
==================================================== ===== ========= =============
Exchange adjustment (0.2) (16.3)
==================================================== ===== ========= =============
Unaudited at 31 March 2021 37.5 380.6
==================================================== ===== ========= =============
Net book value - Unaudited at 31 March 2020 244.6 110.6
==================================================== ===== ========= =============
Net book value - Audited at 30 September 2020 255.4 94.9
==================================================== ===== ========= =============
Net book value - Unaudited at 31 March 2021 231.1 98.5
==================================================== ===== ========= =============
The Group tests goodwill annually for impairment, or more
frequently if there are indicators that goodwill might be impaired.
Intangible assets, all of which have finite lives, are tested
separately from goodwill only where impairment indicators
exist.
The Directors have considered indicators of impairment including
those outlined in IAS 36, Impairment of Assets which would require
an impairment review to be performed.
Despite the continued impact of the Covid-19 pandemic during the
period, the Group has continued to trade strongly throughout the
pandemic. Nevertheless, the impact of the pandemic on specific cash
generating units (CGUs) in the Exhibitions and Events segment where
certain exhibitions and events have been cancelled has been
considered an indicator of impairment and accordingly the Group has
undertaken a full impairment review on these CGUs.
Following this review goodwill impairment losses recognised in
the period amounted to GBPnil. In the prior period ended 31 March
2020 , the Group recorded a goodwill impairment charge of GBP5.1
million relating to the Events and Exhibitions segment and GBP2.9
million relating to the Consumer Media segment. The tax credit in
respect of the impairment of goodwill amounted to GBPnil . In the
prior year ended 30 September 2020 , the Group recorded a goodwill
impairment charge of GBP11.8 million of which GBP8.9 million
related to the Events and Exhibitions segment. The prior period
impairment charge was the result of reduced forecasts following the
Covid-19 pandemic which has resulted in a reduction in value in
use. There is a tax credit of GBPnil associated with this
impairment charge.
Impairment charges relating to intangible assets during the
period to 31 March 2021 amounted to GBPnil (31 March 2020 GBP0.1
million relating to the Events and Exhibitions segment, 30
September 2020 GBP1.5 million relating to the Property Information
segment and GBP2.3 million relating to the Events and Exhibitions
segment).
The Group has also made further disclosures, in accordance with
paragraph 134 of IAS 36, where a reasonably possible change in the
key assumptions may result in an impairment. Using this criteria,
the Group has provided a sensitivity analysis of the key
assumptions used in CWC and Atticus in the Events and Exhibitions
segment.
CWC, acquired on 9 April 2020 in the Events and Exhibitions
segment holds goodwill with a carrying value of GBP7.9 million (30
September 2020 GBP7.9 million) together with intangible assets with
a carrying value of GBP7.4 million (30 September 2020 GBP8.2
million). The carrying value of CWC has been determined using a
value in use calculation in line with IAS 36. The methodology
applied to the value in use calculations reflects past experience
and external sources of information including:
(i) cash flows for the business for the six month period to 30
September 2021 derived from current forecasts. The Directors
believe these to be reasonably achievable;
(ii) subsequent cash flows for the period to 31 March 2026
increased in line with growth expectations of the business;
(iii) cash flows beyond the period to 31 March 2026 extrapolated
using a long-term nominal growth rate of 2.00% ; and
(iv) a pre-tax discount rate of 16.67% .
Using the above methodology, the recoverable amount exceeded the
total carrying value by GBP1.0 million (30 September 2020 GBP7.0
million). For this business the Directors performed a sensitivity
analysis on the total carrying value of the CGU. For the
recoverable amount to be equal to the carrying value the discount
rate would need to be increased by 0.81% to 17.48% (2020 4.30% to
17.43%), the long-term growth rate would need to decline by 0.82%
to 1.18% (30 September 2020 decline by 5.28% to -3.28%), or the CGU
would need to miss budget by 6.43% (30 September 2020 100.0%).
Atticus in the Events and Exhibitions segment holds goodwill
with a carrying value of GBP1.9 million (31 March 2020 GBP2.1
million , 30 September 2020 GBP2.1 million ) together with
intangible assets with a carrying value of GBP0.3 million (31 March
2020 2020 GBP0.5 million , 30 September 2020 GBP0.5 million ). The
carrying value of Atticus has been determined using a value in use
calculation in line with IAS 36. The methodology applied to the
value in use calculations reflects past experience and external
sources of information including:
(i) cash flows for the business for the six month period to 30
September 2021 derived from current forecasts. The Directors
believe these to be reasonably achievable;
(ii) subsequent cash flows for the period to 31 March 2026
increased in line with growth expectations of the business;
(iii) cash flows beyond the period to 31 March 2026 extrapolated
using a long-term nominal growth rate of 2.00% ; and
(iv) a pre-tax discount rate of 15.00% .
Using the above methodology, the recoverable amount exceeded the
total carrying value by GBP0.7 million (31 March 2020 GBP5.3
million , 30 September 2020 GBP0.1 million ). For this business the
Directors performed a sensitivity analysis on the total carrying
value of the CGU. For the recoverable amount to be equal to the
carrying value the discount rate would need to be increased by
3.81% to 18.81% (31 March 2020 increased by 19.18% to 31.92% , 30
September 2020 increased by 0.14% to 13.26% ), the long-term growth
rate would need to decline by 4.77% to -2.77% (31 March 2020
decline by 48.33% to -45.33% , 30 September 2020 decline by 0.15%
to 1.85% ), or the CGU would need to miss budget by 26.87% (31
March 2020 206.99% , 30 September 2020 3.08% ) .
19 Property, plant and equipment
Short Plant
Freehold leasehold and
properties properties equipment Total
Note GBPm GBPm GBPm GBPm
========================= ===== ============ ============ =========== =======
Cost
========================= ===== ============ ============ =========== =======
Audited at 30
September 2019 32.4 22.1 279.6 334.1
========================= ===== ============ ============ =========== =======
Owned by subsidiaries
acquired - - 0.1 0.1
========================= ===== ============ ============ =========== =======
Additions 0.2 0.1 6.3 6.6
========================= ===== ============ ============ =========== =======
Disposals (0.2) (0.2) (2.1) (2.5)
========================= ===== ============ ============ =========== =======
Exchange adjustment - (0.2) (0.9) (1.1)
========================= ===== ============ ============ =========== =======
Unaudited at 31
March 2020 32.4 21.8 283.0 337.2
========================= ===== ============ ============ =========== =======
Audited at 30
September 2019 32.4 22.1 279.6 334.1
========================= ===== ============ ============ =========== =======
Owned by subsidiaries
acquired - - 0.2 0.2
========================= ===== ============ ============ =========== =======
Additions 0.7 1.7 9.8 12.2
========================= ===== ============ ============ =========== =======
Disposals (0.2) (0.2) (4.1) (4.5)
========================= ===== ============ ============ =========== =======
Transfers to intangible
fixed assets - - (0.7) (0.7)
========================= ===== ============ ============ =========== =======
Exchange adjustment - (0.8) (2.5) (3.3)
========================= ===== ============ ============ =========== =======
Audited at 30
September 2020 32.9 22.8 282.3 338.0
========================= ===== ============ ============ =========== =======
Owned by subsidiaries
acquired 14 9.7 - 3.2 12.9
========================= ===== ============ ============ =========== =======
Additions 0.4 - 3.6 4.0
========================= ===== ============ ============ =========== =======
Disposals - - (0.8) (0.8)
========================= ===== ============ ============ =========== =======
Owned by subsidiaries
disposed 15 - - (2.7) (2.7)
========================= ===== ============ ============ =========== =======
Exchange adjustment - (1.2) (3.4) (4.6)
========================= ===== ============ ============ =========== =======
Unaudited at 31
March 2021 43.0 21.6 282.2 346.8
========================= ===== ============ ============ =========== =======
Short Plant
Freehold leasehold and
properties properties equipment Total
Note GBPm GBPm GBPm GBPm
========================== ===== ============ ============ =========== =======
Accumulated depreciation
and impairment
========================== ===== ============ ============ =========== =======
Audited at 30
September 2019 18.1 17.5 224.1 259.7
========================== ===== ============ ============ =========== =======
Charge for the
period 3 0.6 1.3 9.2 11.1
========================== ===== ============ ============ =========== =======
Disposals (0.2) (0.2) (2.1) (2.5)
========================== ===== ============ ============ =========== =======
Exchange adjustment - (0.1) (0.6) (0.7)
========================== ===== ============ ============ =========== =======
Unaudited at 31
March 2020 18.5 18.5 230.6 267.6
========================== ===== ============ ============ =========== =======
Audited at 30
September 2019 18.1 17.5 224.1 259.7
========================== ===== ============ ============ =========== =======
Charge for the
period 3 1.3 2.6 18.6 22.5
========================== ===== ============ ============ =========== =======
Disposals (0.2) (0.2) (3.9) (4.3)
========================== ===== ============ ============ =========== =======
Transfers to intangible
fixed assets - - (0.2) (0.2)
========================== ===== ============ ============ =========== =======
Exchange adjustment - (0.8) (1.9) (2.7)
========================== ===== ============ ============ =========== =======
Audited at 30
September 2020 19.2 19.1 236.7 275.0
========================== ===== ============ ============ =========== =======
Charge for the
period 3 0.7 0.9 9.5 11.1
========================== ===== ============ ============ =========== =======
Disposals - - (0.7) (0.7)
========================== ===== ============ ============ =========== =======
Owned by subsidiaries
disposed 15 - - (2.1) (2.1)
========================== ===== ============ ============ =========== =======
Exchange adjustment - (1.1) (2.8) (3.9)
========================== ===== ============ ============ =========== =======
Unaudited at 31
March 2021 19.9 18.9 240.6 279.4
========================== ===== ============ ============ =========== =======
Net book value
- Unaudited at
31 March 2020 13.9 3.3 52.4 69.6
========================== ===== ============ ============ =========== =======
Net book value
- Audited at 30
September 2020 13.7 3.7 45.6 63.0
========================== ===== ============ ============ =========== =======
Net book value
- Unaudited at
31 March 2021 23.1 2.7 41.6 67.4
========================== ===== ============ ============ =========== =======
During the period the Group spent GBP 4.0 million (period ended
31 March 2020 GBP6.6 million , year ended 30 September 2020 GBP
12.2 million ) on property, plant and equipment and disposed
certain of its property, plant and equipment with a carrying value
of GBP0.1 million (31 March 2020 GBP nil million, 30 September 2020
GBP 0.2 million ) for net proceeds of GBP0.1 million (31 March 2020
GBP nil , 30 September 2020 GBPnil ). In addition property, plant
and equipment with a carrying value of GBP 0.6 million was owned by
subsidiaries disposed during the year (31 March 2020 GBP nil , 30
September 2020 GBP nil ).
20 Right of use assets
Leasehold Plant and
properties equipment Total
Note GBPm GBPm GBPm
================================ ===== ============ =========== =======
Cost
================================ ===== ============ =========== =======
Audited at 30 September 2019
================================ ===== ============ =========== =======
Adjustment for transition to
IFRS 16 68.1 1.8 69.9
================================ ===== ============ =========== =======
Restated at 1 October 2019 68.1 1.8 69.9
================================ ===== ============ =========== =======
Owned by subsidiaries acquired 0.2 - 0.2
================================ ===== ============ =========== =======
Additions 2.5 0.3 2.8
================================ ===== ============ =========== =======
Exchange adjustment (0.7) - (0.7)
================================ ===== ============ =========== =======
Unaudited at 31 March 2020 70.1 2.1 72.2
================================ ===== ============ =========== =======
Audited at 30 September 2019 - - -
================================ ===== ============ =========== =======
Adjustment for transition to
IFRS 16 68.1 1.8 69.9
================================ ===== ============ =========== =======
Restated at 1 October 2019 68.1 1.8 69.9
================================ ===== ============ =========== =======
Owned by subsidiaries acquired 0.1 - 0.1
================================ ===== ============ =========== =======
Additions 41.4 0.7 42.1
================================ ===== ============ =========== =======
Disposals (0.1) - (0.1)
================================ ===== ============ =========== =======
Transfers to intangible fixed
assets 0.6 - 0.6
================================ ===== ============ =========== =======
Exchange adjustment (2.0) - (2.0)
================================ ===== ============ =========== =======
Audited at 30 September 2020 108.1 2.5 110.6
================================ ===== ============ =========== =======
Owned by subsidiaries acquired 14 3.5 - 3.5
================================ ===== ============ =========== =======
Additions 11.4 0.1 11.5
================================ ===== ============ =========== =======
Disposals (3.1) - (3.1)
================================ ===== ============ =========== =======
Classified as held for sale 17 (0.8) - (0.8)
================================ ===== ============ =========== =======
Owned by subsidiaries disposed 15 (5.0) - (5.0)
================================ ===== ============ =========== =======
Exchange adjustment (4.3) (0.2) (4.5)
================================ ===== ============ =========== =======
Unaudited at 31 March 2021 109.8 2.4 112.2
================================ ===== ============ =========== =======
Leasehold Plant and
properties equipment Total
Note GBPm GBPm GBPm
================================ ===== ============ =========== =======
Accumulated depreciation and
impairment
================================ ===== ============ =========== =======
Audited at 30 September 2019
================================ ===== ============ =========== =======
Charge for the period 3 9.4 0.4 9.8
================================ ===== ============ =========== =======
Exchange adjustment 0.1 - 0.1
================================ ===== ============ =========== =======
Unaudited at 31 March 2020 9.5 0.4 9.9
================================ ===== ============ =========== =======
Audited at 30 September 2019 - - -
================================ ===== ============ =========== =======
Charge for the year 3 20.1 0.8 20.9
================================ ===== ============ =========== =======
Exchange adjustment (0.1) - (0.1)
================================ ===== ============ =========== =======
Audited at 30 September 2020 20.0 0.8 20.8
================================ ===== ============ =========== =======
Charge for the period 3 10.1 0.4 10.5
================================ ===== ============ =========== =======
Disposals (1.9) (0.2) (2.1)
================================ ===== ============ =========== =======
Classified as held for sale 17 (0.3) - (0.3)
================================ ===== ============ =========== =======
Owned by subsidiaries disposed 15 (1.7) - (1.7)
================================ ===== ============ =========== =======
Exchange adjustment (0.7) - (0.7)
================================ ===== ============ =========== =======
Unaudited at 31 March 2021 25.5 1.0 26.5
================================ ===== ============ =========== =======
Net book value - Unaudited
at 31 March 2020 60.6 1.7 62.3
================================ ===== ============ =========== =======
Net book value - Audited at
30 September 2020 88.1 1.7 89.8
================================ ===== ============ =========== =======
Net book value - Unaudited
at 31 March 2021 84.3 1.4 85.7
================================ ===== ============ =========== =======
21 Financial assets at fair value through Other Comprehensive
Income
Unlisted
Note GBPm
=============================================== ===== =========
Audited at 30 September 2019 33.8
=============================================== ===== =========
Additions - cash 37.7
=============================================== ===== =========
Additions - non cash, conversion of loan note 9.0
=============================================== ===== =========
Disposals (0.3)
=============================================== ===== =========
Transfer from investment in associates (i) 26.5
=============================================== ===== =========
Fair value movement in the year 65.0
=============================================== ===== =========
Exchange adjustment (0.3)
=============================================== ===== =========
Unaudited at 31 March 2020 171.4
=============================================== ===== =========
Audited at 30 September 2019 33.8
=============================================== ===== =========
Additions - cash 48.0
=============================================== ===== =========
Additions - non cash 9.0
=============================================== ===== =========
Disposals (0.3)
=============================================== ===== =========
Transfer from investment in associates (i) 26.5
=============================================== ===== =========
Transfer to investment in associates (ii) (0.8)
=============================================== ===== =========
Fair value movement in the period 295.0
=============================================== ===== =========
Exchange adjustment (0.5)
=============================================== ===== =========
Audited at 30 September 2020 410.7
=============================================== ===== =========
Additions - cash 34.3
=============================================== ===== =========
Transfer from investment in associates (i) 1.9
=============================================== ===== =========
Fair value movement in the year 2 397.6
=============================================== ===== =========
Exchange adjustment (0.5)
=============================================== ===== =========
Unaudited at 31 March 2021 844.0
=============================================== ===== =========
The financial assets above are non-interest bearing unlisted
securities, which are recorded as non-current assets unless they
are expected to be sold within one year, in which case they are
recorded as current assets.
(i) In the current period, the Group's interest in Bricklane
Technologies Ltd, previously an associate, was diluted and the
Group no longer has significant influence. Accordingly, the
investment has been reclassified as a financial asset.
In the prior periods ended 31 March 2020 and 30 September 2020
the Group's investment in Cazoo Holdings Ltd (Cazoo), previously an
associate, was reclassified as a financial asset. The Group can
participate in Cazoo Board discussions but cannot veto any Cazoo
Board decisions - which are based on a simple Board majority, due
to the current composition of the other seats on the Board and has
no other means that give it the ability to participate in the
financial and operating policy decisions of Cazoo. The Group
provides no essential technical information to develop the Cazoo
business and there is no interchange of managerial personnel
between the Group and Cazoo. Therefore, the Directors have
concluded that the Group does not possess the ability to exert
significant influence over Cazoo and accordingly the Group has not
equity accounted for its interest.
(ii) During the prior period ended 30 September 2020 the Group
increased its investment in Quick Move Ltd which is now held as an
associate.
Financial assets at fair value through Other Comprehensive
Income are analysed as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Class of Group
Note Holding interest GBPm GBPm GBPm
=========================================== ======= ============== ========== ========== ========== ===========
Unlisted
=========================================== ======= ============== ========== ========== ========== ===========
Cazoo Holdings Ltd (incorporated 2, Preference
and operating in the UK) (i) and Ordinary 21.0% 802.2 140.0 375.0
=========================================== ======= ============== ========== ========== ========== ===========
PA Media Group Ltd (incorporated
and operating in the UK) (ii) Ordinary 17.3% 10.7 7.2 7.4
=========================================== ======= ============== ========== ========== ========== ===========
BDG Media, Inc. (incorporated Common
and operating in the US) (iii) Stock 3.4% 6.0 6.7 6.4
=========================================== ======= ============== ========== ========== ========== ===========
Kortext Ltd (incorporated and Preference
operating in the UK) (iv) and Ordinary 9.8% 5.6 3.4 5.6
=========================================== ======= ============== ========== ========== ========== ===========
Cue Ball Capital LP (incorporated Limited
and operating in the US) (v) Partner 2.5% 2.7 2.9 3.1
=========================================== ======= ============== ========== ========== ========== ===========
Hambro Perks Ltd (incorporated
and operating in the UK) (vi) Ordinary 2.9% 2.2 2.2 2.2
=========================================== ======= ============== ========== ========== ========== ===========
Taboola.com Ltd (incorporated 2,
and operating in Israel) (vii) Preference 0.4% 4.1 2.0 2.7
=========================================== ======= ============== ========== ========== ========== ===========
Farewill Ltd (incorporated and
operating in the UK) (viii) Preference 5.4% 3.7 1.8 3.7
=========================================== ======= ============== ========== ========== ========== ===========
Air Mail LLC (incorporated and
operating in the US) (ix) Preference 5.0% 0.9 1.0 1.0
=========================================== ======= ============== ========== ========== ========== ===========
Financial Network Analytics (incorporated
and operating in the UK) (x) Ordinary 10.0% 1.0 1.0 1.0
=========================================== ======= ============== ========== ========== ========== ===========
GPNutrition Ltd (incorporated
and operating in the UK) (xi) Ordinary 13.9% 0.5 1.0 1.0
=========================================== ======= ============== ========== ========== ========== ===========
Bricklane Technologies Ltd (incorporated
and operating in the UK) (xii) Preference 15.6% 2.7 - -
=========================================== ======= ============== ========== ========== ========== ===========
CompStak, Inc. (incorporated and
operating in the US) (xiii) Ordinary 2.0% 0.5 0.6 0.5
=========================================== ======= ============== ========== ========== ========== ===========
Other 1.2 1.6 1.1
=========================================== ======= ============== ========== ========== ========== ===========
844.0 171.4 410.7
=========================================== ======= ============== ========== ========== ========== ===========
(i) Cazoo Holdings Ltd provides an online used car sales platform.
(ii) PA Media Group Ltd is a provider of news, sport and entertainment information.
(iii) BDG Media, Inc. operating as Bustle provides an online
information platform covering fashion, politics, technology,
diversity, celebrities, health and beauty.
(iv) Kortext Ltd provides a digital learning platform and supplies digital textbooks.
(v) Cue Ball Capital LP is a venture capital and private equity
firm specialising in start-ups, early-stage, mid-venture, growth
equity scale-ups and buy-out investments.
(vi) Hambro Perks Ltd is a venture capital firm.
(vii) Taboola.com Ltd is a content marketing platform provider.
(viii) Farewill Ltd provides online-based will-writing
services.
(ix) Air Mail, LLC owns and operates an online media service
that provides weekly digital newsletter covering politics,
business, the environment, the arts, literature, film and
television, food, design, travel, architecture, society, fashion
and crime.
(x) Financial Network Analytics Ltd provides a platform which
allows financial regulators and financial market infrastructures to
map and monitor complex financial networks and to simulate
operational and financial risks.
(xi) GPNutrition Ltd provides direct to consumer nutritional supplements.
(xii) Bricklane Technologies Ltd provides an online property investment platform.
(xiii) CompStak, Inc. provides commercial real estate
information to brokers, appraisers, researchers, landlords, lenders
and investors.
22 Borrowings
The Group's borrowings are unsecured and are analysed as
follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
Note 2021 Undrawn 2020 Undrawn 2020 Undrawn
GBPm GBPm GBPm
============================= ===== ============== ============== ==============
Current liabilities
============================= ===== ============== ============== ==============
Bonds 13 0.8 - 0.8
----------------------------- ----- -------------- -------------- --------------
Bank overdrafts 13 17.9 10.8 20.4
----------------------------- ----- -------------- -------------- --------------
Lease liabilities 13 21.5 23.3 22.7
----------------------------- ----- -------------- -------------- --------------
40.2 34.1 43.9
----------------------------- ----- -------------- -------------- --------------
Classified as held for sale 17 (0.7) - -
----------------------------- ----- -------------- -------------- --------------
39.5 34.1 43.9
============================= ===== ============== ============== ==============
Non-current liabilities
============================= ===== ============== ============== ==============
Bonds 13 201.0 203.4 202.7
----------------------------- ----- -------------- -------------- --------------
Lease liabilities 13 73.0 50.4 77.1
----------------------------- ----- -------------- -------------- --------------
274.0 253.8 279.8
============================= ===== ============== ============== ==============
Committed borrowing facilities
The Group's total committed bank facilities amount to GBP362.2
million (31 March 2020 GBP380.0 million , 30 September 2020
GBP373.2 million ) . Of these facilities GBP205.0 million (31 March
and 30 September 2020 GBP205.0 million ) are denominated in
sterling and GBP157.2 million ( US$217.0 million ) (31 March 2020
GBP175.0 million ( US$217.0 million ), 30 September 2020 GBP168.2
million ( US$217.0 million )) are denominated in US dollars.
Drawings are permitted in all major currencies.
The Group's bank loans bear interest charged at LIBOR plus a
margin. The margin varies by bank and is based on the Group's ratio
of net debt to EBITDA or the Group's credit rating. EBITDA for
these purposes is defined as the aggregate of the Group's
consolidated operating profit including share of results of joint
ventures and associates before deducting depreciation, amortisation
and impairment of goodwill, intangible and tangible assets, before
exceptional items and before interest and finance charges, and is
shown in Note 12 . For the purposes of calculating the Group's bank
covenants, EBITDA is calculated on a pre-IFRS 16 basis, by
deducting operating lease charges and adding sublease rental income
and amounts to GBP 113.9 million for the 12 month period ending 31
March 2021.
Whilst the Group's internal target of a 12-month rolling net
debt to EBITDA ratio is no greater than 2.0 times at any point, the
limit imposed by its bank covenants is no greater than 3.5 times
together with a minimum interest cover ratio of 3.0 times measured
in March and September. These covenants were met at the relevant
testing dates during the period. The bank covenant ratio uses the
average exchange rate in the calculation of net debt. For bank
covenant purposes, net debt is calculated on a pre-IFRS 16 basis by
excluding IFRS 16 lease liabilities to allow comparability between
testing periods. At 31 March 2021 the Group had net cash (excluding
cash held in escrow (see Note 23 ); calculated at average exchange
rates as adjusted for IFRS 16) amounting to GBP301.5 million (31
March 2020 GBP273.5 million , 30 September 2020 GBP286.7 million )
and therefore the net debt to EBITDA covenant was met at 31 March
2021 and each of the comparative period testing dates. Interest
cover for the 12-month period ended 31 March 2021 was 10.5 times
(31 March 2020 34.2 times, 30 September 2020 18.0 times).
The Group's committed bank facilities and undrawn committed
facilities available to the Group in respect of which all
conditions precedent had been met are analysed by maturity as
follows:
Unaudited Unaudited Unaudited Unaudited Audited Audited
at 31 at 31 at 31 at 31 at 30 at 30
March March March March September September
2021 2021 2020 2020 2020 2020
Committed Undrawn Committed Undrawn Committed Undrawn
GBPm GBPm GBPm GBPm GBPm GBPm
================================= =========== ========== =========== ========== =========== ===========
Expiring in more than one year
but not more than two years 362.2 362.2 - - - -
=================================== =========== ========== =========== ========== =========== ===========
Expiring in more than two years
but not more than three years - - 380.0 380.0 373.2 373.2
=================================== =========== ========== =========== ========== =========== ===========
Total bank facilities 362.2 362.2 380.0 380.0 373.2 373.2
=================================== =========== ========== =========== ========== =========== ===========
Lease liabilities
The Group leases various office space, equipment and vehicles
which are negotiated on an individual basis with differing terms
and conditions. The Group's key lease arrangements relate to office
space in the key cities in which it operates.
Of the Group's leased properties, the most significant leases
relate to the DMGT head office premises at Northcliffe House, 2
Derry Street, London, W8 5TT which expires in December 2022, and
the RMS head office premises at 7575 Gateway Blvd, Newark,
California which expires in December 2030.
An analysis of the Group's lease liabilities is as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 Undrawn 2020 Undrawn 2020 Undrawn
GBPm GBPm GBPm
==================== ============== ============== ==============
Northcliffe House 14.7 24.5 19.8
--------------------- -------------- -------------- --------------
7575 Gateway Blvd 28.8 2.2 31.7
--------------------- -------------- -------------- --------------
Other office space 48.9 45.3 46.6
--------------------- -------------- -------------- --------------
Motor vehicles 1.3 1.6 1.6
--------------------- -------------- -------------- --------------
Other equipment 0.1 0.1 0.1
--------------------- -------------- -------------- --------------
93.8 73.7 99.8
==================== ============== ============== ==============
There are no leases with residual value guarantees or leases not
yet commenced to which the Group is committed.
23 Other financial assets
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Note GBPm GBPm GBPm
======================================== ======== ========== ========== ===========
Current assets
======================================== ======== ========== ========== ===========
Collateral 13, (i) 7.8 21.9 21.7
======================================== ======== ========== ========== ===========
Non-current assets
======================================== ======== ========== ========== ===========
Escrow (ii) 120.7 - -
---------------------------------------- -------- ---------- ---------- -----------
Loans to joint ventures and associates (iii) 15.5 13.1 14.2
---------------------------------------- -------- ---------- ---------- -----------
136.2 13.1 14.2
======================================== ======== ========== ========== ===========
(i) The Group deposits collateral with its bank counterparties
with whom it has entered into a credit support annex to an ISDA
(International Swaps and Derivatives Association) Master Agreement.
This represents cash that cannot be readily used in operations.
(ii) Following the disposal of Euromoney in 2019 the Company has
made available GBP120.7 million from the Group's cash resources to
the Group's Pension Schemes. These funds are held in escrow deposit
accounts with original maturities of greater than three months and
any movement of funds out of these escrow accounts require the
approval of the Pension Scheme Trustees.
As part of the funding agreement from the 31 March 2019
triennial valuation, the Company has agreed to make annual payments
of GBP7.0 million into these escrow deposit accounts to October
2024.
None of the escrow balances will be released before 2024. Up to
GBP50.0 million may be released to the Schemes in 2024 depending on
Pension Scheme funding levels and in 2026 any remaining funds in
escrow will either be released to the Company or to the Schemes
depending on Pension Scheme funding levels at that time.
(iii) Loans to joint ventures and associates are stated net of
expected credit loss provision as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
GBPm GBPm GBPm
============================================= ========== ========== ===========
Total gross loans to joint ventures and
associates 27.5 25.1 26.2
---------------------------------------------- ---------- ---------- -----------
Loss allowance provision (12.0) (12.0) (12.0)
---------------------------------------------- ---------- ---------- -----------
Loan receivable net of expected credit loss
provision 15.5 13.1 14.2
============================================== ========== ========== ===========
Movement in the impairment allowance is as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
GBPm GBPm GBPm
============================ ========== ========== ===========
At start and end of period 12.0 12.0 12.0
============================= ========== ========== ===========
24 Financial instruments and risk management
The Group's financial assets and liabilities are as follows:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
Carrying Carrying Carrying
value value value
Note GBPm GBPm GBPm
============================================== ========== ========== ========== ===========
Financial assets
============================================== ========== ========== ========== ===========
Fair value through profit and loss
---------------------------------------------- ---------- ---------- ---------- -----------
Derivative instruments in designated
hedge accounting relationships (i) 2.0 3.6 3.7
---------------------------------------------- ---------- ---------- ---------- -----------
Derivative instruments not in designated
hedge accounting relationships 0.5 0.2 0.1
---------------------------------------------- ---------- ---------- ---------- -----------
Provision for contingent consideration
receivable 2.3 0.3 0.1
---------------------------------------------- ---------- ---------- ---------- -----------
Fair value through other comprehensive
income
---------------------------------------------- ---------- ---------- ---------- -----------
Financial assets 21 844.0 171.4 410.7
---------------------------------------------- ---------- ---------- ---------- -----------
Amortised cost
---------------------------------------------- ---------- ---------- ---------- -----------
Trade receivables, contract assets
and other receivables 199.9 209.9 188.0
---------------------------------------------- ---------- ---------- ---------- -----------
Sublease receivable 5.0 9.1 6.8
---------------------------------------------- ---------- ---------- ---------- -----------
Collateral 23 7.8 21.9 21.7
---------------------------------------------- ---------- ---------- ---------- -----------
Escrow 23 120.7 - -
---------------------------------------------- ---------- ---------- ---------- -----------
Loans to joint ventures and associates 23, (ii) 15.5 13.1 14.2
---------------------------------------------- ---------- ---------- ---------- -----------
Cash and cash equivalents 13 513.9 489.2 500.3
---------------------------------------------- ---------- ---------- ---------- -----------
1,711.6 918.7 1,145.6
============================================== ========== ========== ========== ===========
Financial liabilities
============================================== ========== ========== ========== ===========
Fair value through profit and loss
---------------------------------------------- ---------- ---------- ---------- -----------
Derivative instruments in designated
hedge accounting relationships (i) (13.3) (30.1) (23.1)
---------------------------------------------- ---------- ---------- ---------- -----------
Provision for contingent consideration
payable (1.5) (2.0) (2.5)
---------------------------------------------- ---------- ---------- ---------- -----------
Amortised cost
---------------------------------------------- ---------- ---------- ---------- -----------
Trade payables (31.8) (38.8) (30.5)
---------------------------------------------- ---------- ---------- ---------- -----------
Bank overdrafts 22 (17.9) (10.8) (20.4)
---------------------------------------------- ---------- ---------- ---------- -----------
Bonds 22, (iii) (201.8) (203.4) (203.5)
---------------------------------------------- ---------- ---------- ---------- -----------
Lease liabilities 22 (93.8) (73.7) (99.8)
---------------------------------------------- ---------- ---------- ---------- -----------
(360.1) (358.8) (379.8)
============================================== ========== ========== ========== ===========
Total for financial instruments 1,351.5 559.9 765.8
============================================== ========== ========== ========== ===========
The Directors consider that the carrying amounts of financial
assets and financial liabilities recorded at amortised cost (other
than the bonds) approximate to their fair values.
(i) The Group has derivatives designated in the following hedging relationships:
- hedges of the change in fair value of recognised assets and liabilities (fair value hedges)
- hedges of net investment in foreign operations (net investment hedges)
To the extent that net investment hedges are effective, changes
in fair value of the derivative are taken to the translation
reserve through other comprehensive income.
(ii) Loans to joint ventures and associates (included within
other financial assets, Note 23 ) include a 10.0% fixed rate
unsecured loan note, repayable on 31 December 2025 with a carrying
value of GBP15.5 million (31 March 2020 GBP13.0 million, 30
September 2020 GBP14.2 million).
(iii) The Group's bonds are measured at amortised cost as adjusted for fair value hedging.
The carrying value and fair values of the Group's bonds and the
coupons payable are as follows:
Unaudited Unaudited Unaudited Unaudited Audited Audited
at 31 at 31 at 31 at 31 at 30 at 30
March March March March September September
2021 2021 2020 2020 2020 2020
Fair Carrying Fair Carrying Fair Carrying
value value value value value value
Maturity Annual
coupon
% GBPm GBPm GBPm GBPm GBPm GBPm
============== ======== ========== ========== ========== ========== =========== ===========
9 April 2021 10.00 0.8 0.8 0.8 0.8 0.8 0.8
=============== ======== ========== ========== ========== ========== =========== ===========
21 June 2027 6.375 230.6 201.0 221.8 202.6 231.8 202.7
=============== ======== ========== ========== ========== ========== =========== ===========
231.4 201.8 222.6 203.4 232.6 203.5
============== ======== ========== ========== ========== ========== =========== ===========
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into levels 1 to 3 based on the degree to which
the fair value is observable:
-- Level 1 fair value measurements are those derived from
unadjusted quoted prices in active markets for identical assets or
liabilities;
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Level Level Level
1 2 3 Total
Unaudited at 31 March 2021 Note GBPm GBPm GBPm GBPm
============================================= ===== ===== ====== ===== ======
Financial assets
============================================= ===== ===== ====== ===== ======
Fair value through other comprehensive 21,
income (i) - 27.0 817.0 844.0
============================================= ===== ===== ====== ===== ======
Fair value through profit and loss
============================================= ===== ===== ====== ===== ======
Derivative instruments not in designated
hedge accounting relationships (ii) - 0.5 - 0.5
============================================= ===== ===== ====== ===== ======
Provision for contingent consideration
receivable (iii) - - 2.3 2.3
============================================= ===== ===== ====== ===== ======
Derivative instruments in designated
hedge accounting relationships (ii) - 2.0 - 2.0
============================================= ===== ===== ====== ===== ======
- 29.5 819.3 848.8
============================================= ===== ===== ====== ===== ======
Financial liabilities
============================================= ===== ===== ====== ===== ======
Fair value through profit and loss
============================================= ===== ===== ====== ===== ======
Provision for contingent consideration
payable (iii) - - (1.5) (1.5)
============================================= ===== ===== ====== ===== ======
Derivative instruments in designated
hedge accounting relationships (ii) - (13.3) - (13.3)
============================================= ===== ===== ====== ===== ======
- (13.3) (1.5) (14.8)
============================================= ===== ===== ====== ===== ======
Level Level Level
1 2 3 Total
Unaudited at 31 March 2020 Note GBPm GBPm GBPm GBPm
============================================= =====
Financial assets
============================================= =====
Fair value through other comprehensive 21,
income (i) - 170.1 1.3 171.4
============================================= =====
Fair value through profit and loss
============================================= =====
Derivative instruments not in designated
hedge accounting relationships (ii) - 0.2 - 0.2
============================================= =====
Provision for contingent consideration
receivable (iii) - - 0.3 0.3
============================================= =====
Derivative instruments in designated
hedge accounting relationships (ii) - 3.6 - 3.6
============================================= =====
- 173.9 1.6 175.5
=====
Financial liabilities
============================================= =====
Fair value through profit and loss
============================================= =====
Provision for contingent consideration
payable (iii) - - (2.0) (2.0)
============================================= =====
Derivative instruments in designated
hedge accounting relationships (ii) - (30.1) - (30.1)
============================================= =====
- (30.1) (2.0) (32.1)
=====
Level Level Level
1 2 3 Total
Audited at 30 September 2020 Note GBPm GBPm GBPm GBPm
Financial assets
Fair value through other comprehensive 21,
income (i) - 409.5 1.2 410.7
Fair value through profit and loss
Derivative instruments not in designated
hedge accounting relationships (ii) - 0.1 - 0.1
Provision for contingent consideration
receivable (iii) - - 0.1 0.1
Derivative instruments in designated
hedge accounting relationships (ii) - 3.7 - 3.7
- 413.3 1.3 414.6
Financial liabilities
Fair value through profit and loss
Provision for contingent consideration
payable (iii) - - (2.5) (2.5)
Derivative instruments in designated
hedge accounting relationships (ii) - (23.1) - (23.1)
- (23.1) (2.5) (25.6)
(i) Unlisted equity investments are valued using a variety of
techniques including comparable company valuation multiples and
discounted cashflows. In extremely limited circumstances, where
insufficient recent information is available to measure fair value
or when there is a wide range of possible fair value measurements,
cost is used since this represents the best estimate of fair value
in the range of possible valuations.
(ii) The fair value of derivative instruments is determined
using market rates of interest and exchange, and established
estimation techniques such as discounted cash flow and option
valuation models.
(iii) Contingent consideration is valued based on the future
profitability of the businesses to which the contingent
consideration relates, discounted at market rates of interest.
A reconciliation of the movement in level 3 financial assets is
as follows:
Note GBPm
Audited at 30 September 2019 8.4
============================================================== =======
Additions to financial assets at fair value through
other comprehensive income 0.1
============================================================== =======
Transfer to Level 2 (6.9)
============================================================== =======
Unaudited at 31 March 2020 1.6
============================================================== =======
Audited at 30 September 2019 8.4
============================================================== =======
Transfer to Level 2 (6.9)
============================================================== =======
Exchange adjustment (0.2)
============================================================== =======
Audited at 30 September 2020 1.3
============================================================== =======
Additions to financial assets at fair value through
other comprehensive income 34.3
============================================================== =======
Transfer from Level 2 (i) 383.8
======================================================= ===== =======
Fair value movement of financial assets at fair value
through other comprehensive income 397.7
============================================================== =======
Additions to contingent consideration 2.2
============================================================== =======
Unaudited at 31 March 2021 819.3
============================================================== =======
(i) Equity investments classified within level 2 in prior
periods have been transferred to level 3, as the observable market
data used in the valuation was not available during the current
reporting period.
A reconciliation of the movement in level 3 financial
liabilities is as follows:
Note GBPm
Audited at 30 September 2019 (2.1)
========================================================= ==== =======
Cash paid to settle contingent consideration in respect
of acquisitions 14 0.4
========================================================= ==== =======
Additions to contingent consideration (0.4)
========================================================= ==== =======
Exchange adjustment 0.1
========================================================= ==== =======
Unaudited at 31 March 2020 (2.0)
========================================================= ==== =======
Audited at 30 September 2019 (2.1)
========================================================= ==== =======
Cash paid to settle contingent consideration in respect
of acquisitions 14 0.4
========================================================= ==== =======
Additions to contingent consideration (1.1)
========================================================= ==== =======
Adjustment to goodwill 18 0.2
========================================================= ==== =======
Exchange adjustment 0.1
========================================================= ==== =======
Audited at 30 September 2020 (2.5)
========================================================= ==== =======
Cash paid to settle contingent consideration in respect
of acquisitions 14 0.9
========================================================= ==== =======
Adjustment to goodwill 18 0.1
========================================================= ==== =======
Unaudited at 31 March 2021 (1.5)
========================================================= ==== =======
The key inputs into the significant level 3 financial
liabilities are the future profitability of the businesses to which
the contingent consideration relates and the discount rate. The
estimated range of possible outcomes for the fair value of these
liabilities is GBP 0.3 million to GBP 2.8 million (31 March 2020
GBPnil to GBP3.2
million , 30 September 2020 GBP0.4 million to GBP6.2 million ).
A one percentage point increase or decrease in the growth rate
used in estimating the expected profits, results in the contingent
consideration liability at 31 March 2021 increasing or decreasing
by GBPnil and GBPnil
respectively (31 March 2020 GBPnil and GBPnil , 30 September 2020 GBPnil and GBPnil ), with the corresponding change to the value at 31 March 2021 charged or credited to the Condensed Consolidated Income Statement in future periods.
The rates used to discount contingent consideration range from
0.0% to 1.1% (31 March 2020 0.0% to 1.0% , 30 September 2020 0.0%
to 1.2% ). A one percentage point increase or decrease in the
discount rate used to discount the expected gross value of
payments, results in the liability at 31 March 2021 decreasing or
increasing by GBPnil and GBPnil respectively (31 March 2020 GBPnil
and GBPnil , 30 September 2020 GBPnil and GBPnil ), with the
corresponding change to the value at 31 March 2021 charged or
credited to the Condensed Consolidated Income Statement in future
periods.
25 Share capital and reserves
Share capital at 31 March 2021 amounted to GBP 29.3 million (31
March 2020 GBP29.3 million, 30 September 2020 GBP29.3 million).
During the period the Company utilised 1.9 million ( 31 March
2020 1.3 million , 30 September 2020 1.3 million ) A Ordinary
Non-Voting Shares out of Treasury and the Employee Benefit Trust
with a carrying value of GBP 13.8 million ( 31 March 2020 GBP 9.3
million, 30 September 2020 GBP 9.5 million) in order to satisfy
incentive schemes. This represented 0.9% ( 31 March 2020 0.6% , 30
September 2020 0.9% ) of the called-up A Ordinary Non-Voting Share
capital at 31 March 2021 .
The Company also purchased 0.1 million ( 31 March 2020 0.2
million , 30 September 2020 0.2 million ) A Ordinary Non-Voting
Shares having a nominal value of GBP nil ( 31 March 2020 GBP nil ,
30 September 2020 GBP nil ) to match obligations under incentive
plans. The consideration paid for these shares was GBP 1.0 million
( 31
March 2020 GBP 1.8 million , 30 September 2020 GBP 19.7 million ) .
At 31 March 2021 options were outstanding under the terms of the
Company's Executive Share Option Schemes, Long-Term Incentive Plans
and nil-cost options, over a total of 8,564,618 A Ordinary
Non-Voting Shares (31
March 2020 2,446,914 shares, 30 September 2020 4,001,779 shares).
26 Retirement benefit obligations
The Group operates a number of pension schemes under which
contributions are paid by the employer and employees.
The schemes include a number of defined contribution pension
arrangements, in addition to funded defined benefit pension
arrangements which are closed to future accrual. The defined
benefit schemes in the UK, together with some defined contribution
plans, are administered by Trustees or Trustee Companies.
The total net pension charge of the Group for the period ended
31 March 2021 was GBP 5.0 million (31 March 2020 GBP 3.8 million,
30 September 2020 GBP 7.6 million).
The defined benefit obligation is calculated on a year-to-date
basis, using the latest actuarial valuation as at 31 March 2021 .
The assumptions used in the valuation are summarised below:
Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2021 2020 2020
% % %
=================== ========== ========== ===========
Price inflation 3.35 2.60 2.95
=================== ========== ========== ===========
Pension increases 3.20 2.60 2.85
=================== ========== ========== ===========
Discount rate 1.95 2.20 1.55
=================== ========== ========== ===========
The net surplus as at the end of the period amounted to GBP166.5
million ( 31 March 2020 GBP352.1 million , 30 September 2020 GBP
123.2 million).
27 Contingent liabilities
The Group has issued standby letters of credit amounting to
GBP2.0 million (31 March 2020 GBP2.3 million , 30
September 2020 GBP2.3 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 and
provides for any settlement costs when such an outcome is judged
probable.
The Group's Energy Information business (Genscape) provided a
third-party auditor service verifying Renewable Identification
Numbers (RINs) for renewable fuel production activities in the US,
as part of the Renewable Fuel Standard Quality Assurance Program
(Program), a regulatory program administered by the US
Environmental Protection Agency (EPA).
Following discovery and self-reporting to the EPA by Genscape of
potential fraudulent RINs generated by two companies unconnected
with DMGT but verified by Genscape between 2013 and 2014 under the
Program, the EPA issued a notice of intent to revoke the ability of
Genscape to verify RINs as a third-party auditor on 4 January 2017.
Following the EPA investigation of the two companies in April 2016,
the two companies pleaded guilty of fraud in connection with the
broader scheme to generate RINs.
EPA regulations for the audit Program set a liability cap on
replacement of invalid RINs of 2.0% of the RINs. In April 2017
Genscape voluntarily paid the 2.0% liability cap associated with
the invalid RINs at a cost of US$1.3 million, based on the
then-prevailing market rates, subject to a reservation of rights.
The EPA regulations allow for situations where the cap does not
apply - including fraud, auditor error and negligence.
The EPA had not formally alleged any fraud or intentional
wrongdoing by Genscape, but in its May 2019 final determination
letter, EPA did find grounds for auditor error and negligence by
Genscape and ordered Genscape to replace 69.2 million additional
RINs it had verified.
In July 2019, Genscape filed a petition for review with the
Sixth Circuit Court of Appeals and a motion to stay the EPA's order
to replace the 69.2 million RINs which was accepted for the
duration of Genscape's petition for review.
Notwithstanding the sale of Genscape to Verisk, DMGT is
responsible for any costs, claims or awards and all settlement
negotiations with the EPA.
Since RINs trade in a volatile range, averaging approximately 68
cents over the previous 18-month period, replacing the maximum 69.2
million RINs claimed by the EPA would equate to a potential maximum
claim of approximately US$47.0 million. Using the period end price
of US$1.23 replacing the maximum 69.2 million RINs claimed by the
EPA would equate to a potential maximum claim of US$85.0
million.
DMGT continues to cooperate with the EPA and settlement
discussions are ongoing but considering the uncertainties involved,
the length of time involved and taking note of the order from the
EPA, the Group, without admitting any wrongdoing, made a provision
for the total cost of replacing RINs as at 30 September 2019.
At each period end IAS 37 requires DMGT to review this provision
and make appropriate adjustments to reflect the current status of
the claim. The Group's closing provision includes the cost of
replacement RINs, estimated purchase costs, associated legal fees
and currency fluctuations. The final settlement amount may be
different than the provision made, however, it is not possible for
the Group to predict with any certainty the potential impact of
this litigation or to quantify the ultimate cost of a verdict or
resolution. Accordingly, the provision could change substantially
over time as the dispute progresses and new facts emerge.
28 Ultimate holding company
The Company's immediate parent company is Rothermere
Continuation Limited (RCL), a company incorporated in Jersey, in
the Channel Islands, and previously named Rothermere Investments
Limited.
On 5 December 2019, pursuant to a consolidation of the Group's
holding structure, RCL acquired a Bermudan company known as
Rothermere Continuation (Old Co) Limited (previously named
Rothermere Continuation Limited), (RCOCL), and certain assets held
by RCOCL, including 100% of the issued Ordinary Shares of the
Company. RCL now holds 100% of the issued Ordinary Shares of the
Company.
Daily Mail and General Trust plc is the only company in the
Group to prepare consolidated financial statements.
29 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.
For the purposes of IAS 24, Related Party Disclosures,
executives below the level of the Company's Board are not regarded
as related parties.
Ultimate controlling party
Rothermere Continuation Limited (RCL) is a holding company
incorporated in Jersey, in the Channel Islands. The main asset of
RCL is its controlling shareholding in DMGT, being its 100% holding
of DMGT's issued Ordinary Shares and the largest single holding of
DMGT A Ordinary Shares. RCL is controlled by a discretionary trust
(the Trust) which is held for the benefit of Viscount Rothermere
and his immediate family. The Trust represents the ultimate
controlling party of the Company. Both RCL and the Trust are
administered in Jersey. RCL and its directors, and the Trust are
related parties of the Company.
On 5 December 2019, pursuant to a consolidation of the Group's
holding structure, RCL acquired a Bermudan company known as
Rothermere Continuation (Old Co) Limited (previously named
Rothermere Continuation Limited), (RCOCL), and certain assets held
by RCOCL, including 100% of the issued Ordinary Shares of the
Company. RCL now holds 100% of the issued Ordinary Shares of the
Company, however the underlying control of DMGT remains unchanged
and continues to lie with the Trust.
Transactions with Directors
During the period, Forsters LLP in which Mr A Lane, a
Non-Executive Director of the Company, is a partner, provided legal
services to the Company amounting to GBP 7,291 (31 March 2020 GBP
25,563 , 30 September 2020 GBP 26,687 ).
Transactions with joint ventures and associates
Associated Newspapers Ltd (ANL) has a 50.0 % (31 March 2020
50.0%, 30 September 2020 50.0%) shareholding in Northprint
Manchester Ltd , a joint venture. The net amount due to ANL of
GBP5.8 million (31 March 2020 GBP5.8
million , 30 September 2020 GBP5.8 million ) has been fully provided.
DMGV Ltd (DMGV) has a 23.9 % (31 March 2020 23.9%, 30 September
2020 23.9%) shareholding in Excalibur Holdco Ltd (Excalibur), an
associate. During the period, services provided to Excalibur
amounted to GBP0.2 million (31 March 2020 GBP0.2 million , 30
September 2020 GBP0.5 million ). At 31 March 2021 , amounts due
from Excalibur amounted to GBPnil (31 March 2020 GBPnil , 30
September 2020 GBP0.1 million ), together with loan notes of
GBP17.3 million (31 March 2020 GBP17.3 million , 30 September 2020
GBP17.3 million ). The loan notes carry an annual coupon of 10.0 %
and GBP10.2 million (31 March 2020 GBP7.7 million , 30 September
2020 GBP8.9 million ) was outstanding in relation to this coupon at
31 March 2021 . An expected lifetime impairment allowance of
GBP12.0 million (31 March 2020 GBP12.0 million , 30 September 2020
GBP12.0 million ) has been made against the loan note and unpaid
coupon balance.
DMGV has a 45.3 % (31 March 2020 45.3%, 30 September 2020 45.3%)
shareholding in Yopa Property Ltd (Yopa), an associate. During the
period, the Consumer Media segment provided services to Yopa
amounting to GBPnil (31 March 2020 GBP0.4 million , 30 September
2020 GBP0.5 million ). Also during the period, the Property
Information segment paid referral fees to Yopa of GBP1.2 million
(31 March 2020 GBP0.4 million , 30 September 2020 GBP0.5 million )
and made sales of GBPnil (31 March 2020 GBPnil , 30 September 2020
GBP0.1 million ) to Yopa.
DMGV has a 22.4 % (31 March 2020 6.0%, 30 September 2020 22.4%)
shareholding in Quick Move Ltd, an associate. DMGV provided cash
funding amounting to GBPnil cash and GBPnil of media credits (31
March 2020 GBP0.3 million cash and GBP0.3 million of media credits,
30 September 2020 GBP2.0 million cash and GBP1.0 million of media
credits) during the period.
DMGV has a 20.1 % shareholding in Factory 14 S.a.r.l, an
associate acquired during the period. DMGV provided cash funding
amounting to GBP4.3 million during the period.
DMGV has a 20.0 % shareholding in Bloobloom Ltd, an associate
acquired during the period. DMGV provided cash funding amounting to
GBP0.8 million and GBP0.2 million of media credits during the
period.
DMG Events (USA), Inc. has a 19.5% shareholding (31 March 2020
19.5%, 30 September 2020 19.5%) in Whereoware, LLC, an associate.
During the period, DMG Events (USA), Inc. received dividends of
GBP0.1 million (31 March 2020
GBP0.4 million , 30 September 2020 GBP0.4 million ) from Whereoware, LLC.
DMGI Land & Property Europe Ltd (DMGILP), of which Landmark
Information Group Ltd (Landmark) is a subsidiary undertaking, has a
50.0 % (31 March 2020 50.0%, 30 September 2020 50.0%) shareholding
in PointX Ltd (PointX), a joint venture. During the period,
Landmark charged management fees of GBP0.2 million (31 March 2020
GBP0.2 million , 30 September 2020 GBP0.3 million ) and recharged
costs of GBP0.1 million (31 March 2020 GBP0.1 million , 30
September 2020 GBP0.1 million ) to PointX. At 31 March 2021 ,
GBPnil (31 March 2020 GBPnil , 30 September 2020 GBP0.1 million )
was owed to Landmark by PointX. DMGILP received dividends of GBP0.1
million
(31 March 2020 GBPnil , 30 September 2020 GBPnil ) from PointX.
Decision Insight Information Group (UK) Ltd (DIIG UK) has a 50.0
% (31 March 2020 50.0%, 30 September 2020 50.0%) shareholding in
Decision First Ltd (DF), a joint venture. During the period, DIIG
UK recharged costs to DF amounting to GBP0.1 million (31 March 2020
GBP0.1 million , 30 September 2020 GBP0.2 million ) and charged
management fees amounting to GBPnil (31 March 2020 GBP0.1 million ,
30 September 2020 GBP0.1 million ). At 31 March 2021 , GBPnil (31
March 2020 GBP0.1 million , 30 September 2020 GBPnil ) was owed by
DF.
RMSI Ltd (RMSI), invoiced sales amounting to GBP0.7 million (31
March 2020 GBP1.1 million , 30 September 2020 GBP1.9 million ) to
Landmark, a company which shares a common director with RMSI. Costs
were recharged by Landmark to RMSI amounting to GBP0.4 million (31
March 2020 GBP0.4 million , 30 September 2020 GBP0.8 million ). At
31 March 2021 , GBPnil (31 March 2020 GBP0.2 million , 30 September
2020 GBP0.1 million ) was owed to RMSI by Landmark.
On 15 December 2020, the Group disposed of its shareholding in
TreppPort, LLC (TreppPort), a joint venture. During the period,
Trepp, LLC received dividends of GBP0.3 million (31 March 2020
GBP0.1 million , 30
September 2020 GBP0.2 million ) from TreppPort.
Other related party disclosures
Under an agreement to guarantee the income generated from
certain property assets held by the Harmsworth Pension Scheme which
were purchased from the Group during a prior period, the Group was
charged for rent and service charges in relation to the current
period amounting to GBP0.1 million (31 March 2020 GBP0.1 million ,
30
September 2020 GBP0.2 million ).
At 31 March 2021 , the Group owed GBP1.1 million (31 March 2020
GBP1.0 million , 30 September 2020 GBP1.0 million ) to the pension
schemes which it operates. This amount comprised employees' and
employer's contributions in respect of March 2021 payrolls.
The Group recharges its principal pension schemes with costs of
investment management fees. The total amount recharged during the
period was GBP0.1 million (31 March 2020 GBP0.1 million , 30
September 2020 GBP0.3 million ).
ANL, which shares common control by Rothermere Continuation
Limited, with DMGT Healthcare Trustees, paid contributions to the
scheme totalling GBP0.5 million (31 March 2020 GBP0.5 million , 30
September 2020 GBP0.9 million ). At 31 March 2021 , a total of
GBP1.2 million (31 March 2020 GBP1.2 million , 30 September
2020 GBP1.2 million ) was owed to the scheme by ANL.
30 Post balance sheet events
Disposals
On 28 April 2021 the Group disposed of Rochford Brady Legal
Services Ltd and Lawlink (UK) Ltd in the Property Information
segment for cash proceeds of EUR5.5 million.
Acquisitions
On 17 May 2021 the Group acquired a 1.23% equity stake in Zilch
Technology Ltd (Zilch) for non-cash consideration of GBP5.0
million. Zilch operates a buy now pay later app.
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END
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