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Edited Transcript of DMGOa.L earnings conference call or presentation 28-May-20 8:30am GMT

Half Year 2020 Daily Mail and General Trust P L C Earnings Call

London Jul 21, 2020 (Thomson StreetEvents) -- Edited Transcript of Daily Mail and General Trust P L C earnings conference call or presentation Thursday, May 28, 2020 at 8:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Adam Webster

Daily Mail and General Trust plc - Head of Management Information & IR

* Paul A. Zwillenberg

Daily Mail and General Trust plc - CEO & Director

* Tim G. Collier

Daily Mail and General Trust plc - Group CFO & Executive Director

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Conference Call Participants

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* Adrien de Saint Hilaire

BofA Merrill Lynch, Research Division - VP & Head of Media Research

* Alexander Mees

JPMorgan Chase & Co, Research Division - Head of UK Small and Mid Cap Research

* Annick Tonie Maas

Exane BNP Paribas, Research Division - Analyst

* Katherine Tait

Goldman Sachs Group, Inc., Research Division - Associate

* Natasha Brilliant

Citigroup Inc., Research Division - VP

* Nicholas Michael Edward Dempsey

Barclays Bank PLC, Research Division - Research Analyst

* Patrick Thomas Wellington

Morgan Stanley, Research Division - MD and Head of the European Media Equity Research

* Robert Berg

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Robin Jenner;BAE Systems Pension Funds Investment Management Limited;Analyst

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Presentation

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [1]

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Good morning, and thank you for joining us for the DMGT half year results presentation. I hope that you and your families are well.

I'm going to start by talking about what's front of mind for all of us, COVID-19 and what it's meant for DMGT, before handing over to Tim to talk you through the numbers and finishing with me giving an update on each of the businesses before answering any questions.

I'm pleased to say that we had strong trading in the first 5 months of the financial year. But you don't need me to tell you that COVID-19 has brought unprecedented levels of change and disruption to everyone's lives. I'm immensely proud to say that everyone at DMGT and across the portfolio responded, not only with calm, but with compassion and adaptability, too. Our transition to working remotely was smooth and successful with product delivery uninterrupted across the portfolio, other than the necessary cancellation of events.

Of particular note, Wednesday, the 25th of March, marked the first time in the history of the group that the Mail Newspapers have been produced remotely. And across the businesses, we've seen our strong customer relationships come to the fore, as they helped us to understand how best to meet their needs in this rapidly changing environment. We're immensely grateful for their support and loyalty.

Underpinning all this is the fact that DMGT's portfolio approach built on a careful mix of quality businesses is a real source of strength. With that variety in mind, our businesses have been affected in different ways depending on their business model, sector and geography. So while our subscription B2B businesses have proven to be resilient and growing to date, our Consumer Media, U.K. Property Information and Events and Exhibitions businesses all rely on revenues directly impacted by COVID-19. We will go into more detail about what that means for each of our businesses shortly. But before I do, I wanted to tell you how we've responded to the crisis.

A top priority has been the well-being of our people, doing everything we can to help them and their families stay safe and supported through COVID-19 and to make sure that they are engaged with our plans for the future. We have also been actively involved in supporting our communities. As a business, we have always taken our role in society seriously and the activities over the past 3 months to help those helping others is a testament to that.

Let me share some examples. We got involved at a grassroots level by launching the charity Mail Force, spurred on by our Chairman and supported by readers, other companies and foundations to provide the NHS with much needed supplies of PPE. To date, Mail Force has raised over GBP 8 million, including an incredible GBP 3 million donated by over 55,000 readers and GBP 1 million donated by DMGT. Working in collaboration with the NHS, by the end of this week, Mail Force will have delivered 2.8 million items to hospitals and care homes across the country, with donations for more supplies on the rise daily. If you would like to contribute, please visit mailforcecharity.co.uk.

At Metro, we continued printing the paper for key workers on their daily commute. For those who couldn't get into the newsagent, we beefed up our home delivery service and augmented Mail Plus, providing enhanced digital versions of a Daily Mail's content.

At Landmark, we assisted the NHS providing free environmental reports to support the design and location of the Nightingale hospitals. And at Hobsons, we have provided Naviance curriculum free to schools across the U.S. to the benefit of more than 3 million students. Finally, we have been working with customers, the government, industry associations, suppliers, partners and regulators to help define priorities for our economy and to establish new and safe ways of working until a vaccine arrives.

Then there's how we've responded by adapting to uncertainty. First, 2 weeks into the lockdown, we introduced an equity for salary scheme for higher earners. It's innovative and we felt was a fair approach for everyone with the added benefit of aligning employees' and shareholders' interest. I'm pleased to say that the response from employees has been overwhelmingly positive.

Second, bolstered by a strong balance sheet with over GBP 160 million in net cash, and thanks to the hard work we've done over the past few years, we made a conscious decision to prioritize the group's self-sufficiency. We thought it was appropriate and responsible not to take government support, allowing those much-needed national resources to be applied elsewhere.

Third, we were quick to make measured reductions in costs. We've acted to reduce overheads and discretionary spend across the portfolio.

Fourth, we have re-prioritized organic investment initiatives, looking at any projects rendered marginal by COVID-19, adjusting our spend and realigning our priorities accordingly.

Fifth and finally, we've been working closely with each of the businesses to put contingency plans in place depending on how their markets evolve over the coming weeks and months. Any short-term decisions have and will continue to be balanced against maintaining option value in the long term.

The adaptability we have shown over the past 3 months has been made possible by the discipline, focus and agility that we have instilled across the businesses. We expected and prepared for a downturn. Obviously, we didn't expect COVID-19, but all the same, our strategy has put us in an infinitely better position both to manage through a crisis like this and to take advantage of the opportunities it inevitably creates.

We have optionality. We are more financially and operationally resilient, and the portfolio is more manageable. And all of DMGT's businesses are market leading, a quality that becomes even more valuable during times of recession. That is why I remain confident about the future and our ability to generate long-term value.

Today, we've announced continued real dividend growth. With that said, there is currently a high level of uncertainty about the general business environment. Future dividends will reflect the prevailing economic outlook and the trading of our businesses.

I will go into more detail about each of the businesses shortly, but now over to Tim.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [2]

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Thank you, Paul. The half year results reflects an encouraging first 5 months, followed by a more difficult March with the impact of COVID-19. Until the new FRC accounting guidance issued last week, the 6-month performance was consistent with our expectations and the full year guidance that we gave in December, and that was in spite of the COVID-19 impact on March trading. Because of the new guidance, the adjusted revenues include GBP 8 million of event costs that we've recognized early, and I'll go into that in a little bit more detail on the next slide.

In the first 5 months, group revenues grew an encouraging underlying 3%, and that was at the top end of our expectations. The table on the right shows how COVID-19 began to impact our businesses in the final month of the period. The 3 B2B subscription businesses continued to grow in March, whereas Consumer Media, U.K. Property Information and Events and Exhibitions shrank, and this resulted in the flat group revenues for the 6 months.

Consumer Media delivered a fairly stable revenue and profit performance. And the B2B result reflects continued revenue growth, with the planned investment impacting profit and margins. I would note, though, that excluding the GBP 8 million of second half event costs, the group's operating margin would have been 11% rather than 9%, as shown here. Finally, we've completed several acquisitions, investments and disposals in the first half and have over GBP 160 million of net cash on the balance sheet.

And the events business has been particularly affected by COVID. And before running through the first half figures in detail, I want to explain the dynamics and the impact of the FRC's announcement.

Other than a few smaller September events, we've canceled or postponed all the shows that were scheduled in this financial year. Today, we announced that Gastech will still be held in Singapore but is postponed by a year. We also announced that the Big 5 Dubai show will be in the last quarter of our next financial year rather than Q1. Our first half results include GBP 3 million of costs for March events that didn't take place. But importantly, they also include a charge of GBP 8 million for costs for events that were scheduled in the second half but were either canceled or postponed. Now events take time to organize, and in a normal market, cost for each event are recognized at the same time as the revenue is.

Last week, the FRC issued clear guidance on the treatment of costs associated with revenue lost because of COVID-19. Essentially, the guidance says that these costs cannot be treated as exceptional. Accordingly, they are included in our cash OI and operating profit all the way through to EPS.

To put this in context, the impact of the accelerated cost is equivalent to 14% of first half PBT and 20% of EPS, so a major factor for you when looking at earnings and margins.

The second key factor to note is that we have insurance cover for communicable diseases. And that is for up to $20 million per financial year to September 2022. In accordance with IAS 37, the insurance payout is a contingent asset, and you are only able to recognize a contingent asset when it is a virtually certain. In practice, for an insurance payout, this means when it has or is about to be paid. Therefore, nothing has been recognized at this stage.

So back to the first half numbers. This slide shows the complete income statement. Underlying revenues were stable, whilst cash OI and operating profit were down, and that's due to our planned investment program. Profit before tax was down an underlying 20% and 44% in absolute terms. And this was due to the swing in the joint ventures and associates line following the distribution of our stake in Euromoney last April. The April distributions resulted in a number of shares being reduced by about 1/3. EPS was down 33%, which includes an increase in the effective tax rate to 39% in the half, and this was due to reduced profit expectations for the second half and the resulting increased significance of tax-adjusting items such as losses from early-stage associates, where there is no tax benefit to DMGT.

Without the acceleration of costs for canceled future events that I described earlier, EPS would have been 18p, down 20%. We've also announced a dividend increase of 3%, consistent with our policy of delivering growth in real terms and reflecting the first half trading performance.

For completeness, this table shows our statutory numbers. The bottom 2 rows include discontinued operations, and you can see the benefit of the gain we made on the sale of Genscape, our Energy Information business.

Now this slide brings the key numbers together. There was underlying growth in B2B revenues, offset by consumer, which, as we said, was impacted by the March performance. Reported revenues were down 5%, and that was due to the B2B disposals that I mentioned. There was an underlying reduction in group cash OI, and that was mainly due to the planned B2B investment in product development and technology as well as the March impact of COVID, which includes events.

Consumer Media delivered a stable cash OI performance on an underlying basis, again, despite COVID, and we continued to reduce cost in the center. The margins on the table here include the GBP 8 million of accelerated event costs. That aside, the investment and COVID impact resulted in a 1% reduction in both cash OI margin and operating profit margin in the half.

So this chart has been promoted from the appendix so I can show you the mix of our revenues and type as well as underlying growth rate in the first half and also where COVID is more likely to impact them. I would note that our events are always more weighted onto the first half. But other than that, it hopefully gives you a good sense of the shape of the group.

Over the past few years, we've taken steps to increase the amount and length of subscription contracts. And that is helping those businesses continue to deliver top line growth, as we are seeing already in the second half to date. The other lines will continue to be affected during the second half. Circulation volumes down due to lockdown restrictions, events not being held, advertising due to the weak market with print exacerbated by the lower subscription. Finally, reduced U.K. property volumes will impact our transaction revenues.

I'll now run through the businesses in a bit more detail. The B2B underlying revenue growth was 2%. Reported revenues were down 9% to GBP 345 million due to the disposals. In December, we flagged a significant investment that we will be making this year in product development and technology that supports future revenue growth as well as reducing future support and development costs. That affected cash OI and profit, but that's what we expected.

The impact of COVID on events and U.K. Property Information in March also reduced margins. I'll now run through each business in more detail. Starting with Insurance Risk, which delivered an encouraging performance. Revenues grew 2% on an underlying basis, increasing to GBP 123 million. We continue to see strong renewals, and there's been good demand for analytical services. Cash OI, operating profits and margins are lower, as we accelerate the product road map. As a reminder, all of RMS's development costs are being expensed. We're very pleased with the progress that RMS has made, and Paul will talk a little bit more about that later.

Looking to the second half and beyond. Around 95% of RMS revenues are from subscriptions, which averaged 2.5 years in length, and this provides a natural short-term resilience. To date, we haven't seen a material impact of COVID on the sales cycle at RMS, and encouragingly, the business remains on track.

Turning now to Property Information. The reported results reflect disposals. We now have just 2 businesses: Landmark in the U.K., which is the larger of the 2; and Trepp in the U.S. Revenues were down 2% on an underlying basis. In the U.S., Trepp delivered revenue growth across all business lines, which was actually very encouraging. But this is more than offset by the weakness in the U.K. As a reminder, total revenues were flat for the first 5 months, and there was a marked slowdown in the U.K. in March, as the lockdown began to hit transaction volumes. Landmark is, however, a business where the financials really only tell half the story. We are very encouraged by the progress that the team are making. They are strengthening their market-leading position, with good product enhancement, strategic bolt-ons and, importantly, some great customer wins.

The cash OI and operating profit margins reduced to 14% and 12%, respectively, reflecting investment by both businesses as well as the impact of lower revenues from Landmark. COVID-19 has had an impact on both businesses but very differently. In Trepp's case, there is clear demand for the insights Trepp can deliver, as they help customers understand their exposure, and we are already seeing that in their recent sales numbers.

In Landmark's case, approximately 85% of Landmark's revenues are driven by property transaction volumes. And both the commercial and residential markets are currently very hard hit. I'll give more color on the next slide. But in April, landmarks revenues were down an underlying 44%. Landmark has made good progress over the last few years to increase the proportion of variable costs, but the lower revenues will inevitably affect margins, and the business was actually loss-making in April.

Now this chart shows U.K. residential transaction volumes over the last 23 years. And we believe that there is a natural floor for housing transactions, and that is reflected on this chart by the horizontal line. It is underpinned by what's often called the 3 Ds. These are transactions that result from either death, divorce or default, and you'll see that in the 2008 and 2009 recession. Transaction levels were very close to what we consider to be that natural floor for a functioning market.

After the lockdown, many grid sales continued to progress, albeit slowly. But there was a marked fall in volumes. We currently estimate that volumes are running at less than half the 2019 level, significantly below what we consider to be the natural floor. Now the government has taken action to try and restart the housing market, but it's realistically likely to take time for transaction volumes to recover from these artificially low levels. And there may be more volatility in the short term, as the pre-COVID pipeline is depleted and the new pipeline grows.

Now to EdTech. There was continued strong and broad-based revenue growth from EdTech, up an underlying 10%. Hobsons is investing in modernizing its platforms, which will help reduce future operating costs and make product development faster and cheaper, and that is reducing current margins.

About 90% of revenues are from subscriptions, and the average contract length is 2 years. COVID is impacting its customers, how they operate and their budgets. The next 3 months are Hobsons' key selling cycle, and we would expect COVID-19 to affect new sales.

So now the final B2B slide, events. We saw an 8% underlying revenue growth for the first 5 months but then canceled all of March events, and that resulted in the 1% growth for the half. The bar chart shows the impact of the GBP 8 million of accelerated second half event costs and the GBP 3 million of sunk cost for canceled March events. Without those, the cash OI and operating profit margins would have been 20% and 21%, respectively.

We invested in content and marketing to drive attendance to support future growth, as notably at ADIPEC. And there has been a change in revenue mix. We are committed to running well-attended shows. And dmg events is working closely with major customers and sponsors. It is increasingly likely that the remaining September shows and some events scheduled for the next financial year will be canceled or postponed. We still have overheads, and the full year outcome will depend on the timing of insurance and decisions about future events.

So that completes B2B. Now to Consumer Media. Here's a breakdown of the 2% underlying reduction in consumer media revenues for the 6 months, with the 5-month rates alongside. The mail circulation accounted for about 40% of revenues, and that was down 5%, with volume declines partially offset by the 10p cover price increase on a Saturday edition and that was put through in January.

Advertising revenues were strong in the first 5 months. And you can see here the March impact of the growth rates for mail print advertising, Metro and MailOnline. And despite that, MailOnline grew 14% in the half, a continued good performance.

So overall, the Mail businesses were down 2% in the half, having been flat at a 5-month mark. Metro was marginally up and the 'i', marginally down. That's on an underlying basis, though its inclusion for the 4 months since acquisition resulted in total Consumer Media revenues growing in absolute terms.

Moving on to cash OI and operating profit. Following a strong first 5 months, we saw a significant impact of COVID-19 in March. But despite this, margins grew, and in absolute terms, so did profits. Operational execution and careful management of the newspaper cost base remains a priority. And total cost were actually down, and that's despite now including the 'i'.

Our usual policy is to avoid commenting on short-term trading periods, as honestly, generally, it's not helpful. Given the exceptional COVID-19 situation though, we think April's and May's trading information is informative. It would, however, be dangerous to extrapolate too much. But you can see that Consumer Media revenues were down an underlying 33% in April, and we estimate they were down 30% in the first 4 weeks of May.

Our print advertising has been particularly affected, whilst digital has been supported by increased traffic. Similarly, we've seen good growth for Mail Plus, which Paul will talk a lot more about later.

Lower circulation volumes also result in lower production and distribution costs, whilst there is a higher drop-through to profits from advertising. The net impact was that Consumer Media operated at a loss in April, with a negative operating margin in the mid-single digits, though we currently expect the profit performance to improve in May to just a small loss. Now we don't know how indicative April and May are for the rest of the year, as it will depend on the easing of the lockdown and the advertising market.

Now to JVs and associates. You'll see on this slide that our net share of operating losses from joint ventures and associates was GBP 7 million, and that is a GBP 25 million change on last year, and that's following the distribution of our stake in Euromoney.

Since August, we've held a 45% stake in Yopa, the U.K. hybrid estate agent, and that compares to 26% last year. So in other words, we're consolidating a larger share of their losses. Clearly, a tough market for them currently, but we are pleased with the growth in share that they are taking.

Cazoo, the disruptive U.K. used car business, had a successful launch in December, and as planned, a funding round that we participated in, increasing our stake to 23% from 19%. Now Cazoo remains an investment and isn't consolidated in the numbers here. It is generally a difficult time to be an early-stage business, but we believe that current climate will accelerate the disruption of markets, and we are pleased that our major holdings are well funded.

Now this slide shows exceptional items, amongst other things. And not much to comment on, which actually is a good thing, an exceptional cash credit of GBP 8 million in the half and significantly lower amortization and impairment charges. The profit on the sale of assets was GBP 179 million, and that's mainly the Genscape disposal.

Looking ahead, we expect a noncash charge in the second half of the year as we are amending the terms of the RMS 2015 incentive plan to make it more appropriate.

Now this bridge chart shows the movement in our cash position in the half. We started the year with pro forma net cash of GBP 247 million. Cash OI totaled GBP 75 million, and there were GBP 30 million of other operating cash outflows. And this compares to GBP 61 million in the first half last year, and it includes the usual incentive plan payments.

Total operating cash flow was consequently GBP 45 million, a conversion of 69%, and that's up from 40% in the first half of last year. And we had the usual payments for tax and pension. Although the dividend per share continued to increase, the outlay was lower this year, following a reduction in share count. Outflows also include GBP 89 million for acquisitions and investments. That's notably GBP 50 million for the 'i' and GBP 37 million for Cazoo.

Pro forma net cash at the end of the March was GBP 163 million, and that excludes the GBP 117 million that has been ring-fenced for the pension schemes and GBP 74 million of lease liabilities that are recognized per IFRS 16. Including those, the statutory net cash position was GBP 206 million.

In the current climate, I also think it's important, not just to look at cash, but look at the availability of cash. We have GBP 203 million of bonds that are not due until 2027. And our gross cash was GBP 361 million at the end of March. We also have GBP 380 million of committed bank facilities that run to March 2023, so over GBP 700 million available in all.

Now capital allocation underpins our whole strategy. As you seen, we are continuing to invest, and that is because we see opportunities for future cash generation and value creation. Our framework remains unchanged. Organic investment is the priority, followed by the dividend.

We continue to look for bolt-on opportunities but will remain structured and disciplined in our approach. It is important that we continue to maintain the financial flexibility to invest as opportunities arise, and our future capital allocation decisions will depend on how the economic outlook evolves.

Like the majority of businesses, we are clearly facing some very difficult conditions in some of our markets. In April, group revenues were down an underlying 23%, and the operating loss was GBP 3 million, which compares to a GBP 5 million profit last April.

Now to break that down a little bit more for you. B2B revenues were down 11% in the month. The Insurance Risk, U.S. Property Information and EdTech businesses continued to grow, up 5% in the month. We expect these businesses to be less affected by COVID-19 and to deliver growth. More events could be postponed or even canceled, and overhead cost continue to be incurred. We expect to -- the benefit from insurance, but exact timing of that is uncertain.

Landmark, the U.K. Property Information business, made a loss in April, as revenues were down 44%. The steps taken by the government earlier this month to stimulate the market are encouraging, but they will take time to flow through.

Turning to Consumer Media. As I outlined earlier, April revenues were down 33%, and the business made a mid-single-digit margin loss. We've seen a slight improvement in each of the past 4 weeks, with revenues down 30%, and we expect the business to make a small loss this month.

So to finish, some comments on the outlook. We don't know how long the tough conditions will last or the rate at which they'll abate. The U.K. lockdown, the advertising market, and the U.K. property market will all play key roles. And given the uncertainty, it is imperative that we remain agile, alive to our options, reducing costs and investing as appropriate.

We suspended the full year guidance in March, and that remains the case. Although the outlook is uncertain, we are well positioned to weather the storm, not least because of our strong balance sheet and commitment to maintaining financial flexibility.

I look forward to taking all of your questions later, but now I'd like to hand you back to Paul to provide an update on each of our businesses.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [3]

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Thank you, Tim. Let me now turn to strategy and the future. As Tim has discussed, we are adjusting with care to the current market conditions, but fundamentally, our strategy remains the same. We are applying a laser focus on operational execution, reducing potential cost commitments and realigning choices about where we invest. We will continue to invest in our core strength, quality, must-have proprietary content, combined with data science to deliver market-leading products that our customers trust and love to use.

We are adapting our products to the new reality and end of life-ing those that are no longer viable. We are prioritizing what moves the needle most in the reality of this new world and preserving future optionality, and we are remaining alert to the potential opportunities as they arise. And amidst all of this, we are keenly aware of the portfolio roles of each business as they evolve and grow.

Let's take a look in more detail business by business, starting with RMS. At the beginning of May, RMS ran their Exceedance customer event remotely from everyone's sitting rooms, which I must say went brilliantly with double the attendees of last year. Encouragingly, the audience comprised a cross-section of people from scientists and modelers through to C-suite leaders. There is much excitement from customers about new product launches and great engagement with RMS's thought leadership on pandemics and climate change.

I was particularly impressed by the participation in the breakout sessions, where there was a lot of Q&A. And the general gist was less around why they should adopt new models and migrate to risk intelligence and more about how and when.

Despite the pandemic, I'm pleased to say that the product delivery remains on track. Risk Modeler 2.0 will be available this June on the Risk Intelligence platform, a major milestone. It will enable customers to run RMS's existing nat cat models on a single platform. This enables complex analysis across multiple perils and significantly faster run times and, very importantly, allows customers to move to the cloud, reducing their total cost of ownership.

In addition, there are advanced applications for the Risk Intelligence platform. An enhanced version of ExposureIQ is being released in September and will help customers gain a quicker assessment of potential losses before, during and after a catastrophic event. While TreatyIQ enables the analysis of immensely complex reinsurance portfolios. Model development continues unabated, with upgrades coming to existing models and the release of a European Convective Storm HD model. Also, all HD models will be available on Risk Modeler 2.0 by September.

The advent of COVID-19 makes the importance of high-quality science, analytics and tools even more apparent. And every time I talk to the team, I'm amazed by their energy, expertise, creativity and relentless focus on delivering for their customers.

Now to Property Information, starting with Landmark. Although the current market conditions are challenging, as Tim has already discussed, the business is positioning itself well for the COVID and post-COVID future. Its market-leading products, services and data now extend across the entire property transaction value chain, thanks to strategic bolt-on acquisitions, like Optimus and OneSearch Direct, and some very successful product development, to ensure it continues to lead through the digitization of the sector.

Landmark is using the time now to accelerate the development of digital tools, building common components to deliver long-term efficiencies as well as retiring older products faster. And because they haven't furloughed any staff, not only are they enhancing products, their sales teams are also out there with customers, strengthening their relationships and supporting them as the market reopens. All this positions us well, and we fully anticipate further market share gains as a result.

Now moving on to Trepp. Just as in The Great Recession of 2008/'09, it's times of uncertainty like this when data that shows you exactly what's going on in your portfolio is at a premium. Analysts need access to in-depth CMBS data and insight they can rely upon with speed and efficiency, which is why Trepp sales pipeline this month for both new and existing clients has been their strongest ever.

In addition, the CRE and banking businesses are flourishing, reaping the benefits of organic investments we have made in product development over the past couple of years and really coming into their own, as new customers and new contracts come in. Trepp has brought its expertise in analyzing complex-structured debt instruments to the CLO market. Its products are receiving great reviews, and we are investing in further enhancements and sales initiative to grow this very exciting part of the business. All in all, Trepp is proving, once again, that it is a growing and dependable business and a strong cash generator for DMGT.

Now to our EdTech and Events and Exhibitions businesses. First, EdTech and Hobsons. Hobsons has continued to grow strongly in March and April. Our sales pipeline remains robust, and we continue to generate new sales. To date, we've seen high retention rates, thanks to the quality of the products and the impact that they have. On top of that, we are investing to accelerate the modernization of our platforms. This will help reduce future operating costs and enable faster and cheaper product development, further strengthening those customer relationships by responding rapidly to their evolving needs.

There's much speculation about the long-term impact on education as a result of COVID-19. Schools, colleges and universities across the U.S. will be under budget pressure in the coming year, and though we are resilient to fluctuations, we are not immune. Hobsons is entering peak renewal season now. And by August, we will have a much better idea of the lay of the land for FY '21 and beyond.

Let's move on to dmg events. The travel and social distancing restrictions have clearly hit the business hard. Thankfully, that doesn't change the fact that dmg events operates market-leading shows in its sectors and geographies, and it is, therefore, well positioned to be the most resilient upon market recovery. Many of you have recently experienced the phenomenon of video fatigue and the difficulty of building strong relationships through a screen, so you will understand the continued importance of face-to-face events in a digitizing world. You can't touch machinery or look someone in the eye properly online. To that end, we have put ourselves in a good position for when events resume, completing the acquisition of 11 small shows in April, further strengthening our market-leading position in the energy sector and expanding our footprint in Africa.

Also, we have been working closely with our partners with venues and industry associations to define the industry standards and a framework for safe and successful events in the future. The strategy now is to focus on the core of the business. We are being pragmatic, practical and long term in our thinking, weighing up how best to shift events to suit customers and suppliers and looking at new opportunities resulting from COVID. We remain confident in the long-term future for events.

Finally, let's take a look at Consumer Media. There is no doubt that at a time like this, we are reminded of the crucial importance of news and information. As a result, we have seen an accelerated migration to digital news, as people seek out ways of connecting with and understanding what's going on in the world around them. This April, MailOnline has seen traffic up 34% to an average of 169 million minutes each day, and that excludes time spent viewing videos. This is a testament to its focus on delivering great content for its highly engaged direct audience.

Meanwhile, Mail Plus, the digital version of the Daily Mail, has increased to more than 80,000 paying subscribers, doubling the number since February. While the daily briefings newsletter now has more than 270,000 unique weekly visitors, up from 20,000 in December, offering additional blogs, vlogs and podcast with insight and entertainment from our most popular journalist and columnist. We are investing in Mail Plus because we believe it will play an important role in the future of the Daily Mail. And finally, for the Daily Mail itself. As you would expect, we have seen more subscribers to the home delivery service, up 65,000 since February.

Metro, by nature of its distribution, obviously reflects commuting habits, and so volumes are low currently but will increase again in time.

Following regulatory approval of the acquisition of the 'i' in March, integration is on track, and dmg media has an expanded proposition for advertisers, which will help as the market recovers. We are clearly experiencing a difficult advertising market, and it's hard to comment on how long that will last. Similarly, only time will tell how new readership habits will evolve.

Importantly, we are continuing to deliver great content to our readers however they want to get it, and their continued high engagement will support revenue recovery in time. There is no crystal ball, but after an exceptionally tough April, the progress to a small loss in May is clearly encouraging.

To summarize, DMGT has proved itself resilient and adaptable in the face of the incredible conditions we continue to experience. We acted quickly and sensibly, putting in responsible measures to safeguard our people, to minimize the impact to the business and to stay close to our customers throughout. And we've worked hard to find the balance for each business that sees us through this crisis, protects profits and puts us in the best possible position for the recovery.

I joined this business 4 years ago because of the brand's heritage, its talent, its ability to adapt and evolve and the important role its products play on a daily basis in customers' lives. Over the past 3 months, I've been reminded of the value of those 4 assets, time and time again, as I've watched the DMGT entrepreneurial spirit and resilient nature come to the fore as we've taken on the challenges this pandemic has thrown at us.

I'm so proud of how the businesses have responded. And would like to say thank you to everyone across the DMGT Group for their continued focus, grit and determination, and their good humor and compassion. They have gone above and beyond every step of the way.

I would also like to thank all of our customers for their continued loyalty and support. Before COVID-19 arrived in our lives, we are looking at the prospect of a good financial year at DMGT, and my confidence was riding high. Much has changed over the past 3 months, but my confidence in each of the businesses and in the group's ability to create lasting long-term value remains as strong as ever. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We will now take the first question from Alexander Mees from JPMorgan.

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Alexander Mees, JPMorgan Chase & Co, Research Division - Head of UK Small and Mid Cap Research [2]

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Paul and Tim, I have quite a few questions, but I'm going to restrict myself to 3. Firstly, I just wonder within events, if you can comment on what the cost base looks like in a zero-revenue environment. So what sort of costs are inevitable in the second half despite the fact that we have no events?

Secondly, thinking more longer term in events. I wonder if virtual conferencing is a possibility at all for the business, or whether face-to-face conferences are just too central to the DNA of the business to make that a viable direction for you to go.

And finally, within Consumer Media, I wonder if you, at this very early stage, see any lasting impact of the virus on the consumption of physical newspapers, especially the Metro, I suppose, and how you might adapt to that if there is a reduction in demand over the long term.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [3]

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Okay. Thanks, Alex. Thanks for starting with a nice easy one for me. It's very kind. So you're right, events, I think we've been pretty clear in the presentation earlier around the impact on events. I guess what you're trying to do is model what you think the cost could be in the second half of the year. We've been pretty clear on the new FRC guidance around what we have to and not have to do. So one of the challenges of that is, if you've moved an event out of the second half of the year into the first half of next year, for example, you're going to have to take the costs of that second year event in that period. I think it's quite an important point because the FRC brought this guidance out. Well, for me, by the time I woke up on Thursday morning, it was here. Prior to that, we were going to take those costs either as exceptional or in the second half of the year. And so it's quite hard for me to answer that question for you in terms of exactly because of that treatment of those events. And I think you'll see that challenge for other event operators. And so I think we're probably the first person who's done that.

So the actual events, I'll have -- the actual cost I will have in the second half of the year will be costs, like our technology costs, will be the team that we keep on. Just because we're running an event doesn't mean that the customers aren't coming in. Actually, we continue to take orders for events and people wanted to know what's happening. So part of the important thing for event is to make sure we retain our leading positions in those events, and that means talking to our customers, sponsors, et cetera.

On the second part, virtual conferencing. Look, I think by -- my personal view is people like the face-to-face meetings. They still like that. It's an important part of business. We've often talked about it as an antidote to digital. I think we will end up doing more and more things digitally, if you will, that helps that conference because maybe everybody doesn't travel. But too early to get sort of definitive things on that. But what I would reiterate is we continue to see people wanting those conferences. We talk about postponing conferences, i.e. moving to another date. Why are we doing that? Because we're talking to our customers and sponsors around what they want to do.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [4]

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And I'll take the third question. In terms of consumption and print, the first thing I'd call out is how Mail Newspapers performed during April and May, where circulation was down only around 9% relative to the market. I mean that is an outstanding achievement and one that reflects our continued investment in editorial, the strength of the brand and really sort of being in tune with our readers through campaigns like Mail Force.

Metro, yes, not surprisingly, we adjusted companies down to the reduced levels of going through using public transport. We felt it was important to keep producing the paper, in particular, to support those key workers who are helping us, who are using -- continuing to use public transportation to get to work. As the lockdown eases, we expect distribution to increase in line with the usage of the public transport. But in terms of having a crystal ball to know exactly how and when that's going to happen, we don't have that.

And then finally, I'd call out the 'i'. If you look at the -- if you de-average the 'i' circulation figures, what you'll see in there is the removal of around 50,000 bulks a day. It was part of our plan. It was part of management's plan, and it was put in place fairly quickly. And that's driving the -- their number, their headline circulation number. The rest -- their performance, excluding bulks is roughly in line with market.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [5]

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Lisa, any other questions? Operator, can you hear us? I think we may have lost some sound here.

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Adam Webster, Daily Mail and General Trust plc - Head of Management Information & IR [6]

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Yes, there are some questions. We're just reconnecting the operator.

(technical difficulty)

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [7]

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Thank you very much. Hello, operator, I think we're -- hello, Lisa?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [8]

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Can any of the members on the call hear us?

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Adam Webster, Daily Mail and General Trust plc - Head of Management Information & IR [9]

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Yes.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [10]

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Okay. Well, why doesn't somebody ask a question, and we'll just manage it without the operator.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [11]

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Nick? Nick Dempsey?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [12]

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Patrick?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [13]

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For those of you who can hear us, we're having a little bit of trouble contacting -- connecting with the operator, but the team -- we're working on it. The team will be with you shortly.

(technical difficulty)

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Operator [14]

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Pardon the interruption. Can we continue with the Q&A?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [15]

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Yes, please.

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Operator [16]

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All right. So we'll take the next question from Robert Berg.

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Robert Berg, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [17]

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Great. Finally. The first question I have is on events and the Big 5 Dubai being shifted to September '21. I guess it's fair to assume no events in November '21, and so do you skip a financial year? Or do you plan to keep the event in September from now?

The second question on M&A. I appreciate always looking at numerous opportunities. You mentioned 11 acquired small events in April. Has there been an obvious increase or decrease in the pace of companies calling you up or companies you've been looking at since lockdown has began? And are you kind of excited about any new opportunities that have arisen?

And the third point on the dividend, just for my own kind of clarity, a slight change in the tone. It sounded on the outlook for obvious reasons, but then at the end, still reiterating the policy of real dividend growth per share. Can we read anything into what you're saying? Or are you still committed to growing the dividend in real terms, unless there's a material kind of deterioration to what you're currently seeing?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [18]

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Okay. Let me start off with your events question. You're right, we have moved Big 5 Dubai from the first quarter to the fourth quarter. I think it'd be too early for me to comment on what will happen for future years after that. That's really around talking, again, with our sponsors, with our major customers at that event, so as the timing is right for them. And this isn't just a DMGT event. This is actually in collaboration with our customers because the events are massively important to them, and that's why we've made that event. M&A?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [19]

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I think the -- in terms of M&A, yes, it won't surprise you given the strength of our balance sheet, our net cash position that we have been on the receiving end of many calls. We have a very -- we're very disciplined and have a clear strategy. And so in many cases, it doesn't take us much more than about 5 minutes to say it's not on strategy for us. But what I would iterate -- what I'd reiterate is that we are a disciplined investor. Our approach to assessing opportunities hasn't changed as a result of COVID-19, and that we have -- for some time, we've had a -- we've known the types of, in particular, bolt-on opportunities that would be accretive for our businesses and have watching briefs on them.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [20]

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So on the dividend, Rob, I think you said it yourself. What we said is fairly obvious. I think you've summed it up better than I was going to do. So yes, I think that's what that statement says.

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Operator [21]

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We'll take the next question from Nick Dempsey from Barclays.

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Nicholas Michael Edward Dempsey, Barclays Bank PLC, Research Division - Research Analyst [22]

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I've got 3 still. First one, so if we're just looking at the second half operating profit before associates, we've got some losses initially in Consumer Media and property. And we've got uncertainty about insurance and exhibitions. We got our corporate costs and we got profit from RMS and a bit from EdTech. Should starting point for second half operating profit before associates be not very much, balancing those things out?

Second question, we've seen Facebook and Google recovering really pretty well in May. Online news advertising haven't, you guys and elsewhere. I mean do you think that inside online advertising, we're seeing an accelerated structural swing to the big players, which is going to be hard to recover regardless of number of people viewing your sites?

And third question, just going back to Rob's question on M&A, I suppose. But I suppose, the sort of 2 areas where you might look to buy things are Consumer Media and growing subscription information. Second part of that, which is obviously the more exciting structurally, hasn't de-rated. So when you were talking about being happy to sit on a net cash position, there'll be some interesting opportunities in the downturn, are actually the exciting assets that would really add to the quality of your group any cheaper now than they were before?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [23]

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Well, there's some more or less [doors]. We need to be quicker getting questions out. This gives you less time to think of such a difficult ones next. So thanks for that.

So I'm trying very hard not to give you a forecast for the second part of my answer. But I think if you look through to some of the comments that you talked about that -- media, we talked. We're very clear. We said they made a small loss in May. I think that's a really fantastic achievement. And I'm sure you noticed it, but I'll just reiterate to Paul's comment earlier on, circulation revenue is only down 9%, I think, is really an incredibly impressive performance. So that gives me a lot of confidence in how media is performing for the rest of the year.

Let me just answer your question more directly on insurance. I don't think there's uncertainty around insurance. I think there's a certainty around the payment -- the timing of any payment we get from them. We're working very well with insurers, and they've been supportive for us through this period.

Yes, there will be some corporate cost. Apparently, it's worth keeping pointing myself around to help us through the year, which is excellent. But you're right around RMS, Trepp, which you missed out, and Hobsons. They continue to perform very well. We're very pleased with their performance in the first half. And I think we've been quite clear how they're getting on so far for the rest -- for the last couple of months. So I'm slightly more positive than your -- than where you were on that.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [24]

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I'll take the second and third questions. I mean in terms of Facebook and Google, I think the -- when we look at what's happening with digital advertising, our conclusion is that a lot of it has to do with actually the liquidity of the auctions. So I think it's sort of not surprising in when you use auctions that when there's fewer buyers, that the price goes down, the yield goes down. That's what we're seeing. There's a lot of SMEs who participate in the auctions. There's a lot of larger advertisers who are out of the market right now. We have seen some firming up of yields, and we've seen some advertisers returning to the market. And we're hopeful that the easing of the lockdown will continue that. But I think our view is that digital advertising, the current sort of decline in yields in current advertising are driven more by option dynamics and supply and demand than structural change.

I'd also note that we watch with -- we are watching with interest the activities of the CMA or the DOJ and the state attorney generals in the U.S. who seem to be building momentum in their investigations of potential anti-competitive activities in online advertising. And our -- yes, again, watching those with interest.

In terms of M&A, you're right. Good assets with bad balance sheets as well as bad assets with bad balance sheets have been re-rated. You can see that in the placements that they're making, et cetera, and then some of the deals that have taken place. The good quality assets, the franchise assets that we're interested in or the bolt-on acquisitions for our businesses that we've been looking at are still fully valued. I think typically, it takes 6 to 12 months or so after a recession for crisis to re-rate, so we remain disciplined.

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Operator [25]

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We'll take the next question from Katherine Tait from Goldman Sachs.

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Katherine Tait, Goldman Sachs Group, Inc., Research Division - Associate [26]

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Just drilling down a bit more on the advertising side. Can you remind us what your breakdown of sort of end markets is in terms of your advertising? I think, historically, you've said that travel has been about 8%, but anything you can do to kind of [pop out] for us would be helpful.

And then secondly, on EdTech. Can you remind us what is the sort of main customer base for the various businesses within your EdTech offering? And yes, I think you've mentioned that the renewals are sort of coming up. So any additional color on what you're seeing in terms of that would be helpful.

And then finally, just on RMS. Can you help us unpick, I suppose, what you expect the ultimate end market impact to be following COVID-19? I know that there's been various estimates out there in the market about what this means to the insurance industry. Can you perhaps talk about how you see the RMS product positioned within that?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [27]

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Okay. Let me -- why don't I take the first one, Paul? I'm not sure we've actually said exactly what the split is, Katherine, but the sort of big areas that I would call out, supermarkets retail is a fair chunk of it. You're right, we have quite a lot of travel for us. And I think, yes, Paul talked about and you mentioned earlier on some of the stuff we're doing in terms of travel advertising, which I think is fantastic.

We -- I think the heart of your question, if I'll try to answer it slightly differently, is in terms of advertising, generally, we're seeing retail down. Obviously, there are going be some other. Travel, we've, obviously, seeing down on our -- hence, interesting not as much. But things like financial, motors, entertainment, actually we've seen up. So again, always, it's that -- it's quite difficult to forecast exactly which business is going to do what, when, but hopefully, that gives you the flavor you're looking for.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [28]

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So your second question was around EdTech. We have 3 primary product lines. Naviance targets K-12, and it's -- that customer base further segments down to large districts like Los Angeles or Chicago. And we have smaller public school districts, and then we have private schools, all U.S.-based. Intersect is targeting the admissions teams at just north of 4,000 colleges and universities in the U.S. Starfish is targeted to those same colleges and universities but tends to be the provost and the guidance counselor who are looking at ensuring student success.

And then in terms of RMS, again, I think the focus on RMS right now is all about delivering the road map. And I think I touched on the plethora of announcements that were made at Exceedance, which is all on track, and then starting the process of migrating customers to Risk Intelligence and our HD models.

I mean in terms of the ultimate end market, I think it's -- really, it's just too early to tell in terms of specifics on how the market is going to evolve. But I think the -- our view that risk is becoming ever more complex and ever more important to understand, I think COVID-19 highlights that. And we expect that to be a long-term tailwind rather than a headwind.

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Operator [29]

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We'll take the next question from Natasha Brilliant from Citibank.

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Natasha Brilliant, Citigroup Inc., Research Division - VP [30]

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I just wanted to come back actually on Katherine's question on EdTech, and just whether you can give us any color on renewals and performance in May. I know you said April, you saw growth. But if you could just give us a bit more color on May and what you're seeing there.

And my second question is on events. The acquisition is, again, focused on energy. So I just wondered if that's a signal that you're very much doubling down on that, or whether there is some possibility of diversification in the future, it just so happened that this asset was in energy.

And then finally, a question on Landmark. I think, historically, you've talked about a bit of a lag between the pickup in the U.K. property market and then an uptick in Landmark revenues. Clearly, what's going on at the moment is unprecedented, but just how should we think about that sort of time lag there?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [31]

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Natasha, thank you. I think Paul thinks I'm the one to answer all 3 of them, so let me have a go here.

EdTech renewals in May -- the reason that we haven't given you May is because May hasn't closed for us, so we can't. It's a simple point, but a little bit more color for you. The major selling season for EdTech is actually the next 3 months, so after that, this month. So that's why it's important for the rest of this year. But roughly, if you're trying to work out this year, probably 80% of the revenue was already -- what I would describe as in the bag for this year, if not more for that.

Second question was on events. You're right, the acquisition we just made was in energy. That's an acquisition we've been talking to for quite some time. It's a classic bolt-on for us. It helps us expand into some more geography with the shows. Why do we like that asset? Because -- and that particular route? Because working with our customers, et cetera, those -- that's the area that they wanted us to expand into, so that's what we've done.

I'm always happy to look at a bit of diversification in events, but they have to be the right type of shows for us. It's not just any events. It's the stuff that we like that we've talked about.

And then your nice easy question at the end around Landmark. I'll try not to use the next hour to answer this question, but what I've seen in terms of the lag is, if you look at the -- what we've talked about, the market for Landmark -- I showed you the chart in terms of is now below those 3 Ds level, so it's artificially low. But what that means to me is there's still pent-up demand coming through the system there. It's why it will continue to progress, continues to have surveys, et cetera, done through lockdown, and we'll part of it through lockdown because we want to complete that. So I think that you have 2 aspects happening there. You have that -- that -- I think, it's about 180 a [den], something like that. So there's a lag here. You've got the stuff coming through, then you got the government trying to reenergize the housing market, which, obviously, we're very supportive of. It's very important to the U.K. economy generally. That lag generally, from, yes, the time you look at the house, the time we get our money, is in the order of 180 days, something of that, maybe slightly less but that sort of range. So I think the dynamic you're going to see over the next few months is a slow exhaustion, if you like, of the pent-up demand, offset by that new demand coming through. So as a result, we watch exactly the numbers that you talked about, even as easy as looking at how many people are actually looking at houses, how many houses come onto the market, et cetera, those things.

So I think at the moment, it's encouraging in the first few days, but that's not a trend. It's encouraging. My own view is it's probably a little bit more choppy as you see that old demand coming through -- coming out and new demand coming in.

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Operator [32]

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We'll take the next question from Adrien de Saint Hilaire from Bank of America.

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Adrien de Saint Hilaire, BofA Merrill Lynch, Research Division - VP & Head of Media Research [33]

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I've got a few questions focused around events. Can you first discuss the forward booking trends that we are seeing at ADIPEC for the rest of this year?

Secondly, you mentioned in your commentary that it's increasingly likely that you, again, see in calendar Q4 get postponed or canceled. I'm just curious if it's because trading venues have not opened yet and you don't expect them to open. Or is it because you feel lack of appetite from exhibitors or attendees to come? And then if you can provide any view on this, that would be incredibly helpful. How do you think it will realistically take for dmg events to get back to the pre-crisis level?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [34]

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Why don't I help Tim out and try and take a few questions. So in terms of forward bookings for ADIPEC, it might surprise you, but there are still bookings coming through, and our salespeople are actively engaged and talking with customers. I think the -- with respect to ADIPEC, we made the decision in consultation with our partners of ADNOC, with the exhibition center and with the industry. And we all felt it was premature to try and put something in place in this calendar year. And that was really the driver of the decision-making, to give us as much time as possible post the current lockdown that we're in order to give as much time as possible following the current lockdown to, yes, hopefully see some recovery, see more comfort with travel and see more visibility before running the show.

In terms of calendar Q4, again, I think it's a similar response. We've been working with the industry association, with exhibition centers, et cetera, to venues, with partners to think about when the right time to hold shows is. And most of the people that we're working with are thinking, give us as much time as possible in order to ensure that we are able to provide a safe and secure environment, that we're able to adjust to post-COVID or post the current lockdown environment and set ourselves up for success.

In terms of when the business recovers, when we get back to pre-COVID levels, again, I think that requires a crystal ball that I don't have. But I think, as we've seen in previous pandemics and previous recessions, these sectors do recover, and they do grow.

And as Tim said earlier, yes, we believe in events for the long term. We take a long-term perspective. And we believe that digitization, which I suspect will accelerate even faster coming out of COVID-19, will create -- reinforce the need for face-to-face activities between buyers and sellers, between operators and policymakers.

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Adrien de Saint Hilaire, BofA Merrill Lynch, Research Division - VP & Head of Media Research [35]

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Understood. Just to come back on the first question though. So despite those efforts, I mean, realistically, the number of exhibitors is going to be down, I would expect, at ADIPEC?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [36]

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I think we've answered the question. I think we're clear what we are. And the important things -- I think the heart of your question is, to go back to the heart of your question, you want to run a show where all the main customers, sponsors are at, yes? So this is not a question of DMGT saying, "I want it to happen on this day or that day." It's very much collaborative. It's making sure the shows happen at the right time. I'm not talking about it, but there are other shows that have moved. They've moved to a deliberate spot, not a random spot, to make sure our customers, exhibitors, et cetera, can actually make those events and have a successful event. That's the secret. Yes.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [37]

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And I think the other thing of getting through your question is, yes, it's -- it is highly likely that exhibitors will be down, that attendees will be down and that revenues will be down. But the reason why you own the types of shows that we have market-leading in their geography, in their sector, is that at times like this during downturns, they outperform the market. That's why you own top shows and top shows, time and time again, have outperformed in recessions.

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Operator [38]

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We'll take the next question from Patrick Wellington from Morgan Stanley.

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Patrick Thomas Wellington, Morgan Stanley, Research Division - MD and Head of the European Media Equity Research [39]

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Yes. A couple of questions on potential enduring effects, if you like, from the COVID-19. First one on Consumer Media. I think Nick was picking up on this. Do you think that, if you like, that lost circulation will return? Or do you think that there will be a lasting impact of people having got out of the habit maybe of buying their newspaper? And do you think you'll see a lost advertising share? Obviously, you've got those big categories of travel and retail, but do you think that there will be an advertising shift as you partly intimated towards the digital business?

And same question in effect on events. 2 parts. When, if you like, do you think we'll be back to normal conditions? Do you -- is there a magic wand at the end of December and you get back on to the original schedule from the start of calendar '21? Or will there be further deferrals in '21? And what are the sort of cost implications of the measures you're going to have to take for security? And do you think that exhibitors will -- although they like to touch on fuel products, that the exhibitors and customers will come back in the same style?

And then a much more mundane one, 39% tax charge in the first half. Should we apply that for the year? Or what is your best guess for the year?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [40]

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Let me pick up Consumer Media, and maybe I'll let Tim try the events question this time and definitely answer the tax question.

In terms of Consumer Media, will the lost circulation return? We're pragmatic. The newspaper industry is in structural decline. What I can -- what I am confident about is that Mail Newspapers will outperform the market, will continue to outperform the market. But I'm also extremely encouraged with, and I use extremely, don't use that word that often, is how we've been able to develop our digital subscription products and our home delivery service. Digital subscription products in Mail Plus, up 100% from 40,000 to over 80,000 subscribers. Weekly unique visitors to Mail Plus, up over 10x from 20,000 in December to over 200,000 and another 60,000-plus home delivery people. I think maybe around -- the numbers aren't -- the news agents don't provide, yes, the same kind of numbers that we get if we were managing it 100% ourselves, but we reckon somewhere maybe around 20% of our circulation is home delivery. I think all those give me a lot of confidence longer term.

In terms of advertising share, I think we will continue to get our fair share and more of advertising. I think advertisers, going forward, want -- they want automation. They want to be able to get to one place and get to sell a lot of their advertising needs. And, yes, with the acquisition of the 'i', we further strengthened that position with our strong [reach] audience and world-class programmatic advertising team. We score very well on the automation side as well.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [41]

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So Patrick, yes, oh, wouldn't it be lovely to have a magic wand, yes? Be the Harry Potter of the events business and get every -- back to normal. I think the honest answer to your question is, it's too early to say. I'll just repeat. We spend a lot of time with our exhibitors, with our customers, with our sponsors, with the venues, ensuring that we can run shows both safely and at the right time for people.

I think it's too early to comment on when it comes back or not. But all of that -- and I'll just repeat Paul's comment earlier on, yes, people are still making bookings for shows, so there's still demand for the great shows, yes? Do I think some of the small shows will be canceled? Yes, I think we've already talked about that. Yes, I think I'm sure there will be, but I think the big shows will continue to work with our customers there.

And the very clever question, very clever question, Patrick, on the last one because you're trying to get me to give you a number so you can back into my profit number. So how about I just say, I don't expect it to be a lower percentage tax rate for the full year.

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Patrick Thomas Wellington, Morgan Stanley, Research Division - MD and Head of the European Media Equity Research [42]

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Okay. And margin effects in exhibitions? I mean is there a permanent reduction in the margins of exhibitions because of all the measures you're going to have to put in place in the future?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [43]

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I think -- again, I think it's hard to speculate at this time. I think if you look back to SARS, it affected the events, it affected the market for a few years. And then it came back to normal and accelerated out of that.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [44]

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I think, Patrick, the -- I think the bigger question you're going to have -- challenging that you have in terms of profitability is actually, over the next couple of years, people having to move shows from different times, different others. And again, I'll just take you back to the FRC's guidance that you have to -- yes, again, that came in for us, literally. Yes, what I was very pleased is that the Thursday morning, when I woke up to find out there's a change on their releases. I went out to know how pleased he was. But, yes, I think you'll see that as a bigger volatility number for both us, candidly, going forward and every other events, exhibition operator.

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Operator [45]

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We'll take the next question from Robin Jenner from BAE Systems.

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Robin Jenner;BAE Systems Pension Funds Investment Management Limited;Analyst, [46]

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I just wanted to ask a little -- for a little more detail on the insurance because, I guess, we heard virtually no businesses were covered apart from the Wimbledon Championships. So what are you covered for in the events business? What aren't you covered for? And what are the barriers or impediments to making a successful claim?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [47]

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Okay. So I won't give you all my insurance because that will take too long, but I'll just talk about the specific subset of our insurance that we have for airborne viruses and the like. Essentially, that covers a -- well, let me explain what it is. We have an insurance for, as Paul mentioned earlier, SARS. So when SARS happened, events get canceled and moved. We bought insurance for that, that enables us to recover lost profits and costs if those events are canceled. We are continuing to work with the underwriters and loss adjusters on that and, so far, have been very pleased with their reaction.

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Operator [48]

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We'll take the last question from Annick Maas from Exane BNP Paribas.

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Annick Tonie Maas, Exane BNP Paribas, Research Division - Analyst [49]

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I have 3 questions. The first one, of course, on events again. So you said that exhibitors and visitors are down, but could you maybe also tell us by how much did you have to adjust the pricing for the events that are still going ahead before December?

My second one is on ADIPEC. If you could maybe tell us how much of the forward bookings are done by companies outside of the region, so -- which I would call international, I guess?

And then on the venues that you work with over 1 year, typically, how many do you know in percentage points that we are already up and running? And how are the price negotiations going? Are they charging extra for the additional safety measures that they have to put through?

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [50]

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So let me start. I can't think of any material price adjustments we've had to make for any shows. I'm just looking at Paul as well. I can't think of any that we've done on that, to answer your first question.

Answer to your second question, I think that's a little bit too commercially sensitive for me to give that out. I'm sure my events team would be after me straight after this call if I was to give you that.

And probably the same answer for your last question. We -- I don't get into price discussions we have with different venues, et cetera, et cetera. Suffice it to say that venues are an important constituents of what we do. We're as important to venues as venues are to us. So there's very much a good relationship between the 2 of us on that. And you see that in terms of the move for Gastech, moving from this year to next year. That's the same venue with Singapore. And Singapore actually were very helpful and very constructive in our workings with them.

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Adam Webster, Daily Mail and General Trust plc - Head of Management Information & IR [51]

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Okay. I think we just have one final question actually from Matthew Walker, who is trying to get back into the conference call from Crédit Suisse. And that is, in the U.S., do you have a sense of the college enrollments decline in the fall of 2020?

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [52]

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The short answer is no, we don't. As Tim said, Hobsons is entering its main selling season. So we'll have much better visibility on that over the course of the next 3 months.

For many schools in the U.S., the commitment they're vying was the 1st of May. Some schools extended that for the 1st of June. But I think the latest information is that the vast majority of schools are still deciding how the -- what form they're going to open up in, if they're going to be completely virtual, completely remote, all on campus or some hybrid. And I think that will impact the decision of students. But it's too early to tell, and you probably won't actually know until they arrive on campus in August and September.

What's important is that our products aimed at universities, Starfish, is all about helping students, helping deliver positive outcomes and helping students navigate their academics and graduate, and it underpins graduation levels. So we think there'll be -- yes, it'll be even more important going forward than it has been in the past for universities to deploy those types of tools.

Likewise, in a more competitive market being able to avail yourself of a tool like Intersect helps the students, helps the high school students, helps the high schools achieve their objectives of getting kids into college and getting them into the best fit universities.

Anything else?

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Adam Webster, Daily Mail and General Trust plc - Head of Management Information & IR [53]

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No, there are no further questions. Back to you.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [54]

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Great. Well, thank you very much indeed, everybody, for joining us. Sorry about the technical difficulty. We appreciate your time. We appreciate your questions as always. We hope you're staying safe and sound. And we look forward to speaking with you next at the third quarter trading update.

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Tim G. Collier, Daily Mail and General Trust plc - Group CFO & Executive Director [55]

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23rd of July.

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Paul A. Zwillenberg, Daily Mail and General Trust plc - CEO & Director [56]

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23rd of July.

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Operator [57]

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This concludes today's call. Thank you for your participation. You may now disconnect.