Source - LSE Regulatory
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:

Revenue down 12% underlying

Cash operating income² down 13% underlying; 11% margin

Adjusted³ operating profit down 19% underlying; 9% margin

Adjusted profit before tax down 20% underlying

Adjusted EPS up 12%

·    Interim dividend increased +1% to 7.6p

·    Statutory4: revenue £547m; profit before tax £42m, down 45%; EPS 111.3p, up 24%

·    Active portfolio management strategy delivering value creation:

Increased investment in Cazoo in October 2020; proposed transaction values stake at c.US$1.35bn5 vs £117m total investment

Disposal of EdTech (Hobsons) for c.US$410m in March 2021

Acquisition of New Scientist for £67m in March 2021

·    Strong financial position maintained: pro forma net cash £293m6 and £362m of committed undrawn bank facilities; statutory net cash £199m

·    Outlook:

B2B Information Services: positioned for continued growth

Events & Exhibitions: physical events scheduled for H2 but risk of further postponements or cancellations

Consumer Media: advertising depends on business confidence and remains unpredictable

 

 

Adjusted Results3

(from continuing and discontinued operations)

Statutory Results4

 

Half Year 2021

Half Year 2020

Change~

Half Year 2021

Half Year 2020

Reported

Underlying¹

Revenue

£580m

£690m

-16%

 -12%

£547m

£642m

Cash operating income

£66m

£75m

-11%

-13%

 

Operating profit

£55m

£65m

-17%

-19%

£44m

£35m

Profit before tax

£47m

£56m

-17%

-20%

£42m

£77m

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:

 

Adjusted3 results

(from continuing and discontinued operations)

Statutory4 results

Half Year 2021

£m

Half Year 2020

£m

Change~

Half Year 2021

£m

Half Year 2020

£m

Reported

Underlying¹

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 income²:

 

 

 

 

 

 

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 Groupµ

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 £9m.

µ The DMGT Group statutory operating profit shown above excludes the share of operating profits from joint ventures and associates.

 

·    Adjusted revenue of £580m; 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 £66m; 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 £10m of insurance benefit in respect of cancelled or postponed events.

 

·    Adjusted operating profit £55m; underlying decrease -19%: reflecting the same operating dynamics as Cash OI.

 

·    Statutory operating profit £44m: compared to £35m in the prior year.

 

·    Losses from JVs and associates £1m: compared to a loss of £7m in the prior year.

 

·    Adjusted profit before tax (PBT) £47m: down an underlying -20%, including £4m increase in net finance costs due to impact of lower interest rates on interest income.  Statutory PBT £42m (H1 2020 £77m).  

 

·    Tax: adjusted tax charge £8m (H1 2020 £22m); with the adjusted tax rate reducing to 18%.  The statutory tax credit was £36m and there was also a statutory tax charge of £58m on discontinued operations, giving a total net tax charge of £22m.

 

·    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 cash6 was £293m as at 31 March 2021, adjusted to exclude £95m 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 £199m.

 

·    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 £67m in March 2021, adding a growing subscription-based business to the Consumer Media portfolio.  In October 2020, three printing plants were acquired for £10m and DMGT invested a further £34m in Cazoo, bringing the total investment to £117m.  In March 2021, Cazoo announced its intention of combining with AJAX I, the US-listed SPAC, valuing DMGT's stake at c.US$1.35bn5.

 

·    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. 

 

B2B Information Services: Insurance Risk and the Property Information businesses are expected to deliver underlying revenue growth.

Events & Exhibitions: despite the planned occurrence of two major physical events in September 2021, trading conditions are likely to remain very challenging.

Consumer Media: advertising is difficult to predict as usual, with circulation revenues expected to be resilient, helped by the Daily Mail cover price increase.

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 £1.2bn.

 

 

Notes

 

1 Underlying growth rates are on a like-for-like basis, see pages 28 to 30.  Underlying revenues, cash operating income2 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 adjustmentsFor 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 £199m including £95m 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 £293m and 2.6 respectively.

 

The pro forma net cash of £293m includes gross cash of £496m, £202m of bond debt and £1m 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 £: US$ exchange rate for the first half of the year was £1:$1.35 (against £1:$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 £117m 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 $1.35bn5 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 £293m 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 results²

(from continuing and discontinued operations)

Half Year

2021

£m

Half Year 2020

£m

Change~

Full Year

2020

£m

Reported

Underlying¹

Revenue

580

690

-16%

-12%

1,211

 

 

 

 

 

 

Cash operating income²

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 £580m, 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 underlying¹ 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 income²

Cash operating income ('cash OI') of £66m 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 £55m 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 £47m, a decrease of 17% in absolute terms and 20% on an underlying basis.  There was a £6m reduction in the share of operating losses from joint ventures and associates which was largely offset by a £4m increase in net finance costs due to the adverse impact of lower interest rates on interest income.  The adjusted tax charge was £8m, 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 £42m, a reduction of £35m 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

2021

£m

Half Year

2020

£m

Explanation

(as per page (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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

266

268

(1)%

+9%

527

Cash operating income2

47

40

+17%

+36%

75

Adjusted3 operating profit

41

35

+19%

+40%

65

Cash operating income2 margin

18%

15%

 

 

14%

Adjusted3 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 £266m, 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 £47m 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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

117

123

-5%

  0%

248

Cash operating income2

20

22

-5%

+4%

35

Adjusted3 operating profit

18

19

-4%

+7%

34

Cash operating income2 margin

17%

17%

 

 

14%

Adjusted3 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 £117m, 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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

115

96

+20%

 +20%

187

Cash operating income2

24

14

+80%

+83%

29

Adjusted3 operating profit

22

12

+86%

+89%

24

Cash operating income2 margin

21%

14%

 

 

16%

Adjusted3 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 £24m 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 £250,000.  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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

34

42

-20%

N/A

85

Cash operating income2

2

4

-35%

N/A

10

Adjusted3 operating profit

1

2

-55%

N/A

6

Cash operating income2 margin

7%

9%

 

 

12%

Adjusted3 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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

-

7

-81%

N/A

7

Cash operating income2

-

1

-61%

N/A

1

Adjusted3 operating profit

-

2

-54%

N/A

2

Cash operating income2 margin

N/A

20%

 

 

20%

Adjusted3 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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Revenue

4

77

-95%

-92%

79

Cash operating income2

0

5

-107%

N/A*

4

Adjusted3 operating profit

(1)

5

-110%

N/A*

4

Cash operating income2 margin

(8)%

6%

 

 

5%

Adjusted3 operating margin

(13)%

6%

 

 

5%

* Cash operating income and adjusted operating profit both reduced by an underlying £9m.

 

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 £4m. 

 

dmg events recognised £2m of costs relating to cancelled or postponed events, compared to £11m in H1 2020 and £18m 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 (£10m) was recognised in the period.  In FY 2020, the full benefit of US$20m (£16m) 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 £1m 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 £5m.  In the extreme, if no major shows are held this year and approximately £2m 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 £15m. 

 

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

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

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 income2

39

48

-19%

-21%

64

Adjusted3 operating profit

34

44

-23%

-25%

56

Cash operating income2 margin

12%

14%

 

 

11%

Adjusted3 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 £311m 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 £148m. Circulation revenues, including subscriptions, decreased an underlying 7% to £139m.  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 £1.10 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% respectively7.  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 £264m, of which £85m was generated by MailOnline.  Total advertising across the Mail businesses decreased by an underlying 1% to £132m, 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 £3m 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 £29m or 72% to £12m, 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 £16m, 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 £67m.  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 £7m in the first full year of ownership, from revenues in excess of £20m, and is well positioned for growth.

 

In October 2020, dmg media acquired three printing plants for £10m, strategically strengthening its position in the newspaper production market and consistent with DMGT's long-term approach.  Printing publications for third-parties generated £5m 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 2021

£m

Half Year 2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Cash operating costs²

(20)

(18)

+10%

+12%

(34)

Adjusted operating costs3

(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 £20m, reflecting particularly low incentive plan costs in the prior period. 

 

 

Joint Ventures, associates and investments

 

 

Half Year

2021

£m

Half Year

2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Share of pre-tax operating losses3

(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 £1m, compared to £7m 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 £34m, increasing DMGT's total investment in Cazoo to £117m.  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 £6m, compared to a cost of £2m 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 2021

£m

Half Year 2020

£m

Change~

 

Underlying¹

Change~

Full Year

2020

£m

Net interest payable and similar charges3

(7)

(2)

+179%

+179%

(10)

 

Net interest payable and similar charges, including DMGT's share of associates' interest costs, were £7m.  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 £1m for the period, reflecting the pension surplus on an accounting basis.  This compared to a £2m credit for the same period last year and £4m 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 £5m from discontinued operations, totalled £6m (H1 2020 £8m credit).  There were no impairment charges in the period (H1 2020 £12m).

 

The charge for amortisation of intangible assets arising on business combinations was £7m (H1 2020 £6m).  The Group recorded other net gains on disposal of businesses and investments, including discontinued operations, of £241m, primarily in respect of the disposal of Hobsons, the EdTech business (H1 2020 gain £179m). 

 

·      Taxation

The adjusted tax charge of £8m (H1 2020 £22m) 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 £36m, including exceptional credits of £44m 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 £58m on discontinued operations, notably an exceptional charge of £59m on the gain on the disposal of Hobsons, giving a total net tax charge of £22m.  There were £14m 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 £240m at the start of the year to pro forma £287m at the half year, calculated in accordance with IAS 19 (Revised).  The pro forma surplus includes £121m 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 £166m.  At the start of the year, the pro forma surplus included £117m 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 £14m and payments into escrow totalled £121m, including the £117m referenced above.  The funding plan agreed with the Trustees is that from FY 2022 to FY 2025 inclusive, payments of £11m p.a. will be made directly into the schemes and, in addition, payments of £7m 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 cash6 at the end of the period was £293m, an increase of £125m since the start of the financial year, reflecting £300m of disposal proceeds partly offset by the usual seasonal cash outflows and £117m spent on acquisitions and investments.  Pro forma net cash is stated after adjusting to exclude £95m 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 £66m is stated after £6m of capital expenditure.  Other operating cash net outflows totalled £45m including the usual seasonal outflows, notably incentive plan payments.  Group operating cash flow was £21m 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 £294m from the disposal of Hobsons, the EdTech business.  Expenditure on acquisitions and investments included £67m to acquire New Scientist, the science publishing title, £34m of investment in Cazoo, the online used car business, and £10m to acquire printing plants.

 

Payments in the period included dividends of £38m, pro forma pension funding payments of £18m and taxation of £2m.  Total pension funding payments, including £117m previously made available to the pension schemes and excluded from pro forma net cash as at 30 September 2020, were £135m.

 

The Group's cash, cash equivalents and short-term deposits, net of overdrafts, totalled £496m at the period end.  Bond debt was £202m, comprised of £201m of the 6.375% bonds, due 2027 and less than £1m of the 10.0% bonds that matured in April 2021.  There was also £1m of net debt in respect of collateral, loan notes and derivatives. The Group's committed bank facilities, which mature in March 2023, were £362m 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 £1m in order to meet obligations to provide shares under its incentive plans.  It utilised 0.5m shares, valued at £3m, and a further 1.4m shares from the Employee Benefit Trust, valued at £10m, 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 Trust8.

 

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

 

 

£ millions

Note

IRA

PIB

ETC

EID

E&EE

CMF

CCG

JV&AH

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

 

 

 

£ millions

Note

IRA

PIB

ETC

EID

E&EE

CMF

CCG

JV&AH

FCI

DMGT Group

 

Statutory PBT

 

18

19

-

-

(2)

35

(20)

(1)

(5)

42

 

Discontinued operations¹

1

-

-

237

(5)

-

-

-

-

-

233

 

Gain on sale or purchase of assets¹

4

-

-

(237)

-

-

(3)

(1)

-

-

(241)

 

Operating profit adjustments ( above)

2, 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 £237m 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

 

£ millions

Note

IRA

PIB

ETC

EID

E&EE

CMF

CCG

JV&AH

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

 

 

£ millions

Note

IRA

PIB

ETC

EID

E&EE

CMF

CCG

JV&AH

FCI

DMGT Group

 

Statutory PBT

 

19

46

-

-

(1)

45

(21)

(10)

-

77

 

Discontinued operations¹

1

-

-

2

147

-

-

-

-

-

150

 

Gain on sale or purchase of assets¹

4

-

(37)

(1)

(134)

-

(6)

(1)

-

-

(179)

 

Operating profit adjustments ( above)

2, 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 £134m 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

£ million

Adjusted results including discontinued operations

 

 

 

Discontinued operations

Adjusted results excluding discontinued operations

 

Adjusted results including discontinued operations

 

 

 

Discontinued operations

Adjusted results excluding discontinued 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 income2

 

Half Year 2021

£ millions

IRA

PIB

ETC

EID

E&EE

CMF

CCG

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

£ millions

IRA

PIB

ETC

EID

E&EE

CMF

CCG

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.

  

Underlying1 analysis - Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Half Year 2021

 

Half Year 2020

£ 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.

 

 

Underlying1 analysis - Adjusted3 operating profit and profit before tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Half Year 2021

 

Half Year 2020

 

£ 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 £8m 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 £1m 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 £6m 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.

 

Underlying1 analysis - Cash operating income²

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Half Year 2021

 

Half Year 2020

 

£ 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 £8m 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 £1m 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 £6m 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 income2 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 adjustmentsFor 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 £199m including £95m 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 £293m and 2.6 respectively.

 

The pro forma net cash of £293m includes gross cash of £496m, £202m of bond debt and £1m 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 £: US$ exchange rate for the first half of the year was £1:$1.35 (against £1:$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 forward-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 plc

Northcliffe House

2 Derry Street

London

W8 5TT

Email: adam.webster@dmgt.com

 

Auditor

PricewaterhouseCoopers LLP

1 Embankment Place

London

WC2N 6RH

Stockbrokers

Credit Suisse International

One Cabot Square

London

E14 4QJ

Registrars

Equiniti

Aspect House

Spencer Road

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Audited year ended 30 September 2020

 

£m

£m

£m

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

 

 

Called-up

share

capital

Share

premium

account

Capital

redemption

reserve

Own

shares

Translation

reserve

Retained

earnings

Equity

attributable

to owners of

the Company

Non-controlling

interests

Total

equity

 

Note

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 £362.2 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

 

 

£m

£m

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

 

 

£m

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:

·        £20.0 million fixed to floating interest rate swap, maturing April 2021 which references 12-month GBP LIBOR.

·        £53.1 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 £53.1 million swap maturing June 2027 as the Phase 1 reliefs will cease to apply to the £20.0 million swap when it matures in April 2021. The £20.0 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 £85.0 million notional and US$20.0 million notional interest rate CAPs. The Group also has £20.0 million notional and US$75.0 million notional interest rate CAPs with a carrying value of £nil 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 £176.0 million (31 March 2020 £362.9 million, 30 September 2020 £136.7 million) and report a net surplus on its pension schemes amounting to £166.5 million (31 March 2020 £352.1 million, 30 September 2020 £123.2 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 £329.6 million (31 March 2020 £355.2 million, 30 September 2020 £350.3 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 £21.3 million (31 March 2020 £23.2 million, 30 September 2020 £23.0 million).

 

The carrying amount of the retirement benefit obligation at 31 March 2021 was a net surplus of £166.5 million (31 March 2020 £352.1 million, 30 September 2020 £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 (£18.3 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 £392.9 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 £80.2 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 £1.4 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 £0.4 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.

 

Unaudited 6 months ended 31 March 2021

 

Total and external revenue

Segment operating profit/(loss)

Less operating (loss)/profit of joint ventures and associates         

Adjusted operating profit/(loss)

 

Note

£m

£m

£m

£m

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 of intangible assets not arising on business combinations

Amortisation of intangible assets arising on business combinations

Exceptional operating costs

 

 

(Note 18)

(Note 18)

 

 

Note

£m

£m

£m

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

 

LTIP

 

Legal fees and claims

Total

 

 

(i)

 

 

 

Note

£m

£m

£m

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 £508.4 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 £23.3 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 £1.7 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 £3.6 million in relation to these exceptional operating costs of which £0.9 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 months ended 31 March 2021

 

Depreciation of right of use assets

Depreciation of property, plant and equipment

Research costs

Other gains and losses

Investment revenue

Finance income

Finance expense

 

 

(Note 20)

(Note 19)

 

(Note 5)

(Note 6)

(Note 7)

(Note 7)

 

Note

£m

£m

£m

£m

£m

£m

£m

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 2020

 

Total and external revenue

Segment operating profit/(loss)

Less operating loss of joint ventures and associates

Adjusted operating profit/(loss)

 

 

 

 

 

 

 

Note

£m

£m

£m

£m

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 2020

 

Amortisation of intangible assets not arising on business combinations

Amortisation of intangible assets arising on business combinations

Impairment of goodwill and intangible assets arising on business combinations

Exceptional operating (costs)/income

 

 

(Note 18)

(Note 18)

(Note 18)

 

 

Note

£m

£m

£m

£m

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

Note

LTIP

 

Legal fees and claims

Total

 

 

(i)

 

 

 

 

£m

£m

£m

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 £508.4 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 £23.2 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 £3.5 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 £1.6 million in relation to these exceptional operating costs of which £2.4 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 months ended 31 March 2020

 

Depreciation of right of use assets

Depreciation of property, plant and equipment

Research costs

Other gains and losses

Investment revenue

Finance income

Finance expense

 

 

 

 

 

 

 

 

 

 

 

(Note 20)

(Note 19)

 

(Note 5)

(Note 6)

(Note 7)

(Note 7)

 

Note

£m

£m

£m

£m

£m

£m

£m

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

 

Total and external revenue

Segment operating profit/(loss)

Less operating profit/(loss) of joint ventures and associates

Adjusted operating profit/(loss)

 

 

 

 

 

 

 

Note

£m

£m

£m

£m

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 September 2020

 

Amortisation of intangible assets not arising on business combinations

Amortisation of intangible assets arising on business combinations

Impairment of goodwill and intangible assets arising on business combinations

Impairment of internally generated and acquired computer software

Exceptional operating (costs)/income

 

 

(Note 18)

(Note 18)

(Note 18)

(Note 18)

 

 

Note

£m

£m

£m

£m

£m

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 September 2020

 

Severance and other closure

 costs

LTIP

Option modification charge

Legal fees and claims

Total

 

(i)

(ii)

(iii)

 

 

 

Note

£m

£m

£m

£m

£m

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 £508.4 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 £22.5 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 £6.1 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 £20.4 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 £2.0 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 £4.7 million in relation to these exceptional operating costs of which a charge of £2.4 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 ended 30 September 2020

 

Depreciation of right of use assets

Depreciation of property, plant and equipment

Research costs

Other gains and losses

Investment revenue

Finance income

Finance expense

 

 

 

 

 

 

 

 

 

 

 

(Note 20)

(Note 19)

 

(Note 5)

(Note 6)

(Note 7)

(Note 7)

 

Note

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2021

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

Unaudited 6 months ended 31 March 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

Audited Year ended 30 September 2020

 

Total

Total

Point in time

Total

Over time

Discontinued operations

Total

Discontinued operations

Point in time

Discontinued operations

Over time

Continuing operations

Total

Continuing operations

Point in time

Continuing operations

Over time

 

 

 

 

(Note 16)

(Note 16)

(Note 16)

 

 

 

 

£m

£m

£m

£m

£m

£m

£m

£m

£m

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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 on business combinations of associates

 

 (0.1)

-

-

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)

Impairment of carrying value of associates

10, (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 £0.1 million write-down in the carrying value of Global Events Partners Ltd in the Events and Exhibitions segment and a £3.6 million write-down in the carrying value of Also Energy Holdings, Inc. held centrally.

 

 

5 Other gains and losses

 

 

Unaudited 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Year ended 30 September 2020

 

Note

£m

£m

£m

Loss on disposal of financial assets held at fair value through other comprehensive income

(i)

 -

 (0.1)

-

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, (iv)

 2.7

-

-

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 £1.1 million (period ended 31 March 2020 £0.7 million, year ended 30 September 2020 £1.6 million) in relation to these other gains and losses.

 

(i)   In the prior period ended 31 March 2020 this relates to a loss of £0.1 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 £24.7 million on the disposal of Inframation AG and a profit of £15.6 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 £24.8 million relating to the disposal of Inframation AG and a profit of £15.7 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 £10.0 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 £1.6 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 £1.2 million on the sale of Also Energy Holdings, Inc. held centrally and a £0.1 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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

 

£m

£m

£m

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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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, not designated for hedge accounting

 

 0.4

-

-

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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 £8.4 million (31 March 2020 £21.8 million, 30 September 2020 £12.7 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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 £40.8 million (31 March 2020 £nil, 30 September 2020 £37.0 million) and UK tax losses of £3.0 million (31 March 2020 £nil, 30 September 2020 £nil). A significant portion of the current period credit of £40.8 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 £nil (31 March 2020 £nil, 30 September 2020 £39.5 million) and US state R&D tax credits of £nil (31 March 2020 £nil, 30 September 2020 £8.6 million).

 

(iii)             Tax on other gains and losses during the 6 months ended 31 March 2021 includes a tax charge of £58.0 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 £6.7 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 £nil to £7.4 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 £2.3 million during the year ending 30 September 2021, with a net credit of £8.4 million being taken to the Income Statement and a net debit of £6.1 million being taken to the Statement of Comprehensive Income.

9 Dividends paid

 

 

Unaudited 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

Audited year ended 30 September 2020

 

 

Pence per share

£m

Pence per share

£m

Pence per share

£m

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 £17.4 million (31 March 2020 £17.2 million, 30 September 2020 £37.6 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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 £0.1 million (31 March 2020 £nil, 30 September 2020 £nil) is stated after eliminating a credit of £0.2 million (31 March 2020 £nil, 30 September 2020 £nil), 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 £253.5 million (31 March 2020 £205.0 million, 30 September 2020 £189.3 million) as adjusted for the effect of dilutive Ordinary Shares of £nil (31 March 2020 £nil, 30 September 2020 £nil) and profits from discontinued operations of £175.3 million (31 March 2020 £132.3 million, 30 September 2020 £142.9 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 £38.2 million (31 March 2020 £34.4 million, 30 September 2020 £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 6 months ended

31 March 2021 Diluted earnings

Unaudited 6 months ended

31 March 2020 Diluted earnings

Audited year ended 30 September 2020 Diluted earnings

 

Unaudited 6 months ended

31 March 2021 Basic earnings

Unaudited 6 months ended

31 March 2020 Basic earnings

Audited year ended 30 September 2020 Basic earnings

 

 

Note

£m

£m

£m

£m

£m

£m

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 6 months ended

31 March 2021 Diluted pence per share

Unaudited 6 months ended

31 March 2020 Diluted pence per share

Audited year ended 30 September 2020 Diluted pence per share

Unaudited 6 months ended

31 March 2021 Basic pence per share

Unaudited 6 months ended

31 March 2020 Basic pence per share

Audited year ended 30 September 2020 Basic pence per 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 at 31 March 2021 Number

Unaudited at 31 March 2020 Number

Audited at 30 September 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 6 months ended

31 March 2021

Unaudited 6 months ended

31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

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 £41.7 million (31 March 2020 increase of £187.1 million, 30 September 2020 increase of £201.6 million) includes a cash outflow of £1.2 million (31 March 2020 inflow of £nil, 30 September 2020 outflow of £2.9 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 £10.0 million. The fair value of net assets acquired amounted to £12.7 million which resulted in a negative goodwill adjustment of £2.7 million. This gain has been recognised in the Consolidated Income Statement in accordance with IFRS 3, Business Combinations.

 

Associated Printing contributed £4.6 million to the Group's revenue, reduced the Group's operating profit by £1.8 million and reduced the Group's profit after tax by £1.4 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 £5.3 million to the Group's revenue, reduced the Group's operating profit by £1.9 million and reduced the Group's profit after tax by £1.5 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 £74.5 million. The New Scientist is a popular weekly science and technology publication.

 

The New Scientist contributed £1.9 million to the Group's revenue, £0.5 million to the Group's operating profit and £0.4 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 £10.9 million to the Group's revenue, £2.1 million to the Group's operating profit and contributed £0.8 million to the Group's profit after tax.

 

Provisional fair value of net assets acquired with all acquisitions:

 

 

Associated Printing

New Scientist

Total

 

Note

£m

£m

£m

Goodwill                                                                                                                   

18, (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

£m

£m

£m

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 £nil.

 

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 £6.5 million to the Group's revenue and reduced the Group's profit after tax by £1.0 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 £2.0 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 £556.4 million and Group profit attributable to equity holders of the parent would have been a profit of £253.6 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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

Cash consideration

 

 84.0

 56.9

 70.7

Cash paid to settle contingent consideration in respect of acquisitions

24, (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 £0.8 million (31 March 2020 £0.3 million, 30 September 2020 £0.3 million) within the Property Information segment, £0.1 million (31 March 2020 £nil, 30 September 2020 £nil) within the Consumer Media segment and £nil (31 March 2020 £0.1 million, 30 September 2020 £0.1 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 £294.4 million.

 

The impact of the disposal of businesses completed during the period on net assets is as follows:

 

 

EdTech

Other

Total

 

Note

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

£m

£m

£m

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 £4.2 million of the Group's net operating cash flows, contributed £296.1 million in investing activities and paid £0.7 million in financing activities.

 

The Group's tax charge includes £59.1 million in relation to these disposals of which £58.0 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 6 months ended 31 March 2021

Unaudited 6 months ended 31 March 2020

Audited year ended 30 September 2020

 

Note

£m

£m

£m

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

Exceptional operating (costs)/income

3, 10, (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

Profit on disposal of discontinued operations

3, 10, 15

 238.0

 145.7

 145.1

Recycled cumulative translation differences on disposal of discontinued operations

3, 10, 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 (£4.7 million) arises on this provision (31 March 2020 US$5.3 million (£4.3 million), 30 September 2020 US$5.3 million (£4.1 million)).

 

Cash flows associated with discontinued operations comprise operating cash outflows of £4.2 million (31 March 2020 £11.4 million inflow, 30 September 2020 £33.6 million inflow), investing cash inflows of £296.1 million (31 March 2020 £237.4 million, 30 September 2020 £235.6 million) and financing cash outflows of £0.7 million (31 March 2020 £2.5 million, 30 September 2020 £3.3 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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

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

 

 

Goodwill

Other Intangibles

 

Note

£m

£m

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 consideration

 

 (0.2)

-

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 consideration

 

 (0.1)

-

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 £nil. In the prior period ended 31 March 2020, the Group recorded a goodwill impairment charge of £5.1 million relating to the Events and Exhibitions segment and £2.9 million relating to the Consumer Media segment. The tax credit in respect of the impairment of goodwill amounted to £nil. In the prior year ended 30 September 2020, the Group recorded a goodwill impairment charge of £11.8 million of which £8.9 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 £nil associated with this impairment charge.

 

Impairment charges relating to intangible assets during the period to 31 March 2021 amounted to £nil (31 March 2020 £0.1 million relating to the Events and Exhibitions segment, 30 September 2020 £1.5 million relating to the Property Information segment and £2.3 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 £7.9 million (30 September 2020 £7.9 million) together with intangible assets with a carrying value of £7.4 million (30 September 2020 £8.2 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 £1.0 million (30 September 2020 £7.0 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 £1.9 million (31 March 2020 £2.1 million, 30 September 2020 £2.1 million) together with intangible assets with a carrying value of £0.3 million (31 March 2020 2020 £0.5 million, 30 September 2020 £0.5 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 £0.7 million (31 March 2020 £5.3 million, 30 September 2020 £0.1 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

 

 

Freehold properties

Short leasehold properties

Plant and equipment

Total

 

Note

£m

£m

£m

£m

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

 

 

 

Freehold properties

Short leasehold properties

Plant and equipment

Total

 

Note

£m

£m

£m

£m

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 £4.0 million (period ended 31 March 2020 £6.6 million, year ended 30 September 2020 £12.2 million) on property, plant and equipment and disposed certain of its property, plant and equipment with a carrying value of £0.1 million (31 March 2020 £nil million, 30 September 2020 £0.2 million) for net proceeds of £0.1 million (31 March 2020 £nil, 30 September 2020 £nil). In addition property, plant and equipment with a carrying value of £0.6 million was owned by subsidiaries disposed during the year (31 March 2020 £nil, 30 September 2020 £nil).

20 Right of use assets

 

 

Leasehold properties

Plant and equipment

 

Note

£m

£m

£m

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 properties

Plant and equipment

 

Note

£m

£m

£m

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

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

Class of Holding

Group interest

£m

£m

£m

Unlisted

 

 

 

 

 

 

Cazoo Holdings Ltd (incorporated and operating in the UK)

2, (i)

Preference 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 and operating in the US)

(iii)

Common Stock

3.4%

6.0

6.7

6.4

Kortext Ltd (incorporated and operating in the UK)

(iv)

Preference and Ordinary

9.8%

5.6

3.4

5.6

Cue Ball Capital LP (incorporated and operating in the US)

(v)

Limited 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 and operating in Israel)

2, (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:

 

Note

Unaudited at 31 March 2021 Undrawn

Unaudited at 31 March 2020 Undrawn

Audited at 30 September 2020 Undrawn

 

 

£m

£m

£m

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 £362.2 million (31 March 2020 £380.0 million, 30 September 2020 £373.2 million). Of these facilities £205.0 million (31 March and 30 September 2020 £205.0 million) are denominated in sterling and £157.2 million (US$217.0 million) (31 March 2020 £175.0 million (US$217.0 million), 30 September 2020 £168.2 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 £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 £301.5 million (31 March 2020 £273.5 million, 30 September 2020 £286.7 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 at 31 March 2021 Committed

Unaudited at 31 March 2021 Undrawn

Unaudited at 31 March 2020 Committed

Unaudited at 31 March 2020 Undrawn

Audited at 30 September 2020 Committed

Audited at 30 September 2020 Undrawn

 

 

 

£m

£m

£m

£m

£m

£m

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 at 31 March 2021 Undrawn

Unaudited at 31 March 2020 Undrawn

Audited at 30 September 2020 Undrawn

 

 

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

Note

£m

£m

£m

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 £120.7 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 £7.0 million into these escrow deposit accounts to October 2024.

 

None of the escrow balances will be released before 2024. Up to £50.0 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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

 

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

 

£m

£m

£m

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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 2020

 

 

Carrying value

Carrying value

Carrying value

 

Note

£m

£m

£m

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 £15.5 million (31 March 2020 £13.0 million, 30 September 2020 £14.2 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 at 31 March 2021 Fair value

Unaudited at 31 March 2021 Carrying value

Unaudited at 31 March 2020 Fair value

Unaudited at 31 March 2020 Carrying value

Audited at 30 September 2020 Fair value

Audited at 30 September 2020 Carrying value

Maturity                                      

 

Annual coupon %

£m

£m

£m

£m

£m

£m

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 1

Level 2

Level 3

Total

Unaudited at 31 March 2021

Note

£m

£m

£m

£m

Financial assets

 

 

 

 

 

Fair value through other comprehensive income

21, (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 1

Level 2

Level 3

Total

Unaudited at 31 March 2020

Note

£m

£m

£m

£m

Financial assets

 

 

 

 

 

Fair value through other comprehensive income

21, (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 1

Level 2

Level 3

Total

Audited at 30 September 2020

Note

£m

£m

£m

£m

Financial assets

 

 

 

 

 

Fair value through other comprehensive income

21, (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

£m

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

£m

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 £0.3 million to £2.8 million (31 March 2020 £nil to £3.2 million, 30 September 2020 £0.4 million to £6.2 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 £nil and £nil respectively (31 March 2020 £nil and £nil, 30 September 2020 £nil and £nil), 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 £nil and £nil respectively (31 March 2020 £nil and £nil, 30 September 2020 £nil and £nil), 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 £29.3 million (31 March 2020 £29.3 million, 30 September 2020 £29.3 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 £13.8 million (31 March 2020 £9.3 million, 30 September 2020 £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 £nil (31 March 2020 £nil, 30 September 2020 £nil) to match obligations under incentive plans. The consideration paid for these shares was £1.0 million (31 March 2020 £1.8 million, 30 September 2020 £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 £5.0 million (31 March 2020 £3.8 million, 30 September 2020 £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 at 31 March 2021

Unaudited at 31 March 2020

Audited at 30 September 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 £166.5 million (31 March 2020 £352.1 million, 30 September 2020 £123.2 million).

 

 

27 Contingent liabilities

The Group has issued standby letters of credit amounting to £2.0 million (31 March 2020 £2.3 million, 30 September 2020 £2.3 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 £7,291 (31 March 2020 £25,563, 30 September 2020 £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 £5.8 million (31 March 2020 £5.8 million, 30 September 2020 £5.8 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 £0.2 million (31 March 2020 £0.2 million, 30 September 2020 £0.5 million). At 31 March 2021, amounts due from Excalibur amounted to £nil (31 March 2020 £nil, 30 September 2020 £0.1 million), together with loan notes of £17.3 million (31 March 2020 £17.3 million, 30 September 2020 £17.3 million). The loan notes carry an annual coupon of 10.0% and £10.2 million (31 March 2020 £7.7 million, 30 September 2020 £8.9 million) was outstanding in relation to this coupon at 31 March 2021. An expected lifetime impairment allowance of £12.0 million (31 March 2020 £12.0 million, 30 September 2020 £12.0 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 £nil  (31 March 2020 £0.4 million, 30 September 2020 £0.5 million). Also during the period, the Property Information segment paid referral fees to Yopa of £1.2 million (31 March 2020 £0.4 million, 30 September 2020 £0.5 million) and made sales of £nil (31 March 2020 £nil, 30 September 2020 £0.1 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 £nil cash and £nil of media credits (31 March 2020 £0.3 million cash and £0.3 million of media credits, 30 September 2020 £2.0 million cash and £1.0 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 £4.3 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 £0.8 million and £0.2 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 £0.1 million (31 March 2020 £0.4 million, 30 September 2020 £0.4 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 £0.2 million (31 March 2020 £0.2 million, 30 September 2020 £0.3 million) and recharged costs of £0.1 million (31 March 2020 £0.1 million, 30 September 2020 £0.1 million) to PointX. At 31 March 2021, £nil (31 March 2020 £nil, 30 September 2020 £0.1 million) was owed to Landmark by PointX. DMGILP received dividends of  £0.1 million (31 March 2020 £nil, 30 September 2020 £nil) 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 £0.1 million (31 March 2020 £0.1 million, 30 September 2020 £0.2 million) and charged management fees amounting to £nil (31 March 2020 £0.1 million, 30 September 2020 £0.1 million). At 31 March 2021, £nil (31 March 2020 £0.1 million, 30 September 2020 £nil) was owed by DF.

 

RMSI Ltd (RMSI), invoiced sales amounting to £0.7 million (31 March 2020 £1.1 million, 30 September 2020 £1.9 million) to Landmark, a company which shares a common director with RMSI. Costs were recharged by Landmark to RMSI amounting to £0.4 million (31 March 2020 £0.4 million, 30 September 2020 £0.8 million). At 31 March 2021, £nil (31 March 2020 £0.2 million, 30 September 2020 £0.1 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 £0.3 million (31 March 2020 £0.1 million, 30 September 2020 £0.2 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 £0.1 million (31 March 2020 £0.1 million, 30 September 2020 £0.2 million).

 

At 31 March 2021, the Group owed £1.1 million (31 March 2020 £1.0 million, 30 September 2020 £1.0 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 £0.1 million (31 March 2020 £0.1 million, 30 September 2020 £0.3 million).

 

ANL, which shares common control by Rothermere Continuation Limited, with DMGT Healthcare Trustees, paid contributions to the scheme totalling £0.5 million (31 March 2020 £0.5 million, 30 September 2020 £0.9 million). At 31 March 2021, a total of £1.2 million (31 March 2020 £1.2 million, 30 September 2020 £1.2 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 €5.5 million.

 

Acquisitions

On 17 May 2021 the Group acquired a 1.23% equity stake in Zilch Technology Ltd (Zilch) for non-cash consideration of £5.0 million. Zilch operates a buy now pay later app.

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