For Footnotes, please see page 26
1
For Footnotes, please see page 26
2
For Footnotes, please see page 26
3
For Footnotes, please see page 26
4
For Footnotes, please see page 26
5
For Footnotes, please see page 26
6
For Footnotes, please see page 26
7
For Footnotes, please see page 26
8
For Footnotes, please see page 26
9
For Footnotes, please see page 26
10
For Footnotes, please see page 26
11
For Footnotes, please see page 26
12
For Footnotes, please see page 26
13
For Footnotes, please see page 26
14
For Footnotes, please see page 26
15
For Footnotes, please see page 26
16
For Footnotes, please see page 26
17
For Footnotes, please see page 26
18
For Footnotes, please see page 26
19
For Footnotes, please see page 26
20
For Footnotes, please see page 26
21
For Footnotes, please see page 26
22
For Footnotes, please see page 26
23
For Footnotes, please see page 26
24
For Footnotes, please see page 26
25
26
27
28
on
assets
intangible
goodwill and a further £79.4 million of
other
the
Consolidated Statement of Financial
Position at 30 September 2022. There
has been an
impairment charge
recorded of £8.5 million against
goodwill and £0.5 million against other
intangible assets for businesses which
remain in the Consolidated Statement
of Financial Position at 30 September
2022.
the
impairment
For the groups of CGUs to which
goodwill relates (which require an
the
annual
test),
determination of
recoverable
amount, being the higher of value in
use (VIU) and fair value less costs of
disposal (FVLCD), requires judgement
and estimation by management. This is
the determination of a
because
includes
recoverable
management’s consideration of key
internal inputs and external market
conditions such as future cash flows,
the
long-term growth
determination of the most appropriate
discount rate. There is a risk that if
these cash flows do not meet the
Directors’ expectations, some of these
assets may be impaired. Therefore, we
considered it to be a key audit matter.
rates, and
amount
drawn up. This included comparing them to
the latest Board approved budget and four-year
plan, and testing the mathematical accuracy of
the assessments.
For the impairment assessment of goodwill and
intangible assets allocated to the material
individual lowest level CGUs, we tested all key
assumptions, including:
● revenue and profit assumptions included
within the future forecasts, by considering
independent third-party support available
and the recovery time from the impact of
Covid-19, along with the impact of climate
change built into the future cash flow
forecasts;
● the long-term growth rates in the forecasts
by comparing them to historical results,
market data, and economic and industry
forecasts using our valuation expertise;
● the discount rate by comparing the cost of
capital for the group with comparable
organisations, and assessing the specific
risk premium applied to the business
using our valuation expertise; and
● the Directors’ potential bias by performing
our own sensitivity analysis on key
assumptions, particularly those driving
underlying cash flows.
We assessed the appropriateness of the related
disclosures in Note 21 and Note 22, including
the sensitivities provided, and considered them
to be reasonable.
required and
The impairment charges recorded for goodwill
and intangibles are reasonable. For those
assets where the Directors determined that no
impairment was
that no
disclosures were
additional
necessary, we found that these judgements
were supported by reasonable assumptions
that would
significant downside
changes before any material impairment was
necessary.
sensitivity
require
Accounting for deferred tax (group)
Refer to the Notes 11 and 36 in the
group financial statements.
The group’s recognition of deferred tax
liabilities on the pension surplus (given
We involved our tax specialists in our testing of
the appropriateness of the estimates taken in
relation to deferred taxation recognised in the
group financial statements.
34
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these financial statements form part of the ESEF-prepared annual financial report
filed on the National Storage Mechanism of the Financial Conduct Authority in accordance
with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no
assurance over whether the annual financial report has been prepared using the single
electronic format specified in the ESEF RTS.
Philip Stokes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
30 November 2022
42
Daily Mail and General Trust plc Annual Report 2022
Financial Statements
Consolidated Income Statement
For the year ended 30 September 2022
CONTINUING OPERATIONS
Revenue
Adjusted operating profit
Exceptional operating costs, impairment of internally generated and acquired computer software
Amortisation and impairment of acquired intangible assets arising on business combinations and
impairment of goodwill
Operating (loss)/profit before share of results and impairment of joint ventures and associates
Share of results of joint ventures and associates
Impairment of carrying value of associates and loans to associates
Total operating loss
Other gains and losses
(Loss)/profit before investment revenue, net finance costs and tax
Investment revenue
Finance expense
Finance income
Net finance costs
Loss before tax
Tax
(Loss)/profit after tax from continuing operations
DISCONTINUED OPERATIONS
Profit from discontinued operations
(LOSS)/PROFIT FOR THE YEAR
Attributable to:
Owners of the Company
Non-controlling interests*
(Loss)/profit for the year
Year ended
30
September
2022
£m
Year ended
30
September
2021
£m
Note
3
974.0
885.3
3, (i)
3
3
4
7
7
8
9
10
10
11
18
38
39
58.8
(79.9)
(20.6)
(41.7)
(6.4)
(38.9)
(87.0)
30.8
(56.2)
2.8
(30.4)
23.7
(6.7)
(60.1)
(85.6)
(145.7)
65.5
(33.4)
(28.2)
3.9
(3.3)
(6.5)
(5.9)
14.3
8.4
2.3
(15.6)
2.5
(13.1)
(2.4)
62.2
59.8
11.6
(134.1)
1,480.1
1,539.9
(133.8)
(0.3)
(134.1)
1,542.3
(2.4)
1,539.9
*All attributable to continuing operations.
(i) Adjusted operating profit is defined as total operating profit from continuing operations before share of results and impairment 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.
43
Financial Statements
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2022
(Loss)/profit for the year
Items that will not be reclassified to Consolidated Income Statement
Actuarial gain on defined benefit pension schemes
Foreign exchange differences on translation of foreign operations of non-controlling interests
Tax relating to items that will not be reclassified to Consolidated Income Statement
Fair value movement of financial assets through Other Comprehensive Income
Year ended
30
September
2022
£m
(134.1)
Year ended
30
September
2021
£m
1,539.9
271.3
(0.2)
(95.0)
(646.0)
155.8
(0.1)
(49.4)
370.8
Note
38
39
38
25, 38
Total items that will not be reclassified to Consolidated Income Statement
(469.9)
477.1
Items that may be reclassified subsequently to Consolidated Income Statement
(Loss)/gain on hedges of net investments in foreign operations
Costs of hedging
Costs of hedging recycled to Consolidated Income Statement on currency swap termination
Translation reserves recycled to Consolidated Income Statement on disposals
Foreign exchange differences on translation of foreign operations
38
38
10, 38
8, 17, 18, 38
38
(5.9)
0.4
(0.3)
(6.4)
5.8
6.1
(0.2)
-
(52.2)
(13.3)
Total items that may be reclassified subsequently to Consolidated Income Statement
(6.4)
(59.6)
Other comprehensive (expense)/income for the year
Total comprehensive (expense)/income for the year
Attributable to:
Owners of the Company
Non-controlling interests
Continuing operations
Discontinued operations
Total comprehensive (expense)/income for the year from continuing operations
attributable to:
Owners of the Company
Non-controlling interests
(476.3)
417.5
(610.4)
1,957.4
(609.9)
(0.5)
(610.4)
(622.0)
11.6
(610.4)
(621.5)
(0.5)
(622.0)
1,959.9
(2.5)
1,957.4
544.4
1,413.0
1,957.4
546.9
(2.5)
544.4
44
Daily Mail and General Trust plc Annual Report 2022
Consolidated Statement of Changes in Equity
For the year ended 30 September 2022
Called-up
share
capital
Share
premium
account
Capital
redemption
reserve
Own
shares
Translation
reserve
At 1 October 2020
Profit/(loss) for the year
Other comprehensive
income/(expense) for the year
Total comprehensive
income/(expense) for the
year
Dividends
Own shares acquired in the
year
Own shares released on
exercise of share options
Credit to equity for share-
based payments
Settlement of exercised share
options
Deferred tax on other items
recognised in equity
At 30 September 2021
Loss for the year
Other comprehensive
expense for the year
Total comprehensive
expense for the year
Cancellation of A Ordinary
Non-Voting Shares
Dividends
Cazoo dividend in specie
Transfers
Own shares released on
exercise of share options
Credit to equity for share-
based payments
Settlement of exercised share
options
Deferred tax on other items
recognised in equity
At 30 September 2022
£m
29.3
£m
17.8
£m
21.0
£m
(59.3)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1.0)
24.8
-
-
-
Note
38, 39
38, 39
12, 38
38
38
38
38
36, 38
38, 39
38, 39
-
-
-
37, 38
(0.5)
12, 38
12, 25, 38
38
38
38
36, 38
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.5
28.9
-
-
-
-
-
-
-
-
-
-
6.6
-
-
-
-
Equity
attributable
to owners
of
the
Company
£m
1,145.2
1,542.3
Retained
earnings
£m
1,069.9
1,542.3
Non-
controlling
interests
Total
equity
£m
1.0
£m
1,146.2
(2.4)
1,539.9
£m
66.5
-
(59.6)
477.2
417.6
(0.1)
417.5
(59.6)
2,019.5
1,959.9
(2.5)
1,957.4
-
-
-
-
-
-
(55.0)
(55.0)
-
-
(1.0)
24.8
40.1
40.1
(34.0)
(34.0)
3.6
3.6
-
(133.8)
(133.8)
-
-
-
-
-
-
(55.0)
(1.0)
24.8
40.1
(34.0)
3.6
(1.5)
(0.3)
3,082.1
(134.1)
(6.4)
(469.7)
(476.1)
(0.2)
(476.3)
(6.4)
(603.5)
(609.9)
(0.5)
(610.4)
-
-
-
-
-
-
-
-
(28.9)
-
(1,356.4)
(109.8)
(3.3)
(1,356.4)
(109.8)
(3.3)
-
6.6
58.8
58.8
(62.7)
(62.7)
(4.4)
(4.4)
-
-
-
-
-
-
-
-
-
(1,356.4)
(109.8)
(3.3)
6.6
58.8
(62.7)
(4.4)
0.5
933.9
1,002.5
(2.0)
1,000.5
29.3
17.8
21.0
(35.5)
6.9
3,044.1
3,083.6
28.8
17.8
21.5
45
Financial Statements
Financial Statements
Consolidated Statement of Financial Position
At 30 September 2022
ASSETS
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right of use assets
Investments in joint ventures
Investments in associates
Financial assets at fair value through Other Comprehensive Income
Trade and other receivables
Other financial assets
Derivative financial assets
Retirement benefit assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current tax receivable
Other financial assets
Derivative financial assets
Cash and cash equivalents
Total assets of businesses held for sale
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Current tax payable
Borrowings
Lease liabilities
Provisions
Total liabilities of businesses held for sale
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Derivative financial liabilities
Retirement benefit deficit
Provisions
Deferred tax liabilities
Total liabilities
Net assets
46
At 30
September
2022
£m
At 30
September
2021
£m
Note
20
21
22
23
24
24
25
27
28
33
34
36
26
27
31
28
33
29
19
30
31
32
32
35
19
30
32
32
33
34
35
36
201.5
79.4
50.2
31.3
1.3
34.7
62.8
1.3
15.9
11.9
1,009.2
31.4
1,530.9
27.7
247.1
-
5.1
-
53.0
-
332.9
1,863.8
(354.3)
(4.2)
(0.7)
(7.3)
(74.7)
-
(441.2)
-
(194.6)
(21.5)
(19.5)
-
(2.2)
(184.3)
(422.1)
(863.3)
208.1
93.0
55.4
34.7
1.7
69.2
806.0
3.3
140.5
0.4
303.1
4.7
1,720.1
16.4
186.9
0.4
9.2
0.4
1,746.9
6.9
1,967.1
3,687.2
(264.4)
(1.7)
(1.7)
(16.6)
(61.4)
(5.9)
(351.7)
-
(199.5)
(20.5)
(17.2)
(8.0)
(2.3)
(5.9)
(253.4)
(605.1)
1,000.5
3,082.1
Daily Mail and General Trust plc Annual Report 2022
Consolidated Statement of Financial Position
At 30 September 2022
SHAREHOLDERS EQUITY
Called-up share capital
Share premium account
Share capital
Capital redemption reserve
Own shares
Translation reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
At 30
September
2022
£m
At 30
September
2021
£m
28.8
17.8
46.6
21.5
-
0.5
933.9
1,002.5
(2.0)
1,000.5
29.3
17.8
47.1
21.0
(35.5)
6.9
3,044.1
3,083.6
(1.5)
3,082.1
Note
37
38
38
38
38
38
39
The financial statements of DMGT plc (Company number 184594) on pages 43 to 134 were approved by the Directors and authorised for issue on
29 November 2022. They were signed on their behalf by
The Viscount Rothermere
Director
47
Financial Statements
Financial Statements
Consolidated Cash Flow Statement
For the year ended 30 September 2022
Cash (used in)/generated by operations
Taxation paid
Taxation received
Net cash (used in)/generated from operating activities
Investing activities
Interest received
Dividends received from joint ventures and associates
Dividends received from financial assets held at fair value through other comprehensive income
Purchase of property, plant and equipment
Expenditure on internally generated intangible fixed assets
Expenditure on other intangible assets
Purchase of financial assets held at fair value through Other Comprehensive Income
Proceeds on disposal of property and plant and equipment
Proceeds on disposal of financial assets held at fair value through Other Comprehensive Income
Purchase of businesses and subsidiary undertakings, net of cash acquired
Collateral posted on Treasury derivatives
Investment in joint ventures and associates
Loans advanced to joint ventures and associates
Proceeds on disposal of businesses and subsidiary undertakings
Proceeds on disposal of joint ventures and associates
Release from/(payment into) escrow
Net cash generated from investing activities
Financing activities
Equity dividends paid
Purchase of own shares
Net payment on settlement of share options
Interest paid on borrowings
Premium paid on options
Bonds repaid
Settlement of derivatives
Amounts received on sublease receivable
Interest paid on lease liabilities
Repayments of lease liabilities
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain/(loss) on cash and cash equivalents
Net cash and cash equivalents at end of year
Year ended
30
September
2022
£m
(369.7)
(7.5)
0.7
Year ended
30
September
2021
£m
128.5
(26.1)
3.8
(376.5)
106.2
0.4
1.2
1.8
(13.5)
(4.3)
-
(7.7)
0.1
-
(1.5)
4.1
(3.4)
(3.8)
7.7
16.9
120.7
1.1
1.0
-
(8.3)
(5.2)
(2.1)
(53.4)
0.3
22.1
(77.9)
12.5
(21.7)
(4.2)
1,519.6
10.9
(120.7)
118.7
1,274.0
(1,356.4)
-
(56.1)
(16.8)
(7.2)
-
(12.9)
3.5
(0.9)
(17.3)
(55.0)
(1.0)
(9.3)
(14.1)
-
(0.8)
-
3.8
(3.4)
(22.3)
(1,464.1)
(102.1)
(1,721.9)
1,745.2
29.0
52.3
1,278.1
479.9
(12.8)
1,745.2
Note
14
24
9
22, 23
21
21
25
16
15
24
17
8, 24
28
12, 38
38
10
15
15
15
15
29
15
15, 29
48
Financial Statements
Financial Statements
Notes to the accounts
1 Basis of preparation
DMGT plc is a company incorporated and domiciled in the United Kingdom. The address of the registered office is Northcliffe House, 2 Derry Street,
London, W8 5TT.
These financial statements have been prepared in accordance with UK adopted international accounting standards.
These financial statements have been prepared for the year ended 30 September 2022.
Other than the Daily Mail, The Mail on Sunday, Metro and the i businesses whose accounts have been prepared to 2 October 2022, the Group
prepares accounts for a year ending on 30 September. The Daily Mail, The Mail on Sunday, Metro and the i businesses prepare financial statements
for a 52 or 53 week period or for the period since acquisition if shorter, ending on a Sunday near to the end of September and do not prepare additional
financial statements corresponding to the Group's financial year 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 year of these businesses and the end of the Group's
financial year and makes any material adjustments as appropriate.
The significant accounting policies used in preparing this information are set out in Note 2.
The Group's financial statements incorporate the financial statements of the Company and all of its subsidiaries together with the Group's share of
all of its interests in joint ventures and associates. The financial statements have been prepared on the historical cost basis, except for derivative
financial instruments, hedged items, equity investments, contingent consideration, put options and the pension scheme surplus all of which are
measured at fair value.
The Group presents the results from discontinued operations separately from those of continuing operations. An operation is classed as discontinued
if it has been, or is in the process of being disposed and represents either a separate major line of business or a geographical area of operations, or
is part of a single coordinated plan to dispose of a separate major line of business or exit a major geographical area of operations.
All amounts presented have been rounded to the nearest £0.1 million.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Financial
Review and the Strategic Report.
As set out in Notes 32 and 33 to the financial statements, the Company has long-term financing in the form of bonds and meets its day to day working
capital requirements through cash balances and committed bank facilities which expire in May 2026, extendable at the banks option for a further
one-year period.
The Directors have reassessed the principal risks facing the Group and determined that there are no material uncertainties to disclose. In making
their assessment of the Groups ability to continue as a going concern, the Directors have considered the projected performance of the Group and
its financial resources after taking account of severe but plausible changes in trading performance. This assessment indicates that the Group is
expected to operate as a going concern.
The Directors assessment of the Group and Companys ability to continue as going concerns includes consideration of cash flow forecasts for the
Group and the committed borrowing and debt facilities of the Group which were in place at 30 September 2022.
These forecasts include consideration of future trading performance, working capital requirements and the wider economy and include the modelling
of a number of severe but plausible scenarios. The base case scenario reflects assumptions of minimal growth in 2023 as described in the Strategic
Report.
The severe but plausible scenarios considered include the following:
The impact of further cancellations in the Events and Exhibitions segment;
The UK housing market operating at volumes at the floor of the functioning market in the Property Information segment; and
A reduction in print advertising revenues and increases in newsprint prices offset by cost saving initiatives and price increases in the Consumer
Media segment.
Accordingly, the Consolidated Financial Statements have been prepared on a going concern basis as the Directors have a reasonable expectation
that the Group has adequate resources for a period of at least 12 months from the date of approval of these financial statements.
49
Daily Mail and General Trust plc Annual Report 2022
2 Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
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, Presentation of Financial Statements, and IFRS Practice Statement 2, Making Materiality Judgements - effective 1 October
2023.
Definition of Accounting Estimates (Amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors) - effective 1 October
2023.
Amendments to IAS 12, Income Taxes - effective 1 October 2023.
The above amendments will not have a significant impact on the Groups Consolidated Financial Statements.
There have been no new IFRSs adopted during the year.
Update on interest rate benchmark (IBOR) reform
During the prior year, the Directors considered the Groups exposures to IBOR and implemented the following changes to documentation and systems:
An amendment to IBOR language within the Groups revolving credit facilities maturing in March 2023, to ensure a switch to risk-free rates (RFR)
following cessation of the relevant IBOR; and
A system upgrade of the Groups treasury management system to incorporate new day-count and compounding conventions required for RFR.
Subsequent to the prior year amendment of IBOR language in the Groups revolving credit facilities, on 6 May 2022 the Group renegotiated new
facilities and terminated the facilities maturing in March 2023. The new facilities reference risk-free rates plus a margin. Further details are given in
Note 32, Borrowings.
The prior period assessment of exposures to IBOR also identified the need to amend IBOR language within derivative contracts. Accordingly, during
the period the Group amended all interest rate swap and cap contracts that previously referenced GBP LIBOR such that they now reference three
month compounded Sterling Overnight Index Average (SONIA) plus a credit adjustment spread (CAS). This change was effective from the first floating
interest rate reset after 1 January 2022. The Group also replaced its USD LIBOR cap with a new cap referencing three month compounded Secured
Overnight Financing Rate (SOFR).
Business combinations
The acquisition of subsidiaries and businesses is accounted for using the acquisition method. The consideration for each acquisition is
measured at the aggregate of fair values of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in the Consolidated Income Statement as incurred.
Where the consideration for an acquisition includes any asset or liability resulting from a contingent arrangement, this is measured at its
discounted fair value on the date of acquisition. Subsequent changes in fair values are adjusted through the Consolidated Income Statement
in Net finance costs. Changes in the fair value of contingent consideration classified as equity is not recognised.
Put options granted to non-controlling interests are recorded at present value as a reduction in equity on initial recognition, since the
arrangement represents a transaction with equity holders. Changes in present value after initial recognition are recorded in the Consolidated
Income Statement in Net finance costs.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group
reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the
measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that
existed as at the date of the acquisition that, if known, would have affected the amounts recognised as at that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and
circumstances that existed as at the acquisition date and is a maximum of one year.
Business combinations achieved in stages
Where a business combination is achieved in stages, the Group's previously held interests in the acquired entity are remeasured to fair value at the
date the Group attains control and the resulting gain or loss is recognised in the Consolidated Income Statement. Amounts arising from interests in
the acquiree prior to the acquisition date that were recognised in Other Comprehensive Income are reclassified to the Consolidated Income Statement
where such treatment would be appropriate if the interest were disposed of.
50
Financial Statements
Financial Statements
Notes to the accounts
Purchases and sales of shares in a controlled entity
Where the Group's interest in a controlled entity increases, the non-controlling interests' share of net assets, excluding any allocation of goodwill, is
transferred to retained earnings. Any difference between the cost of the additional interest and the existing carrying value of the non-controlling interests'
share of net assets is recorded in retained earnings.
Where the Group's interest in a controlled entity decreases, but the Group retains control, the share of net assets disposed, excluding any allocation
of goodwill, is transferred to the non-controlling interests. Any difference between the proceeds of the disposal and the existing carrying value of the
net assets or liabilities transferred to the non-controlling interests is recorded in retained earnings.
Disposal of controlling interests where non-controlling interest retained
Where the Group disposes of a controlling interest but retains a non-controlling interest in the business, the Group accounts for the disposal of a
subsidiary and the subsequent acquisition of a joint venture, associate or financial assets at fair value through Other Comprehensive Income at fair
value on initial recognition. On disposal of a subsidiary all amounts in cumulative translation reserves are recycled to the Consolidated Income
Statement.
Contingent consideration receivable
Where the consideration for a disposal includes consideration resulting from a contingent arrangement, the contingent consideration receivable is
discounted to its fair value, with any subsequent movement in fair value being recorded in the Consolidated Income Statement in Net finance costs.
Discontinued operations
The Group presents the results from discontinued operations separately from those of continuing operations. An operation is classed as discontinued
if it has been, or is in the process of being disposed and represents either a separate major line of business or a geographical area of operations, or
is part of a single coordinated plan to dispose of a separate major line of business or exit a major geographical area of operations.
Assets and liabilities of businesses held for sale
An asset or disposal group is classified as held for sale if its carrying amount is intended to be recovered principally through sale rather than continuing
use, is available for immediate sale and it is highly probable that the sale will be completed within 12 months of classification as held for sale. Assets
classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment is recognised in the
Consolidated Income Statement and is first allocated to the goodwill associated with the disposal group and then to the remaining assets and liabilities
on a pro rata basis. No further depreciation or amortisation is charged on non-current assets classified as held for sale from the date of classification.
Accounting for subsidiaries
A subsidiary is an entity controlled by the Group. Control is achieved where the Group has power over an investee; exposure, or rights, to variable
returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the returns.
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Income Statement from the effective date control
is obtained or up to the date control is relinquished, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries
to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein, either at fair value or
at the non-controlling interests share of the net assets of the subsidiary, on a case-by-case basis. The total comprehensive income of a subsidiary is
apportioned between the Group and the non-controlling interest, even if it results in a deficit balance for the non-controlling interest.
Interests in joint ventures and associates
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control, that
is, when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant
influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
The post-tax results of joint ventures and associates are incorporated in the Group's results using the equity method of accounting. Under the equity
method, investments in joint ventures and associates are carried in the Consolidated Statement of Financial Position at cost as adjusted for post-
acquisition changes in the Group's share of the net assets of the joint venture and associate, less any impairment in the value of investment. Losses
of joint ventures and associates in excess of the Group's interest in that joint venture or associate are not recognised. Additional losses are provided
for, and a liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint
venture or associate.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint
venture or associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the
investment.
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Daily Mail and General Trust plc Annual Report 2022
Foreign currencies
For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of entities with a functional currency other than sterling are
translated into sterling using exchange rates prevailing on the period end date.
Income and expense items and cash flows are translated at the average exchange rates for the period and exchange differences arising are recognised
directly in equity. On disposal of a foreign operation, the cumulative amount recognised in equity relating to that operation is recognised in the
Consolidated Income Statement as part of the gain or loss on sale.
The Group records foreign exchange differences arising on retranslation of foreign operations within the translation reserve in equity.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency are recorded at the
exchange rate prevailing on the date of the transaction. At each period end date, monetary items denominated in foreign currencies are retranslated
at the rates prevailing on the period end date.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate prevailing on the date when fair value
was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the Consolidated Income
Statement for the period.
Goodwill, intangible assets and fair value adjustments arising on the acquisition of foreign operations after transition to IFRS are treated as part of the
assets and liabilities of the foreign operation and are translated at the closing rate. Goodwill which arose pre-transition to IFRS is not translated.
Goodwill and intangible assets
Goodwill and intangible assets acquired arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group's interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially
recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Negative goodwill arising on an
acquisition is recognised directly in the Consolidated Income Statement.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are
translated at the closing exchange rates on the period end date. On disposal of a subsidiary, associate or a jointly controlled entity, the attributable
amount of goodwill is included in the determination of the profit or loss recognised in the Consolidated Income Statement on disposal.
Impairment of goodwill
The Group tests goodwill annually for impairment, or more frequently if there are indicators that goodwill might be impaired.
For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as cash-
generating units (CGUs). If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit, prorated on the basis of the carrying amount
of each asset in the unit, but subject to not reducing any asset below its recoverable amount.
When testing for impairment, the recoverable amounts for all of the Group's CGUs are measured at the higher of value in use or fair value less costs
to sell. Value in use is calculated by discounting future expected cash flows. These calculations use cash flow projections based on Board-approved
budgets and forecasts which reflect the Directors current experience and future expectations of the markets in which the CGU operates. Risk adjusted
pre-tax discount rates used by the Group in its impairment tests range from 12.1% to 25.9% (2021 10.9% to 30.0%) the choice of rates depending on
the risks specific to that CGU. The Directors' estimate of DMGTs post tax weighted average cost of capital is 12.0% (2021 7.5%). The cash flow
projections consist of Board-approved budgets for the following year, together with forecasts for up to four additional years and nominal long-term
growth rates beyond these periods. The nominal long-term (decline)/growth rates used range from -3.0% to 6.9% (2021 -3.0% to 4.0%) and varies
with the Directors view of the CGU's market position, maturity of the relevant market and does not exceed the long-term average growth rate for the
industry in which the CGU operates.
An impairment loss recognised for goodwill is charged immediately in the Consolidated Income Statement and is not subsequently reversed.
Research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally generated intangible asset arising
from the Group's development activity, including software for internal use, is recognised only if the asset can be separately identified, it is probable the
asset will generate future economic benefits, the development cost can be measured reliably, the project is technically feasible and the project will be
completed with a view to sell or use the asset. Additionally, guidance in Standing Interpretations Committee (SIC) 32 has been applied in accounting
for internally developed website development costs.
Internally generated intangible assets are amortised on a straight-line basis over their estimated useful lives, when the asset is available for use, and
are reported net of impairment losses. Where no internally generated intangible asset can be recognised, such development expenditure is charged
to the Consolidated Income Statement in the period in which it is incurred.
52
Financial Statements
Financial Statements
Notes to the accounts
Licences
Computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These costs are
amortised over their estimated useful lives, being three to five years.
Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that are expected to
generate economic benefits exceeding costs and directly attributable overheads, are capitalised as intangible assets.
Computer software which is integral to a related item of hardware equipment is accounted for as property, plant and equipment. Costs associated with
maintaining computer software programs are recognised as an expense as incurred.
Other intangible assets
Other intangible assets with finite lives are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to Operating
Profit in the Consolidated Income Statement on a reducing balance or straight-line basis over the estimated useful lives of the intangible assets from
the date they become available for use. The estimated useful lives are as follows:
Publishing rights, mastheads and titles
Brands
Market- and customer-related databases and customer relationships
Computer software
5 - 30 years
3 - 20 years
3 - 20 years
2 - 5 years
Amortisation of intangible assets not arising on business combinations is included within Adjusted Operating Profit in the Consolidated Income
Statement.
The Group has no intangible assets with indefinite lives.
Software-as-a-Service (SaaS) arrangements represent service contracts which provide the Group with the right to access a cloud providers application
software over a contract period. Costs incurred to configure or customise, and any on-going fees to obtain access to the cloud providers application
software are recognised as an operating expense when the services are received.
These costs are capitalised as intangible assets and amortised over the useful life of the software if they represent the development of software code
which enhances or modifies, or creates additional capability to existing on-premise systems and which meets the definition of and recognition criteria
for an intangible asset under IAS 38, Intangible Assets.
Impairment of intangible assets
At each period end date, reviews are carried out of the carrying amounts of intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of value in use and fair value less
costs to sell, of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows
that are independent from other assets, value in use estimates are made based on the cash flows of the CGU to which the asset belongs.
If the recoverable amount of an asset or CGU is estimated to be less than its net carrying amount, the net carrying amount of the asset or CGU is
reduced to its recoverable amount. Impairment losses are recognised immediately in the Consolidated Income Statement.
At the end of each reporting period the Group assesses whether there is any indication that an impairment loss recognised in prior periods, for an
asset other than goodwill, may no longer exist or may have decreased. If any such indication exists, the Group estimates the recoverable amount of
that asset. In assessing whether there is any indication that an impairment loss recognised in prior periods for an asset other than goodwill may no
longer exist or may have decreased, the Group considers, as a minimum, the following indications:
whether the assets market value has increased significantly during the period;
whether any significant changes with a favourable effect on the entity have taken place during the period, or will take place in the near future, in
the technological, market, economic or legal environment in which the entity operates or in the market to which the asset is dedicated; and
whether market interest rates or other market rates of return on investments have decreased during the period, and those decreases are likely to
affect the discount rate used in calculating the assets value in use and increase the assets recoverable amount materially.
Property, plant and equipment
Land and buildings held for use are stated in the Consolidated Statement of Financial Position at their cost, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
Assets in the course of construction are carried at cost, less any recognised impairment loss. Depreciation of these assets commences when the
assets are ready for their intended use. Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment
losses.
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Daily Mail and General Trust plc Annual Report 2022
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
Depreciation is charged so as to write off the cost of assets, other than property, plant and equipment under construction using the straight-line method,
over their estimated useful lives as follows:
Freehold properties
Short leasehold properties
Plant and equipment
Depreciation is not provided on freehold land or works of art
50 years
the term of the lease
3 - 25 years
Right of use assets
Right of use assets are depreciated over the shorter of the assets useful economic life and the lease term on a straight-line basis.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the inventories to their present location and condition. The Group uses the Average Cost method in the
Consumer Media segment for newsprint and the First In First Out method for all other inventories.
Exhibition, training and event costs
Directly attributable costs relating to future exhibition, training and events are deferred within work in progress and measured at the lower of cost and
net realisable value. These costs are charged to the Consolidated Income Statement when the exhibition, training or event takes place.
Marketing costs
All marketing and promotional costs are charged to the Consolidated Income Statement in the period in which they are incurred. Direct event costs
are charged to the Consolidated Income Statement.
Cash and cash equivalents
Cash and cash equivalents shown in the Consolidated Statement of Financial Position includes cash, short-term deposits and other short-term highly
liquid investments with an original maturity of three months or less and which are subject to insignificant changes in value. For the purpose of the
Consolidated Cash Flow Statement, cash and cash equivalents are as defined above, net of bank overdrafts.
Revenue
Revenue is stated at the fair value of consideration, net of value added tax, trade discounts and commission where applicable and is recognised using
methods appropriate for the Groups businesses.
Where revenue contracts have multiple elements (such as software licences, data subscriptions and support), all aspects of the transaction are
considered to determine whether these elements can be separately identified. Where transaction elements can be separately identified and revenue
can be allocated between them on a fair and reliable basis, revenue for each element is accounted for according to the relevant policy below. Where
transaction elements cannot be separately identified, revenue is recognised when the control of performance obligations have been transferred.
The Consumer Media segment enters into agreements with advertising agencies and certain clients, which are subject to a minimum spend and
typically include a commitment to deliver rebates to the agency or client based on the level of agency spend over the contract period.
The principal revenue performance obligations are:
subscriptions revenue, including revenue from information services, is recognised over the period of the subscription or contract;
circulation revenue is recognised on a sale or return basis at cover price less the contractual wholesaler and retail margins;
publishing revenue is recognised on issue of the publication or report;
advertising revenue is recognised on issue of the publication or over the period of the online campaign;
contract print revenue is recognised on completion of the print contract;
exhibitions, training and events revenues are recognised over the period of the event;
software revenue is recognised on delivery of the software or the technology or over a period of time where the transaction is a licence (the licence
term). If support is unable to be separately identified from hosting and revenue is unable to be allocated on a fair and reliable basis, support
revenue is recognised over the licence term. Commissions paid to acquire software and services contracts are capitalised in prepayments and
recognised over the term of the contract;
support revenue associated with software licences and subscriptions is recognised over the term of the support contract.
54
Financial Statements
Financial Statements
Notes to the accounts
Adjusted measures
The Group presents adjusted operating profit and adjusted profit before tax adjusting for costs and profits which the Directors believe to be significant
by virtue of their size, nature or incidence or which have a distortive effect on current year 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 and closure of businesses and subsidiary undertakings, finance costs relating to premium on bond buy backs, fair value movements,
exceptional operating costs, impairment of goodwill, intangible assets and property, plant and equipment and amortisation of intangible assets arising
on business combinations.
The Board and management team believe these adjusted results, used in conjunction with statutory IFRS results, give a greater insight into the
financial performance of the Group and the way it is managed. Similarly, adjusted results are used in setting management remuneration.
See Note 13 for a reconciliation of profit before tax to adjusted profit before and after tax.
The Group also presents a measure of net debt/cash in Note 15. 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.
Other gains and losses
Other gains and losses comprise profit or loss on sale of property, plant and equipment, profit or loss on sale and closure of businesses and subsidiary
undertakings, gain from bargain purchase and profit or loss on sale of joint ventures and associates.
EBITDA
The Group discloses EBITDA, being adjusted operating profit before depreciation of property, plant and equipment and right of use assets and
amortisation of assets not arising on business combinations. EBITDA is broadly used by analysts, rating agencies, investors and the Group's banks
as part of their assessment of the Group's performance. A reconciliation of EBITDA from operating profit is shown in Note 14.
Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use and obtain
substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.
The Group as a lessee
Where the Group acts as a lessee it recognises a right of use asset and corresponding liability at the date at which a leased asset is made available
for use by the Group, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
The lease liability is measured at the present value of the future lease payments, discounted at the rate implicit in the lease, or if that cannot be readily
determined, at the Groups incremental borrowing rate specific to the term, country, currency and start date of the lease.
The Groups lease payments include: fixed payments; variable lease payments dependent on an index or rate, initially measured using the index or
rate at commencement; and payments in an optional renewal period if the Group is reasonably certain to exercise an extension option or not exercise
a break option less any lease incentives receivable.
The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured, with a corresponding
adjustment to the right of use asset, when there is a change in future lease payments resulting from a rent review, change in an index or rate such as
inflation, or change in the Groups assessment of whether it is reasonably certain to exercise a purchase, extension or break option.
The right of use asset is initially measured at cost based on the value of the associated lease liability, adjusted for any payments made before inception,
initial indirect costs and any dilapidation or restoration costs.
The right of use asset is subsequently depreciated on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset.
The right of use asset is tested for impairment if there are any indicators of impairment.
Leases of low value assets and short-term leases of 12 months or less are expensed to the Consolidated Income Statement, as are non-lease service
components.
The Group as a lessor
Leases for which the Group is a lessor are classified as finance or operating leases. A lease is classified as a finance lease if it transfers substantially
all the risks and rewards of ownership to the lessee and classified as an operating lease if it does not.
When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is classified as a
finance or operating lease by reference to the right of use asset arising from the head lease. Amounts due from lessees under finance leases are
recognised as receivables at the amount of the Groups net investment in the leases. Finance lease income is allocated to accounting periods so as
to reflect a constant periodic rate of return on the Groups net investment in the lease. Rental income from operating leases is recognised on a straight-
line basis over the term of the relevant lease.
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Daily Mail and General Trust plc Annual Report 2022
Dividends
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established. Dividends are recognised
as a distribution in the period in which they are approved by the shareholders. Interim dividends are recorded in the period in which they are paid.
Borrowing costs
Unless capitalised under IAS 23, Borrowing Costs, all borrowing costs are recognised in the Consolidated Income Statement in the period in which
they are incurred. Finance charges, including premiums paid on settlement or redemption and direct issue costs and discounts related to borrowings,
are accounted for on an accruals basis and charged to the Consolidated Income Statement using the effective interest method.
Retirement benefits
Pension scheme assets are measured at market value at the period end date. Scheme liabilities are measured using the projected unit credit method
and discounted at a rate reflecting current yields on high-quality corporate bonds having regard to the duration of the liability profiles of the schemes.
For defined benefit retirement plans, the difference between the fair value of the plan assets and the present value of the plan liabilities is recognised
as an asset or liability on the Consolidated Statement of Financial Position. Actuarial gains and losses arising in the year are taken to the Consolidated
Statement of Comprehensive Income. For this purpose, actuarial gains and losses comprise both the effects of changes in actuarial assumptions and
experience adjustments arising because of differences between the previous actuarial assumptions and what has actually occurred. For defined
benefit schemes, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out
triennially. In accordance with the advice of independent qualified actuaries in assessing whether to recognise a surplus, the Group has regard to the
principles set out in IFRIC 14.
Other movements in the net surplus or deficit are recognised in the Consolidated Income Statement, including the current service cost, any past
service cost and the effect of any curtailment or settlements. The net finance income/(expense) is also charged to the Consolidated Income Statement
within Net finance costs.
The Group's contributions to defined contribution pension plans are charged to the Consolidated Income Statement as they fall due.
Taxation
Income tax expense represents the sum of current tax and deferred tax for the year.
The current tax payable or recoverable is based on the taxable profit for the year. Taxable profit differs from profit as reported in the Consolidated
Income Statement because some items of income or expense are taxable or deductible in different years or may never be taxable or deductible. The
Group's liability for current tax is calculated using the UK and foreign tax rates that have been enacted or substantively enacted by the period end
date.
Current tax assets and liabilities are set off and stated net in the Consolidated Statement of Financial Position when there is a legally enforceable right
to set off current tax assets against current tax liabilities and when they either relate to income taxes levied by the same taxation authority or on the
same taxable entity or on different taxable entities which intend to settle the current tax assets and liabilities on a net basis.
Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill or from the initial recognition other than in a
business combination of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising in investments in subsidiaries, joint ventures and associates except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
Goodwill arising on business combinations also includes amounts corresponding to deferred tax liabilities recognised in respect of acquired intangible
assets. A deferred tax liability is recognised to the extent that the fair value of the assets for accounting purposes exceeds the value of those assets
for tax purposes and will form part of the associated goodwill on acquisition.
The carrying amount of deferred tax assets is reviewed at each period end date, and is reduced or increased as appropriate to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered, or it becomes probable that sufficient
taxable profits will be available.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised, based on tax rates
that have been enacted or substantively enacted by the period end date, and is not discounted.
Deferred tax assets and liabilities are set off when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis.
56
Financial Statements
Financial Statements
Notes to the accounts
Tax is charged or credited to the Consolidated Income Statement, except when it relates to items charged or credited directly to equity, in which case
the tax is recognised directly in equity.
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. 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 on the basis of the
Directors judgement 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.
Financial instruments
Financial assets and financial liabilities are recognised on the Consolidated Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amount reported in the Consolidated Statement of Financial Position when there is a legally
enforceable right to settle on a net basis, or realise the asset and liability simultaneously and where the Group intends to net settle.
Financial assets
Trade receivables
Trade receivables do not carry interest and are recognised initially at the value of the invoice sent to the customer i.e. amortised cost and
subsequently reduced by allowances for lifetime expected credit losses.
Other receivables include loans which are held at the capital sum outstanding plus unpaid interest reduced by allowances for expected credit
losses.
Estimates are used in determining the level of receivables that will not, in the opinion of the Directors, be collected. The Group applies the
simplified approach permitted by IFRS 9, Financial Instruments, which requires the use of the lifetime expected loss provision for all
receivables, including contract assets. These estimates are based on historic credit losses, macro-economic and specific country-risk
considerations with higher default rates applied to older balances.
In addition, if specific circumstances exist which would indicate that the receivable is irrecoverable a specific provision is made. A provision is
made against trade receivables and contract assets until such time as the Group believes there to be no reasonable expectation of recovery,
after which the trade receivable or contract asset balance is written off.
Financial assets at fair value through Other Comprehensive Income
Financial assets are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require
delivery of the investment within the time frame established by the market concerned, and are measured at fair value, including transaction costs.
As permitted by IFRS 9, the Group classifies its equity investments at Fair Value through Other Comprehensive Income. All fair value movements are
recorded in Other Comprehensive Income and gains and losses are not recycled to the Consolidated Income Statement on disposal.
Dividend income from Financial assets held at fair value through Other Comprehensive Income is recorded in the Consolidated Income Statement.
Unlisted equity investments are valued using a variety of approaches including comparable company valuation multiples and discounted cash flow
techniques. 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.
The fair value of listed equity investments is determined based on quoted market prices.
Financial liabilities and equity instruments
Trade payables
Trade payables are non-interest bearing and are stated at their nominal value.
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into
and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities.
Capital market and bank borrowings
Interest bearing loans and overdrafts are initially measured at fair value (which is equal to net proceeds at inception), and are subsequently measured
at amortised cost, using the effective interest rate method. A portion of the Group's bonds are subject to fair value hedge accounting as explained
below and this portion is adjusted for the movement in the hedged risk to the extent hedge effectiveness is achieved. Any difference between the
proceeds, net of transaction costs and the settlement or redemption of borrowings is recognised over the term of the borrowing.
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Daily Mail and General Trust plc Annual Report 2022
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received, net of transaction costs.
Derecognition
The Group derecognises a financial asset, or a portion of a financial asset, from the Consolidated Statement of Financial Position where the contractual
rights to cash flows from the asset have expired, or have been transferred, usually by sale, and with them either substantially all the risks and rewards
of the asset or significant risks and rewards, along with the unconditional ability to sell or pledge the asset.
Financial liabilities are derecognised when the liability has been settled, has expired or has been extinguished.
Derivative financial instruments and hedge accounting
Derivative financial instruments are used to manage exposure to market risks. The principal derivative instruments used by the Group are foreign
currency swaps, interest rate swaps, foreign exchange forward contracts and options. The Group does not hold or issue derivative financial instruments
for trading or speculative purposes.
Changes in the fair value of derivative instruments which do not qualify for hedge accounting are recognised immediately in the Consolidated Income
Statement.
Where the derivative instruments do qualify for hedge accounting, the following treatments are applied:
Fair value hedges
Changes in the fair value of the hedging instrument are recognised in the Consolidated Income Statement for the year together with the changes in
the fair value of the hedged item due to the hedged risk, to the extent the hedge is effective. When the hedging instrument expires or is sold, terminated,
or exercised, or no longer qualifies for hedge accounting, hedge accounting is discontinued.
Cash flow hedges
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in
equity and the ineffective portion is recognised immediately in the Consolidated Income Statement.
If a hedged firm commitment or forecast transaction results in the recognition of a non-financial asset or liability, then, at the time that the asset or
liability is recognised, the associated gains and losses on the derivative that had previously been recognised in equity are included in the initial
measurement of the asset or liability.
For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the Consolidated Income
Statement in the same period in which the hedged item affects the Consolidated Income Statement.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised, revoked, or no longer qualifies for hedge
accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction
occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss previously recognised in equity is included in the
Consolidated Income Statement for the period.
Net investment hedges
Exchange differences arising from the translation of the net investment in foreign operations are recognised in the translation reserve. Gains and
losses arising from changes in the fair value of the hedging instruments are recognised in equity to the extent that the hedging relationship is effective.
Any ineffectiveness is recognised immediately in the Consolidated Income Statement for the period.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting.
Gains and losses accumulated in the translation reserve are included in the Consolidated Income Statement on disposal of the foreign operation.
Provisions
Provisions are recognised when the Group has a present obligation, legal or constructive, as a result of a past event, and it is probable that the Group
will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at
the period end date and are discounted to present value where the effect is material.
Onerous contract provisions are recognised for losses on contracts where the forecast costs of fulfilling the contract throughout the contract period
exceed the forecast income receivable. The provision is calculated based on cash flows to the end of the contract.
58
Financial Statements
Financial Statements
Notes to the accounts
Share-based payments
Prior to going private, the Group issued equity-settled and cash-settled share-based payments to certain Directors and employees. Equity-settled
share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the
Group's estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.
Fair value is measured using a binomial pricing model which is calibrated using a Black-Scholes framework. The expected life used in the models has
been adjusted, based on the Directors best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations.
A liability equal to the portion of the goods or services received is recognised at the current fair value determined at each period end date for cash-
settled share-based payments.
Investment in own shares
Treasury shares
Prior to going private, when the Company purchased its equity share capital as Treasury Shares, the consideration paid, including any directly
attributable incremental costs (net of income taxes) was recorded as a deduction from shareholders equity until such shares were cancelled, reissued
or disposed of. Where such shares were subsequently sold or reissued, any consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, was recognised in equity, with any difference between the proceeds from the sale and the original
cost being taken to retained earnings.
Employee Benefit Trust
The Company established an Employee Benefit Trust (EBT) for the purpose of purchasing shares in order to satisfy outstanding share options and
potential awards under long-term incentive plans. The assets of the EBT comprised shares in DMGT plc and cash balances. The EBT was
administered by independent trustees and its assets were held separately from those of the Group. The Group bore the major risks and rewards of
the assets held by the EBT until the shares vested unconditionally with employees. The Group recognised the assets and liabilities of the EBT in the
Consolidated Financial Statements and shares held by the EBT were recorded at cost as a deduction from shareholders equity. Consideration
received for the sale of shares held by the EBT was recognised in equity, with any difference between the proceeds from the sale and the original cost
being taken to retained earnings.
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 the Consolidated Financial Statements:
Adjusted measures
The Directors believe that the adjusted profit measure provides additional useful information to users of the Consolidated Financial Statements on 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 year 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, intangible assets and property, plant and equipment and amortisation 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 13 for a reconciliation of profit before tax to adjusted profit before and after tax.
The Group also presents a measure of net debt/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 15 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 £1,009.2 million (2021 £303.1
million) and report a net surplus on its pension schemes amounting to £1,009.2 million (2021 £295.1 million).
59
Daily Mail and General Trust plc Annual Report 2022
Mail Force Charitable Incorporated Organisation (CIO)
The Group established the Mail Force CIO in a 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 Charitys activities and does
not control Mail Force. Accordingly Mail Forces accounts have not been consolidated within the Groups financial statements.
The following represent key sources of estimation uncertainty that have the most significant effect on the amounts recognised in
the 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
and viability assessments and for the purposes of impairment reviews. Longer-term forecasts use long-term growth rates applicable to the relevant
businesses. See Note 20 for a sensitivity assessment of these long-term growth rates on the carrying values of certain of the Groups goodwill and
intangible assets.
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 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 including an assessment
of climate change on the applicable businesses and calculate the net present value of these cash flows using a suitable discount rate. The key areas
of estimation are the long-term growth rate, operating cash flows, and the discount rate applied to those cash flows.
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 (i) the recoverability of deferred tax assets relating to losses based on forecasts of future taxable
profits which are, by their nature, uncertain; and (ii) the amount of the pension scheme surplus that might be returned to the Group, thereby impacting
the level of deferred tax liability arising thereon. See Note 36 for further information concerning recognised and unrecognised deferred tax assets and
deferred tax liabilities.
Retirement benefits
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 Groups pension scheme assets includes 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 Groups pension scheme assets by £17.9 million (2021 £22.8 million).
The carrying amount of the retirement benefit obligation at 30 September 2022 was a surplus of £1,009.2 million (2021 £295.1 million). The
assumptions used and the associated sensitivity analysis can be found in Note 34.
60
Financial Statements
Financial Statements
Notes to the accounts
Legal claim provisions
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 18 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.
During the period a settlement agreement was reached with the EPA whereby the Company without admitting any wrongdoing, will replace 24 million
RINs over a four-year period.
At each period end IAS 37, Provisions, Contingent Liabilities and Contingent Assets requires DMGT to review this provision and make appropriate
adjustments to reflect the current status of the claim. The Groups 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.
RINs trade in a volatile range. Using the period end price of US$1.74 compared to the estimated future forecast price of US$1.51 replacing the 24
million RINs would increase the provision by approximately US$3.1 million (£2.7 million).
61
Daily Mail and General Trust plc Annual Report 2022
3 Segment analysis
The Groups business activities are split into three continuing operating divisions: 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 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 Note 2.
Less
operating
(loss)/profit of
joint ventures
and
associates
£m
0.9
-
-
0.9
(6.9)
Segment
operating
profit/(loss)
£m
33.4
8.9
52.0
94.3
(41.5)
Total and
external
revenue
£m
216.9
99.5
657.6
974.0
-
974.0
Adjusted
operating
profit/(loss)
£m
32.5
8.9
52.0
93.4
(34.6)
58.8
(79.9)
(9.3)
(11.3)
(41.7)
(6.4)
(38.9)
(87.0)
30.8
(56.2)
2.8
(30.4)
23.7
(60.1)
(85.6)
11.6
(134.1)
Year ended 30 September 2022
Property Information
Events and Exhibitions
Consumer Media
Corporate costs
Adjusted operating profit
Exceptional operating costs
Impairment of goodwill and acquired intangible assets arising
on business combinations
Amortisation of acquired intangible assets arising on business
combinations
Operating loss before share of results and impairment of
joint ventures and associates
Share of results of joint ventures and associates
Impairment of carrying value of associates and loans to
associates
Total operating loss
Other gains and losses
Loss before investment revenue, net finance costs and tax
Investment revenue
Finance expense
Finance income
Loss before tax
Tax
Profit from discontinued operations
Loss for the year
Note
20, 21
21
7
7
8
9
10
10
11
18
62
Financial Statements
Financial Statements
Notes to the accounts
An analysis of the amortisation and impairment of goodwill and intangible assets, exceptional operating costs by segment is as follows:
Year ended 30 September 2022
Property Information
Events and Exhibitions
Energy Information
Consumer Media
Corporate costs
Relating to discontinued operations
Continuing operations
Amortisation
of intangible
assets not
arising on
business
combinations
(Note 21)
£m
(3.9)
-
-
-
(3.9)
(0.4)
(4.3)
-
(4.3)
Note
18
Amortisation
of intangible
assets arising
on business
combinations
Impairment of
goodwill and
intangible
assets arising
on business
combinations
(Note 21)
£m
(Notes 20, 21)
£m
(5.3)
0.1
-
(6.1)
(11.3)
-
(11.3)
-
(11.3)
-
(0.8)
-
(8.5)
(9.3)
-
(9.3)
-
(9.3)
Exceptional
operating
costs
£m
(0.4)
-
(11.2)
(22.4)
(34.0)
(57.1)
(91.1)
11.2
(79.9)
The Group's exceptional operating (costs)/income which have been disclosed separately due to their size, nature and incidence are analysed in the
table below. The Directors believe this presentation provides users of these accounts with clear and consistent reporting:
Year ended 30 September 2022
Property Information
Energy Information
Consumer Media
Corporate costs
Note
Relating to discontinued operations
18
Continuing operations
Severance and
closure costs
(i)
£m
(0.4)
-
(18.8)
(19.2)
(15.1)
(34.3)
-
(34.3)
LTIP
(ii)
£m
-
-
(15.0)
(15.0)
(43.2)
(58.2)
-
(58.2)
Pension past
service credit
Professional fees
and claims
Total
(iii)
£m
-
-
11.4
11.4
6.4
17.8
-
17.8
(iv)
£m
-
(11.2)
-
(11.2)
(5.2)
(16.4)
11.2
(5.2)
£m
(0.4)
(11.2)
(22.4)
(34.0)
(57.1)
(91.1)
11.2
(79.9)
(i)
(ii)
(iii)
(iv)
Following the prior years disposals of the Euromoney, Energy Information, EdTech and Insurance Risk segments, the Group is no
longer operating at the scale it was before these disposals. Accordingly the Group has begun a review of its support functions. This
has resulted in the loss of certain roles and functions which are no longer necessary as a consequence of the reduced size of the
Group and the Companys delisting.
During the year Rothermere Continuation Limited (RCL) acquired all of the issued DMGT A Shares not already owned by RCL.
Following this transaction, certain of the Groups equity settled long term incentive plan (LTIP) arrangements early vested subject
to pro-rata vesting and have been replaced or are expected to be replaced with cash settled awards.
Where an equity settled LTIP is cancelled, IFRS 2, Share-based Payment requires this is treated as an acceleration of the original
vesting period. The impact of this acceleration results in non-cash LTIP charges being charged against profits of the current period
which normally would have been charged against profits of future periods.
These accelerated charges have been treated as exceptional operating costs.
The pension past service credit represents a non-cash reduction in the Groups Pension Scheme liabilities following the acceptance
of a Pension Increase Exchange option by certain members of the Harmsworth Pension Scheme and Senior Executive Pension
Fund during the year.
Professional fees include costs in relation to the advice relating to the offer by Rothermere Continuation Limited (RCL) for the issued
DMGT A Shares not already owned by RCL.
The Group's tax charge includes net charges of £19.3 million in relation to these exceptional operating costs, including charges of £29.9 million
in respect of the pension scheme and credits of £7.3 million in respect of severance and closure costs and £3.3 million in respect of LTIP. None
of these net tax charges relates to discontinued operations.
63
Daily Mail and General Trust plc Annual Report 2022
An analysis of the depreciation of right of use assets and property, plant and equipment, investment revenue, other gains and losses and
finance income and expense by segment is as follows:
Depreciation of
right of use
assets
Depreciation of
property, plant
and equipment
Investment
revenue
Other gains and
losses
Finance income Finance expense
(Note 23)
(Note 22)
(Note 9)
(Note 8)
(Note 10)
(Note 10)
£m
-
-
-
-
-
2.8
2.8
-
2.8
Total and
external
revenue
£m
223.0
227.1
33.5
34.4
623.8
1,141.8
-
(256.5)
885.3
Year ended 30 September 2022
Note
Insurance Risk
Property Information
Events and Exhibitions
Consumer Media
Corporate costs
Relating to discontinued operations
Continuing operations
18
£m
-
(1.9)
(0.7)
(11.2)
(13.8)
-
(13.8)
-
(13.8)
£m
-
(1.4)
-
(14.6)
(16.0)
(0.3)
(16.3)
-
(16.3)
Year ended 30 September 2021
Note
Insurance Risk
Property Information
EdTech
Events and Exhibitions
Consumer Media
Corporate costs
Discontinued operations
Adjusted operating profit
Exceptional operating costs, impairment of internally generated
and acquired computer software
Impairment of goodwill and acquired intangible assets arising
on business combinations
Amortisation of acquired intangible assets arising on business
combinations
Operating profit before share of results and impairment of
joint ventures and associates
Share of results of joint ventures and associates
Impairment of carrying value of associates and loans to
associates
Total operating loss
Other gains and losses
Profit before investment revenue, net finance costs and
tax
Investment revenue
Finance expense
Finance income
Loss before tax
Tax
Profit from discontinued operations
Profit for the year
18
20, 21
18, 21
7
7
8
9
10
10
11
18
64
£m
2.7
7.3
-
(0.9)
9.1
24.4
33.5
(2.7)
30.8
£m
-
-
-
7.6
7.6
16.1
23.7
-
23.7
£m
-
(0.4)
(0.1)
(0.5)
(1.0)
(29.4)
(30.4)
-
(30.4)
Less
operating
(loss)/profit of
joint ventures
and
associates
Segment
operating
profit/(loss)
Adjusted
operating
profit/(loss)
£m
39.4
44.7
1.1
0.4
59.7
145.3
(42.3)
(40.5)
£m
(0.1)
1.2
-
-
-
1.1
(4.2)
0.1
£m
39.5
43.5
1.1
0.4
59.7
144.2
(38.1)
(40.6)
65.5
(33.4)
(13.0)
(15.2)
3.9
(3.3)
(6.5)
(5.9)
14.3
8.4
2.3
(15.6)
2.5
(2.4)
62.2
1,480.1
1,539.9
Financial Statements
Financial Statements
Notes to the accounts
An analysis of the amortisation and impairment of goodwill and intangible assets, exceptional operating costs by segment is as follows:
Year ended 30 September 2021
Insurance Risk
Property Information
EdTech
Events and Exhibitions
Energy Information
Consumer Media
Corporate costs
Relating to discontinued operations
Continuing operations
The Group's exceptional operating (costs)/income are analysed as follows:
Year ended 30 September 2021
Property Information
Energy Information
Consumer Media
Corporate costs
Relating to discontinued operations
Continuing operations
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
(Note 21)
(Note 21)
(Notes 20, 21)
Exceptional
operating
(costs)/income
Note
18
Note
18
£m
(0.1)
(4.5)
(3.0)
(0.1)
-
(0.4)
(8.1)
(1.4)
(9.5)
3.1
(6.4)
Severance and
other closure
costs
£m
(0.1)
-
0.6
0.5
-
0.5
-
0.5
£m
-
(5.7)
(0.2)
(4.3)
-
(5.2)
(15.4)
-
(15.4)
0.2
(15.2)
LTIP
(i)
£m
-
-
(2.4)
(2.4)
(13.5)
(15.9)
-
(15.9)
£m
-
-
-
(13.0)
-
-
(13.0)
-
(13.0)
-
(13.0)
Professional fees
and claims
(ii)
£m
(0.5)
(5.3)
-
(5.8)
(17.5)
(23.3)
5.3
(18.0)
£m
-
(0.6)
-
-
(5.3)
(1.8)
(7.7)
(31.0)
(38.7)
5.3
(33.4)
Total
£m
(0.6)
(5.3)
(1.8)
(7.7)
(31.0)
(38.7)
5.3
(33.4)
(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). During the year ended 30 September 2021 Cazoo successfully listed on the New York Stock Exchange (NYSE) and
the Group disposed of its Insurance Risk segment (RMS). As a direct consequence of these transactions the value of the DMGT
Long Term Incentive Plans (LTIPs) are estimated to have increased by £35.8 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 Euromoney and RMS and of Cazoos NYSE listing amounts to £15.9
million. Since the profit on sale of RMS and the capital benefit of the Euromoney disposal and Cazoo listing are excluded from our
adjusted profit measure, the incremental increase in the LTIP charge was treated as an adjusting item.
(ii)
Professional fees and claims include costs in respect of restructuring advice relating to the offer by Rothermere Continuation Limited
(RCL) to purchase the issued DMGT A Shares not already owned by RCL.
The Group's tax credit includes £2.8 million in relation to these exceptional operating costs of which a charge of £0.4 million relates to discontinued
operations.
65
Daily Mail and General Trust plc Annual Report 2022
An analysis of the depreciation of right of use assets and property, plant and equipment, research costs, investment revenue, other gains and losses
and finance income and expense by segment is as follows:
Depreciation
of right of use
assets
Depreciation
of property,
plant and
equipment
Research
costs
Investment
revenue
Other gains
and losses
Year ended 30 September 2021
Insurance Risk
Note
Property Information
EdTech
Events and Exhibitions
Energy Information
Consumer Media
Corporate costs
(Note 23)
£m
(5.6)
(2.0)
(0.5)
(0.7)
-
(11.5)
(20.3)
-
(20.3)
(Note 22)
£m
(3.9)
(1.5)
(0.1)
(0.1)
-
(14.8)
(20.4)
(0.6)
(21.0)
Relating to discontinued
operations
Continuing operations
18
6.1
4.0
(14.2)
(17.0)
£m
(27.6)
-
-
-
-
(0.2)
(27.8)
-
(27.8)
27.6
(0.2)
(Note 9)
£m
0.2
-
-
-
-
-
0.2
2.3
2.5
(Note 8)
£m
1,319.6
9.2
230.6
(0.2)
1.0
3.9
1,564.1
1.4
1,565.5
(0.2)
(1,551.2)
2.3
14.3
Finance
income
(Note 10)
£m
-
-
-
-
-
1.7
1.7
0.8
2.5
-
2.5
Finance
expense
(Note 10)
£m
(2.0)
(0.4)
(0.1)
(0.2)
-
(0.7)
(3.4)
(14.3)
(17.7)
2.1
(15.6)
The Group's revenue comprises sales excluding value added tax, less discounts and commission where applicable and is analysed as follows:
Year
ended 30
September
2022
Year
ended 30
September
2022
Year
ended 30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Total
£m
129.0
170.9
257.6
Total
Point in
time
£m
129.0
5.6
257.6
Total
Over time
£m
-
165.3
-
Discontinued
operations
Total
(Note 18)
£m
-
-
-
Discontinued
operations
Point in time
(Note 18)
£m
-
-
-
Discontinued
operations
Over time
(Note 18)
£m
-
-
-
99.6
4.1
95.5
99.4
99.2
0.2
217.5
974.0
160.3
655.8
57.2
318.2
-
-
-
-
-
-
-
-
-
-
-
-
Year
ended 30
September
2022
Continuing
operations
Total
Year
ended 30
September
2022
Continuing
operations
Point in
time
Year
ended 30
September
2022
Continuing
operations
Over time
£m
129.0
170.9
257.6
£m
129.0
5.6
257.6
£m
-
165.3
-
99.6
4.1
95.5
99.4
99.2
0.2
217.5
974.0
160.3
655.8
57.2
318.2
Print advertising
Digital advertising
Circulation
Subscriptions and
recurring licences
Events,
conferences and
training
Transactions and
other
66
Financial Statements
Financial Statements
Notes to the accounts
Year
ended 30
September
2021
Year
ended 30
September
2021
Year
ended 30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Total
£m
113.2
172.7
262.6
Total
Point in
time
£m
113.2
5.3
262.6
Total
Over time
£m
-
167.4
-
Discontinued
operations
Total
(Note 18)
£m
-
-
-
Discontinued
operations
Point in time
(Note 18)
£m
-
-
-
Discontinued
operations
Over time
(Note 18)
£m
-
-
-
Year
ended 30
September
2021
Continuing
operations
Total
Year
ended 30
September
2021
Continuing
operations
Point in
time
Year
ended 30
September
2021
Continuing
operations
Over time
£m
113.2
172.7
262.6
£m
113.2
5.3
262.6
£m
-
167.4
-
324.0
0.6
323.4
243.6
0.4
243.2
80.4
0.2
80.2
34.9
34.7
0.2
0.4
0.4
-
34.5
34.3
0.2
234.4
1,141.8
224.4
640.8
10.0
501.0
12.5
256.5
12.5
13.3
-
243.2
221.9
885.3
211.9
627.5
10.0
257.8
Print advertising
Digital advertising
Circulation
Subscriptions and
recurring licences
Events,
conferences and
training
Transactions and
other
By geographic area
The majority of the Group's operations are located in the United Kingdom and North America. The analysis of Group revenue below is based on the
location of group companies in these regions.
Year
ended 30
September
2022
Year
ended 30
September
2022
Year
ended 30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Total
£m
820.2
73.7
80.1
974.0
Total
Point in
time
£m
572.5
15.5
67.8
655.8
Total
Over time
£m
247.7
58.2
12.3
318.2
Discontinued
operations
Total
(Note 18)
£m
-
-
-
-
Discontinued
operations
Point in time
(Note 18)
£m
-
-
-
-
Discontinued
operations
Over time
(Note 18)
£m
-
-
-
-
Year
ended 30
September
2021
Year
ended 30
September
2021
Year
ended 30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Total
£m
777.6
317.7
46.5
1,141.8
Total
Point in
time
£m
582.4
23.6
34.8
640.8
Total
Over time
£m
195.2
294.1
11.7
501.0
Discontinued
operations
Total
(Note 18)
£m
-
256.5
-
256.5
Discontinued
operations
Point in time
(Note 18)
£m
-
13.3
-
13.3
Discontinued
operations
Over time
(Note 18)
£m
-
243.2
-
243.2
Year
ended 30
September
2022
Continuing
operations
Total
Year
ended 30
September
2022
Continuing
operations
Point in
time
Year
ended 30
September
2022
Continuing
operations
Over time
£m
820.2
73.7
80.1
974.0
£m
572.5
15.5
67.8
655.8
£m
247.7
58.2
12.3
318.2
Year
ended 30
September
2021
Continuing
operations
Total
Year
ended 30
September
2021
Continuing
operations
Point in
time
Year
ended 30
September
2021
Continuing
operations
Over time
£m
777.6
61.2
46.5
885.3
£m
582.4
10.3
34.8
627.5
£m
195.2
50.9
11.7
257.8
UK
North America
Rest of the World
UK
North America
Rest of the World
67
Daily Mail and General Trust plc Annual Report 2022
The analysis of Group revenue below is based on the geographic location of customers in these regions.
Year
ended 30
September
2022
Year
ended 30
September
2022
Year
ended 30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Year ended
30
September
2022
Total
£m
590.3
209.7
174.0
974.0
Total
Point in
time
£m
549.6
26.3
79.9
655.8
Total
Over time
£m
40.7
183.4
94.1
318.2
Discontinued
operations
Total
(Note 18)
£m
-
-
-
-
Discontinued
operations
Point in time
(Note 18)
£m
-
-
-
-
Discontinued
operations
Over time
(Note 18)
£m
-
-
-
-
Year
ended 30
September
2021
Year
ended 30
September
2021
Year
ended 30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Year ended
30
September
2021
Total
£m
698.0
299.6
144.2
1,141.8
Total
Point in
time
£m
572.9
21.5
46.4
640.8
Total
Over time
£m
125.1
278.1
97.8
501.0
Discontinued
operations
Total
(Note 18)
£m
43.6
Discontinued
operations
Point in time
(Note 18)
£m
1.9
Discontinued
operations
Over time
(Note 18)
£m
41.7
159.7
53.2
256.5
9.4
2.0
13.3
150.3
51.2
243.2
Year
ended 30
September
2022
Continuing
operations
Total
Year
ended 30
September
2022
Continuing
operations
Point in
time
Year
ended 30
September
2022
Continuing
operations
Over time
£m
590.3
209.7
174.0
974.0
£m
549.6
26.3
79.9
655.8
£m
40.7
183.4
94.1
318.2
Year
ended 30
September
2021
Continuing
operations
Total
Year
ended 30
September
2021
Continuing
operations
Point in
time
Year
ended 30
September
2021
Continuing
operations
Over time
£m
654.4
139.9
91.0
885.3
£m
571.0
12.1
44.4
627.5
£m
83.4
127.8
46.6
257.8
UK
North America
Rest of the World
UK
North America
Rest of the World
The closing net book value of goodwill, intangible assets, property, plant and equipment and right of use assets is analysed by geographic area as
follows:
At 30
September
2022
Closing
net book
value of
property,
plant and
equipment
(Note 22)
£m
46.4
3.4
0.4
50.2
At 30
September
2021
Closing
net book
value of
property,
plant and
equipment
(Note 22)
£m
51.6
3.4
0.4
55.4
At 30
September
2022
At 30
September
2021
At 30
September
2022
At 30
September
2021
At 30
September
2022
At 30
September
2021
Closing
net book
value of
right of
use assets
Closing
net book
value of
right of
use assets
(Note 23)
£m
14.7
12.4
4.2
31.3
(Note 23)
£m
17.0
13.2
4.5
34.7
Closing
net book
value of
goodwill
(Note 20)
£m
164.3
24.5
12.7
201.5
Closing
net book
value of
goodwill
(Note 20)
£m
172.8
24.9
10.4
208.1
Closing
net book
value of
intangible
assets
Closing
net book
value of
intangible
assets
(Note 21)
£m
79.2
0.1
0.1
79.4
(Note 21)
£m
91.7
0.2
1.1
93.0
UK
North America
Rest of the World
The additions to non-current assets are analysed as follows:
Insurance Risk
Property Information
EdTech
Events and Exhibitions
Consumer Media
Corporate costs
Year
ended 30
September
2022
Property,
plant and
equipment
Year
ended 30
September
2021
Property,
plant and
equipment
(Note 22)
£m
-
0.6
-
-
8.1
8.7
1.2
9.9
(Note 22)
£m
1.1
0.6
0.2
-
17.2
19.1
0.5
19.6
Year
ended 30
September
2022
Year
ended 30
September
2021
Year
ended 30
September
2022
Year
ended 30
September
2021
Year
ended 30
September
2022
Year
ended 30
September
2021
Right of
use assets
Right of
use assets
Goodwill
Goodwill
Intangible
assets
Intangible
assets
(Note 23)
£m
7.7
0.1
-
0.8
11.0
19.6
-
19.6
(Note 20)
£m
-
-
-
-
0.2
0.2
-
0.2
(Note 20)
£m
-
(0.7)
-
-
46.3
45.6
-
45.6
(Note 21)
£m
-
3.9
-
-
0.4
4.3
-
4.3
(Note 21)
£m
-
5.2
1.5
-
35.7
42.4
-
42.4
(Note 23)
£m
-
1.8
-
0.7
8.7
11.2
-
11.2
68
Financial Statements
Financial Statements
Notes to the accounts
4 Operating (loss)/profit before the share of results and impairment of joint ventures and associates
Operating (loss)/profit before the share of results and impairment of joint ventures and associates is further analysed as follows:
Year
ended 30
September
2022 Total
£m
974.0
Note
3
3
3
3
3
8.4
(256.8)
(248.4)
(395.6)
(9.3)
(11.3)
(4.3)
(26.5)
(32.2)
(55.1)
(35.6)
(15.2)
(16.3)
(13.8)
(30.2)
(12.6)
3.8
(0.3)
(1.1)
(122.9)
Year ended
30
September
2022
Discontinued
operations
(Note 18)
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11.2)
Year
ended 30
September
2022
Continuing
operations
£m
974.0
8.4
(256.8)
(248.4)
(395.6)
(9.3)
Year
ended 30
September
2021 Total
£m
1,141.8
(1.5)
(179.0)
(180.5)
(489.7)
(13.0)
Year ended
30
September
2021
Discontinued
operations
(Note 18)
£m
256.5
(1.8)
-
(1.8)
(155.7)
-
Year
ended 30
September
2021
Continuing
operations
£m
885.3
0.3
(179.0)
(178.7)
(334.0)
(13.0)
(11.3)
(15.4)
(0.2)
(15.2)
(4.3)
(26.5)
(32.2)
(55.1)
(35.6)
(15.2)
(16.3)
(13.8)
(30.2)
(12.6)
3.8
(0.3)
(1.1)
(111.7)
(9.5)
(26.9)
(9.3)
(84.3)
(32.7)
(18.7)
(21.0)
(20.3)
(26.5)
(5.5)
(1.2)
(1.5)
(1.7)
(145.1)
(3.1)
(1.9)
-
-
(0.1)
(3.6)
(4.0)
(6.1)
(1.8)
-
-
(0.1)
(0.6)
(42.4)
(6.4)
(25.0)
(9.3)
(84.3)
(32.6)
(15.1)
(17.0)
(14.2)
(24.7)
(5.5)
(1.2)
(1.4)
(1.1)
(102.7)
(52.9)
(11.2)
(41.7)
39.0
35.1
3.9
Revenue
Increase/(decrease) in stocks of finished goods and
work in progress
Raw materials, consumables and direct staff costs
Inventories recognised as an expense in the year
Staff costs
Impairment of goodwill and intangible assets
Amortisation of intangible assets arising on business
combinations
Amortisation of internally generated and acquired
computer software not arising on business
combinations
Promotion and marketing costs
Venue and delegate costs
Editorial and production costs
Distribution and transportation costs
Royalties and similar charges
Depreciation of property, plant and equipment
Depreciation of right of use assets
Other property costs
Rental of venue space
Foreign exchange translation differences
Net credit losses on financial assets
Low-value asset lease expense
Other expenses
Operating (loss)/profit before share of results and
impairment of joint ventures and associates
5 Auditor's remuneration
Fees payable to the Company's Auditor for the audit of the Company's annual accounts
for the audit of the Company's subsidiaries
Audit services provided to all Group companies
Audit-related assurance services
Assurance services
Total non-audit services
Total remuneration
Year ended 30
September
2022
£m
0.8
0.8
1.6
Year ended 30
September
2021
£m
1.1
1.3
2.4
-
0.1
0.1
1.7
0.3
0.3
0.6
3.0
69
Daily Mail and General Trust plc Annual Report 2022
6 Directors and Employees
The average monthly number of persons employed by the Group including Directors is analysed as follows:
Insurance Risk
Property Information
EdTech
Events and Exhibitions
Consumer Media
Corporate costs
Note
(i)
(i)
Year ended 30
September
2022
Number
-
Year ended 30
September
2021
Number
1,417
1,020
-
368
2,634
47
4,069
996
390
315
2,716
65
5,899
(i)
The prior year represents the average monthly number of persons employed in the Insurance Risk segment for the period ended 15
September 2021 and in the EdTech segment for the period ended 2 March 2021 when these segments were disposed.
The total average number of persons employed by the Group in the year, for the purposes of calculating an average cost per employee, is 4,069 (2021
5,683).
Total staff costs comprised:
Wages and salaries
Share-based payments
Social security costs
Pension costs
Total Directors remuneration comprised:
Aggregate emoluments
Aggregate pension allowances
Aggregate gains made on exercise of share options
Note
38, 41
Year ended 30
September
2022
£m
315.5
58.8
31.2
11.7
Year ended 30
September
2021
£m
409.7
40.1
39.8
12.2
417.2
501.8
Year ended 30
September
2022
£m
6.8
0.7
19.2
26.7
Year ended 30
September
2021
£m
8.5
1.0
25.0
34.5
During the year, the Company paid four (2021 four) Executive Directors (EDs) and eight (2021 eight) Non-Executive Directors (NEDs) for their
services.
All four EDs made gains on the exercise of share options in the current and prior periods.
The total remuneration of the highest paid Director in the period was £8.4 million (2021 £11.0 million) analysed as follows:
Aggregate emoluments
Aggregate pension allowances
Aggregate gains made on exercise of share options
70
Year ended 30
September
2022
£m
2.3
0.3
5.8
8.4
Year ended 30
September
2021
£m
2.5
0.3
8.2
11.0
Financial Statements
Financial Statements
Notes to the accounts
7 Share of results and impairment of joint ventures and associates
Share of adjusted operating profits from operations of joint ventures
Share of adjusted operating losses from operations of associates
Share of adjusted operating losses from joint ventures and associates
Share of associates' other gains
Share of amortisation of intangibles arising on business combinations of associates
Share of associates' interest payable
Share of joint ventures' tax
Impairment of carrying value of associates
Impairment of carrying value of loans to associates
Share of results of joint ventures and associates and impairment of carrying value of associates
and loans to associates
Share of results from operations of joint ventures
Share of results from operations of associates
Impairment of carrying value of associates
Impairment of carrying value of loans to associates
Share of results of joint ventures and associates and impairment of carrying value of associates
and loans to associates
Note
13
13
11, 13
13, 24, (i)
13, 28, (ii)
24
18, 24
24
28
Year ended 30
September
2022
£m
0.9
(6.8)
Year ended 30
September
2021
£m
1.0
(4.1)
(5.9)
0.1
(0.1)
(0.3)
(0.2)
(30.7)
(8.2)
(45.3)
0.7
(7.1)
(6.4)
(30.7)
(8.2)
(38.9)
(45.3)
(3.1)
0.1
(0.1)
(0.1)
(0.1)
(6.5)
-
(9.8)
0.9
(4.2)
(3.3)
(6.5)
-
(6.5)
(9.8)
(i) During the current year, this represents a write-down in the carrying value of Factory 14 S.a.r.l amounting to £3.0 million and Yopa Property Ltd
amounting to £27.7 million both held centrally in light of current trading conditions. During the prior year, this represents a £1.7 million write-down
in the carrying value of Entale Media Ltd and a £4.8 million write-down in the carrying value of WellAware Holdings, Inc. both held centrally.
(ii) During the current year, this represents a write down in the carrying value of convertible loan notes in Factory 14 S.a.r.l of £4.4 million and in Yopa
Property Ltd of £3.8 million.
8 Other gains and losses
Loss on disposal of property, plant and equipment
Profit on disposal and closure of businesses
Recycled cumulative translation differences
Gain from bargain purchase
Profit on disposal of joint ventures and associates
Note
13
13, 17, (i)
13, 17, 38, (ii)
13, (iii)
13, (iv)
Year ended 30
September
2022
£m
(0.8)
5.8
6.4
-
19.4
30.8
Year ended 30
September
2021
£m
-
2.5
0.1
3.9
7.8
14.3
There is no tax charge in relation to these other gains and losses (2021 £nil).
(i)
(ii)
(iii)
In the current year this principally relates to the disposal of Landmark Insurance, a division of Landmark Information Group Ltd within the
Property Information segment. In the prior year this principally relates to the sale of Rochford Brady Legal Services Ltd and Lawlink (UK) Ltd
in the Property Information segment.
Represents cumulative translation differences required to be recycled through the Consolidated Income Statement on disposal and closure
of businesses.
On 18 October 2020, the Consumer Media segment acquired JPI Medias 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 was recognised in the Consolidated Income Statement in accordance with IFRS 3, Business
Combinations.
(iv)
In the current year this represents additional unprovided proceeds from a prior year disposal of Also Energy Holdings, Inc. held centrally.
71
Daily Mail and General Trust plc Annual Report 2022
In the prior year this principally represents a profit of £6.8 million on the sale of Mercatus, Inc. and a profit of £1.0 million on the sale of
TreppPort, LLC both in the Property Information segment.
9 Investment revenue
Dividend income
Interest receivable from short-term deposits
Interest receivable on loan notes
10 Net finance costs
Interest, arrangement and commitment fees payable on bonds, bank loans and loan notes
Finance charge on lease liabilities
Premium paid on options
Change in fair value of derivative hedge of bond
Change in fair value of hedged portion of bond
Amortisation relating to terminated fair value hedge of bond
Hedge ineffectiveness
Change in fair value of contingent consideration payable
Finance expense
Change in fair value of derivatives, or portions thereof, not designated for hedge accounting
Costs of hedging recycled on currency swap termination
Finance income on defined benefit pension schemes
Finance income on sublease receivable
Finance income
Net finance costs
Year ended 30
September
2022
£m
1.8
Year ended 30
September
2021
£m
-
0.4
0.6
2.8
0.9
1.4
2.3
Year ended 30
September
2022
£m
(17.0)
(0.9)
(7.2)
(5.3)
5.3
(0.3)
(4.9)
(0.1)
(30.4)
Year ended 30
September
2021
£m
(14.2)
(1.3)
-
(3.3)
3.3
-
-
(0.1)
(15.6)
11.5
0.3
11.9
-
23.7
0.3
-
2.1
0.1
2.5
(6.7)
(13.1)
Note
13, (i)
15, 33
15, 33
13, 33,15
13, 33
13, 35, (ii)
13
13, 33,38
13, 34
(i)
The premium paid on options represents the net cost of foreign exchange options (which do not meet the requirements for hedge accounting)
used to economically hedge US$600.0 million of the Groups cash balances into sterling. During the year, the Group purchased US$600.0
million notional European call options, giving it the right, but not the obligation to buy GBP at an average GBP/USD exchange rate of 1.3555
exercisable for settlement at the end of January 2022. This economically hedged the conversion of the Groups USD cash balances into GBP,
due to the highly probable expectation that a special GBP dividend would be paid to shareholders following Rothermere Continuation Limiteds
(RCL) offer to acquire all the issued DMGT A Shares not already owned by RCL.
Following the announcement on 17 December 2021 that the final cash offer for all of the issued DMGT A Shares not already owned by RCL
had been declared unconditional, settlement of the special dividend (which was conditional on the final cash offer becoming or being declared
unconditional) occurred on 30 December 2021. Accordingly the purchased call options were unwound.
(ii)
The fair value movement of contingent consideration arises from the requirement of IFRS 3, Business Combinations, to measure such
consideration at fair value with changes in fair value taken to the Consolidated Income Statement.
72
Financial Statements
Financial Statements
Notes to the accounts
11 Tax
The (charge)/credit on the (loss)/profit for the year consists of:
UK tax
Corporation tax at 19.0% (2021 19.0%)
Adjustments in respect of prior years
Overseas tax
Corporation tax
Adjustments in respect of prior years
Total current tax
Deferred tax
Origination and reversals of temporary differences
Adjustments in respect of prior years
Total deferred tax
Total tax charge
Relating to discontinued operations
Relating to continuing operations
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
Note
0.3
0.4
0.7
(7.3)
(2.6)
(9.9)
(9.2)
(77.9)
21.6
(56.3)
(65.5)
20.1
(85.6)
(0.1)
(0.4)
(0.5)
(47.0)
(1.3)
(48.3)
(48.8)
6.8
-
6.8
(42.0)
(104.2)
62.2
36
18
A deferred tax charge of £95.0 million (2021 £49.4 million) relating to the actuarial movement on defined benefit pension schemes was recognised
directly in the Consolidated Statement of Comprehensive Income. A deferred tax charge of £4.4 million (2021 credit of £3.6 million) and a current tax
charge of £nil (2021 £nil) relating to share based payments were recognised directly in equity.
Legislation was enacted in June 2021 to increase the UK corporation tax rate from 19.0% to 25.0% with effect from 1 April 2023. Accordingly, for the
year ended 30 September 2022, the UK deferred tax balances are measured at 25.0% unless the temporary difference is expected to reverse before
1 April 2023, in which case the rate used is the one applicable at the expected time of reversal. For the year ended 30 September 2021, the UK
deferred tax balances were measured at 25.0% as this was the rate applicable for the reversal of all UK temporary differences as at 30 September
2021. On 23 September 2022, the UK Government announced that the main rate of corporation tax would no longer increase to 25% with effect from
1 April 2023 but would instead stay at 19%. On 14 October 2022, the UK Government announced that the tax rate would increase to 25% from 1 April
2023 as originally set out in the Spring Budget 2021.
73
Daily Mail and General Trust plc Annual Report 2022
The tax charge for the year is higher than the standard rate of corporation tax in the UK of 19.0% (2021 lower than 19.0%) representing the weighted
average annual corporate tax rate for the full financial year. The differences are explained below:
Loss on ordinary activities before tax - continuing operations
(Loss)/profit before tax - discontinued operations
Profit on disposal of discontinued operations
Recycled cumulative translation differences on disposal of discontinued operations
Total (loss)/profit before tax
Tax on loss on ordinary activities at the standard rate
Effect of:
Amortisation and impairment of goodwill and intangible assets
Other expenses not deductible for tax purposes
Additional items deductible for tax purposes
Derecognition of previously recognised deferred tax assets
Recognition of previously unrecognised deferred tax assets
Effect of overseas tax rates
Effect of associates tax
Current year tax losses not recognised/unrecognised tax losses utilised
Write off/disposal of subsidiaries and associates
Effect of change in tax rate
Adjustment in respect of prior years
Other
Total tax charge on the (loss)/profit for the year - continuing and discontinued operations
Note
18
18
18
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Year ended 30
September
2022
£m
(60.1)
Year ended 30
September
2021
£m
(2.4)
(11.2)
2.7
-
(68.6)
13.0
(1.1)
(9.8)
-
(29.8)
-
(0.3)
(1.2)
(29.3)
(1.0)
(23.2)
19.4
(2.2)
(65.5)
33.1
1,499.1
52.1
1,581.9
(300.6)
(2.0)
(1.1)
22.8
-
53.8
(3.8)
(0.7)
(0.6)
181.6
12.5
(1.7)
(2.2)
(42.0)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
The tax impact of Other expenses not deductible for tax purposes includes £7.7 million (2021 £nil) in respect of the acceleration of stock option
expense to the Income Statement for which no tax deduction is due.
The tax impact of Additional items deductible for tax purposes includes £nil (2021 £16.4 million) in respect of stock option deductions in excess
of cumulative deferred tax and £nil (2021 £6.3 million) in respect of Research and Development tax credits.
Derecognition of previously recognised deferred tax assets £28.6 million (2021 £nil) relates to UK tax losses no longer expected to be offset
against future profits.
Recognition of previously unrecognised deferred tax assets of £nil (2021 £53.8 million) relates to UK tax losses and US deferred interest
expected to be offset against future profits.
The tax impact of Current year tax losses not recognised/unrecognised tax losses utilised includes £27.9 million (2021 £nil) in respect of
current year UK tax losses not recognised following the large pension contributions made during the year.
Write off/disposal of subsidiaries and associates relates to the actual tax charge on disposals being higher than the book profit on sale at the
statutory tax rate by £1.0 million (2021 £181.6 million lower than book profit).
(vii)
The adjustment in respect of prior years includes the reassessment of prior year items following the filing of tax returns, of which a credit of
£20.1 million relates to a reduction of the tax charge on sale of the Insurance Risk segment in 2021.
74
Financial Statements
Financial Statements
Notes to the accounts
Adjusted tax on profits before amortisation and impairment of intangible assets and non-recurring items (adjusted tax charge) amounted to a charge
of £9.7 million (2021 £17.2 million) and the resulting effective rate is 24.8% (2021 19.5%). The differences between the tax charge and the adjusted
tax charge are shown in the reconciliation below:
Total tax charge on the (loss)/profit for the year
Share of tax in joint ventures and associates
Deferred tax on amortisation and impairment of acquired intangible assets
Current year losses not recognised
Reassessment of temporary differences
Tax on other gains and losses - continuing and discontinued operations
Tax on exceptional payments to pension schemes
Tax on exceptional operating costs
Effect of difference between UK statutory rate and deferred tax rate
Tax on other adjusting items
Adjusted tax charge on the (loss)/profit for the year
Year ended 30
September
2022
£m
(65.5)
(0.2)
(1.6)
27.9
29.4
(20.1)
23.7
(4.4)
(4.2)
5.3
(9.7)
Year ended 30
September
2021
£m
(42.0)
(0.1)
(2.5)
-
(56.7)
98.7
-
(2.8)
(12.5)
0.7
(17.2)
Note
7
(i)
(ii)
(iii)
(iv)
(v)
13
(i)
(ii)
(iii)
(iv)
In calculating the adjusted tax rate, the Group excludes the potential future impact of the deferred tax effects of 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. Deferred tax would only crystallise on a sale of the relevant businesses, which is not anticipated at the current
time, and such a sale, being an exceptional item, would result in an exceptional tax impact.
The tax impact of Current year tax losses not recognised/unrecognised tax losses utilised includes £27.9 million (2021 £nil) in respect of
current year UK tax losses not recognised following the large pension contributions made during the year.
Reassessment of temporary differences includes the derecognition of previously recognised deferred tax assets of which £29.4 million (2021
£nil) relates to UK tax losses no longer expected to be offset against future profits. The prior year tax credits relate to the recognition of
previously unrecognised deferred tax assets in respect of UK tax losses of £58.4 million and US deferred interest of £39.5 million.
Tax on other gains and losses includes a tax charge of £nil (2021 £56.6 million) in respect of the sale of the EdTech segment, a tax credit of
£20.1 million (2021 tax charge of £39.9 million) in respect of the sale of the Insurance Risk segment, and a tax charge of £nil (2021 £0.4
million) in respect of the sale of the Energy Information segment.
(v)
The numbers for the current and prior years include the impact on deferred tax of the enacted UK rate change with effect from 1 April 2023.
75
Daily Mail and General Trust plc Annual Report 2022
12 Dividends paid
Amounts recognisable as distributions to equity holders in
the year
Ordinary Shares - final dividend for the year ended 30
September 2021
A Ordinary Non-Voting Shares - final dividend for the year
ended 30 September 2021
Ordinary Shares - final dividend for the year ended 30
September 2020
A Ordinary Non-Voting Shares - final dividend for the year
ended 30 September 2020
Ordinary Shares - interim dividend for the year ended 30
September 2022
A Ordinary Non-Voting Shares - interim dividend for the year
ended 30 September 2022
Ordinary Shares - special dividend
A Ordinary Non-Voting Shares - special dividend
Cazoo shares distributed in specie - special dividend
Ordinary Shares - interim dividend for the year ended 30
September 2021
A Ordinary Non-Voting Shares - interim dividend for the year
ended 30 September 2021
Year ended 30
September
2022
Pence per
share
Year ended 30
September
2022
£m
Year ended 30
September
2021
Pence per
share
Note
17.3
17.3
-
-
-
2.8
2.8
568.0
568.0
82.8
-
-
-
-
3.4
36.4
-
-
39.8
0.5
5.8
113.0
1,197.3
109.8
-
-
1,426.4
1,466.2
-
-
16.6
16.6
-
-
-
-
-
-
7.6
7.6
-
-
(i)
(i)
25, (i)
Year ended 30
September
2021
£m
-
-
3.3
34.3
37.6
-
-
-
-
-
1.5
15.9
17.4
55.0
(i) On 14 December 2021, a special dividend was declared to all DMGT shareholders with a record date of 16 December 2021. It was comprised
of a cash element of £5.68 per share and a share element of approximately 0.5749 shares in Cazoo Group Ltd (Cazoo) per DMGT share.
Settlement of the cash element of £1,310.3 million occurred on 30 December 2021 and settlement of the Cazoo share element of £109.8 million
occurred on 24 June 2022.
Following the year end, the Board declared and paid an interim dividend of £5.4 million at its 1 November 2022 meeting (2.0 pence per Ordinary/A
Ordinary Non-Voting Share).
The Board declared a final dividend of 3.78 pence per Ordinary/A Ordinary Non-Voting Share at its 29 November 2022 meeting (2021 17.3
pence). It will absorb an estimated £8.7 million (2021 £39.8 million) of shareholders equity for which no liability has been recognised in these
Consolidated Financial Statements.
76
Financial Statements
Financial Statements
Notes to the accounts
13 Adjusted profit
3
3
7
7
7
8
8
Year ended 30
September
2022
Total
£m
(71.3)
Year ended 30
September
2022
Discontinued
operations
(Note 18)
£m
(11.2)
Year ended 30
September
2022
Year ended 30
September
2021
Continuing
operations
£m
(60.1)
Total
£m
30.7
Year ended 30
September
2021
Discontinued
operations
(Note 18)
£m
33.1
Year ended 30
September
2021
Continuing
operations
£m
(2.4)
2.7
2.7
-
1,551.2
1,551.2
-
Note
3
18
3, 7
11.4
9.3
-
-
11.4
15.5
0.2
15.3
9.3
13.0
-
13.0
91.1
11.2
79.9
38.7
5.3
33.4
(0.1)
30.7
8.2
0.8
(31.6)
-
-
-
-
-
(0.1)
30.7
8.2
0.8
(0.1)
6.5
-
-
(31.6)
(14.3)
-
-
-
-
-
18
(2.7)
(2.7)
-
(1,551.2)
(1,551.2)
10
10
10
10
10
10
7, 11
11
(i)
7.2
(11.9)
(11.1)
4.9
(0.3)
1.8
0.2
39.3
(9.7)
0.2
29.8
-
-
-
-
-
-
-
-
-
-
-
7.2
(11.9)
(11.1)
4.9
(0.3)
1.8
0.2
39.3
(9.7)
0.2
29.8
-
(2.1)
0.1
-
-
-
0.1
88.1
(17.2)
0.4
71.3
-
-
-
-
-
-
-
38.6
(7.8)
-
30.8
(0.1)
6.5
-
-
(14.3)
-
-
(2.1)
0.1
-
-
-
0.1
49.5
(9.4)
0.4
40.5
(Loss)/profit before tax
Profit on disposal of discontinued
operations including recycled cumulative
translation differences
Adjust for:
Amortisation of intangible assets in
Group profit, including joint ventures
and associates, arising on business
combinations
Impairment of goodwill and intangible
assets arising on business
combinations
Exceptional operating costs,
impairment of internally generated and
acquired computer software
Share of joint ventures' and
associates' other gains and losses
Impairment of carrying value of joint
ventures and associates
Impairment of carrying value of loans
to associates
Other gains and losses:
Loss on disposal of property, plant and
equipment
Profit on disposal of businesses, joint
ventures, associates, change of
control and recycled cumulative
translation differences
Profit on disposal of discontinued
operations including recycled
cumulative translation differences
Finance costs:
Cost of buying options
Finance income on defined benefit
pension schemes
Fair value movements including share
of joint ventures and associates
Hedge ineffectiveness
Costs of hedging recycled on currency
swap termination
Upfront revolving credit facility fees
Tax:
Share of tax in joint ventures and
associates
Adjusted profit before tax and non-
controlling interests
Adjusted tax charge
Non-controlling interests
Adjusted profit after taxation and non-
controlling interests
(i) The adjusted non-controlling interests share of losses for the year of £0.2 million (2021 £0.4 million) is stated after eliminating a credit of £0.1
million (2021 £2.0 million), being the non-controlling interests share of adjusting items.
77
Daily Mail and General Trust plc Annual Report 2022
14 EBITDA and cash (used in)/generated by operations
Continuing operations
Adjusted operating profit
Non-exceptional depreciation charge on property, plant and equipment
Non-exceptional depreciation charge on right of use assets
Amortisation of internally generated and acquired computer software not arising on business
combinations
Operating losses from joint ventures and associates
Share of charge of depreciation and amortisation of internally generated and acquired computer
software not arising on business combinations of joint ventures and associates
Dividend income
Discontinued operations
Adjusted operating profit
Non-exceptional depreciation charge on property, plant and equipment
Non-exceptional depreciation charge on right of use assets
Amortisation of internally generated and acquired computer software not arising on business
combinations
Share of losses from operations of joint ventures and associates
EBITDA
Adjustments for:
Share-based payments
Loss on disposal of lease liability re right to use assets
Share of losses from joint ventures and associates
Exceptional operating costs
Non-cash pension past service credit
Dividend income
Share of charge of depreciation and amortisation of internally generated and acquired computer
software not arising on business combinations of joint ventures and associates
Increase in inventories
Increase in trade and other receivables
Increase in trade and other payables
Increase/(decrease) in provisions
Additional payments into pension schemes
Cash (used in)/generated by operations
Note
3
3, 22
3, 23
3, 21
7
9
18
18, 22
18, 23
18, 21
18
38
7, 18
3
3
9
34
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
58.8
16.3
13.8
4.3
(5.9)
0.4
1.8
-
-
-
-
-
89.5
58.8
(0.1)
5.9
(91.1)
(17.8)
(1.8)
(0.4)
(9.0)
(38.2)
37.0
10.4
(412.9)
(369.7)
65.5
17.0
14.2
6.4
(3.1)
0.3
-
40.6
4.0
6.1
3.1
(0.1)
154.0
40.1
-
3.2
(38.7)
-
-
(0.3)
(2.7)
(22.6)
13.3
(3.6)
(14.2)
128.5
78
Financial Statements
Financial Statements
Notes to the accounts
15 Analysis of net (debt)/cash
Cash and cash equivalents
Bank overdrafts
At 1
October
2021
£m
1,746.9
(1.7)
Cash flow
£m
(1,722.9)
1.0
Fair value
hedging
adjustments
£m
-
-
Note
29
29, 32
Net cash and cash equivalents
1,745.2
(1,721.9)
Debt due within one year
Lease liabilities
Debt due after one year
Bonds
Lease liabilities
32, (i)
(16.6)
18.2
32, (i)
32, (i)
(199.5)
(20.5)
-
-
Net (debt)/cash before effect of derivatives
1,508.6
(1,703.7)
Effect of derivatives
Collateral deposits
(ii)
28
(12.7)
9.2
12.9
(4.1)
Net (debt)/cash at closing exchange rate
1,505.1
(1,694.9)
Net (debt)/cash at average exchange rate
1,497.8
-
-
5.3
-
5.3
(5.3)
-
-
Foreign
exchange
movements
£m
29.0
-
29.0
Other non-
cash
movements
(i)
£m
-
-
At 30
September
2022
£m
53.0
(0.7)
-
52.3
(0.8)
(8.1)
(7.3)
-
(2.2)
26.0
(10.9)
-
15.1
(0.4)
1.2
(7.3)
-
-
(7.3)
(194.6)
(21.5)
(171.1)
(16.0)
5.1
(182.0)
(173.7)
The net cash outflow of £1,721.9 million (2021 inflow of £1,278.1 million) includes a cash outflow of £70.3 million (2021 £3.1 million) in respect
of operating exceptional items.
(i) Other non-cash movements include the unwinding of bond issue discount and amortisation of bond issue costs amounting to £0.1 million
(2021 £0.1 million) and amortisation relating to the terminated bond fair value hedge amounting to £0.3 million (2021 £nil), £0.9 million
(2021 £3.4 million) finance charges relating to IFRS 16 Leases and £8.1 million (2021 £15.2 million) in relation to new lease commitments.
(ii) Effect of derivatives includes the fair value interest rate swaps used to convert a portion of the Groups fixed rate debt to floating rates
and the foreign exchange (FX) impact of fixed-to-fixed cross-currency swaps entered into with the intention of economically converting
the currency of borrowings into an alternative currency. The movements in the year comprise a £5.3 million loss on fair value interest
rate swaps and a £10.9 million FX loss on fixed-to-fixed cross-currency swaps. Further details on the Groups derivative instruments
are provided in Note 33.
16 Summary of the effects of acquisitions
There have been no material acquisitions during the year.
Reconciliation to purchase of businesses and subsidiary undertakings as shown in the Consolidated Cash Flow Statement:
Cash consideration
Cash paid to settle contingent consideration in respect of acquisitions
Cash and cash equivalents acquired with subsidiaries
Purchase of businesses and subsidiary undertakings
Note
35, (i)
Year ended 30
September
2022
£m
0.3
1.2
-
1.5
Year ended 30
September
2021
£m
84.0
1.4
(7.5)
77.9
(i) Cash paid to settle contingent consideration in respect of acquisitions includes £0.5 million (2021 £0.8 million) within the Property
Information segment and £0.7 million (2021 £0.6 million) within the Events and Exhibitions segment.
79
Daily Mail and General Trust plc Annual Report 2022
17 Summary of the effects of disposals
On 5 November 2021 the Group disposed of Landmark Insurance, a division of Landmark Information Group Ltd within the Groups Property
Information segment for net proceeds of £4.8 million. This was recognised as held for sale in the prior year.
The impact of the disposal of businesses completed during the period on net assets is as follows:
Trade and other receivables
Trade and other payables
Net assets disposed
Profit/(loss) on sale of businesses including recycled cumulative
exchange differences
Satisfied by:
Cash received
Directly attributable costs paid
Working capital adjustment
Recycled cumulative translation differences
Note
8
38
Prior year
assets held for
sale disposed
in current year
£m
0.5
(0.2)
0.3
Adjustment on
sale of assets
held for sale in
current year
£m
(0.2)
0.1
(0.1)
(0.3)
-
4.9
4.8
5.5
(0.7)
-
-
4.8
Other
£m
-
-
-
7.6
7.6
0.9
-
0.3
6.4
7.6
Total
£m
0.3
(0.1)
0.2
12.2
12.4
6.4
(0.7)
0.3
6.4
12.4
Reconciliation to disposal of businesses and subsidiary undertakings as shown in the Consolidated Cash Flow Statement:
Cash consideration net of disposal costs - continuing operations
Cash consideration net of disposal costs - discontinued operations
Cash and cash equivalents disposed with subsidiaries
Bank overdrafts disposed with subsidiaries
Proceeds on disposal of businesses and subsidiary undertakings
Year ended 30
September
2022
£m
5.7
2.0
-
-
Year ended 30
September
2021
£m
3.6
1,560.4
(44.7)
0.3
7.7
1,519.6
All of the businesses disposed of during the year absorbed £0.1 million of the Groups net operating cash flows, contributed £nil in respect of investing
activities and paid £nil in respect of financing activities.
There is no tax in relation to these disposals.
80
Financial Statements
Financial Statements
Notes to the accounts
18 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 which completed on 4 March 2021.
On 5 August 2021, the Group announced the sale of its Insurance Risk segment to Moodys Corporation which completed on 15 September 2021
following the completion of customary closing conditions.
The Groups Consolidated Income Statement includes the following results from discontinued operations:
Year
ended 30
September
2022
Insurance
Risk
Energy
Information
Year
ended 30
September
2021
Insurance
Risk
EdTEch
Energy
Information
£m
£m
£m
£m
£m
£m
£m
Note
3
3
-
-
-
3
3
3, 13, (i)
-
-
(11.2)
3, 13
-
4
(11.2)
24
-
3
11
(11.2)
-
-
(11.2)
-
(11.2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
256.5
(202.7)
(10.1)
223.0
(173.9)
(9.5)
-
-
(11.2)
(3.1)
40.6
(5.3)
(0.1)
39.5
-
33.5
(28.8)
(0.6)
(3.0)
1.1
-
-
-
-
-
-
(5.3)
-
(0.2)
-
(0.2)
-
(11.2)
35.1
39.5
0.9
(5.3)
-
(0.1)
(0.1)
-
-
(11.2)
-
-
(11.2)
-
35.0
0.2
(2.1)
33.1
(1.7)
39.4
0.2
(2.0)
37.6
2.4
0.9
-
(0.1)
0.8
(0.2)
(5.3)
-
-
(5.3)
(3.9)
(11.2)
31.4
40.0
0.6
(9.2)
3, 13, 17
2.7
2.7
-
1,499.1
1,267.1
232.0
-
3, 13, 17
-
-
11
20.1
20.1
-
-
52.1
52.5
(1.4)
(102.5)
(49.7)
(56.3)
1.0
3.5
11.6
22.8
(11.2)
1,480.1
1,309.9
174.9
(4.7)
Revenue
Expenses
Depreciation
Amortisation of intangible assets not
arising on business combinations
Adjusted operating profit
Exceptional operating costs
Amortisation of intangible assets
arising on business combinations
Operating (loss)/profit before
share of results of joint ventures
and associates
Share of adjusted operating losses
from operations of joint ventures and
associates
(Loss)/profit before net finance
costs and tax
Investment revenue
Finance costs
(Loss)/profit before tax
Tax (charge)/credit
(Loss)/profit after tax attributable
to discontinued operations
Profit on disposal of discontinued
operations
Recycled cumulative translation
differences on disposal of
discontinued operations
Tax credit/(charge) on profit on
disposal of discontinued operations
Profit/(loss) attributable to
discontinued operations
(i) The Groups 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.
81
Daily Mail and General Trust plc Annual Report 2022
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 EPAs order to replace the 69.2
million RINs which was accepted for the duration of Genscapes 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.
During the year a settlement agreement was reached with the EPA whereby DMGT, without admitting any wrongdoing, will replace 24 million
RINs over a four year period.
At each year end IAS 37 requires DMGT to review this provision and make appropriate adjustments to reflect the current status of the claim. The
Groups 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 ultimate
cost of settlement. Accordingly, the provision could change substantially over time. Any change to this provision will continue to be disclosed as
an exceptional operating item within discontinued operations.
RINs trade in a volatile range. Using the year end price of US$1.74 compared to the estimated future price of US$1.51 replacing the 24 million
RINs would increase the provision by approximately US$3.1 million (£2.7 million).
No deferred tax is recorded against this provision.
Cash flows associated with discontinued operations comprise operating cash outflows of £nil (2021 £361.4 million), investing cash inflows of £2.2
million (2021 £1,559.4 million) and financing cash outflows of £nil (2021 £7.5 million).
82
Financial Statements
Financial Statements
Notes to the accounts
19 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 30 September 2021, the assets and liabilities held for sale relate to Landmark Solutions and Landmark Insurance, divisions of Landmark Information
Group Ltd within the Groups Property Information segment.
During the year, the Landmark Insurance business was disposed whilst the Landmark Solutions business was reclassified back out of assets and
liabilities held for sale.
Trade and other receivables:
Trade receivables
Prepayments
Contract acquisition costs
Total assets associated with businesses held for sale
Trade and other payables
Total liabilities associated with businesses held for sale
Net assets of the disposal group
Note
27
27
27
30
At 30
September
2022
£m
At 30
September
2021
£m
-
-
-
-
-
-
-
1.7
2.7
2.5
6.9
(5.9)
(5.9)
1.0
83
Daily Mail and General Trust plc Annual Report 2022
20 Goodwill
Cost
At 1 October 2020
Additions from business combinations
Transfer to other intangible assets
Adjustment to previous year estimate of contingent consideration
Disposals
Exchange adjustment
At 30 September 2021
Additions
Transfer from other intangible assets
At 30 September 2022
Accumulated impairment losses
At 1 October 2020
Impairment
Disposals
Exchange adjustment
At 30 September 2021
Impairment
At 30 September 2022
Net book value 2020
Net book value 2021
Net book value 2022
Note
Goodwill
£m
3
21
35
3
21
294.5
45.6
(1.9)
(0.1)
(80.1)
(4.0)
254.0
0.2
2.0
256.2
Note
Goodwill
£m
3
3
39.1
8.0
(1.0)
(0.2)
45.9
8.8
54.7
255.4
208.1
201.5
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. Recoverable amounts have been determined using
value in use calculations in accordance with IAS 36, Impairment of Assets.
The discount rates and long-term growth rates used in the value in use calculations for CGUs with goodwill and intangible assets with a total carrying
value greater than £10.0 million are as follows:
CGU
Property Information
The 'i' Goodwill
The 'i' Masthead
New Scientist Goodwill
New Scientist Brand
New Scientist Customer Relations
Segment
Property Information
Consumer Media
Consumer Media
Consumer Media
Consumer Media
Consumer Media
Intangible asset
£m
18.3
-
27.3
-
20.4
11.0
77.0
Goodwill
£m
141.1
8.9
-
37.9
-
-
187.9
Pre-tax discount rate
15.47% to 17.19%
14.31%
14.31%
14.31%
14.31%
14.31%
Long term
growth/(decline)
rate
2.0%
(3.0%)
(3.0%)
2.0%
2.0%
2.0%
84
Financial Statements
Financial Statements
Notes to the accounts
Goodwill impairment losses recognised in the period amounted to £8.5 million relating to New Scientist in the Consumer Media segment following a
reduced forecast and £0.3 million relating to IPE in the Events and Exhibitions segment following a reduced forecast given the continued uncertainty
caused by the Covid-19 pandemic. There is a tax charge of £nil associated with these impairment charges.
In the prior year ended 30 September 2021, the Group recognised goodwill impairment losses amounting to £8.0 million relating to CWC in the Events
and Exhibitions segment following a significantly reduced forecast given the continued uncertainty caused by the Covid-19 pandemic. There was a
tax credit of £nil associated with this impairment charge.
The Groups policy on impairment of goodwill is set out in Note 2.
In accordance with paragraph 134 of IAS 36, further disclosures have been provided in relation to New Scientist where reasonably possible changes
in the key assumptions would result in an increased impairment charge.
The New Scientist CGU within the Consumer Media segment holds goodwill with a carrying value of £37.9 million (2021 £46.4 million) together with
intangible assets with a carrying value of £31.4 million (2021 £33.7 million). The carrying value of the New Scientist CGU 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 following year derived from budgets for 2023. The Directors believe these to be reasonably achievable;
(ii) subsequent cash flows for four additional years increased in line with growth expectations of the business;
(iii) cash flows beyond the five-year period extrapolated using a long-term nominal growth rate of 2.0%; and
(iv) a pre-tax discount rate of 14.31%.
For this business the Directors have performed a sensitivity analysis on the total carrying value of the CGU. If the discount rate increased by 1.0% the
impairment charge would increase by £7.7 million; if the long-term growth rate decreased by 1.0% the impairment charge would increase by £5.9
million; if the business missed budget by 10.0% the impairment charge would increase by £4.7 million.
85
Daily Mail and General Trust plc Annual Report 2022
21 Other intangible assets
Cost
At 1 October 2020
Analysis reclassifications
Transfer from goodwill
Additions from business
combinations
Other additions
Internally generated
Disposals
Exchange adjustment
At 30 September 2021
Transfer to goodwill
Internally generated
Disposals
Exchange adjustment
At 30 September 2022
Accumulated amortisation
At 1 October 2020
Charge for the year
Impairment
Disposals
Exchange adjustment
At 30 September 2021
Charge for the year
Impairment
Disposals
Exchange adjustment
At 30 September 2022
Net book value 2020
Net book value 2021
Net book value 2022
Note
20
3
3
3
20
3
17
Note
3
3
3
3
17
Publishing
rights,
mastheads
and titles
£m
108.2
-
-
-
-
-
(2.5)
(0.1)
105.6
-
-
-
-
105.6
Publishing
rights,
mastheads
and titles
£m
70.1
-
-
(2.5)
(0.1)
67.5
-
-
-
-
67.5
38.1
38.1
38.1
Market- and
customer-
related
databases and
customer
relationships
£m
Computer
software
(i)
£m
Other
£m
Total
£m
86.3
(0.7)
1.9
12.1
-
-
(10.9)
(0.7)
88.0
(2.0)
-
-
1.7
87.7
310.1
(0.5)
-
-
2.1
5.2
(230.9)
(15.2)
70.8
-
4.3
(0.1)
2.6
77.6
0.1
-
-
-
-
-
-
-
0.1
-
-
-
-
0.1
541.7
(0.5)
1.9
35.1
2.1
5.2
(254.0)
(16.7)
314.8
(2.0)
4.3
(0.1)
6.6
323.6
Market- and
customer-
related
databases and
customer
relationships
£m
Computer
software
(i)
£m
Other
£m
Total
£m
62.5
8.2
1.6
(8.7)
(0.4)
63.2
4.5
0.1
-
1.6
69.4
23.8
24.8
18.3
279.9
10.6
-
(219.0)
(13.7)
57.8
5.0
-
(0.1)
2.6
65.3
30.2
13.0
12.3
0.1
-
-
-
-
0.1
-
-
-
-
0.1
-
-
-
446.8
24.9
5.0
(239.8)
(15.1)
221.8
15.6
0.5
(0.1)
6.4
244.2
94.9
93.0
79.4
Brands
£m
37.0
0.7
-
23.0
-
-
(9.7)
(0.7)
50.3
-
-
-
2.3
52.6
Brands
£m
34.2
6.1
3.4
(9.6)
(0.9)
33.2
6.1
0.4
-
2.2
41.9
2.8
17.1
10.7
Impairment losses recognised in the period amount to £0.5 million relating to Plastex in the Events and Exhibitions segment following a
reduced forecast given the continued uncertainty caused by the Covid-19 pandemic. There is a tax credit of £0.1 million associated with this
impairment charge.
86
Financial Statements
Financial Statements
Notes to the accounts
(i)
Computer software includes purchased and internally generated intangible assets, not arising on business combinations, as follows:
Cost
At 1 October 2020
Additions
Disposals
Analysis reclassifications
Exchange adjustment
At 30 September 2021
Additions
Exchange adjustment
At 30 September 2022
Accumulated amortisation
At 1 October 2020
Charge for the year
Disposals
Exchange adjustment
At 30 September 2021
Charge for the year
Exchange adjustment
At 30 September 2022
Net book value 2020
Net book value 2021
Net book value 2022
Note
£m
289.3
7.3
(221.5)
(1.0)
(14.1)
60.0
4.3
2.2
66.5
262.2
9.5
(209.6)
(13.2)
48.9
4.3
2.2
55.4
27.1
11.1
11.1
3
3
The following table analyses intangible assets in the course of construction included in the internally generated intangibles above, on which
no amortisation has been charged in the year since they have not been brought into use.
Cost
At 1 October 2020
Additions
Projects completed
At 30 September 2021
Additions
Projects completed
At 30 September 2022
£m
2.2
5.7
(1.9)
6.0
4.3
(2.6)
7.7
The methodologies applied to the Groups CGUs when testing for impairment and details of the above impairment charge are set out in Note
2.
The Groups largest intangible assets with a carrying value greater than £10.0 million are further analysed as follows:
The 'i' Masthead
New Scientist Brand
New Scientist Customer Relations
At 30
September
2022 Carrying
value
£m
27.3
20.4
11.0
At 30
September
2021 Carrying
value
£m
31.1
22.1
11.6
At 30
September
2022
Remaining
amortisation
period
Years
7.2
13.4
13.4
At 30
September
2021
Remaining
amortisation
period
Years
8.2
14.4
14.4
Segment
Consumer Media
Consumer Media
Consumer Media
87
Daily Mail and General Trust plc Annual Report 2022
22 Property, plant and equipment
Cost
At 1 October 2020
Owned by subsidiaries acquired
Additions
Disposals
Owned by subsidiaries disposed
Exchange adjustment
At 30 September 2021
Additions
Disposals
Transfers from Right of use assets
Exchange adjustment
At 30 September 2022
Accumulated depreciation and impairment
At 1 October 2020
Charge for the year
Disposals
Owned by subsidiaries disposed
Exchange adjustment
At 30 September 2021
Charge for the year
Disposals
Transfers from Right of use assets
Exchange adjustment
At 30 September 2022
Net book value 2020
Net book value 2021
Net book value 2022
Note
3
3
3
23
Note
3
3
23
Freehold
properties
£m
Short
leasehold
properties
£m
Plant,
equipment
and other
£m
32.9
7.9
0.5
-
(0.1)
-
41.2
-
-
1.5
-
42.7
22.8
-
0.2
-
(20.0)
(1.1)
1.9
0.8
-
-
-
2.7
282.3
3.4
7.6
(3.2)
(43.6)
(2.9)
243.6
9.1
(2.9)
0.2
2.7
252.7
Freehold
properties
£m
Short
leasehold
properties
£m
Plant,
equipment
and other
£m
19.2
1.5
-
(0.1)
-
20.6
1.5
-
-
-
22.1
13.7
20.6
20.6
19.1
1.4
-
(18.1)
(1.0)
1.4
0.3
-
-
-
1.7
3.7
0.5
1.0
236.7
18.1
(3.1)
(39.9)
(2.5)
209.3
14.5
(1.8)
0.2
1.9
224.1
45.6
34.3
28.6
Total
£m
338.0
11.3
8.3
(3.2)
(63.7)
(4.0)
286.7
9.9
(2.9)
1.7
2.7
298.1
Total
£m
275.0
21.0
(3.1)
(58.1)
(3.5)
231.3
16.3
(1.8)
0.2
1.9
247.9
63.0
55.4
50.2
88
Financial Statements
Financial Statements
Notes to the accounts
23 Right of use assets
Cost
At 1 October 2020
Owned by subsidiaries acquired
Additions
Disposals
Owned by subsidiaries disposed
Exchange adjustment
At 30 September 2021
Additions
Disposals
Transfers to freehold properties and plant and equipment
Exchange adjustment
At 30 September 2022
Accumulated depreciation
At 1 October 2020
Charge for the year
Disposals
Owned by subsidiaries disposed
Exchange adjustment
At 30 September 2021
Charge for the year
Disposals
Transfers to freehold properties and plant and equipment
Exchange adjustment
At 30 September 2022
Net book value - 2020
Net book value - 2021
Net book value - 2022
Note
3
3
3
22
Note
3
3
22
Leasehold
properties
£m
Plant and
equipment
£m
108.1
5.0
13.7
(7.6)
(58.8)
(3.8)
56.6
10.6
(3.4)
(1.5)
4.3
66.6
2.5
0.2
0.7
(0.4)
-
-
3.0
0.6
(0.5)
(0.2)
-
2.9
Leasehold
properties
£m
Plant and
equipment
£m
20.0
19.4
(3.1)
(12.1)
(0.7)
23.5
13.0
(1.6)
-
1.8
36.7
88.1
33.1
29.9
0.8
0.9
(0.3)
-
-
1.4
0.8
(0.5)
(0.2)
-
1.5
1.7
1.6
1.4
Total
£m
110.6
5.2
14.4
(8.0)
(58.8)
(3.8)
59.6
11.2
(3.9)
(1.7)
4.3
69.5
Total
£m
20.8
20.3
(3.4)
(12.1)
(0.7)
24.9
13.8
(2.1)
(0.2)
1.8
38.2
89.8
34.7
31.3
89
Daily Mail and General Trust plc Annual Report 2022
24 Investments in joint ventures and associates
Joint ventures
At 1 October 2020
Disposals
Owned by subsidiaries disposed
Share of retained reserves
Dividends received
Exchange adjustment
At 30 September 2021
Share of retained reserves
Dividends received
At 30 September 2022
Note
Cost of shares
£m
Share of post-
acquisition
retained
reserves
£m
(i)
7
(ii)
7
(iii)
7.8
(6.4)
(1.1)
-
-
(0.3)
-
-
-
-
0.8
(0.7)
1.1
0.9
(0.4)
-
1.7
0.7
(1.1)
1.3
Total
£m
8.6
(7.1)
-
0.9
(0.4)
(0.3)
1.7
0.7
(1.1)
1.3
(i)
During the prior year, the Group sold its investment in TreppPort LLC in the Property Information segment.
(ii)
During the prior year, the Group received dividends from TreppPort LLC and PointX Ltd, both in the Property Information segment.
(iii)
During the year, the Group received dividends from Decision First Ltd and PointX Ltd, both in the Property Information segment.
Summary aggregated financial information for the Groups joint ventures, extracted on a 100% basis from the joint ventures own financial
information, is set out below:
Year ended 30 September 2022
Property Information
At 30 September 2022
Property Information
Year ended 30 September 2021
Property Information
At 30 September 2021
Property Information
Revenue
£m
4.6
Operating profit
£m
1.7
Total expenses Profit for the year
£m
1.4
£m
(3.2)
Total
comprehensive
income
£m
1.4
Non-current
assets
£m
0.3
Current assets
£m
3.6
Total assets Current liabilities
£m
(1.3)
£m
3.9
Total liabilities
£m
(1.3)
Net assets
£m
2.6
Revenue
£m
6.4
Operating profit
£m
2.2
Total expenses Profit for the year
£m
1.9
£m
(4.5)
Total
comprehensive
income
£m
1.9
Non-current
assets
£m
0.4
Current assets
£m
11.6
Total assets Current liabilities
£m
(3.6)
£m
12.0
Total liabilities
£m
(3.6)
Net assets
£m
8.4
At 30 September 2022 the Group's joint ventures had capital commitments amounting to £nil (2021 £nil). There were no material contingent
liabilities (2021 none).
Information on principal joint ventures:
Unlisted
PointX Ltd
(incorporated and operating in the UK)
Decision First Ltd
(incorporated and operating in the UK)
Segment
Principal activity
Year ended
Description of
holding
Group
interest
%
Property
Information
Provider of a 'Points of Interest' database
covering Great Britain
31 March
2022
Ordinary B
50.0
Property
Information
Developer of technology links to allow
communication between mortgage lenders
and service providers
31 December
2021
Ordinary
50.0
90
Financial Statements
Financial Statements
Notes to the accounts
Associates
At 1 October 2020
Additions - cash
Additions - non cash
Share of retained reserves
Dividends received
Impairment
Transfer to financial assets at fair value through Other Comprehensive Income
Transfer from financial assets at fair value through Other Comprehensive Income
Disposal
Owned by subsidiaries disposed
Exchange adjustment
At 30 September 2021
Additions - cash
Additions - non cash
Share of retained reserves
Dividends received
Impairment
Transfer to financial assets at fair value through Other Comprehensive Income
Disposals
Exchange adjustment
At 30 September 2022
Note
Cost of shares
£m
Share of post-
acquisition
retained
reserves
£m
(i)
(ii)
7, 18
(iii)
7
25
25
(iv)
(v)
(vi)
7
(vii)
7
25
(viii)
94.1
21.7
0.3
-
-
(6.5)
(2.5)
13.5
(3.8)
(5.9)
(1.2)
109.7
3.4
0.3
-
-
(30.7)
(0.3)
(0.3)
0.5
82.6
(45.7)
-
-
(4.3)
(0.6)
-
0.6
-
4.0
5.0
0.5
(40.5)
-
-
(7.1)
(0.1)
-
-
0.3
(0.5)
(47.9)
Total
£m
48.4
21.7
0.3
(4.3)
(0.6)
(6.5)
(1.9)
13.5
0.2
(0.9)
(0.7)
69.2
3.4
0.3
(7.1)
(0.1)
(30.7)
(0.3)
-
-
34.7
The cumulative unrecognised share of losses of the Groups associates principally comprises £14.5 million (2021 £23.4 million) in relation to
the Groups investment in Independent Television News Ltd and £21.8 million (2021 £18.9 million) in relation to Excalibur Holdco Ltd.
Joint ventures and associates have been accounted for under the equity method using unaudited financial information for the year ended 30
September 2022.
(i)
During the prior year cash additions relate to additions in Bloobloom Ltd, Factory 14 S.a.r.l and Kortext Ltd, all held centrally.
(ii)
During the prior year non-cash additions relate to additions in Bloobloom Ltd held centrally and settled with media credits.
(iii)
During the prior year the Group received dividends from Whereoware, LLC in the Events and Exhibitions segment and from Mercatus,
Inc. in the Property Information segment.
(iv)
During the prior year the Group disposed of its investment in Mercatus, Inc. in the Property Information segment.
(v)
Cash additions during the year relate to Bloobloom Ltd and Quick Move Ltd, all held centrally.
(vi)
Non-cash additions during the year relate to Quick Move Ltd held centrally and settled with media credits and accrued interest.
(vii)
During the year, the Group received dividends from Whereoware, LLC in the Events and Exhibitions segment.
(viii) During the year the Group disposed of its investment in Entale Media Ltd and iProf Learning Solutions, all held centrally.
Summary aggregated financial information for the Groups associates, extracted on a 100% basis from the associates own financial
information is set out below:
Year ended 30 September 2022
Events and Exhibitions
Centrally held
Revenue
£m
0.9
187.5
188.4
Operating profit
£m
0.8
33.3
34.1
Total expenses
£m
(0.1)
(225.3)
(225.4)
(Loss)/Profit for
the year
£m
0.8
(37.8)
(37.0)
Other
comprehensive
income
£m
-
34.5
34.5
Total
comprehensive
(expense)/income
£m
0.8
(3.3)
(2.5)
91
Daily Mail and General Trust plc Annual Report 2022
At 30 September 2022
Centrally held
Non-current
assets
£m
47.3
Current assets
£m
143.9
Total assets Current liabilities
£m
(103.1)
£m
191.2
Non-current
liabilities
£m
(236.9)
Total liabilities
£m
(340.0)
Net liabilities
£m
(148.8)
Year ended 30 September 2021
Property Information
Events and Exhibitions
Centrally held
At 30 September 2021
Property Information
Centrally held
Operating
profit/(loss)
Total expenses
(Loss)/profit for
the year
Other
comprehensive
expense
Total
comprehensive
(expense)/income
Revenue
£m
3.9
0.6
181.6
186.1
£m
(3.6)
0.6
18.6
15.6
£m
(7.3)
(0.1)
(221.4)
(228.8)
Non-current
assets
£m
-
80.8
80.8
Current assets
Total assets Current liabilities
£m
1.4
158.7
160.1
£m
1.4
239.5
240.9
£m
(3.5)
(211.2)
(214.7)
£m
(3.4)
0.5
(39.8)
(42.7)
Non-current
liabilities
£m
-
(305.0)
(305.0)
£m
-
-
(15.7)
(15.7)
£m
(3.4)
0.5
(55.5)
(58.4)
Total liabilities
Net liabilities
£m
(3.5)
(516.2)
(519.7)
£m
(2.1)
(276.7)
(278.8)
At 30 September 2022 the Groups associates had capital commitments amounting to £nil (2021 £nil). There were no material contingent
liabilities (2021 none).
Information on principal associates:
Unlisted
LineVision, Inc.
(incorporated and operating in the US)
Excalibur Holdco Ltd
(incorporated and operating in the UK)
Independent Television News Ltd
(incorporated and operating in the UK)
Propstack Services Private Ltd
(incorporated and operating in India)
Quick Move Ltd
(incorporated and operating in the UK)
Kortext Ltd
(incorporated and operating in the UK)
Bloobloom Ltd
(incorporated and operating in the UK)
Yopa Property Ltd
(incorporated and operating in the UK)
Segment
Principal activity
Year ended
Description of
holding
Group
interest
%
Centrally held
Provider of transmission line monitoring
and asset management for utilities
31 December
2021
Series A1
24.1
Centrally held
Operator of online discount businesses
Centrally held
Independent TV news provider
30
September
2022
31 December
2021
B Ordinary
23.9
Ordinary
20.0
Centrally held
Centrally held
Provider of commercial real estate
information
31 March
2022
Preference,
Equity
Serviced marketplace for the purchase
and resale of second-hand luxury goods
30
September
2022
22.7
33.9
22.0
Ordinary,
Preference
Ordinary,
Preference
Centrally held
Online learning platform 30 June 2022
Centrally held
Sales of prescription glasses and
sunglasses
Centrally held
Online property portal
31 July 2022
Preference
21.5
31 December
2021
Preference
45.3
92
Financial Statements
Financial Statements
Notes to the accounts
25 Financial assets at fair value through Other Comprehensive Income
At 1 October 2020
Additions - cash
Additions - non cash
Disposals
Transfer from investment in associates
Transfer to investment in associates
Fair value movement in the period
Exchange adjustment
At 30 September 2021
Additions - cash
Additions - non cash
Distributed in specie
Transfer from investment in associates
Fair value movement in the period - Cazoo
Fair value movement in the period - other
Exchange adjustment
At 30 September 2022
Note
24, (i)
24, (ii)
38
12, (iii)
24
38
38
£m
410.7
53.4
5.2
(22.0)
1.9
(13.5)
370.8
(0.5)
806.0
7.7
4.5
(109.8)
0.3
(653.6)
7.6
0.1
62.8
The financial assets above are non-interest bearing 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)
During the prior year, the Groups investment in Bricklane Technologies Ltd, previously an associate, was reclassified as a financial asset.
(ii)
During the prior year, the Group increased its investment in Kortext Ltd which is now held as an associate.
(iii)
During the year, the Groups investment in Cazoo was distributed in specie.
Financial assets at fair value through Other Comprehensive Income are analysed as follows:
Listed
Cazoo Group Ltd (incorporated and operating in the UK)
Taboola.com Ltd (incorporated and operating in Israel)
Stem, Inc. (incorporated and operating in the US)
Unlisted
PA Media Group Ltd (incorporated and operating in the UK)
BDG Media, Inc. (incorporated and operating in the US)
Farewill Ltd (incorporated and operating in the UK)
Cue Ball Capital LP (incorporated and operating in the US)
Hambro Perks Ltd (incorporated and operating in the UK)
Financial Network Analytics Ltd (incorporated and operating in the UK)
Air Mail, LLC (incorporated and operating in the US)
CompStak, Inc. (incorporated and operating in the US)
Bricklane Technologies Ltd (incorporated and operating in the UK)
Zilch Technology Ltd (incorporated and operating in the UK)
Plum Fintech Ltd (incorporated and operating in the UK)
Papier Ltd (incorporated and operating in the UK)
Other
Note
Class of Holding
Group
interest
%
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
Common Equity
Common Equity
Common Equity
Ordinary
Common,
Preference
Preference
Limited Partner
Ordinary
Ordinary
Preference
Ordinary
Preference
Ordinary
Preference
Preference and
Ordinary
-
0.3
0.2
18.4
3.4
5.4
2.5
3.1
4.5
3.1
2.0
13.2
1.1
2.3
4.2
At 30
September
2022
At 30
September
2021
£m
-
1.3
3.6
9.9
5.9
3.7
2.7
3.9
1.4
1.3
0.5
2.7
15.0
2.2
6.0
2.7
62.8
£m
763.4
4.9
-
9.3
6.0
3.7
2.7
3.9
1.4
0.9
0.5
2.7
5.0
-
-
1.6
806.0
93
Daily Mail and General Trust plc Annual Report 2022
(i)
Cazoo Group Ltd (Cazoo) provides an online used car sales platform.
On 2 December 2021, Rothermere Continuation Limited (RCL) and the Non-conflicted DMGT Directors announced the terms of a
recommended increased and final cash offer for all of the issued DMGT A Ordinary Non-Voting Shares not already owned by RCL (the Final
Offer).
On 16 December 2021, RCL announced that all of the conditions to the Final Offer had been satisfied or, where applicable, waived and the
Final Offer was therefore unconditional in all respects. Following the Final Offer being declared unconditional DMGT declared a special
dividend payable to all DMGT shareholders, including RCL. The special dividend comprised cash of £5.68 per share and approximately
0.5749 shares in Cazoo Group Ltd (Cazoo) per DMGT share, subject to a possible deduction for tax.
The cash element was paid on 30 December 2021 and the settlement of the Cazoo shares component of the special dividend occurred in
June 2022.
The carrying value of Cazoo as at 30 September 2022 was £nil (2021 £763.4 million) and a loss of £653.6 million (2021 gain of £357.2 million)
was recognised in Other Comprehensive Income during the year.
(ii)
Taboola.com Ltd is a content marketing platform provider.
(iii)
Stem, Inc. provides artificial intelligence driven clean energy storage systems.
(iv)
PA Media Group Ltd is a provider of news, sport and entertainment information.
(v)
BDG Media, Inc. operating as Bustle provides an online information platform covering fashion, politics, technology, diversity, celebrities,
health and beauty.
(vi)
Farewill Ltd provides online-based will-writing services.
(vii)
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.
(viii)
Hambro Perks Ltd is a venture capital firm.
(ix)
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.
(x)
GPNutrition Ltd provides direct to consumer nutritional supplements.
(xi)
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.
(xii)
CompStak, Inc. provides commercial real estate information to brokers, appraisers, researchers, landlords, lenders and investors.
(xiii)
Bricklane Technologies Ltd is a property investment platform provider.
(xiv)
Zilch Technology Ltd operates a buy now pay later application.
(xv)
Plum Fintech Ltd operates an application which automatically saves, invests and switches bills on behalf of the user.
(xvi)
Papier Ltd is a direct-to-consumer stationery provider.
94
Financial Statements
Financial Statements
Notes to the accounts
26 Inventories
Raw materials and consumables
Work in progress
27 Trade and other receivables
Current assets
Trade receivables
Impairment allowance
Prepayments
Contract acquisition costs
Contract assets
Sublease receivable
Other receivables
Classified as held for sale
Non-current assets
Other receivables
The maturity analysis of the Groups sublease receivables is as follows:
Within one year
Total undiscounted cashflows
Net investment in the lease
Movement in the impairment allowance is as follows:
At start of year
Impairment losses recognised
Amounts written off as uncollectable
Amounts recovered during the year
Owned by subsidiaries disposed
Exchange adjustment
At end of year
At 30
September
2022
£m
11.6
16.1
27.7
At 30
September
2021
£m
8.7
7.7
16.4
At 30
September
2022
£m
At 30
September
2021
£m
Note
19
186.7
(6.1)
180.6
43.0
2.8
9.0
-
11.7
247.1
-
247.1
1.3
248.4
At 30
September
2022
£m
-
-
-
At 30
September
2022
£m
(7.5)
(1.8)
3.0
0.8
-
(0.6)
(6.1)
130.7
(7.5)
123.2
39.4
2.5
7.0
3.2
18.5
193.8
(6.9)
186.9
3.3
190.2
At 30
September
2021
£m
3.2
3.2
3.2
At 30
September
2021
£m
(4.7)
(4.1)
0.3
0.4
0.5
0.1
(7.5)
IFRS 9 introduced an expected credit loss (ECL) model which requires an impairment provision to be made on initial recognition of the
receivable which previously under IAS 39 was required only when a loss event occurred. Accordingly, the Group recognises an ECL by
reference to historical recovery rates and forward-looking indicators.
The Group applies the IFRS 9 simplified approach to measuring impairment allowances using a lifetime expected credit loss allowance for
trade receivables, contract assets and other short-term receivables. To measure expected credit losses on a collective basis, trade
receivables and contract assets are grouped based on similar credit risk and ageing.
95
Daily Mail and General Trust plc Annual Report 2022
The expected loss rates are based on the Groups historical credit losses experience as adjusted for current and forward-looking information
and macroeconomic factors in the countries where the debtor is located.
For trade receivables the expected credit loss allowance is calculated using a provision matrix, with higher default rates applied to older
balances.
The provision rates are based on days past due for groupings of customers with similar loss patterns.
There are no trade receivables and contract assets subject to enforcement activity which have been written off.
The Group applies IFRS 9 in measuring impairment allowances using a 12-month expected credit loss allowance for long-term other
receivables. To estimate a range of expected credit losses, the probability of default tables based on the debtors proxy credit rating was
estimated and applied to the carrying amount outstanding at 30 September 2022.
The lifetime expected loss provision for trade receivables, contract assets, sublease receivable and other receivables is as follows:
At 30 September 2022
Expected loss rate
Gross carrying amount (£m)
Loss allowance provision (£m)
At 30 September 2021
Expected loss rate
Gross carrying amount (£m)
Loss allowance provision (£m)
Current
0.7%
126.1
0.9
More than 30 days
past due
0.3%
33.9
0.1
More than 60 days
past due
1.1%
18.3
0.2
More than 90 days
past due
16.1%
30.4
4.9
Current
2.1%
120.7
2.5
More than 30 days
past due
2.3%
13.0
0.3
More than 60 days
past due
-
7.1
-
More than 90 days
past due
21.6%
21.8
4.7
Total
2.9%
208.7
6.1
Total
4.6%
162.6
7.5
Ageing of impaired trade receivables, contract assets, sublease receivables and other receivables:
0 - 30 days
31 - 60 days
61 - 90 days
91 - 120 days
121+ days
Total
At 30
September
2022
£m
0.9
0.1
0.2
0.3
4.6
6.1
At 30
September
2021
£m
2.5
0.3
-
0.1
4.6
7.5
Included in the Groups trade receivables are amounts owed with a carrying value of £28.3 million (2021 £14.0 million) which are past due at
30 September 2022 for which no allowance has been made. The Group is not aware of any deterioration in the credit quality of these
customers and considers that the amounts are still recoverable.
Ageing of past due but not impaired trade receivables and contract assets is as follows:
1 - 30 days overdue
31 - 60 days overdue
61 - 90 days overdue
91+ days overdue
Total
The carrying amount of trade and other receivables approximates to their fair value.
At 30
September
2022
£m
12.5
8.5
1.0
6.3
28.3
At 30
September
2021
£m
4.2
2.9
0.2
6.7
14.0
96
Financial Statements
Financial Statements
Notes to the accounts
28 Other financial assets
Current assets
Collateral
Non-current assets
Escrow
Loans to joint ventures and associates
At 30
September
2022
£m
At 30
September
2021
£m
Note
15, (i)
5.1
9.2
(ii)
(iii)
-
15.9
15.9
120.7
19.8
140.5
(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.
The collateral deposited at both the current and prior year end principally relates to fixed-to-fixed cross-currency swaps. At 30
September 2022 these swaps had a carrying value of £19.5 million liability (2021 £17.2 million). Further details relating to these
swaps are disclosed in Note 33.
(ii)
Following the disposal of Euromoney in 2019, the Company made available £120.7 million from the Groups cash resources to the
Groups Pension Schemes.
Following the acceptance on 16 December 2021 of Rothermere Continuation Limiteds (RCL) offer for all of the issued DMGT A
Ordinary Non-Voting Shares not already owned by RCL, the escrow balances were released to the Groups Pension Schemes as
part of a £402.0 million cash pension funding payment.
(iii)
Loans to joint ventures and associates stated net of expected credit loss provision are as follows:
Total gross loans to joint ventures and associates
Loss allowance provision
Loan receivable net of expected credit loss provision
Movement in the impairment allowance is as follows:
At start of year
Movement in the year
At end of year
At 30
September
2022
£m
36.1
(20.2)
15.9
At 30
September
2022
£m
12.0
8.2
20.2
At 30
September
2021
£m
31.8
(12.0)
19.8
At 30
September
2021
£m
12.0
-
12.0
Note
7
97
Daily Mail and General Trust plc Annual Report 2022
29 Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Unsecured bank overdrafts
Cash and cash equivalents in the Consolidated Cash Flow Statement
Analysis of cash and cash equivalents by currency:
Sterling
US dollar
Australian dollar
Canadian dollar
Euro
Other
Analysis of cash and cash equivalents by interest rate type:
Floating rate interest
Fixed rate interest
(i)
The carrying amount of cash and cash equivalents equates to their fair values.
30 Trade and other payables
Current liabilities
Trade payables
Interest payable
Other taxation and social security
Other creditors
Accruals
Deferred revenue
Classified as held for sale
The carrying amount of trade and other payables approximates to their fair value.
31 Current tax
Corporation tax payable
Corporation tax receivable
98
Note
(i)
(i)
32
15
At 30
September
2022
£m
53.0
53.0
(0.7)
52.3
27.2
19.4
0.4
0.7
1.2
4.1
53.0
19.1
33.9
53.0
At 30
September
2021
£m
1,746.9
1,746.9
(1.7)
1,745.2
1,254.6
486.7
0.2
0.6
0.5
4.3
1,746.9
361.5
1,385.4
1,746.9
At 30
September
2022
£m
At 30
September
2021
£m
Note
53.1
3.6
6.8
17.6
147.8
125.4
354.3
-
354.3
22.6
3.6
4.6
21.4
137.9
80.2
270.3
(5.9)
264.4
19
At 30
September
2022
£m
4.2
-
4.2
At 30
September
2021
£m
1.7
(0.4)
1.3
Financial Statements
Financial Statements
Notes to the accounts
32 Borrowings
The Groups borrowings are unsecured and are analysed as follows:
At 30 September 2022
Within one year
Between one and two years
Between two and five years
Over five years
At 30 September 2021
Within one year
Between one and two years
Between two and five years
Over five years
Overdrafts
Bonds
Lease liabilities
£m
0.7
-
-
-
-
0.7
£m
-
-
194.6
-
194.6
194.6
£m
7.3
8.2
10.8
2.5
21.5
28.8
Total
£m
8.0
8.2
205.4
2.5
216.1
224.1
1.7
-
16.6
18.3
-
-
-
-
1.7
-
-
199.5
199.5
199.5
Euro
£m
1.2
-
1.2
1.5
-
1.5
5.6
11.2
3.7
20.5
37.1
Other
£m
2.7
-
2.7
1.4
-
1.4
5.6
11.2
203.2
220.0
238.3
Total
£m
223.4
0.7
224.1
236.6
1.7
238.3
The Group's borrowings are analysed by currency and interest rate type as follows:
Sterling
US dollar Australian dollar
At 30 September 2022
Fixed rate interest
Floating rate interest
At 30 September 2021
Fixed rate interest
Floating rate interest
£m
£m
204.0
0.5
204.5
218.5
1.0
219.5
13.6
0.2
13.8
15.2
0.7
15.9
£m
1.9
-
1.9
-
-
-
The Groups borrowings, analysed by currency and interest rate type, adjusting the principal borrowed and interest rate type by the notional amount
of interest rate swaps, interest rate caps and currency derivatives, are as follows:
At 30 September 2022
Fixed rate interest
Floating rate interest
At 30 September 2021
Fixed rate interest
Floating rate interest
Sterling
US dollar Australian dollar
£m
£m
235.4
(84.5)
150.9
165.2
(30.9)
134.3
85.1
(17.7)
67.4
170.8
(69.7)
101.1
£m
1.9
-
1.9
-
-
-
Euro
£m
1.2
-
1.2
1.5
-
1.5
Other
£m
2.7
-
2.7
1.4
-
1.4
Total
£m
326.3
(102.2)
224.1
338.9
(100.6)
238.3
99
Daily Mail and General Trust plc Annual Report 2022
Committed borrowing facilities
On 6 May 2022 the Group successfully renegotiated its committed bank facilities for a four year term extendable for a further one year at each banks
option. The new total committed bank facilities amount to £209.1 million (2021 £315.7 million). Of these facilities £160.0 million (2021 £155.0 million)
are denominated in sterling and £49.1 million (US$55.0 million) (2021 £160.7 million (US$217.0 million)) are denominated in US dollars. Drawings are
permitted in all major currencies. The net debt to EBITDA covenant in the new bank facilities is no greater than 3.25 times (3.50 times for the previous
facilities which were cancelled on 6 May 2022) temporarily increasing to 3.5 times following an acquisition. The interest cover covenant remains at 3.0
times.
The Groups bank loans bear interest charged at the relevant term or compounded risk-free rate plus a margin. The margin varies by bank and is
based on the Groups ratio of net debt to EBITDA. EBITDA for these purposes is defined as the aggregate of the Groups 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 14. For the purposes of calculating the Groups
bank covenants, EBITDA is calculated on a pre-IFRS 16 basis and amounts to £74.8 million by deducting operating lease charges and adding sublease
rental income.
The Groups 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:
Expiring in more than one year but not more than two years
Expiring in more than three years but not more than four years
Total bank facilities
At 30
September
2022
Committed
£m
-
209.1
209.1
At 30
September
2021
Committed
£m
315.7
-
315.7
At 30
September
2022 Undrawn
£m
-
209.1
209.1
At 30
September
2021 Undrawn
£m
315.7
-
315.7
The Group has issued standby letters of credit amounting to £2.0 million (2021 £3.3 million).
Bonds
Following maturity of the Companys 2021 bonds in the prior year, the only remaining bonds are those maturing 21 June 2027 with an annual
coupon of 6.375%. The nominal, carrying and fair values are as follows:
Nominal value
Carrying value
Fair value
At 30
September
2022
£m
200.0
194.6
170.3
At 30
September
2021
£m
200.0
199.5
221.6
The bonds have been adjusted from their nominal values to take account of direct issue costs, discounts and movements in hedged risks. The issue
costs and discount are being amortised over the expected lives of the bonds using the effective interest method. The unamortised issue costs amount
to £0.3 million (2021 £0.3 million) and the unamortised discount amounts to £0.5 million (2021 £0.6 million).
The Group used interest rate swaps designated as hedges of a proportion of the change in fair value of the bonds. Following termination of the last
remaining interest rate swap on 21 June 2022, the residual bond fair value adjustment of £4.9 million is required to be amortised over the period to 21
June 2027 being the maturity of the bond. Amortisation charged in the year amounts to £0.3 million leaving an unamortised residual fair value
adjustment of £4.6 million (see Note 33).
The fair value of the Groups bonds has been calculated on the basis of quoted market rates using level 2 fair value inputs.
Following the year end, on 3 November 2022, the Company bought back and cancelled £50.0 million nominal of its bonds for cash consideration of
£46.6 million.
Lease liabilities
The Group leases various office space, equipment and vehicles which are negotiated on an individual basis with differing terms and conditions.
The Groups key lease arrangements relate to office space in the key cities in which it operates. The Group negotiates lease contracts according to
the Groups needs with a view to balancing stability, security of tenure and lease terms against the risk of entering excessively long or onerous
arrangements.
Of the Groups leased properties, the most significant leases relate to the temporary DMGT head office premises at 9 Derry Street, London, W8 5TT
which expires in June 2025, 51 Astor Place, New York in the Consumer Media segment which expires in December 2024 and 600 Fifth Avenue, New
York in the Property Information segment which expires in November 2028.
100
Financial Statements
Financial Statements
Notes to the accounts
The lease payments for Northcliffe House (NCH) made during the year amount to £10.5 million (2021 £10.0 million) which were adjusted each year in
line with the Consumer Price Index of the preceding year. The lease at NCH expires in December 2022. Prior to this date, the employees currently
working at NCH will move into temporary office space at 9 Derry Street whilst redevelopment works are being carried out. The target end date for
these works is June 2024, at which point the Group will commence its own fit out works prior to employees moving back to NCH.
The lease payments for 51 Astor Place made during the year amount to £2.4 million (US$2.7 million) and these are fixed until maturity of the lease in
December 2024.
The lease payments for 600 Fifth Avenue made during the year amount to £1.4 million (US$1.6 million) and these are fixed until 9 November 2023.
Starting 10 November 2023, the annual lease payments will be £1.5 million (US$1.7 million) until maturity of the lease in November 2028.
An analysis of the Groups finance lease liabilities is as follows:
Northcliffe House
9 Derry Street
51 Astor Place
600 Fifth Avenue
Other office space
Motor vehicles
Other equipment
There are no leases with residual value guarantees or leases not yet commenced to which the Group is committed.
At 30
September
2022
£m
-
4.2
5.3
8.3
9.8
1.2
-
28.8
At 30
September
2021
£m
9.9
-
6.2
7.8
11.6
1.5
0.1
37.1
101
Daily Mail and General Trust plc Annual Report 2022
33 Financial instruments and risk management
The carrying amounts of the Groups financial instruments together with the gains and losses thereon are as follows:
At 30
September
2022
Carrying
value
Year ended
30
September
2022
(Loss)/gain
to income
Year ended
30
September
2022
(Loss)/gain
to equity
At 30
September
2021
restated (i)
Carrying
value
Year ended
30
September
2021
restated (i)
(Loss)/gain
to income
Year ended
30
September
2021
restated (i)
Gain/(loss)
to equity
Note
£m
£m
£m
£m
£m
£m
Financial assets
Fair value through profit and loss
Derivative instruments in designated hedge
accounting relationships
Interest rate swaps
Derivative instruments not in designated
hedge accounting relationships
Interest rate caps
Provision for contingent consideration
receivable
Loans to joint ventures and associates
Fair value through Other Comprehensive
Income
Financial assets
Amortised cost
Trade receivables and contract assets
Other receivables
Sublease receivable
Collateral
Other financial assets - Escrow
Loans to joint ventures and associates
Cash and cash equivalents
Financial liabilities
Fair value through profit and loss
Derivative instruments in designated hedge
accounting relationships
Fixed-to-fixed cross-currency swaps
Provision for contingent consideration
payable
Amortised cost
Trade payables
Interest payable
Other creditors
Accruals
Lease liabilities
Bank overdrafts
Bonds
Bank loans
Total for financial instruments
(ii)
(ii)
(iii)
28 (iv)
-
(5.0)
11.9
11.5
-
-
-
-
-
-
-
-
0.4
0.2
4.2
0.4
(2.2)
25 (v)
62.8
1.8
(645.8)
806.0
28
28
28 (iv)
29
(ii)
(iii)
32
32
32 (vi)
189.6
13.0
-
5.1
-
15.9
53.0
351.3
(19.5)
-
(53.1)
(3.6)
(17.6)
(147.8)
(28.8)
(0.7)
(194.6)
-
(465.7)
(114.4)
2.0
-
-
-
-
(7.6)
0.4
3.1
(5.8)
(0.2)
-
-
-
-
(0.9)
-
(7.8)
(3.2)
(17.9)
(14.8)
7.1
4.0
-
-
-
-
29.0
(605.7)
128.5
21.6
3.2
9.2
120.7
15.6
1,746.9
2,856.9
(5.8)
(17.2)
-
(1.1)
(0.6)
-
(0.5)
(5.2)
(3.0)
-
-
-
(15.1)
(16.7)
(3.6)
(21.4)
(137.9)
(37.1)
(1.7)
(199.5)
-
(436.2)
(620.8)
2,420.7
-
-
-
-
370.3
(3.6)
(1.9)
-
-
-
-
(13.0)
351.8
5.9
-
0.3
-
0.3
3.3
3.4
0.2
-
-
13.4
365.2
0.3
-
-
-
(3.4)
-
0.1
-
0.1
1.4
0.8
(2.9)
(0.8)
(0.1)
-
-
-
-
(1.3)
-
(9.6)
(1.6)
(13.4)
(16.3)
(i)
(ii)
The 2021 financial liabilities have been restated to include accruals, interest payable and other creditors.
Derivative instruments are measured at Fair Value Through Profit and Loss (FVTPL). Their fair values are determined using market
rates of interest and exchange and established estimation techniques such as discounted cashflow and option valuation models. The
Group has derivatives designated in the following hedging relationships:
102
Financial Statements
Financial Statements
Notes to the accounts
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.
(iii)
Contingent consideration is valued based on the future profitability of the business to which the contingent consideration relates,
discounted at market rates of interest.
(iv)
Loans to joint ventures and associates (included within other financial assets) include the following:
10.0% fixed rate unsecured convertible loan note which was issued and fully impaired during the year, repayable on 21 November 2024
with a carrying value of £nil (2022 £nil) (at FVTPL);
8.0% fixed rate unsecured convertible loan note issued during the prior year (which was fully impaired in the year to 30 September 2022),
repayable on 4 August 2023 with a carrying value (which includes accrued interest) of £nil (2021 £4.2 million) (at FVTPL);
10.0% fixed rate unsecured loan note, repayable on 31 December 2025 with a carrying value (which includes accrued interest) of £15.7
million at 30 September 2022 (2021 £15.6 million) (at Amortised cost).
(v)
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.
(vi)
The Groups bonds are measured at amortised cost as adjusted for fair value hedging.
Risk management
The Group is exposed to credit, interest rate and currency risks arising in the normal course of business. Derivative financial instruments
are used to manage exposures to fluctuations in foreign currency exchange rates and interest rates but are not employed for speculative
purposes.
Capital risk management
The Group manages its capital, defined as equity shareholders funds and net cash or borrowings, to ensure that entities in the Group are
able to continue as going concerns for the foreseeable future. Further detail is provided in the Going Concern section of the Basis of
Preparation (Note 1).
Debt management
The Group borrows on an unsecured basis and arranges its debt to ensure an appropriate maturity profile. The Groups principal sources of
funding are the long-term sterling bond market and committed bank facilities. The Group is mindful of its credit rating, currently BB- with
Standard & Poors and BB+ with Fitch and ensures it has sufficient committed bank facilities in order to meet short-term business
requirements, after taking into account the Groups holding of cash and cash equivalents together with any distribution restrictions which
exist. The Group aims to maximise the term and flexibility of indebtedness and retain headroom in the form of undrawn committed bank
facilities of approximately £100.0 million. Additionally, the Group arranges its currency borrowings in order that they are in proportion to the
ratio of earnings in that particular currency to total Group earnings.
The Directors consider that the Groups cash generative businesses together with its bond issuances and bank facilities are sufficient to cover
the likely medium-term funding requirements of the Group.
Associates, joint ventures and other equity investments in general arrange and maintain their own financing and funding requirements. In all
cases such financing is on a non-recourse basis to the Company.
Whilst the Groups 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 3.25 times (3.50 times for the previous facilities which were cancelled on 6 May 2022, see Note 32)
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 year. 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 lease liabilities. The resultant Net Debt to EBITDA ratio for the year to
30 September 2022 is 1.97 times. Using a closing rate basis for the valuation of net debt, the ratio is 2.05 times. At 30 September 2021, the
Group had net cash (at average exchange rates as adjusted for lease liabilities and excluding Escrow balances) amounting to £1,534.7
million.
Cash and liquidity risk management
The Group monitors its cash balances to ensure that sufficient resources are available to meet operational requirements as they fall due.
Short-term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due
consideration to credit risk. A detailed maturity profile of both derivative and non-derivative financial liabilities are analysed in the table later
in this note.
103
Daily Mail and General Trust plc Annual Report 2022
Market risk management
The Groups primary market risks are interest rate fluctuations and exchange rate movements.
Interest rate risk management
The limit imposed by the Groups bank covenants is at least 3.0 times EBITDA to net interest. The actual ratio for the year was 5.3 times
(2021 11.3 times).
Group debt is comprised largely of fixed GBP bond debt and, from time to time, floating rate sterling (GBP) and US dollar (USD) bank
borrowings.
The Groups interest rate exposure management policy is aimed at reducing the exposure of the consolidated businesses to changes in
interest rates. The Groups long term policy aims to ensure that between 70.0% and 80.0% of interest rate exposures are fixed with the
balance floating. Whilst recognising this, policy is subject to short term fluctuations as a result of the prevailing economic climate.
This policy is achieved by issuing fixed rate GBP bond debt and entering into derivative contracts that economically swap fixed rate interest
into floating rate. Derivatives are used to hedge or reduce the risks of interest rate and exchange rate movements and are not entered into
unless such risks exist.
To meet policy the Group:
swaps a portion of its fixed GBP bond debt into GBP floating debt using interest rate swaps;
swaps a portion of its fixed GBP bond debt into USD fixed debt by using fixed-to-fixed cross-currency swaps;
buys caps to fix its debt; and
enters forward contracts, selling USD and buying GBP to swap its GBP floating rate debt into USD floating rate debt.
The derivatives in place to meet Group policy are as follows:
(i)
(ii)
Fixed-to-floating interest rate swaps, designated as fair value hedges of a portion of the Groups bonds; changes in the fair value of
the swaps are recognised in the Consolidated Income Statement and at the same time the carrying value of the hedged bonds are
adjusted for movements in the hedged risk to the extent effective and those adjustments are also recognised in the Consolidated
Income Statement. The last remaining swap was closed out during the year. The notional value of these interest rate swaps amounts
to £nil (2021 £53.1 million) with the Group paying floating rates of between 0.0% and 0.9% (2021 0.0% and 0.5%). The average
hedged interest rate for the year was 0.2% (2021 0.1%).
Fixed-to-fixed cross-currency swaps designated as hedges of the Groups net investments in foreign operations. The notional value
of these cross-currency swaps amounts to £37.6 million/US$60.0 million (2021 £72.0 million/US$115.0 million) with the Group paying
fixed US dollar interest at rates of between 6.0% and 7.0% (2021 6.0% and 7.0%). The average hedged GBP/USD exchange rate
for the year was 1.60 (2021 1.60).
(iii)
Interest rate caps amounting to US$20.0 million and £85.0 million notional (2021 US$95.0 million and £85.0 million) at rates of
between 2.5% and 3.4% (2021 2.4% and 3.5% ).
Foreign exchange rate risk management
Translation exposures arise on the earnings and net assets of business operations in entities with functional currencies other than that of the
parent company. The net asset exposures are economically hedged by a policy of denominating borrowings in currencies where significant
translation exposures exist, most notably US dollars.
The Group also designates currency swaps, forward contracts and US dollar bank borrowings as net investment hedges, hedging the Groups
overseas investments.
Credit risk management
The Groups principal credit risk relates to its trade and other receivables and non-performance by counterparties to financial instrument
contracts.
104
Financial Statements
Financial Statements
Notes to the accounts
Trade and other receivables
The Groups customer base is diversified geographically and by segment with customers generally of a good financial standing. Before
accepting any new customers, the Group assesses the potential customers credit quality and sets credit limits by customer. The average
credit period is 56 days (2021 42 days). The Group considers the credit risk of trade receivables to be low, although the Group remains
vigilant in the current economic climate. The Group reserves the right to charge interest on overdue receivables, although the Group does
not hold collateral over any trade receivable balances. The Group makes an impairment allowance which is reviewed regularly in conjunction
with an analysis of historical payment profiles, past default experience together with relevant forward looking information. Further information
on impairment allowances relating to trade receivables, contract assets, sublease receivable and other receivables can be found in Note 27.
The maximum exposure to credit risk from trade and other receivables at the reporting date is the amount of each class disclosed in the table
at the start of this note.
Institutional counterparty risk
The Group seeks to limit interest rate and foreign exchange risks, described above, by the use of derivative financial instruments. As a result,
credit risk arises from the potential non-performance of the counterparties to those financial instruments, which are unsecured. The amount
of this credit risk is normally restricted to the amounts of any hedge gain and not the principal amount being hedged. The Group also has a
credit exposure to counterparties for the full principal amount of cash and cash equivalents.
Credit risk is controlled by monitoring the credit quality of these counterparties, principally licensed commercial banks and investment banks
with strong long-term credit ratings, and of the amounts outstanding with each of them. The credit risk on cash deposits and derivative
financial instruments is considered low since the counterparties are banks with high credit ratings.
Group policy is to have no more than the higher of £20.0 million or 25.0% of surplus cash balances deposited (or at risk) with any AA rated
or UK ring-fenced banking counterparty and no more than the higher of £10.0 million or 15.0% of surplus cash balances deposited with any
A rated counterparty. Additionally, no more than £75.0 million in aggregate should be deposited with any one AA rated banking group and
no more than £65.0 million in aggregate should be deposited with any one A rated banking group. The Group has no significant concentration
of risk with exposure spread over a large number of counterparties and customers.
Expected credit losses on cash and cash equivalents (which includes cash deposits with an original maturity of less than three months) were
reviewed at the reporting date and determined to be immaterial.
The maximum exposure to credit risk from derivative assets and cash and cash equivalents at the reporting date is the amount of each class
disclosed in the table at the start of this note.
Derivative financial instruments and hedge accounting
The Group designates certain derivatives as:
(i)
(ii)
(iii)
hedges of the change in fair value of recognised assets and liabilities (fair value hedges); or
hedges of highly probable forecast transactions (cash flow hedges); or
hedges of net investments in foreign operations (net investment hedges).
To qualify for hedge accounting, each individual hedging relationship must be expected to be effective, be designated and documented at its
inception and throughout the life of the hedge relationship.
Fair value hedges
The Groups policy is to use interest rate swaps to convert a proportion of its fixed rate debt to floating rates. The swaps are designated as a
hedge of the change in fair value of the Groups fixed rate debt.
Up until termination of the last remaining swap on 21 June 2022, the notional amount of the interest rate swaps was used to hedge an
equivalent notional amount of fixed rate debt. Accordingly, the hedge ratio was 100%.
Since the critical terms of the swaps matched those of the fixed rate debt the Group expected a highly effective hedging relationship. The fair
value of the designated fixed rate debt was expected to move in the opposite direction to the fair value of the interest rate swaps as a result
of changes in external market interest rates.
The nominal and carrying amounts of hedged fixed rate debt are as follows:
Nominal amount
Carrying amount
105
At 30
September
2022
£m
-
-
At 30
September
2021
£m
53.1
53.0
Daily Mail and General Trust plc Annual Report 2022
The last remaining interest rate swap was closed out on 21 June 2022, therefore the amount of hedged fixed rate debt at 30 September 2022
is nil. In the prior year the carrying amount of debt in the table above is included within Borrowings in the Consolidated Statement of Financial
Position.
The change in value of the hedged fixed rate debt is used as the basis for recognising hedge ineffectiveness for the year. The following table
shows the fair value adjustment to sterling debt (in the prior year this is included in the carrying amount above) and the fair value of related
derivatives designated in fair value hedging relationships included in the Consolidated Statement of Financial Position, together with the fair
value gains and losses thereon included in the Consolidated Income Statement for the current and prior years:
Fair value at
30 September
2020
£m
3.7
(3.7)
-
Year ended 30
September
2021 fair value
gain/(loss)
£m
(3.3)
3.3
-
Fair value at
30 September
2021
£m
0.4
(0.4)
-
Year ended 30
September
2022 fair value
gain/(loss)
£m
(5.3)
5.3
-
Termination of
interest rate
swap
£m
4.9
-
4.9
Amortisation
relating to
terminated fair
value hedge of
bond
£m
-
(0.3)
(0.3)
Fair value at
30 September
2022
£m
-
4.6
4.6
Sterling interest rate swaps
Sterling debt
Total
Following termination of the last remaining interest rate swap, the residual fair value adjustment to sterling debt of £4.9 million is required to
be amortised over the period to maturity of the bond, being the remaining duration of the original hedge relationship.
Cash flow hedges
The Groups policy is to use certain derivative financial instruments in order to hedge the foreign exchange risk arising from certain firm
commitments or forecast highly probable transactions in currencies other than the functional currency of the relevant Group entity.
There were no cash flow hedging relationships during the current or prior year.
Net investment hedges
The Group seeks to manage the foreign currency exposure arising on retranslation of the reporting entitys share of net assets of foreign
operations at each reporting date by designating certain derivative financial instruments and foreign currency borrowings as net investment
hedging instruments.
The whole or part of the hedging instruments are designated in the hedge relationship in a 1:1 ratio against the Groups available net
investments in foreign operations. Accordingly, the hedge ratio is deemed to be 100%.
Since the critical terms of the hedging instruments match those of the net investments in foreign operations the Group expects a highly
effective hedging relationship. The carrying value of the designated net investments in foreign operations is expected to move in the opposite
direction to the mark-to-market value of the hedging instruments as a result of changes in market exchange rates.
Hedge effectiveness
Since the Group expects the hedge relationships described above to be highly effective, a qualitative assessment of effectiveness is
performed on inception, at each reporting date, and upon any material change in circumstances affecting the hedge effectiveness
requirements.
The key sources of ineffectiveness for the designated relationships described above are:
(i) A reduction to the amount of the Groups hedged fixed rate debt to an amount that is less than the notional amount of the interest rate
swaps.
(ii) An insufficient amount of net investments in foreign operations (i.e. less than the amount of the hedging instruments).
(iii) A material change in the Groups credit risk or that of its swap counterparties.
If changes in circumstances cause the critical terms of the hedging instrument to no longer match those of the hedged item, ineffectiveness
is monitored using appropriate methodologies.
All designated fair value hedge relationships were effective throughout the year ended 30 September 2022, until termination of the swap in
June 2022. Hedge ineffectiveness in relation to net investment hedges of £4.9 million was recognised in the Consolidated Income Statement
in Net finance costs (see Note 10), due to the amount of the hedging instruments exceeding the Groups net investments in foreign operations.
There was no ineffectiveness recognised in the Consolidated Income Statement in the prior year.
The Groups derivative financial instruments and their maturity profiles are summarised as follows:
106
Financial Statements
Financial Statements
Notes to the accounts
Derivative financial assets:
At 30 September 2022
Between two and five years
Over five years
At 30 September 2021
Within one year
Over five years
Derivative financial liabilities:
At 30 September 2022
Between two and five years
At 30 September 2021
Between two and five years
Over five years
Fair value
hedges
Derivatives not
qualifying for
hedge
accounting
Derivative
financial assets
£m
£m
£m
-
-
-
0.4
-
0.4
5.5
6.4
11.9
-
0.4
0.4
5.5
6.4
11.9
0.4
0.4
0.8
Net investment
hedges
£m
(19.5)
(13.2)
(4.0)
(17.2)
107
Daily Mail and General Trust plc Annual Report 2022
Maturity profile of financial liabilities
The remaining undiscounted contractual liabilities and their maturities together with a reconciliation to amounts included in the Consolidated
Statement of Financial Position are as follows:
Within one
year
Between
one and
two years
Between
two and five
years
Between
five and
ten years
Total
undiscounted
liability
Interest
Undiscounted
value of
financial asset
Discounting,
mark to
market and
other
adjustments
Included in
Consolidated
Statement of
Financial
Position
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 30 September 2022
Trade payables
Interest payable
Other creditors
Accruals
Bank overdrafts
Bonds
Lease liabilities
Fixed-to-fixed cross-currency
swaps
At 30 September 2021 restated
Trade payables
Interest payable
Other creditors
Accruals
Bank overdrafts
Bonds
Lease liabilities
Contingent consideration
Fixed-to-fixed cross-currency
swaps
(53.1)
(3.6)
(17.6)
(147.8)
(0.7)
(9.2)
(8.1)
-
-
-
-
-
(12.8)
(8.8)
-
-
-
-
-
(234.6)
(11.5)
-
-
-
-
-
-
(2.6)
(53.1)
(3.6)
(17.6)
(147.8)
(0.7)
(256.6)
(31.0)
-
-
-
-
-
56.6
2.2
(3.4)
(3.4)
(55.1)
-
(61.9)
2.6
(243.5)
(25.0)
(301.2)
(2.6)
(572.3)
61.4
(16.7)
(3.6)
(21.4)
(137.9)
(1.7)
(9.2)
(17.5)
(1.1)
-
-
-
-
-
(12.8)
(6.1)
-
-
-
-
-
-
(38.3)
(12.0)
-
-
-
-
-
-
(209.1)
(3.8)
-
(16.7)
(3.6)
(21.4)
(137.9)
(1.7)
(269.4)
(39.4)
(1.1)
-
-
-
-
-
69.4
2.3
-
(5.5)
(5.5)
(77.0)
(19.5)
(107.5)
3.8
(214.6)
(24.4)
(127.3)
(232.4)
(598.7)
75.5
-
-
-
-
-
-
-
-
-
-
-
-
5.4
-
(53.1)
(3.6)
(17.6)
(147.8)
(0.7)
(194.6)
(28.8)
43.3
43.3
(3.5)
(19.5)
1.9
(465.7)
-
-
-
-
-
-
-
-
90.4
90.4
-
-
-
-
-
0.5
-
-
(3.9)
(3.4)
(16.7)
(3.6)
(21.4)
(137.9)
(1.7)
(199.5)
(37.1)
(1.1)
(17.2)
(436.2)
The 2021 financial liabilities have been restated to include accruals, interest payable and other creditors.
Included in the maturity table above are currency swaps with a notional value of US$60.0 million (2021 US$90.0 million) with mutual break
clauses at fair value every five years.
At the prior year end all interest rate swaps were in an asset position. Since interest rate swaps are settled on a net basis, no liability is
included in the above maturity tables.
Following the year end, on 3 November 2022 the Company bought back and cancelled £50.0 million nominal of its bonds. The above maturity
table reflects the position at 30 September 2022 and neither the cash flows relating to the buy back, nor the revised future cash flows relating
to the remaining bond are included in the table.
Sensitivity analysis
In managing the Groups interest rate and currency risks, the Group aims to reduce the impact of short-term fluctuations. However, changes
in foreign exchange rates and interest rates may have an impact on the Groups statutory results.
At 30 September 2022 it is estimated that an increase of 1.0% in interest rates would have reduced the Groups finance costs by £2.9 million
(2021 £0.1 million increase). There would have been no effect on amounts recognised directly in equity. A decrease of 1.0% in interest rates
would have increased the Groups finance costs by £2.8 million (2021 £0.1 million). There would have been no effect on amounts recognised
directly in equity. This sensitivity has been calculated by applying the interest rate change to the Groups variable rate borrowings, net of any
interest rate swaps, at the year end date.
108
Financial Statements
Financial Statements
Notes to the accounts
At 30 September 2022 it is estimated that a 10.0% strengthening of sterling against the US dollar would have reduced the net loss taken to
equity by £3.0 million (2021 £10.2 million increase in the net gain) and reduced the net loss taken to income by £2.2 million (2021 no change
to the net loss). A 10.0% weakening of sterling against the US dollar would have increased the net loss taken to equity by £3.8 million (2021
£12.6 million reduction to the net gain) and increased the net loss taken to income by £2.9 million (2021 no change to the net loss). This
sensitivity has been calculated by applying the foreign exchange change to the Groups derivative financial instruments which are affected
by changes in foreign exchange rates, at the year end date.
Fair value hierarchy
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 quoted prices (unadjusted) 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).
At 30 September 2022
Financial assets
Financial assets at fair value through Other Comprehensive Income
Fair value through profit and loss
Derivative instruments not in designated hedge accounting relationships
Note
25
Level 1
£m
Level 2
£m
Level 3
£m
4.9
-
4.9
51.8
11.9
63.7
6.1
-
6.1
Total
£m
62.8
11.9
74.7
Financial liabilities
Fair value through profit and loss
Derivative instruments in designated hedge accounting relationships
At 30 September 2021
Financial assets
Financial assets at fair value through Other Comprehensive Income
Fair value through profit and loss
Derivative instruments in designated hedge accounting relationships
Derivative instruments not in designated hedge accounting relationships
Provision for contingent consideration receivable
Loans to joint ventures and associates
Financial liabilities
Fair value through profit and loss
Derivative instruments in designated hedge accounting relationships
Provision for contingent consideration payable
-
(19.5)
-
(19.5)
Note
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
25
768.3
-
-
-
-
768.3
31.7
0.4
0.4
-
-
32.5
35
-
-
-
(17.2)
-
(17.2)
6.0
806.0
-
-
0.2
4.2
10.4
-
(1.1)
(1.1)
0.4
0.4
0.2
4.2
811.2
(17.2)
(1.1)
(18.3)
109
Daily Mail and General Trust plc Annual Report 2022
Reconciliation of level 3 fair value measurement of financial assets is as follows:
At 1 October 2020
Transfer from Level 2
Contingent consideration received
Loans advanced to joint ventures and associates
Exchange adjustment
At 30 September 2021
Settlement of contingent consideration receivable
Loans advanced to associates
Interest on loans to associates
Transfer to investment in associates
Impairment of loan to associate
Exchange adjustment
At 30 September 2022
Note
(i)
7, 28
£m
1.3
4.8
0.2
4.2
(0.1)
10.4
(0.2)
5.8
0.4
(2.2)
(8.2)
0.1
6.1
(i) Equity investments classified within level 2 in prior years have been transferred to level 3, as the observable market data used in the
valuation was not available.
Reconciliation of level 3 fair value measurement of financial liabilities is as follows:
At 1 October 2020
Cash paid to settle contingent consideration in respect of acquisitions
Change in fair value of contingent consideration
Adjustment to goodwill
At 30 September 2021
Cash paid to settle contingent consideration in respect of acquisitions
Change in fair value of contingent consideration
At 30 September 2022
Note
35
10, 35
20, 35
35
10, 35
£m
(2.5)
1.4
(0.1)
0.1
(1.1)
1.2
(0.1)
-
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. At 30 September 2021 the estimated range of possible outcomes for the fair value of these liabilities was £0.2
million to £1.1 million.
In the current year the increase in fair value of contingent consideration of £0.1 million (2021 £0.1 million) was charged to the Consolidated Income
Statement within Net finance costs (Note 10).
A one percentage point increase or decrease in the growth rate used in estimating the expected profits, results in no change to the contingent
consideration liability at 30 September 2021.
No discounting was applied to the contingent consideration balance as at 30 September 2021, as the entire balance was payable within less
than one year.
110
Financial Statements
Financial Statements
Notes to the accounts
34 Retirement benefit obligations
The Group operates a number of pension schemes under which contributions are paid by the employer and employees. The total net pension credit
of the Group for the year ended 30 September 2022 was £18.0 million (2021 costs of £10.1 million).
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.
Defined benefit schemes
Background
The Company operates two main defined benefit schemes (the Schemes), the Harmsworth Pension Scheme (HPS) and the Senior Executive
Pension Scheme (SEPF), both of which are closed to new entrants and to further accrual.
Full actuarial valuations of the Schemes are carried out triennially by the scheme actuary and determine the level of contributions payable by
the Company to the Schemes. The Technical Provisions position for the most recent funding valuations of the Schemes are summarised in
the table below:
Latest Funding Position
Date of latest triennial valuation
Total Liabilities
Total Assets
(Deficit)/Surplus
HPS
31 March 2019
£m
(2,821.0)
2,583.0
(238.0)
SEPF
31 March 2019
£m
(330.5)
346.1
15.6
AVC
31 March 2017
£m
(52.8)
49.0
(3.8)
Following the results of the latest triennial valuations as at 31 March 2019, the Company and the Trustees of the Schemes (Trustees) agreed
to eliminate the above HPS deficit through a combination of additional contributions and investment returns by 5 October 2024. The agreed
Recovery Plan contributions were as follows:
HPS
£16.2 million paid on 5 October 2019 under the Recovery Plan agreed at the 31 March 2016 valuation;
£11.0 million each year for 5 years from 5 October 2020 paid annually in advance; and
£50.0 million at October 2024 or such lower amount required to meet the deficit at 31 March 2024 based on the Scheme Actuarys estimate
of the technical provisions at this date.
The Company also agreed to pay the Pension Protection Fund levy and all other expenses excluding investment management expenses for
HPS.
In addition, the Recovery Plan contributions were supplemented by arrangements offering contingent security to HPS, including:
An Escrow arrangement, to which the Company agreed to contribute an initial sum of £113.6 million and five annual payments of £7.0
million each, with a termination date of 30 September 2026;
A long-term insolvency guarantee (to replace the Limited Partnership Investment vehicle), capped at £150.0 million with a termination
date of 2035 (or the date on which the Scheme reaches full funding on a self-sufficiency basis); and
Further Funding Agreement in relation to contributions provided in certain circumstances.
The Company considered that these contributions were sufficient to eliminate any deficit over the agreed period. This recovery plan was to be reviewed
at the next triennial funding valuation of the Schemes which is due to be completed with an effective date of 31 March 2022.
SEPF
For the actuarial valuation as at 31 March 2019, there was no shortfall and therefore no deficit contributions were required.
The Company will pay the Pension Protection Fund levy and all other expenses excluding investment management expenses for SEPF.
AVC Plan
The Recovery Plan agreed as part of the 31 March 2017 valuation of the AVC Plan estimated that the deficit would be eliminated by 30
September 2026. No deficit contributions were payable as it was assumed that this would be met through returns on the AVC Plans assets.
111
Daily Mail and General Trust plc Annual Report 2022
On 24 October 2022, the AVC plan was merged into HPS. Therefore, the assets and liabilities have been transferred to HPS and the 31 March 2020
valuation of the AVC plan will not be completed.
Following acceptance of Rothermere Continuation Limiteds (RCL) offer for all of the issued DMGT A Ordinary Non Voting shares not already owned
by RCL on 16 December 2021, the Company made a cash funding payment into the Pension Schemes amounting to £402.0 million in addition to a
£11.0 million Recovery Plan cash funding payment made on 5 October 2021. These payments replaced all previously agreed Recovery Plan
contributions.
In addition, the Company has agreed with the Trustees that, should it make any permanent reductions in the Companys capital, including share buy-
backs, it will make additional contributions to the Schemes amounting to 20.0% of the capital reduction capped at the aggregate HPS and SEPF
funding deficits shown in the most recent actuarial report. Contributions of £nil (2021 £nil) relating to this agreement were made in the year to 30
September 2022. Following payment of the £402.0 million cash funding referenced above, this agreement was dissolved.
Strategic Plan
The Trustees have developed a comprehensive approach to managing the Schemes investment strategy to ensure it is always aligned with the
Strategic Plan. The Schemes financial performance has been sufficiently better than envisaged so the Trustees have reduced risk largely by
decreasing the equity allocation and increasing its interest rate and inflation rate hedging which is reflected in the analysis of the Schemes assets. In
addition, the Strategic Plan has been amended to target an asset allocation that may enable the Schemes to be self-sufficient by 2026.
The figures in this note are based on calculations using membership data as at 30 September 2022 along with asset valuations and cash flow
information from the schemes for the year to 30 September 2022.
A reconciliation of the net pension obligation reported in the Consolidated Statement of Financial Position is shown in the following table:
Present value of defined benefit obligation
Assets at fair value
Impact of asset ceiling
Surplus/(deficit) reported in the Consolidated
Statement of Financial Position
At 30
September
2022
Schemes in
surplus
£m
(1,869.0)
2,879.9
(1.7)
1,009.2
At 30
September
2022 Schemes
in deficit
£m
-
-
-
-
At 30
September
2022 Total
£m
(1,869.0)
2,879.9
(1.7)
At 30
September
2021 Schemes
in surplus
At 30
September
2021 Schemes
in deficit
£m
(2,893.4)
3,196.5
-
£m
(50.0)
42.0
-
At 30
September
2021 Total
£m
(2,943.4)
3,238.5
-
1,009.2
303.1
(8.0)
295.1
The IAS 19, Employee Benefits, accounting surplus/(deficit) data above differs to the triennial actuarial surplus/(deficit) calculation used in the
assessment of future funding obligations.
There are a number of reasons for this. The Technical Provisions basis is agreed by the Trustees and Company as part of the triennial actuarial
funding valuation which is used to determine the level of any contributions payable by the Company into the Schemes. The guidance issued to Trustees
from the Pensions Regulator is that the Technical Provisions basis should reflect the covenant strength and investment strategy at the time of the
valuation. In addition, the Technical Provisions discount rate represents the expected risk adjusted return on the Schemes assets and is normally set
with reference to the yield on government bonds.
For accounting purposes, IAS 19 states that the actuarial assumptions used must represent the best estimate of the variables determining the ultimate
post-employment benefit cost. The discount rate used is determined by reference to market yields at the end of the reporting period on high quality
(AA rated) corporate bonds, and therefore doesnt directly relate to the expected return on the Schemes assets.
The key differences between the make-up of the bases are the reference yields used for the discount rate, which is higher on the IAS 19 basis, and
that the Technical Provisions incorporate different risk adjustment factors, compared to the accounting basis which is set to represent best estimate
assumptions.
Due to the different methodologies used it is not uncommon for a scheme to be in IAS 19 accounting surplus but still be in a deficit on a Technical
Provisions basis.
The International Financial Reporting Interpretations Committee, in its document IFRIC 14, has interpreted the extent to which a company can
recognise a pension surplus on its Statement of Financial Position.
In relation to HPS and the SEPF, having taken account of the rules of the schemes, the Company has an unconditional right to a refund of any surplus
under IFRIC 14 and considers that the recognition of surpluses in these schemes on its Statement of Financial Position is in accordance with the
interpretations of IFRIC 14. In relation to the AVC, having taken account of the rules of the scheme, the Company does not have an unconditional right
to a refund under IFRIC 14. At 30 September 2022 the AVC Plan showed a surplus and an asset ceiling has been applied to restrict the surplus on
the Consolidated Statement of Financial Position as required under IFRIC 14.
112
Financial Statements
Financial Statements
Notes to the accounts
The surplus/(deficit) for the year, set out above, excludes a related deferred tax liability of £299.8 million (2021 £75.0 million).
A reconciliation of the present value of the defined benefit obligation is shown in the following table:
Defined benefit obligation at start of year
Interest cost
Past service credit/(cost)
Net benefit payments
Actuarial gain/(loss) as a result of:
- Changes in financial assumptions
- Changes in demographic assumptions
- Membership experience
Defined benefit obligation at end of year
A reconciliation of the fair value of assets is shown in the following table:
Fair value of assets at start of year
Interest income on scheme assets
Company contributions
Net benefit payments
Return on plan assets, excluding amounts included in interest income on scheme assets
Fair value of assets at end of year
The fair value of assets is categorised as follows:
Year ended 30
September
2022
£m
(2,943.4)
Year ended 30
September
2021
£m
(3,005.8)
(56.2)
17.8
117.7
1,014.5
38.2
(57.6)
(1,869.0)
(45.7)
(0.2)
116.2
(29.3)
(3.3)
24.7
(2,943.4)
Year ended 30
September
2022
£m
3,238.5
68.1
412.9
(117.7)
(721.9)
2,879.9
Year ended 30
September
2021
£m
3,129.0
47.8
14.2
(116.2)
163.7
3,238.5
Note
10
3
38
38
38
Note
10
14
38
Equities
- Investment funds
- Private equity
Liability Driven Investments
Bonds and loans
Property
Infrastructure
Cash / Other
Total Assets
Year ended 30
September
2022
At 30
September
2022
At 30
September
2021
At 30
September
2021
Note
(i)
(ii)
(iii)
(iv)
£m
-
194.8
591.6
1,287.3
373.0
187.6
245.6
2,879.9
%
-
6
21
44
13
7
9
100
£m
%
586.3
205.7
665.8
1,088.6
434.0
201.1
57.0
3,238.5
18
6
21
34
13
6
2
100
(i)
Equities include hedge funds and infrastructure funds. Quoted securities in active markets are valued at the latest available bid price at the
reporting date.
Private equity and infrastructure funds are valued by investment managers using appropriate valuation techniques. These are derived from
market based multiples and discount rates of comparable quoted businesses or market transactions which have been determined by the
Trustees investment advisors to represent fair value.
(ii)
(iii)
(iv)
Liability Driven Investment funds (LDI) are a collateralised portfolio of gilt repo and swap contracts designed to hedge approximately 100.0%
(by value of assets) of the schemes inflation and interest rate sensitivity. These are independently valued using quoted prices and for OTC
instruments by the investment manager using recognised discounting techniques.
Bonds and loans include corporate bonds, distressed credit and loans. Corporate bonds are held in unitised pooled investment vehicles
and are valued at the latest available bid price provided by the pooled investment manager. Distressed credit and loans are valued by the
investment managers using relevant valuation techniques.
The schemes property portfolio represent a mixture of industrial, retail, office and leisure. These assets are independently valued at open
market value at 31 March each year with subsequent changes in value based on changes in the Morgan Stanley Capital International
(MSCI) property index.
113
Daily Mail and General Trust plc Annual Report 2022
The value of employer-related assets held on behalf of the schemes at 30 September 2022 was £nil (0.0% of assets), (2021 £nil, 0.0% of assets).
The main financial assumptions are shown in the following table:
Price inflation
Pension increases
Discount rate
Year ended 30
September
2022
%
3.70
3.55
5.30
Year ended 30
September
2021
%
3.50
3.35
1.95
The discount rate for both scheme liabilities and the fair value of scheme assets reflects yields at the year-end date on high-quality corporate bonds
and are based on a cash flow-based yield curve, calculating a single equivalent discount rate reflecting the average duration of the schemes liabilities,
rounded to the nearest 0.05% p.a. This methodology incorporates bonds given an AA rating from at least two of the main four rating agencies (Standard
& Poors, Moodys, Fitch and DBRS).
RPI inflation is derived in a similar way to the discount rate but with reference to the Bank of England spot curve at the duration of the schemes
weighted average duration with an appropriate allowance for inflation risk premium (0.20% p.a.), rounded to the nearest 0.05% p.a.
Mortality assumptions take account of scheme experience, and also allow for further improvements in life expectancy based on the Continuous
Mortality Investigation (CMI) projections but with a long-term rate of improvement in future mortality rates of 1.25% p.a. Allowance is made for the
extent to which employees have chosen to commute part of their pension for cash at retirement.
The average duration of the defined benefit obligation at the end of the year is approximately 13 years (2021 17 years).
The table below illustrates examples of the assumed average life expectancies from age 60 for the principal schemes:
For a current 60-year-old male member of the scheme
For a current 60-year-old female member of the scheme
For a current 50-year-old male member of the scheme
For a current 50-year-old female member of the scheme
Year ended 30
September
2022 Future
life
expectancy
from age 60
(years)
25.8
28.4
26.5
Year ended 30
September
2021 Future
life
expectancy
from age 60
(years)
26.9
28.6
27.2
29.2
29.3
The amounts charged to the Consolidated Income Statement relating to the Groups defined benefit schemes, based on the above assumptions are
shown in the following table:
Past service credit/(cost)
Credit/(charge) to operating profit
Finance income
Total credit to the Consolidated Income Statement
Note
3
10
Year ended 30
September
2022
£m
17.8
17.8
Year ended 30
September
2021
£m
(0.2)
(0.2)
11.9
29.7
2.1
1.9
The fair value of some of our pension assets are made up of quoted and unquoted investments. The latter require more judgement as their values are
not directly observable. The assumptions used in valuing unquoted investments are affected by current market conditions and trends which could
result in changes in fair value after the measurement date.
114
Financial Statements
Financial Statements
Notes to the accounts
Pension costs and the size of any pension surplus or deficit are sensitive to the assumptions adopted. The table below indicates the effect from
changes in the principal assumptions used above:
Mortality
Increase in pension obligation at 30 September from a one-year increase in life expectancy
Decrease in projected pension credit for the year to 30 September 2023 from a one year increase in life
expectancy
Inflation rate
Increase in pension obligation at 30 September from a 0.1% p.a. increase (excluding hedging)
Decrease in projected pension credit for the year to 30 September 2023 from a 0.1% p.a. increase in inflation
Discount rate
Decrease in pension obligation at 30 September from a 0.1% p.a. increase (excluding hedging)
Increase in projected pension credit for the year to 30 September 2023 from a 0.1% increase in discount rate
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
54.0
2.8
17.9
0.8
22.1
2.1
118.8
2.3
45.9
0.9
51.8
1.3
There are significant risks in connection with running defined benefit schemes, and the key risks are highlighted below:
Inflation rate risk
A significant proportion of the defined benefit obligation is linked to inflation, therefore increased inflation will result in a higher pension obligation. The
Trustees have sought to acquire certain assets with exposure to inflationary uplifts in order to negate a proportion of this risk. Monetary assets such
as bonds and loans hedge approximately 100.0% of the schemes risk (by value of assets).
Life expectancy risk
The present value of the defined benefit obligation is calculated with reference to the best estimate of the mortality of scheme members. An increase
in assumed life expectancy will result in an increase in the defined benefit obligation. Regular reviews of mortality experience are performed to ensure
life expectancy assumptions remain appropriate.
Investment risk
This is a measure of the uncertainty that the return on the schemes assets meet the return necessary to fund pension obligations. The schemes hold
a significant proportion of equities, but during the year have been reallocating some of these investments into credit and property investments which
exhibit lower volatility of return and the LDI investments.
Discount rate risk
The present value of the defined benefit obligation is calculated using a discount rate set with reference to high-quality corporate bond yields. A
decrease in corporate bond yields will increase the present value of the defined benefit obligation, although this will be partially offset by bonds and
the LDI investment funds which reduce the gilt rate risk by hedging approximately 100.0% of the schemes risk (by value of assets).
Amounts recognised in the Consolidated Statement of Comprehensive Income (SOCI) are shown in the following table:
Actuarial gain
Impact of asset ceiling on AVC Plan
Total gain recognised in SOCI
Cumulative actuarial gain recognised in SOCI at beginning of year
Cumulative actuarial gain recognised in SOCI at end of year
Note
38
Year ended 30
September
2022
£m
273.0
(1.7)
271.3
329.7
601.0
Year ended 30
September
2021
£m
155.8
-
155.8
173.9
329.7
115
Daily Mail and General Trust plc Annual Report 2022
A history of experience gains and losses is shown in the following table:
Present value of defined benefit obligation
Fair value of scheme assets
Impact of asset ceiling on AVC Plan
Combined surplus in schemes
Experience adjustments on defined benefit obligation
Experience adjustments on fair value of scheme assets
At 30
September
2022
£m
(1,869.0)
2,879.9
(1.7)
1,009.2
995.1
(721.9)
At 30
September
2021
£m
(2,943.4)
3,238.5
-
295.1
(7.9)
163.7
At 30
September
2020
£m
(3,005.8)
3,129.0
-
123.2
(91.9)
(20.2)
At 30
September
2019
£m
(2,975.8)
3,190.8
-
215.0
(419.4)
374.1
At 30
September
2018
£m
(2,594.9)
2,838.4
-
243.5
82.6
101.0
UK defined contribution plans
The Group has introduced a number of PensionSaver group personal pension plans that have replaced the trust-based defined contribution pension
plans previously offered to employees. These plans create a consistent pensions savings vehicle across all Group segments. The benefits for all
members of the trust-based plans have been transferred to individual policies held in the members own name and the scheme is now wound up.
Insured death benefits previously held under this trust have already been transferred to a new trust-based arrangement specifically for life assurance
purposes.
The aggregate value of the Group personal pension plans was £204.0 million (2021 £214.0 million) at the year end. The pension cost attributable to
these plans during the year amounted to £17.7 million (2021 £17.8 million).
Overseas pension plans
Overseas subsidiaries of certain Group segments operate defined contribution retirement benefit plans, primarily in North America. The pension cost
attributable to these plans during the year amounts to £0.9 million (2021 £1.8 million).
116
Financial Statements
Financial Statements
Notes to the accounts
35 Provisions
Contract
discounts and
rebates (iv)
£m
Note
Coupon
discount
£m
Onerous
contracts
£m
Contingent
consideration
(ii)
£m
Claims
and legal
(iii)
£m
Other (i)
£m
Total
£m
Current liabilities
At 1 October 2020
Charged/(released) during year
Utilised during year
Owned by subsidiaries disposed
Transfer from non-current liabilities
Contingent consideration paid
Adjustment to goodwill
Fair value adjustment to contingent
consideration
Exchange adjustment
At 30 September 2021
Charged/(released) during year
Utilised during year
Transfer from non-current liabilities
Recognised during year
Contingent consideration paid
Fair value adjustment to contingent
consideration
Exchange adjustment
At 30 September 2022
16, 33
10
16, 33
10
Non-current liabilities
At 1 October 2020
Released during year
Utilised during year
Owned by subsidiaries disposed
Transfer to current liabilities
Contingent consideration paid
At 30 September 2021
Released during year
Utilised during year
Transfer to current liabilities
Exchange adjustment
At 30 September 2022
30.0
1.4
(6.8)
-
-
-
-
-
-
24.6
(1.1)
(1.0)
-
-
-
-
-
22.5
0.1
-
0.7
-
-
-
-
-
-
0.8
0.3
-
-
-
-
-
-
1.1
1.3
(0.1)
(0.7)
-
-
-
-
-
-
0.5
2.6
-
-
-
-
-
-
3.1
1.9
-
-
-
0.4
(1.2)
(0.1)
0.1
-
1.1
-
-
-
-
(1.2)
0.1
-
-
23.2
12.3
(7.2)
-
-
-
-
-
(1.2)
27.1
7.2
(1.3)
-
-
-
-
4.7
37.7
Onerous
contracts
£m
Contingent
consideration
(ii)
£m
Note
16, 33
2.4
(1.5)
-
-
-
-
0.9
(0.6)
-
-
-
0.3
0.6
-
-
-
(0.4)
(0.2)
-
-
-
-
-
-
9.8
0.1
(2.5)
(0.2)
0.2
-
-
66.3
13.7
(16.5)
(0.2)
0.6
(1.2)
(0.1)
-
0.1
(0.1)
7.3
0.7
(1.1)
(0.7)
2.9
-
-
1.2
10.3
Other (i)
£m
2.9
(0.7)
(0.1)
(0.5)
(0.2)
-
1.4
0.1
(0.2)
0.7
(0.1)
1.9
(1.3)
61.4
9.7
(3.4)
(0.7)
2.9
(1.2)
0.1
5.9
74.7
Total
£m
5.9
(2.2)
(0.1)
(0.5)
(0.6)
(0.2)
2.3
(0.5)
(0.2)
0.7
(0.1)
2.2
(i)
Other current provisions principally comprise end of service provisions of £6.0 million (2021 £4.3 million), dilapidation provisions of £0.5
million (2021 £1.2 million) and cancellation provisions of £2.9 million.
Other non-current provisions principally comprise dilapidation provisions of £1.6 million (2021 £0.6 million) and a provision for amounts
payable to the Newspaper Society following the cessation of membership on disposal of Northcliffe Newspapers Ltd in 2012 of £0.3 million
(2021 £0.4 million).
(ii)
The maturity profile of the Groups contingent consideration provision is as follows:
Expiring in one year or less
117
At 30
September
2022
£m
-
At 30
September
2021
£m
1.1
Daily Mail and General Trust plc Annual Report 2022
Contingent consideration was based on future business valuations and profit multiples and has been estimated using available data forecasts. There
was no contingent consideration relating to acquisitions in the year (2021 £0.4 million). Certain contingent consideration arrangements are not capped
since they are based on future business performance.
(iii)
Claims and provisions largely relate to the EPAs claim against Genscape, see Note 18 for further details.
(iv)
Contract discounts and rebates relate to provisions held for rebates agreed with advertising agencies and advertisers, on advertising spend
across the Groups Consumer Media titles.
36 Deferred taxation
Accelerated
capital
allowances
£m
32.4
Goodwill
and
intangible
assets
£m
(15.2)
Share-
based
payments
£m
11.9
Deferred
interest
£m
33.7
Trading
losses
and tax
credits
£m
9.7
Note
Pension
scheme
surplus
and
pension
payment
spreading
£m
(21.0)
Other
£m
22.6
Total
£m
74.1
11, (i)
11, (i)
38
38
11, (i)
11, (i)
38
-
(0.3)
-
-
-
-
-
(0.3)
32.4
(14.9)
11.9
33.7
9.7
(21.0)
22.6
74.4
0.9
8.0
-
-
0.6
(5.4)
(0.3)
36.2
2.6
(2.0)
-
-
(3.9)
1.9
0.2
(16.4)
36.0
(17.1)
0.1
1.6
2.5
1.1
-
(4.9)
(0.3)
12.0
12.0
(14.3)
19.0
(6.0)
(8.0)
(5.7)
0.3
2.8
1.3
0.5
12.5
-
-
-
(16.2)
(2.0)
1.5
-
-
-
-
(0.6)
30.9
(29.5)
(19.9)
-
-
-
(75.1)
-
-
-
(4.5)
(0.9)
9.7
(27.0)
(18.8)
(3.3)
(29.1)
(3.9)
(1.2)
1.2
29.9
(75.1)
7.2
(5.9)
0.2
2.4
0.7
-
1.7
41.0
0.7
-
23.2
(7.7)
-
0.1
-
(0.2)
6.6
(4.4)
-
-
41.0
(17.1)
-
23.7
41.0
6.6
-
-
-
0.3
2.8
-
-
-
4.3
4.0
0.3
4.3
1.0
-
2.5
4.7
(23.1)
(56.4)
(0.1)
(58.9)
0.5
-
1.5
9.8
1.2
(95.0)
-
(225.3)
0.1
-
1.0
10.7
2.6
(99.4)
4.0
(152.9)
3.9
(225.3)
9.2
(184.3)
5.9
-
1.5
31.4
9.8
(225.3)
10.7
(152.9)
At 30 September 2020
Disclosed within non-current
liabilities
Disclosed within non-current
assets
(Charge)/credit to income
Credit/(charge) to income due to
change in tax rate
(Charge)/credit to equity
Charge to equity due to change
in tax rate
Owned by subsidiaries acquired
Owned by subsidiaries sold
Exchange adjustment
At 30 September 2021
Disclosed within non-current
liabilities
Disclosed within non-current
assets
(Charge)/credit to income
Credit/(charge) to income due to
change in tax rate
Charge to equity
Exchange adjustment
At 30 September 2022
Disclosed within non-current
liabilities
Disclosed within non-current
assets
At 30 September 2022
(i)
Includes a £22.2 million credit attributable to discontinued operations (2021 £57.0 million charge).
The deferred tax asset disclosed in the Consolidated Statement of Financial Position in respect of deferred interest, tax losses and tax credits is
analysed as follows:
UK
North America
Rest of the World
118
At 30
September
2022
£m
7.9
4.6
1.6
14.1
At 30
September
2021
£m
31.0
0.3
1.1
32.4
Financial Statements
Financial Statements
Notes to the accounts
During the year the Groups IAS 19 pension scheme surplus (the IAS 19 Surplus) increased by £714.1 million to £1,009.2 million. The deferred tax
liability in respect of the IAS 19 Surplus increased by £224.8 million to £299.8 million during the year. This deferred tax liability is calculated as the sum
of the income tax that would be withheld on the part of the IAS 19 Surplus that is expected (when measuring deferred tax) to be returned to the Group
in the future (the Income Tax Temporary Difference) plus the corporation tax impact of the reversal of the remainder of the IAS 19 Surplus through
the Groups income statement. The excess of the IAS 19 Surplus over the Income Tax Temporary Difference is assumed to reverse through the
Groups income statement in a straight line over the current weighted average life expectancy of the members of each scheme, being 23 years for the
Harmsworth Pension Scheme and 18 years for the DMGT Senior Executive Pension Fund.
The amount of the IAS 19 Surplus that might be returned to the Group in the future is highly uncertain and depends on a range of factors including (i)
performance of scheme assets, (ii) macroeconomic conditions, (iii) future costs of insuring liabilities, (iv) the manner in which the pension schemes are
operated and concluded. For the purpose of considering the manner of recovery of the IAS 19 Surplus under IAS 12 (i.e. for the measurement of
deferred tax), judgement is therefore required. In accordance with IAS 12, the Group has used its best estimate to calculate the Income Tax Temporary
Difference. The assumptions used in calculating the Income Tax Temporary Difference include (i) using discount rates based on long term gilt rates,
which are lower than the discount rates used in calculating the IAS 19 Surplus, (ii) making estimates as to current insurer pricing, (iii) making no
allowance for costs of any transaction or discount on sales of illiquid assets. If £100.0 million more or less of the IAS 19 Surplus were recovered as an
Income Tax Temporary Difference, deferred tax liabilities would increase or decrease by £10.0 million respectively.
A deferred tax asset of £74.5 million has been recognised in relation to the spreading of UK tax relief for the £412.9 million payments made into the
pension schemes during the year and is shown above netted against the £299.8 million deferred tax liability in relation to the pension scheme surplus.
Deferred tax assets are first recognised against the reversal of deferred tax liabilities and then against future forecast taxable profits where there is
sufficient evidence to consider these probable.
Deferred tax assets totalling £110.1 million in respect of deferred interest (£4.0 million), tax losses (£nil), the temporary timing difference in respect of
pensions payments (£74.5 million), accelerated capital allowances (£28.3 million), and other timing differences (£3.3 million) have been recognised in
the UK against the deferred tax liability arising in respect of the excess of the IAS 19 Surplus over the Income Tax Temporary Difference.
Deferred tax assets totalling £16.1 million in respect of deferred interest (£nil), tax losses (£3.9 million), the temporary timing difference in respect of
pensions payments (£nil), accelerated capital allowances (£12.2 million), and other timing differences (£nil) have been recognised in the UK on the
basis that the Directors are of the opinion, based on recent and forecast trading, that there is convincing evidence that sufficient taxable profits will be
generated in the UK in future accounting periods, such that it is considered probable that these assets will be recovered. Evidence includes the Groups
recent and forecast trading, taking into account: non-recurring exceptional costs, the long-term nature of the business and risks associated with the
future performance of the Group. The future performance of the Group could result in revisions of risk-weighted profit forecasts such that there is a
material change in deferred tax assets recognised in respect of future forecast taxable profits. If the forecast risk-weighted operating profits were to
increase or decrease by 5.0%, deferred tax assets would increase or decrease by £2.0 million respectively.
Deferred tax assets totalling £24.9 million in respect of deferred interest (£0.3 million), tax losses (£4.3 million), accelerated capital allowances (£0.6
million), intangible assets (£13.5 million), and other timing differences (£6.2 million) have been recognised in North America and deferred tax assets
totalling £1.7 million have been recognised in the Rest of the World on the basis that the Directors are of the opinion, based on recent and forecast
trading, that there is convincing evidence that sufficient taxable profits will be generated in the relevant territories in future accounting periods, such
that it is considered probable that these assets will be recovered.
The Income Tax Temporary Difference does not give rise to a deferred tax liability of the type against which the Groups deferred tax assets can be
utilised. The quantum of deferred tax assets recognised in the UK in respect of tax losses and other timing differences is therefore dependent on the
quantum of the deferred tax liability arising in respect of the excess of the IAS 19 Surplus over the Income Tax Temporary Difference. Accordingly,
any volatility in the IAS 19 Surplus, or any change in the Directors assessment of its manner of recovery, creates volatility in the quantum of deferred
tax assets recognised.
There is an unrecognised deferred tax asset of £114.7 million (2021 £62.8 million) which relates to revenue losses and £34.2 million (2021 £33.5
million) which relates to deferred interest where there is insufficient certainty that these losses will be utilised in the foreseeable future. There is an
additional unrecognised deferred tax asset of £403.8 million (2021 £147.8 million which relates to capital losses carried forward). £436.4 million of the
revenue losses in respect of which the Group recognises no deferred tax asset have no expiry date, and £1.5 million of the unrecognised revenue
losses are expected to expire during the period 2024 to 2029. All of the deferred interest of £136.6 million and capital losses of £1,615.1 million in
respect of which the Group recognises no deferred tax asset have no expiry date.
No deferred tax liability is recognised on temporary differences of £372.5 million (2021 £0.5 million) relating to the unremitted earnings of overseas
subsidiaries as the Group is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the
foreseeable future. The temporary differences at 30 September 2022 represent only the unremitted earnings of those overseas subsidiaries where
remittance to the UK of those earnings may still result in a tax liability, principally as a result of dividend withholding taxes levied by the overseas tax
jurisdictions in which these subsidiaries operate.
119
Daily Mail and General Trust plc Annual Report 2022
37 Called-up share capital
Ordinary Shares of 12.5 pence each
A Ordinary Non-Voting Shares of 12.5 pence each
Ordinary Shares
A Ordinary Non-Voting Shares
Allotted,
issued and
fully paid At
30 September
2022
£m
2.5
26.3
Allotted,
issued and
fully paid At
30 September
2021
£m
2.5
26.8
28.8
29.3
Allotted,
issued and
fully paid At
30 September
2022
Number of
shares
19,890,364
210,798,306
230,688,670
Allotted,
issued and
fully paid At
30 September
2021
Number of
shares
19,890,364
214,913,327
234,803,691
The two classes of shares are equal in all respects, except that the A Ordinary Non-Voting Shares do not have voting rights and hence their
holders are not entitled to vote at general meetings of the Company.
On 2 December 2021, Rothermere Continuation Limited (RCL) and the Non-conflicted DMGT Directors announced the terms of a recommended
increased and final cash offer of £2.70 per share for all of the issued DMGT A Ordinary Non-Voting Shares not already owned by RCL (the Final
Offer).
On 16 December 2021, RCL announced that all of the Conditions to the Final Offer had been satisfied or, where applicable, waived and the Final Offer
was therefore unconditional in all respects.
Following the Final Offer becoming unconditional the Board of DMGT resolved to make applications to (i) the FCA to cancel the listing of all DMGT A
Ordinary Non-Voting Shares on the FCA's Official List and (ii) to cancel trading in all DMGT A Ordinary Non-Voting Shares on the London Stock
Exchange's main market for listed securities which took effect as of 8.00 am on 10 January 2022. On 24 February 2022, RCL acquired all remaining
DMGT shares that it had not already acquired by that date.
At 30 September 2022 options were outstanding under the terms of the Companys Executive Share Option Schemes, Long-Term Incentive Plans
and nil-cost options, over a total of nil A Ordinary Non-Voting shares (2021 9,935,671 shares).
38 Reserves
Share premium account
At start and end of year
Capital redemption reserve
At start of year
On cancellation of A Ordinary Non-Voting Shares
At end of year
Own shares
At start of year
Purchase of DMGT shares
Own shares released on vesting of share options
On cancellation of A Ordinary Non-Voting Shares
At end of year
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
Note
17.8
17.8
(iii)
(i)
(ii)
(iii)
21.0
0.5
21.5
(35.5)
-
6.6
28.9
-
21.0
-
21.0
(59.3)
(1.0)
24.8
-
(35.5)
The Groups investment in its own shares represented shares held in treasury and shares held by an employee benefit trust (EBT) to satisfy incentive
schemes.
120
Financial Statements
Financial Statements
Notes to the accounts
At 30 September 2022, this investment comprised nil A Ordinary Non-Voting Shares (2021 4,115,021 shares) held in treasury and nil A Ordinary Non-
Voting Shares (2021 875,450 shares) held in the EBT. The market value of the Treasury Shares at 30 September 2022 was £nil (2021 £44.1 million)
and the market value of the shares held in the EBT at 30 September 2022 was £nil (2021 £9.4 million).
The EBT is independently managed and purchases shares in order to satisfy outstanding share options and potential awards under long-term incentive
plans.
(i)
(ii)
(iii)
The Company purchased nil (2021 0.1 million) A Ordinary Non-Voting Shares having a nominal value of £nil (2021 £nil) into treasury to
match obligations under incentive plans. The consideration paid for these shares was £nil (2021 £1.0 million).
During the year, the Company utilised 0.9 million (2021 3.3 million) A Ordinary Non-Voting Shares in order to satisfy incentive schemes.
This represented 0.4% (2021 1.6%) of the called-up A Ordinary Non-Voting Share capital at 30 September 2022. The carrying value of
these shares was £6.6 million (2021 £24.8 million).
On 7 February 2022 4,115,021 DMGT A Ordinary Non-Voting Treasury shares were cancelled resulting in the transfer of £0.5 million
nominal value of these shares from Share capital to the Companys Capital Redemption Reserve together with a transfer of £28.9 million
from Treasury shares to Retained earnings.
At 30 September 2022 options were outstanding under the terms of the Companys Executive Share Option Schemes, Long-Term Incentive Plans
and nil-cost options, over a total of nil A Ordinary Non-Voting Shares (2021 9,935,671 shares).
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
Note
Translation reserve
At start of year
Foreign exchange differences on translation of foreign operations
Translation reserves recycled to Consolidated Income Statement on disposals
(Loss)/gain on hedges of net investments in foreign operations
Costs of hedging
Costs of hedging recycled to Consolidated Income Statement on currency swap termination
8, 17, 18
10
At end of year
6.9
5.8
(6.4)
(5.9)
0.4
(0.3)
0.5
66.5
(13.3)
(52.2)
6.1
(0.2)
-
6.9
The translation reserve arises on the translation into sterling of the net assets of the Groups foreign operations, offset by changes in fair value of
financial instruments used to hedge this exposure.
Included in the translation reserve is a cumulative loss of £7.1 million (2021 £0.1 million) in relation to continuing hedge relationships and a cumulative
loss of £6.1 million (2021 £7.2 million) in relation to hedging relationships for which hedge accounting is no longer applied.
Retained earnings
At start of year
(Loss)/profit for the year
Dividends paid
Cazoo dividend in specie
Actuarial gain on defined benefit pension schemes
Credit to equity for share-based payments
Settlement of exercised share options
Transfers
Fair value movement of financial assets at fair value through Other Comprehensive Income
Deferred tax on actuarial movement
Deferred tax on other items recognised directly in equity
Cancellation of shares
At end of year
At end of year - total reserves
121
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
Note
12
12
34
6, 14, 41
25
36
36
3,044.1
(133.8)
(1,356.4)
(109.8)
271.3
58.8
(62.7)
(3.3)
(646.0)
(95.0)
(4.4)
(28.9)
933.9
1,069.9
1,542.3
(55.0)
-
155.8
40.1
(34.0)
-
370.8
(49.4)
3.6
-
3,044.1
973.7
3,054.3
Daily Mail and General Trust plc Annual Report 2022
39 Non-controlling interests
At start of year
Share of loss for the year
Foreign exchange differences on translation of foreign operations
At end of year
40 Commitments and contingent liabilities
Commitments
At 30 September 2022, the Group had outstanding capital expenditure commitments as follows:
Right of use assets - Property, plant and equipment
Contracted but not provided in the financial statements
Year ended 30
September
2022
£m
(1.5)
Year ended 30
September
2021
£m
1.0
(0.3)
(0.2)
(2.0)
(2.4)
(0.1)
(1.5)
At 30
September
2022
£m
At 30
September
2021
£m
7.5
-
The lease at Northcliffe House (NCH) expires in December 2022. Prior to this date, employees currently working at NCH will move into nearly
alternative office space whilst redevelopment works are being carried out. The target end date for these works is June 2024, at which point the Group
will commence its own fit out works prior to employees moving back into NCH.
A new lease for NCH has been signed covering 109,000 square feet for 15 years. The new NCH lease includes a 42-month rent free period and
includes five-year market reviews. The total amount payable over the lease term is estimated to be £98.4 million.
At 30 September 2022 the Group had contracted for but not provided for capital expenditure amounting to £7.5 million (2021 £nil) in relation to this
move.
At 30 September 2022, the Group had outstanding commitments under non-cancellable agreements made to secure venues for future events and
exhibitions which fall due as follows:
Within one year
At 30
September
2022
£m
13.8
At 30
September
2021
£m
7.0
The Group has entered into arrangements with ink suppliers to obtain ink for the year to December 2023 at competitive prices and to secure supply.
At 30 September 2022, the commitment to purchase ink over this period was £0.3 million (2021 £3.8 million for the period to December 2022).
The Group has entered into agreements with various printers for years up to December 2024 at competitive prices and to secure supply.
At 30 September 2022, the commitment to purchase printing capacity over this period was £4.1 million (2021 £7.8 million for the period to December
2024).
Contingent liabilities
The Group has issued standby letters of credit amounting to £2.0 million (2021 £3.3 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.
122
Financial Statements
Financial Statements
Notes to the accounts
41 Share-based payments
Prior to going private the Group offered a number of share-based remuneration schemes to Directors and certain employees. The principal schemes
comprised share options under the DMGT, Insurance Risk, Property Information and Consumer Media segments. Share options were exercisable
after the vesting period, subject in some cases to the satisfaction of performance conditions, and up to 10 years from the date of grant at a price
equivalent to the market value of the respective shares at the date of grant.
The fair value of share options for each of these schemes was determined using a Black-Scholes model. Full details of inputs to the models, particular
to each scheme, are set out below. With respect to all Schemes, expected volatility was estimated, based upon relevant historic data in respect of the
DMGT A Ordinary Non-Voting Share price. The expected life used in the model being adjusted, based on managements best estimate, for the effects
of non-transferability.
During the period Rothermere Continuation Limited (RCL) acquired all of the issued DMGT A Shares not already owned by RCL. Following this
transaction, certain of the Groups equity settled long term incentive plan (LTIP) arrangements early vested subject to pro-rata vesting and were
replaced with cash settled incentive awards.
The cash settled incentive awards are fixed amounts payable on the vesting dates of the original equity settled awards and vest subject to a service
period as follows:
Vesting date
December 2022
December 2023
December 2024
December 2025
LTIP payable
£m
1.4
1.9
2.5
2.1
7.9
Where an equity settled LTIP is cancelled, IFRS 2, Share-based Payment requires this is treated as an acceleration of the original vesting period.
The impact of this acceleration results in non-cash LTIP charges being charged against profits of the current period which normally would have been
charged against profits of future periods. These accelerated charges have been treated as exceptional operating costs.
The total charge to the Consolidated Income Statement in respect of LTIP arrangements is as follows:
Segment
Scheme
DMGT Board and Corporate Costs
Insurance Risk
Property Information
Consumer Media
Equity settled LTIP arrangements
Cash settled LTIP arrangements
Social security costs
Equity-Settled Executive Bonuses
Long-Term Incentive Plan
Option Plan
Option Plan
Option Plan
Long-Term Incentive Plan
Option Plan
The Group did not reprice any of its outstanding options during the year.
Further details of the Group's significant schemes are set out below:
Year ended 30
September
2022
£m
-
44.7
-
-
Year ended 30
September
2021
£m
0.7
19.7
0.2
11.0
-
14.0
0.1
58.8
3.7
0.2
62.7
1.2
5.8
1.5
40.1
-
7.4
47.5
DMGT 2006 Executive Share Option Scheme
Under the DMGT 2006 Executive Share Option Scheme, each award of options has a maximum life of 10 years. The maximum award limit was
100.0% of salary in any year in normal circumstances and 200.0% of salary in exceptional circumstances. Awards will not normally vest until three
years after the award and the performance conditions have been met. No options were outstanding to Directors during the year.
During the period all the outstanding ESOS awards were exercised following the Groups go private transaction for consideration of £1.9 million.
123
Daily Mail and General Trust plc Annual Report 2022
Outstanding at 1 October
Granted during the period
Exercised during the period
Expired during the period
Outstanding at 30 September
Exercisable at 30 September
Exercisable at 1 October
Year ended 30
September
2022 Number
of share
options
Year ended 30
September
2022 Weighted
average
exercise price
£
Year ended 30
September
2021 Number
of share
options
Year ended 30
September
2021 Weighted
average
exercise price
£
369,414
-
(369,414)
-
-
-
-
6.07
-
5.54
-
-
-
-
531,576
100,000
(251,800)
(10,362)
369,414
-
168,903
5.62
7.09
5.54
5.69
6.07
-
5.23
The aggregate of the estimated fair values of the options granted during the prior year is £0.1 million. The options outstanding at 30 September
2021 had a weighted average remaining contractual life of 6.0 years.
The inputs into the Black-Scholes model at 30 September 2021 were as follows:
Date of grant
Market value of shares at date of grant (£)
Option price (£)
Number of share options outstanding
Term of option (years)
Assumed period of exercise after vesting (years)
Exercise price (£)
Risk-free rate (%)
Expected dividend yield (%)
Volatility (%)
Fair value per option (£)
25 January 2019
5.69
5.69
-
10
7
5.69
0.81
3.59
27.95
24 November
2020
7.09
7.09
-
3
-
7.09
1.28
2.61
24.00
0.84
0.99
Nil-cost options under the DMGT Executive Bonus Scheme
Since December 2009, a portion of a cash bonus earned by Executive Directors under the Executive Bonus Scheme has been deferred into shares
in the form of nil-cost options. These options are to the value of the equity portion of the bonus and are fully expensed in the year in which they are
earned.
Outstanding at 1 October
Granted during the period
Exercised during the period
Outstanding at 30 September
Exercisable at 30 September
Exercisable at 1 October
Year ended 30
September
2022 Number
of share
options
Year ended 30
September
2022 Weighted
average
exercise price
£
Year ended 30
September
2021 Number
of share
options
Year ended 30
September
2021 Weighted
average
exercise price
£
191,243
95,338
(286,581)
-
-
105,344
-
-
-
-
-
-
191,243
-
-
191,243
105,344
-
-
-
-
-
-
-
The aggregate of the estimated fair values of the awards granted during the year is £1.0 million (2021 £nil). The awards outstanding at 30
September 2021 had a weighted average remaining contractual life of 4.6 years.
During the period all the outstanding nil-cost option awards were exercised following the Groups go private transaction for consideration of £3.2
million.
124
Financial Statements
Financial Statements
Notes to the accounts
DMGT Long-Term Incentive Plan
DMGT Long-Term Executive Incentive Plan Awards 2019 and 2020
These awards entitle participants (who are not Executive Directors) to a set number of shares further to a three-year restricted period. Awards are
based on financial and individual performance for the previous financial year. The awards are settled in A Ordinary Non-Voting Shares based on the
average share price for the first three days following release of the annual financial results or the date of employment.
During the period all the outstanding nil-cost option awards were exercised following the Groups go private transaction for consideration of £9.2 million.
DMGT Long-Term Executive Director Incentive Plan Awards 2019, 2020 and 2021
The Executive Directors LTIPs spanned 12 years three awards pursuant to which shares will accrue and be delivered at the end of a different ten-
year period. The Executive Directors will therefore be strongly incentivised to deliver value creation through share price appreciation and dividend
payments over that period.
The first two Awards to the Executive Directors under the Executive Director LTIP were made on 31 March 2021 covering the following periods: 1
October 2019 to 30 September 2029 and 1 October 2020 to 30 September 2030. The third Executive Director LTIP Award covering the period: 1
October 2021 to 30 September 2031 was made on 23 November 2021. This award was calculated by reference to the Volume Weighted Average of
DMGTs share price (VWAP) in the twelve months period up to and including 22 November 2021, three days after DMGTs financial results for 2021
were announced. Each award was to vest on a graded vesting rather than straight line basis as a result of service conditions associated with each
award. This results in a higher charge in the earlier years of the award. The charge for the period was £55.5 million (2021 £3.0 million).
The Executive Directors LTIPs were cancelled during the period and the participants award shares were pro-rated vested. The dividend equivalent
payment mechanism in the LTIP was calculated as if all dividends declared during the performance period were reinvested into DMGT shares on the
date they would have been paid. This cash settlement of dividends was based on the full number of shares in the award i.e., not pro-rata. Accordingly,
the Executive Directors received cash consideration of £18.7 million including a dividend equivalent payment of £15.8 million. It is the Boards intention
that this award will be replaced with a three-year cash settled incentive plan.
Outstanding at 1 October
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Modified during the period
Outstanding at 30 September
Exercisable at 30 September
Exercisable at 1 October
Year ended 30
September
2022 Number
of share
options
6,604,794
2,877,516
(74,114)
(1,803,773)
(6,232,361)
(1,372,062)
-
-
-
Year ended 30
September
2022 Weighted
average
exercise price
£
-
-
-
-
-
-
-
-
-
Year ended 30
September
2021 Number
of share
options
2,603,313
5,117,940
-
(1,116,459)
-
-
6,604,794
-
-
Year ended 30
September
2021 Weighted
average
exercise price
£
-
-
-
-
-
-
-
-
-
The aggregate of the estimated fair values of the awards granted during the year is £30.0 million (2021 £26.8 million). The awards outstanding at 30
September 2021 had a weighted average remaining contractual life of 7.4 years.
Options under the DMGT Long-Term Incentive Scheme
The inputs into the Black-Scholes model at 30 September 2021 for the Executive Directors Long Term Incentive Plan awards with accrual schedules
from 2019 to 2029 and 2020 to 2030 respectively were as follows:
Date of grant
Market value of shares at date of grant (£)
Number of share options outstanding
Term of option (years)
Risk-free rate (%)
Expected dividend yield (%)
Volatility (%)
Fair value per option (£)
3 February 2021
6.82
-
3 February 2021
7.39
-
23 November
2021
10.92
-
10
0.9
3.0
24.0
5.96
10
0.9
3.0
24.0
5.78
10
1.0
2.3
2.8
8.70
125
Daily Mail and General Trust plc Annual Report 2022
Insurance Risk (RMS) Option Plans
RMS maintained a 2014 Equity Award Plan (2014 Plan) and a 2015 Equity Incentive Plan (2015 Plan). The 2014 Plan allowed grants of options and
Restricted Stock Units (RSUs), both time and performance based, to employees, officers, directors and consultants of RMS. The 2015 Plan allowed
grants of options to employees, officers, directors and consultants of RMS. Options granted under this plan had two vesting conditions a service
period and the occurrence of an initial public offering of RMS or an event in which the Group ceases to hold at least 50.0% of the voting rights of RMS.
On 20 July 2020, the 2015 Plan was modified such that vesting occurred only on the satisfaction of the service period. In addition, the modified plan
allows for the granting of RSUs. RMS options under the 2014 and 2015 Plans were granted at market value and are settled in equity upon exercise.
Following the Groups disposal of RMS to Moodys Corporation (Moodys) during the prior period, all vested RMS options were cancelled in exchange
for cash payment equal to the market value of these options less the option cost; all unvested RMS options were cancelled in exchange for RSU
awards in Moodys; and all RMS RSUs were converted into RSUs in Moodys.
42 Ultimate holding company
The Companys immediate parent company is Rothermere Continuation Limited (RCL), a company incorporated in Jersey, in the Channel
Islands.
Daily Mail and General Trust plc is the only company in the Group to prepare Consolidated Financial Statements.
43 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 Companys Board are not regarded as related parties.
The remuneration of the Directors at the year end, who are the key management personnel of the Group, is set out in aggregate in Note 6.
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 DMGTs issued Ordinary Shares and DMGT issued 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.
Transactions with Directors
During the year, 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 £170,899 (2021 £90,752). During the year, Dixon Wilson Chartered Accountants and H.W. Wood Ltd., in which Mr D Nelson, a Non-
Executive Director of the Company, is a partner and director respectively, provided professional services to the Company amounting to £76,350 (2021
£30,500).
The charge to the Income Statement in relation to Directors' remuneration is as follows:
Salary and fees paid to Executive Directors
Fees paid to third parties and Non-Executive Directors
Annual bonuses
Long term incentives
Pension benefits
Other
Year ended 30
September
2022
£m
3.2
0.5
9.1
56.9
0.8
0.2
70.7
Year ended 30
September
2021
£m
3.8
0.2
3.3
17.1
1.0
0.3
25.7
126
Financial Statements
Financial Statements
Notes to the accounts
Transactions with joint ventures and associates
Details of the Groups principal joint ventures and associates are set out in Note 24.
Associated Newspapers Ltd (ANL) has a 50.0% (2021 50.0%) shareholding in Northprint Manchester Ltd, a joint venture. The net amount due to ANL
of £5.8 million (2021 £5.8 million) has been fully provided.
DMGV Ltd (DMGV) has a 23.9% (2021 23.9%) shareholding in Excalibur Holdco Ltd (Excalibur), an associate. During the year, services provided to
Excalibur amounted to £0.3 million (2021 £0.3 million). At 30 September 2022, amounts due from Excalibur amounted to £nil (2021 £nil), together with
loan notes of £17.3 million (2021 £17.3 million). The loan notes carry an annual coupon of 10.0% and £10.3 million (2021 £10.3 million) was outstanding
in relation to this coupon at 30 September 2022. An expected lifetime impairment allowance of £12.0 million (2021 £12.0 million) has been made
against the loan note and unpaid coupon balance.
DMGV has a 45.3% (2021 45.3%) shareholding in Yopa Property Ltd (Yopa), an associate. During the year, DMGV provided cash funding of £3.8
million (2021 £nil). At 30 September 2022, amounts due from Yopa amounted to £3.8 million (2021 £nil) convertible loan notes. The loan notes carry
an annual coupon of 10.0% and £0.2 million (2021 £nil) was outstanding in relation to this coupon at 30 September 2022. The total loan amount due
of £3.8 million has been fully provided. During the year, the Consumer Media segment provided services to Yopa amounting to £nil (2021 £0.1 million).
Also, during the year, the Property Information segment paid referral fees of £2.8 million (2021 £2.9 million) and made sales of £nil (2021 £0.1 million)
to Yopa.
DMGV has a 33.9% (2021 21.4%) shareholding in Quick Move Ltd, an associate. DMGV provided cash funding amounting to £0.4 million and £0.2
million of media credits (2021 £nil cash and £nil of media credits) during the year. In addition, DMGV also provided cash funding of £2.0 million
convertible loan notes (2021 £nil). The loan notes carry an annual coupon of 10.0% and £0.2 million (2021 £nil) was accrued in relation to this coupon.
On 6 September 2022, the loan notes and outstanding coupon were converted to Ordinary shares amounting to £2.2 million.
DMGV has a 20.1% (2021 20.1%) shareholding in Factory 14 S.a.r.l, an associate. DMGV provided cash funding amounting to £nil (2021 £8.6 million)
during the year. At 30 September 2022, amounts due from Factory 14 amounted to £4.2 million loan notes. The loan notes carry an annual coupon of
8.0% and £0.2 million (2021 £nil) was outstanding in relation to this coupon at 30 September 2022. The total amount due of £4.4 million has been fully
provided.
DMGV has a 21.5% (2021 20.0%) shareholding in Bloobloom Ltd, an associate. DMGV provided funding amounting to £1.0 million cash (2021 £0.8
million) and £nil of media credits (2021 £0.2 million) during the year.
DMGV has a 22.0% (2021 22.0%) shareholding in Kortext Ltd, an associate. DMGV provided cash funding amounting to £nil (2021 £16.6 million)
during the year.
DMG Events (USA), Inc. has a 19.5% (2021 19.5%) shareholding in Whereoware, LLC, an associate. During the year, DMG Events (USA), Inc.
received dividends of £0.1 million (2021 £0.1 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% (2021
50.0%) shareholding in PointX Ltd (PointX), a joint venture. During the year, Landmark charged management fees of £0.3 million (2021 £0.3 million)
and recharged costs of £0.1 million (2021 £0.1 million) to PointX. DMGILP received dividends of £0.1 million (2021 £0.1 million) from PointX.
Decision Insight Information Group (UK) Ltd (DIIG UK), of which SearchFlow Ltd (SF) is a subsidiary undertaking, has a 50.0% (2021 50.0%)
shareholding in Decision First Ltd (DF), a joint venture. During the year, DIIG UK recharged costs to DF amounting to £0.2 million (2021 £0.2 million)
and charged management fees of £0.1 million (2021 £0.1 million). During the year, SF received dividends of £1.0 million (2021 £nil) from DF.
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 year, the Group was charged for rent and service charges in relation to the current year amounting to £0.2 million (2021
£0.2 million).
At 30 September 2022, the Group owed £1.1 million (2021 £1.0 million) to the pension schemes which it operates. This amount comprised employees
and employers contributions in respect of September 2022 payrolls.
The Group recharges its principal pension schemes with costs of investment management fees. The total amount recharged during the year was £0.3
million (2021 £0.3 million).
Contributions made during the year to the Groups retirement benefit plans are set out in Note 34, along with details of the Groups future funding
commitments.
ANL paid contributions to DMGT Healthcare Trustees totaling £1.1 million (2021 £0.9 million). At 30 September 2022, a total of £1.0 million (2021 £1.2
million) was owed to the scheme by ANL.
127
Daily Mail and General Trust plc Annual Report 2022
44 Post balance sheet events
Acquisitions
Following the year end the Group made the following acquisitions:
(i)
A £0.5 million investment in Napo Ltd, a pet insurance company, representing a 1.24% equity stake. The Groups investment comprised
cash funding of £0.2 million and media credits of £0.3 million.
(ii)
An additional £0.9 million cash investment in convertible loan notes in Yopa Property Ltd, an associate, the online property portal.
Disposals
Following the year end the Group disposed of 4.2% of its stake in LineVision, Inc. an associate, for cash consideration of £0.9 million.
Other
Following the year end the Company bought back and cancelled £50.0 million nominal of its outstanding £200.0 million 2027 bonds for cash
consideration of £46.6 million.
128
Financial Statements
Financial Statements
Notes to the accounts
45 Subsidiaries exempt from audit
The following UK subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the year
ending 30 September 2022:
Subsidiary name
Daily Mail and General Holdings Ltd
Daily Mail and General Investments Ltd
DMGB Ltd
DMGV Ltd
Daily Mail International Ltd
DMG Asset Finance Ltd
DMG Atlantic Ltd
DMG Events International Ltd
DMG Information Ltd
DMGZ Ltd
Northcliffe Media Ltd
Ralph US Holdings
Young Street Holdings Ltd
Trepp UK Ltd
Company registration
number
01693108
02251116
04521116
05830195
01966438
05528329
04521108
04118004
03708142
00272225
03403993
06341444
04485808
03209327
Subsidiary name
Searchflow Ltd
DMG Events (Conferences) Ltd
Landmark Valuation Services Ltd
Decision Insight Hub Ltd
Decision Insight Information Group (UK) Ltd
Millar & Bryce Ltd
dmgi Land and Property Europe Ltd
OneSearch Direct Ltd
dmg media Limited
Mail Finance Services Ltd
Associated Print Holdings Limited
Associated Printing (Dinnington) Limited
Associated Printing (Portsmouth) Limited
Associated Printing (Carn) Limited
Company registration
number
04084804
03410466
01670075
04084803
02099085
SC134475
01163844
SC230285
05765286
04282263
11573312
11575473
11575513
11575502
The Directors of Daily Mail and General Trust plc have confirmed that the Company will provide a guarantee under Section 479C in relation to the
subsidiaries listed above.
No dormant subsidiaries have taken the exemption from preparing individual accounts by virtue of Section 394A of Companies Act 2006.
No dormant subsidiaries have taken the exemption from filing with the registrar individual accounts by virtue of Section 448A of Companies Act
2006.
The following UK subsidiaries will take advantage of the audit exemption set out within Section 480 of the Companies Act 2006, exemption from
audit for dormant companies for the year ended 30 September 2022:
Subsidiary name
A&N Media Finance Services Ltd
Abbey Newco Ltd
Central Independent News and Media Ltd
Daily Mail Ltd
JPIMedia Publications Ltd
Lincolnshire Media Ltd
Company registration
number
Subsidiary name
Company registration
number
03709742
13550497
03015855
01160542
11575526
00037928
Mail Finance Services Ltd
MailLife Financial Services Ltd
Northcliffe Trustees Ltd
OneSearch Direct Group Ltd
The Mail on Sunday Ltd
04282263
01063950
03394992
SC202596
01160545
129
Daily Mail and General Trust plc Annual Report 2022
46 Full list of Group undertakings
Subsidiary name
Registered office
A&N Media Finance Services Ltd
Abbey Newco Ltd
AN Mauritius Ltd
Argyll Environmental Ltd
Associated Newspapers (Ireland) Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Ground Floor, 7 Abbey Court, Eagle Way,
Sowton, Exeter, Devon EX2 7HY
10th Floor, Standard Chartered Tower, 19
Cybercity, Ebène, Mauritius
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Top Floor, Two Haddington Buildings, 20-38
Haddington Road, Dublin 4, D04 HE94
Associated Newspapers Ltd
Associated Newspapers North America,
Inc.
Associated Print Holdings Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Northcliffe House, 2 Derry Street, London W8 5TT
Associated Printing (Carn) Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Associated Printing (Dinnington) Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Associated Printing (Portsmouth) Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Central Independent News and Media Ltd Northcliffe House, 2 Derry Street, London W8 5TT
Coral Mint Ltd
Daily Mail and General Holdings Ltd*
Top Floor, Two Haddington Buildings, 20-38
Haddington Road, Dublin 4, D04 HE94
Northcliffe House, 2 Derry Street, London W8 5TT
Daily Mail and General Investments Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Daily Mail and General Trust plc
Northcliffe House, 2 Derry Street, London W8 5TT
Daily Mail International Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Daily Mail Ltd
Daily Mail On-Air, LLC
Dailymail.com Australia Pty Ltd
Decision Insight Hub Ltd
Decision Insight Information Group (UK)
Ltd
DMG Angex Ltd (in Liq'n)
DMG Asset Finance Ltd
DMG Atlantic Ltd
DMG Conference & Exhibition Services
(Shanghai) Ltd
DMG Connect, Inc
DMG Events (Canada), Inc.
Northcliffe House, 2 Derry Street, London W8 5TT
CSC Lawyers Incorporating Service, 2710
Gateway Oaks Drive, Suite 150N, Sacramento,
CA 95833, United States
Level 12, 207 Kent Street, Sydney, NSW 2000
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
31st Floor, 40 Bank Street, London E14 5NR
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Room 428, Level 4, No 55 Xiya Road (Plot 5 Of
Zone F), Shanghai, China
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
1510 140 10 Avenue SE, Calgary, Alberta T2G
0R1, Canada
Country of
incorporation or
registration
Classes of
shares held
UK
UK
Ordinary
Ordinary
%
shareholding
(% held
directly by
parent)
100%
100%
Mauritius
Ordinary
100%
UK
Ordinary A
100%
Ireland
Ordinary
UK
USA
UK
UK
UK
UK
UK
Ordinary
Common
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ireland
Ordinary
UK
UK
UK
UK
UK
Ordinary
Ordinary
Ordinary and A
ordinary non
voting
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
N/A
100%
100%
USA
Ordinary
100%
Australia
Ordinary
UK
UK
UK
UK
UK
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
China
Ordinary
100%
100%
100%
100%
100%
100%
100%
USA
Common
100%
Canada
Ordinary
DMG Events (Conferences) Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
UK
Ordinary
DMG Events (Doha), LLC
Office 706, Palm Tower B, PO Box 3601, West
Bay, Doha, Qatar
Qatar
Ordinary
DMG Events (MEA) Ltd (in liq'n)
31st Floor, 40 Bank Street, London E14 5NR
UK
Ordinary
130
100%
100%
100%
100%
Financial Statements
Financial Statements
Notes to the accounts
DMG Events (PNG) Ltd
DMG Events (UK) Ltd
DMG Events (USA), Inc.
DMG Events Asia Pacific Pte Ltd
DMG Events Egypt Ltd
DMG Events India Private Ltd
DMG Events International Ltd
DMG Events, LLC
Level 3, Pacific Mmi Building, Port Moresby,
National Capital District, Papua New Guinea
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
8 Marina Boulevard #05-02, Marina Bay Financial
Centre, Singapore 018981
Office 1, Mezzanine Floor, Hall 2, Egypt
International Exhibition Centre, Elmoushir
Tantawy Axis, New Cairo, Egypt
Level 4, Dynasty A Wing, Andheri Kurla Road,
Mumbai- 400 059, Maharashtra, India
Northcliffe House, 2 Derry Street, London W8 5TT
Office 408, Salama Tower, Al Madinah, Al
Munawarah Road, As Salamah District, PO Box
3650, Jeddah, Saudi Arabia
DMG Exhibition Management Services
(PTY) Ltd
76 Eleventh Street, Parkmore, Johannesburg,
2196, South Africa
DMG Information Hong Kong Company
Ltd
14/F One Taikoo Place, 979 King's Rd, Quarry
Bay, Hong Kong
DMG Information Ltd
DMG Media Ltd
DMG Nigeria Events Limited
DMG World Media Abu Dhabi Ltd (i)
DMG World Media Dubai (2006) Ltd (i)
DMGB Ltd*
dmgi Land & Property Europe Ltd
DMGK Ltd
DMGT Air Holdings Ltd
DMGT US Employee Services, Inc.
DMGV Ltd
DMGZ Ltd
Entale Media Ltd
ES London Ltd
Estate Technical Solutions Ltd
JPIMedia Publications Ltd (in liq'n)
Kingston Midco 1 Ltd
Kingston Midco 2 Ltd
Landmark Analytics Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Plot E, Ikosi Road, Oregun Industrial Estate, Ikeja,
Lagos, Nigeria
15 Esplanade, St Helier, JE1 1RB, Jersey,
Channel Islands
15 Esplanade, St Helier, JE1 1RB, Jersey,
Channel Islands
Northcliffe House, 2 Derry Street, London W8 5TT
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
C/O Begbies Traynor (London) LLP, 31st Floor,
40 Bank Street, London E14 5NR
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Landmark Information Group Ltd
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Papua New Guinea
Ordinary
UK
USA
Ordinary
Common
100%
100%
100%
Singapore
Ordinary
100%
Egypt
Ordinary
100%
India
UK
Ordinary
Ordinary
100%
100%
Saudi Arabia
Ordinary
100%
South Africa
Ordinary
100%
Hong Kong
Ordinary
UK
UK
Ordinary
Ordinary
100%
100%
100%
Nigeria
Ordinary
49.0%
Jersey
Ordinary
100%
Jersey
Ordinary
UK
UK
UK
UK
Ordinary
Ordinary
Preference
Ordinary
USA
Common
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Ordinary
Ordinary
Ordinary,
Preference
Ordinary
Ordinary A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary,
Ordinary A,
Redeemable
Preference
100%
100%
100%
75.0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
131
Daily Mail and General Trust plc Annual Report 2022
Landmark Optimus Ltd
Landmark Valuation Services Ltd
Lincolnshire Media Ltd (in liq'n)
Mail Finance Services Ltd
Mail Force Charity CIO
Mail Media, Inc.
MailLife Financial Services Ltd
Millar & Bryce Ltd
Nalac Ltd
5-7 Abbey Court Eagle Way, Sowton Industrial
Estate, Exeter, Devon EX2 7HY
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
C/O Begbies Traynor (London) LLP, 31st Floor,
40 Bank Street, London E14 5NR
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Northcliffe House, 2 Derry Street, London W8 5TT
10th Floor 133 Finnieston Street, Glasgow, G3
8HB Scotland
30 Morehampton Road, Dublin 4 D04 YN81,
Ireland
New Scientist Group Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
New Scientist Ltd
New Scientist, Inc.
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Northcliffe Media Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe Trustees Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Ochresoft Technologies Ltd
OneSearch Direct Group Ltd
OneSearch Direct Holdings Ltd
OneSearch Direct Ltd
Ralph US Holdings
SearchFlow Ltd
Springthorpe Drake, Inc.
The Mail on Sunday Ltd
Trepp UK Ltd
Trepp, Inc.
Xceligent Inc (in liq'n)
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
6th Floor, Skypark Sp1, 8 Elliot Place, Glasgow
G3 8EP
6th Floor, Skypark Sp1, 8 Elliot Place, Glasgow
G3 8EP
6th Floor, Skypark Sp1, 8 Elliot Place, Glasgow
G3 8EP
Northcliffe House, 2 Derry Street, London W8 5TT
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Northcliffe House, 2 Derry Street, London W8 5TT
Northcliffe House, 2 Derry Street, London W8 5TT
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Young Street Holdings Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
All subsidiaries are included in the consolidated financial statements of the Group.
UK
Ordinary A
100%
Ordinary
100%
UK
UK
UK
UK
Ordinary
Ordinary
-
USA
Ordinary
UK
UK
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
Ireland
Ordinary
100%
Ordinary, A1
Ordinary, A2
Ordinary, B1
Ordinary, B2
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary A,
Ordinary B
100%
100%
100%
100%
100%
Ordinary
100%
Ordinary
100%
UK
UK
USA
UK
UK
UK
UK
UK
Ordinary A
100%
UK
UK
UK
Ordinary
Ordinary
Ordinary
USA
Ordinary
UK
UK
Ordinary
Ordinary
USA
Ordinary
USA
UK
Common,
Series A
preferred
Ordinary
100%
100%
100%
100%
100%
100%
100%
86.8%
100%
*
Direct investment held by the parent Company Daily Mail and General Trust plc (DMGT). All other subsidiaries are held indirectly through
subsidiaries of DMGT.
(i)
Principal place of business in the UAE.
132
Financial Statements
Financial Statements
Notes to the accounts
Joint Venture name
Address of principal place of business
Decision First Ltd
Northprint Manchester Ltd
PointX Ltd
Cardinal House, 9 Manor Road, Leeds, West
Yorkshire, LS11 9AH
PO Box 68164, Kings Place, 90 York Way,
London N1P 2 AP
5-7 Abbey Court, Eagle Way, Sowton, Exeter,
Devon EX2 7HY
Classes of
shares held
Financial year
end
% capital
included in
consolidation
Ordinary B
31 December
50.0%
Ordinary
30 September
50.0%
Ordinary B
31 March
50.0%
The Group has joint control over all of the joint ventures listed above, because key operating decisions require the unanimous consent of the Group and
the other investor(s).
Associate name
Address of principal place of business
Bloobloom Ltd
Conveyancing Information
Executive Ltd
Excalibur Holdco Ltd
242 Acklam Road, Westbourne Studios Unit 209,
London W10 5JJ
Alpha House, 4 Greek Street, Stockport, Cheshire
SK3 8AB
Wowcher Limited, Dalston Works, 69 Dalston
Lane, London E8 2NG
Country of
incorporation or
registration
Classes of
shares held
%
shareholding
Preference
21.5%
UK
UK
UK
Limited by
Guarantee
B Ordinary
23.0%
23.9%
20.1%
Factory 14 S.a.r.l
53 boulevard Royale, L-2449, Luxembourg
Luxembourg
Preference
Funcent DMG Information
Technology Hong Kong Company
Ltd
Independent Television News Ltd
Kortext Ltd
Liases Foras Real Estate Rating
and Research Private Ltd
LineVision, Inc.
Propstack Services Private Ltd
27/F 248 Queen's Road East, Wanchai, Hong
Kong
200 Grays Inn Road, London WC1X 8XZ
26-32 Oxford Road, Suite B, 6th Floor, Avalon
House, Bournemouth, Dorset, BH8 8EZ
S6, 2nd Floor, Pinnacle Business Park, Mahakali
Cave Road, Andheri East, Mumbai, 400093 India
India
444 Somerville Ave, Somerville, 02413, MA,
United States
1st & 2nd Floor, Nyay Sagar Bdlg, Kalanagar,
Bandra (East), Mumbai 400 051, India
Quick Move Ltd
86-90 Paul Street, London EC2A 4NE
RLTO Ltd
Office 7 35-37 Ludgate Hill, London EC4M 7JN
Skymet Weather Services Private
Ltd
109, Kushal Bazar, Nehru Place, New Delhi,
110019, India
Whereoware, LLC
Yopa Property Ltd
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
Suite 4, Building 4, Hatters Lane, Watford WD18
8YF
Investment name
Address of principal place of business
Air Mail, LLC
BDG Media, Inc.
Registered Agent Solutions, 9.E Loockerman
Street, Suite 311, Dover, Kent, Delaware 19901,
United States
315 Park Avenue South, 11th Floor, New York,
NY 10010
133
Hong Kong
Ordinary
22.6%
UK
UK
Ordinary
Ordinary,
Preference
India
Equity, Series A
CCCPS
20.0%
22.0%
30.5%
USA
Series A1
24.1%
India
UK
UK
India
USA
Equity, Series A
CCCPS
Ordinary,
Preference
Ordinary
Ordinary
Membership
Interests
22.7%
33.9%
20.0%
15.9%
19.5%
UK
Preference
45.3%
Country of
incorporation or
registration
Classes of
shares held
%
shareholding
USA
Preference
3.1%
USA
Ordinary,
Preference
3.4%
Daily Mail and General Trust plc Annual Report 2022
Believe in Science Ltd
Bricklane Technologies Ltd
Compstak, Inc.
Cue Ball Capital, LP
Finsgate, 5-7 Cranwood Street, London EC1V
9EE
20 Baltic Street, London EC1Y 0UL
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
The Corporation Trust Company, 1209 Orange
Street, Wilmington, DE 19801, United States
Evening Standard Ltd
Northcliffe House, 2 Derry Street, London W8 5TT
Farewill Ltd
Financial Network Analytics Ltd
Global Event Partners Ltd
GPNutrition Ltd
Hambro Perks Ltd
1st Floor, 27 Downham Road, London N1 5AA
Albert House, 256-260 Old Street, London EC1V
9DD
Suite 1, 3rd Floor, 11-12 St. James's Square,
London SW1Y 4LB
24 Hills Road, Cambridge CB2 1JP
111 Buckingham Palace Road, London SW1W
0SR
IPSX Group Ltd
Birchin Court, 20 Birchin Lane, London EC3V 9DU
L Lambert Holdings Ltd
411-413 Oxford Street, London W1C 2PE
Laundrapp Ltd (in liq'n)
Lindentor 226. V V GmbH
Live Better With Ltd
Media Investors 17, LLC
2nd Floor 110 Cannon Street, London EC4N 6EU
Charlottenstraße 4, Berlin, 10969, Germany
70 White Lion Street, Islington, London N1 9PP
The Corporation Trust Company, 1209 Orange
Street, Wilmington, DE 19801, United States
OceanSaver Ltd
3 Park Square East, Leeds LS1 2NE
PA Media Group Ltd
The Point, 37 North Wharf Road, Paddington,
London W2 1AF
Papier Ltd
Third Floor, 20 Old Bailey, London EC4M 7AN
Pascal Metrics, Inc.
Pembroke Holdings, LLC
Plandek Ltd
Plum Fintech Ltd
Stem, Inc.
Taboola.com Ltd
Upstream Group, Inc.
WellAware Holdings, Inc.
Workana, LLC
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808, United States
485 West Putham Avenue, Greenwich, CT,
06830, United States
United States
C/O Praxis, 1 Poultry, London EC2R 8EJ
2-7 Clerkenwell Green, 2nd Floor, London EC1R
0DE
100 California St, 14th Floor, San Francisco, CA
94111, Unites States
7 Totseret Haaretz St., Tel-Aviv Israel
The Corporation Trust Company, 1209 Orange
Street, Wilmington, DE 19801, United States
3424 Paesanos Parkway, Suite 200, San Antonio,
Texas 78231, United States
SAN ANTONIO TX 78231
120 East 56th Street, Suite 420, New York, NY
10022, United States
Zapkey Technologies Private
Limited
B1 1401, Godrej Platinum Pirojshanagar, Vikhroli
East, Mumbai, Maharashtra, 400079, India
Zilch Technology Ltd
123 Buckingham Palace Road, London SW1W
9SH
134
UK
UK
Preference
Preference
USA
Common
USA Partnership Units
UK
UK
UK
UK
UK
UK
UK
UK
UK
Germany
UK
USA
UK
UK
UK
Ordinary
Preference
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Preference
Preference
Ordinary B
Ordinary
Ordinary A
Ordinary
Ordinary, Series
C Preference
USA
Ordinary
USA
UK
UK
USA
Israel
USA
Membership
Interests
Ordinary B
Series A
Preference
Common
Ordinary
Ordinary
2.5%
13.2%
2.0%
2.5%
5.0%
5.4%
4.5%
15.0%
13.9%
3.1%
1.6%
1.5%
1.7%
0.1%
4.6%
12.8%
5.0%
18.4%
4.2%
4.4%
10.0%
2.5%
2.3%
0.2%
0.3%
3.6%
USA
Preference
3.4%
USA
Membership
interests
India
Equity, CCPS
UK
Ordinary
3.8%
5.0%
1.1%
Daily Mail and General Trust plc Annual Report 2022
Unaudited Five Year Financial Summary
Consolidated Income Statement
For the year ended 30 September
Revenue
Adjusted operating profit
Exceptional operating costs, impairment of internally generated
and acquired computer software, property, plant and
equipment and investment property, amortisation and
impairment of acquired intangible assets arising on business
combinations and impairment of goodwill
Operating (loss)/profit before share of results and
impairment of joint ventures and associates
Share of results and impairment of joint ventures and
associates and loans to associates
Total operating (loss)/profit
Other gains and losses
(Loss)/profit before investment revenue, net finance costs
and tax
Investment revenue
Net finance costs
(Loss)/profit before tax
Tax
(Loss)/profit for the year after tax
Discontinued operations
Non-controlling interests
(Loss)/profit for the year
Year ended
30 September
2018
£m
1,340.9
144.6
Year ended
30 September
2019
£m
1,337.0
135.8
Year ended
30 September
2020
£m
870.2
48.7
Year ended
30 September
2021
£m
885.3
65.5
Year ended
30 September
2022
£m
974.0
58.8
(94.8)
(41.2)
(40.9)
(61.6)
(100.5)
49.8
94.6
7.8
3.9
(41.7)
118.4
168.2
565.5
733.7
4.8
(32.0)
706.5
(7.6)
698.9
(10.7)
1.2
689.4
(28.1)
(10.7)
66.5
73.7
140.2
11.5
(17.4)
134.3
(20.4)
113.9
(22.6)
(0.4)
90.9
(2.9)
42.1
39.2
7.0
(12.5)
33.7
2.0
35.7
153.3
0.3
189.3
(9.8)
(5.9)
14.3
8.4
2.3
(13.1)
(2.4)
62.2
59.8
1,480.1
2.4
1,542.3
(45.3)
(87.0)
30.8
(56.2)
2.8
(6.7)
(60.1)
(85.6)
(145.7)
11.6
0.3
(133.8)
Adjusted profit before tax and non-controlling interests
182.3
144.7
72.1
88.1
39.3
Earnings before interest, taxation, depreciation and
amortisation (EBITDA)
287.7
205.6
142.5
154.0
89.5
Adjusted profit after taxation and non-controlling interests
149.3
114.5
59.4
71.3
29.8
135
Financial Statements
Financial Statements
Unaudited Five Year Financial Summary
Consolidated Cash Flow Statement
For the year ended 30 September
Net cash (outflow)/inflow from operating activities
Investing activities
Financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain/(loss) on cash and cash equivalents
2018
£m
115.0
481.3
(169.4)
426.9
7.4
1.6
2019
£m
154.8
221.1
(533.3)
(157.4)
435.9
10.7
2020
£m
142.5
173.2
(114.1)
201.6
289.2
(10.9)
2021
£m
106.2
1,274.0
(102.1)
1,278.1
479.9
(12.8)
2022
£m
(376.5)
118.7
(1,464.1)
(1,721.9)
1,745.2
29.0
Cash and cash equivalents at end of year
435.9
289.2
479.9
1,745.2
52.3
Net (decrease)/increase in cash and cash equivalents
Cash inflow from change in debt and finance leases
Change in net debt from cash flows
Other non-cash items
(Increase)/decrease in net debt in the year
Net cash/(debt) at start of year
Net (debt)/cash at end of year
Consolidated Statement of Financial Position
At 30 September
Goodwill and intangible assets
Property, plant and equipment
Right of use assets
Other investments including joint ventures and associates
Other non-current assets
Non-current assets
Net current assets/(liabilities)
Non-current liabilities
Net assets
Shareholders' equity
Called-up share capital
Share premium account
Other reserves
Non-controlling interests
Retained earnings
Total equity
Shareholder information
At 30 September
Dividend per share *
426.9
268.4
695.3
1.7
697.0
(464.3)
232.7
2018
£m
464.4
99.7
-
790.9
353.3
1,708.3
217.7
(250.6)
1,675.4
45.3
17.8
1.3
13.5
1,597.5
1,675.4
(157.4)
2.5
(154.9)
4.1
(150.8)
232.7
81.9
2019
£m
321.1
74.4
-
132.8
322.8
851.1
155.0
(231.8)
774.3
29.3
17.8
24.4
702.8
774.3
201.6
32.3
233.9
(130.9)
103.0
81.9
184.9
2020
£m
350.3
63.0
89.8
467.7
239.0
1,209.8
260.5
(324.1)
1,146.2
29.3
17.8
28.2
1.0
1,069.9
1,146.2
1,278.1
14.0
1,292.1
28.1
1,320.2
184.9
1,505.1
2021
£m
301.1
55.4
34.7
876.9
452.0
1,720.1
1,615.4
(253.4)
3,082.1
29.3
17.8
(7.6)
(1.5)
3,044.1
3,082.1
(1,721.9)
27.0
(1,694.9)
7.8
(1,687.1)
1,505.1
(182.0)
2022
£m
280.9
50.2
31.3
98.8
1,069.7
1,530.9
(108.3)
(422.1)
1,000.5
28.8
17.8
22.0
(2.0)
933.9
1,000.5
2018
23.30p
2019
23.90p
2020
24.10p
2021
24.90p
2022
653.53p
*Represents the dividends declared by the Directors in respect of the above years excluding the Euromoney cash distributions and Euromoney dividend
in specie.
136
Daily Mail and General Trust plc Annual Report 2022
Company Statement of Financial Position
At 30 September 2022
ASSETS
Non-current assets
Fixtures, fittings and artwork
Shares in Group undertakings
Financial assets at fair value through Other Comprehensive Income
Other financial assets
Trade and other receivables
Current assets
Trade and other receivables
Cash at bank and in hand
Deferred tax
Total assets
LIABILITIES
Creditors: amounts falling due within one year
Trade and other payables
Borrowings
Provisions
Creditors: amounts falling due after more than one year
Borrowings
Derivative financial liabilities
Total liabilities
Net assets
CAPITAL AND RESERVES
Called-up share capital
Share premium account
Share capital
Reserve for own shares
Capital redemption reserve
Profit and loss account
Equity shareholders' funds
At 30
September
2022
£m
At 30
September
2021
£m
Note
7
8
9
11
10
10
12
13
14
14
16
15
15
17
17
18
19
1.2
1,350.2
3.6
-
11.9
1,366.9
114.5
25.1
1.6
141.2
1,508.1
(23.2)
(0.4)
(34.5)
(58.1)
(194.6)
(19.5)
(214.1)
(272.2)
-
2,914.4
-
120.7
0.4
3,035.5
42.8
1,246.4
12.2
1,301.4
4,336.9
(296.2)
(1.0)
(23.1)
(320.3)
(199.5)
(17.2)
(216.7)
(537.0)
1,235.9
3,799.9
28.8
17.8
46.6
-
21.7
1,167.6
29.3
17.8
47.1
(35.5)
21.2
3,767.1
1,235.9
3,799.9
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company income statement.
The loss for the Company for the year was £400.6 million (2021 profit of £1,134.7 million).
The financial statements on pages 137 to 147 were approved by the Directors and authorised for issue on 29 November 2022. They were signed on their
behalf by:
The Viscount Rothermere
Director
137
Financial Statements
Financial Statements
Company Statement of Changes in Equity
Called-up
share
capital
Share
premium
account
Capital
redemption
reserve
Reserve for
own
shares
Profit and loss
account
For the year ended 30 September 2022
At 1 October 2020
Profit for the year
Total comprehensive income for the year
Dividends paid
Fair value movement of financial assets at fair
value through Other Comprehensive Income
Credit to equity for share-based payments
Deferred tax on share-based payments
Own shares acquired in the year
Settlement of exercised share options
Own shares released on vesting of share options
At 30 September 2021
Loss for the year
Fair value movement of financial assets at fair
value through Other Comprehensive Income
Total comprehensive loss for the year
Cancellation of A Ordinary Non-voting shares
Dividends paid
Cazoo dividend in specie
Credit to equity for share based payments
Deferred tax on share based payments
Settlement of exercised share options
Own shares released on vesting of share options
At 30 September 2022
£m
2,668.6
1,134.7
1,134.7
Total
£m
2,677.6
1,134.7
1,134.7
(55.0)
(55.0)
0.4
0.4
25.5
3.6
-
(16.0)
5.3
3,767.1
25.5
3.6
(1.0)
(16.0)
30.1
3,799.9
(400.6)
(400.6)
(713.8)
(713.8)
(1,114.4)
(1,114.4)
(28.9)
(1,356.4)
(109.8)
51.5
(4.4)
(40.0)
2.9
1,167.6
-
(1,356.4)
(109.8)
51.5
(4.4)
(40.0)
9.5
1,235.9
£m
17.8
-
-
-
-
-
-
-
-
-
17.8
-
-
-
-
-
-
-
-
-
-
17.8
£m
21.2
-
-
-
-
-
-
-
-
-
21.2
-
-
-
0.5
-
-
-
-
-
-
21.7
£m
(59.3)
-
-
-
-
-
-
(1.0)
-
24.8
(35.5)
-
-
-
28.9
-
-
-
-
-
6.6
-
£m
29.3
-
-
-
-
-
-
-
-
-
29.3
-
-
-
(0.5)
-
-
-
-
-
-
28.8
138
Financial Statements
Financial Statements
Notes to the Company Statement
of Financial Performance
1 Basis of preparation
Daily Mail and General Trust plc (DMGT) is an unlisted public limited company incorporated and domiciled in the United Kingdom. The address of the
registered office is Northcliffe House, 2 Derry Street, London, W8 5TT, England.
The financial statements of DMGT have been prepared in accordance with Financial Reporting Standard 101, Reduced Disclosure Framework (FRS 101).
The financial statements have been prepared under the historical cost convention or historic cost modified by revaluation of financial assets and financial
liabilities held at fair value through profit and loss, and in accordance with the Companies Act 2006 and on a going concern basis. The preparation of
financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the Companys accounting policies. See Note 2 for further detail.
All amounts presented have been rounded to the nearest £0.1 million.
Profit for the financial year
As permitted by Section 408 of the Companies Act 2006, a separate profit and loss account for the Company has not been included in these accounts. The
Companys loss after tax for the year was £400.6 million (2021 profit of £1,134.7 million). This includes dividends receivable from subsidiary undertakings
amounting to £1,275.4 million (2021 £1,565.9 million).
Impact of amendments to accounting standards
The Company has applied the exemption available under FRS 101 in relation to paragraphs 30 and 31 of IAS 8, Accounting policies, changes in accounting
estimates and errors (requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued and is not yet effective).
2 Significant accounting policies
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied
to all the years presented, unless otherwise stated.
Foreign exchange
Transactions in currencies other than the Company's reporting currency are recorded at the exchange rate prevailing on the date of the transaction. At
each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items
carried at fair value that are denominated in foreign currencies are retranslated at the rate prevailing on the date when fair value was determined. Non-
monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of
monetary items, and on the retranslation of monetary items, are included in the profit and loss account for the year.
Investments in subsidiary undertakings
Investments in subsidiary undertakings are held at cost less any provision for impairment.
Financial assets at fair value through Other Comprehensive Income
Financial assets are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require
delivery of the investment within the time frame established by the market concerned, and are measured at fair value, including transaction costs.
As permitted by IFRS 9, the Group classifies its equity investments at Fair Value through Other Comprehensive Income. All fair value movements are
recorded in Other Comprehensive Income and gains and losses are not recycled to the Income Statement on disposal.
Dividend income from Financial assets held at fair value through other comprehensive income is recorded in the Income Statement.
Unlisted equity investments are valued using a variety of approaches including comparable company valuation multiples and discounted cashflow
techniques. 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.
The fair value of listed equity investments is determined based on quoted market prices.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have
been enacted or substantively enacted by the reporting date. Deferred tax is provided in full on timing differences that result in an obligation at the reporting
date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included
in financial statements. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell
the asset, or on unremitted earnings of subsidiaries and associates where there is no commitment to remit these earnings. Deferred tax assets are
recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax is not discounted.
139
Daily Mail and General Trust plc Annual Report 2022
Financial instruments disclosures
Financial assets
Trade and other receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.
The majority of other receivables relate to amounts owed by subsidiary undertakings. Further information concerning interest charged on these receivables
is set out in Note 10.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, short-term deposits and other short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity instruments
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Trade and other payables
Trade payables are non-interest bearing and are stated at their nominal value.
Capital market and bank borrowings
Interest bearing loans and overdrafts are initially measured at fair value (which is equal to net proceeds at inception), and are subsequently measured at
amortised cost, using the effective interest rate method. A portion of the Company's bonds are subject to fair value hedge accounting and this portion of
the carrying value is adjusted for the movement in the hedged risk to the extent hedge effectiveness is achieved. Any difference between the proceeds, net
of transaction costs and the settlement or redemption of borrowings is recognised over the term of the borrowing.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to settle
on a net basis, or realise the asset and liability simultaneously.
Derivative financial instruments and hedge accounting
The Company's activities expose it to the financial risks of changes in foreign exchange rates and interest rates. The Company uses various derivative
financial instruments to manage its exposure to these risks.
The use of financial derivatives is set out in Note 33 of the Group's Annual Report. The Company does not use derivative financial instruments for speculative
purposes.
The Company does not apply hedge accounting except for fair value hedges. Gains and losses arising on derivatives that form part of net investment hedge
or cash flow hedge relationships in the consolidated financial statements are recorded in the profit and loss account in the Company.
Financial instruments disclosures
The Company has taken advantage of the exemption provided in IFRS 7, Financial Instruments: Disclosures and included disclosures relating to financial
instruments in Note 33 of the Group's Annual Report.
Cash flow statement
The Company has utilised the exemptions provided under IAS 7, Statement of Cash Flows and has not presented a cash flow statement. A consolidated
cash flow statement has been presented in the Group's Annual Report.
Related party transactions
The Company has taken advantage of the exemptions of IAS 24, Related Party Disclosures and included disclosures relating to related parties in Note 43
of the Group's Annual Report.
Share-based payments
The Company operates the Groups LTIP and other Group share-based payment schemes, details of which can be found in Note 41 of the Groups Annual
Report.
140
Financial Statements
Financial Statements
Notes to the Company Statement
of Financial Performance
Retirement benefits
The defined benefit pension schemes surpluses/deficits have been allocated to Group companies on a buy-out basis that is of an estimate of the liabilities
and assets of the defined benefit schemes as at 30 September 2022. Accordingly the Company has not recorded an asset or liability in relation to the
Group's defined benefit scheme.
Further information can be found in Note 34 of the Groups Annual Report.
Provisions
Provisions are recognised when the Company has a present obligation, legal or constructive, as a result of a past event, and it is probable that the Company
will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the
period end date and are discounted to present value where the effect is material.
Critical accounting judgements and key sources of estimation uncertainty
The following represents the key source of estimation uncertainty that has the most significant effect on the amounts recognised in the financial statements:
Impairment
Impairment reviews are performed when there is an indicator that the carrying value of the shares in Group undertakings could exceed their recoverable
values based on their value in use or fair value less costs to sell. Value in use is calculated by discounting future expected cash flows. These calculations
use cash flow projections based on Board-approved budgets and forecasts which reflect management's current experience and future expectations of the
markets in which the Group undertaking operates.
Risk adjusted pre-tax discount rates used by the Company in its impairment tests range from 12.1% to 25.9% (2021 10.9% to 30.0%), the choice of rates
depending on the risks specific to that cash generating unit (CGU). The cash flow projections consist of a Board-approved budget for the following year,
outlooks for the proceeding four years with nominal long-term growth rates beyond these periods. The nominal long-term (decline)/growth rates range from
-3.0% to 6.9% (2021 -3.0% to 4.0%) and vary with management's view of the CGU's market position, maturity of the relevant market and do not exceed
the long-term average growth rate for the industry in which the CGU operates.
The carrying value of the investment in Group undertakings is £1,350.2 million (2021 £2,914.4 million).
Using the criteria above the Company has provided a sensitivity analysis of the key assumptions used to support the carrying value of its investments in
Group undertakings.
If the growth rate assumptions above were reduced by 1.0% this would increase the impairment by £108.2 million. If the growth rate assumptions
above were increased by 1.0% this would reduce the impairment by £137.7 million.
If the discount rate assumptions above were reduced by 1.0% this would reduce the impairment by £133.3 million. If the discount rate assumptions above
were increased by 1.0% this would increase the impairment by £110.9 million.
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 18 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.
During the period a settlement agreement was reached with the EPA whereby the Company without admitting any wrongdoing, will replace 24 million RINs
over a four-year period.
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 Groups
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.
141
Daily Mail and General Trust plc Annual Report 2022
RINs trade in a volatile range, using the period end price of US$1.74 compared to the estimated future forecast price of US$1.51 would increase the
provision by approximately US$3.1 million (£2.7 million).
3 Auditor's remuneration
Statutory audit fees relating to the Company amounted to £0.8 million (2021 £1.1 million).
4 Employees
Average number of persons employed by the Company:
Administration
Directors
Total staff costs comprised:
Wages and salaries
Share-based payments
Social security costs
Pension costs
Year ended 30
September
2022
Number
Year ended 30
September
2021
Number
7
3
10
7
3
10
Year ended 30
September
2022
£m
Year ended 30
September
2021
£m
16.3
43.2
3.1
-
62.6
10.7
15.7
4.5
0.1
31.0
The remuneration of the Directors of the Company during the year are disclosed in Note 6 of the Group's Annual Report.
5 Tax
There was a current tax credit for the year of £2.1 million (2021 £12.6 million).
6 Dividends
On 14 December 2021, a special dividend was declared to all DMGT shareholders with a record date of 16 December 2021. It was comprised of a cash
element of £5.68 per share and a share element of approximately 0.5749 shares in Cazoo Group Ltd (Cazoo) per DMGT share. Settlement of the cash
element of £1,310.3 million occurred on 30 December 2021 and settlement of the Cazoo share element of £109.8 million occurred on 24 June 2022.
Following the year end, the Board declared and paid an interim dividend of £5.4 million at its 1 November 2022 meeting (2.0 pence per Ordinary/A
Ordinary Non-Voting Share).
The Board declared a final dividend of 3.78 pence per Ordinary/A Ordinary Non-Voting Share at its 29 November 2022 meeting (2021 17.3
pence). It will absorb an estimated £8.7 million (2021 £39.8 million) of shareholders equity for which no liability has been recognised in these
Consolidated Financial Statements.
142
Financial Statements
Financial Statements
Notes to the Company Statement
of Financial Performance
7 Fixtures, fittings and artwork
Cost
At 1 October 2020 and 30 September 2021
Additions
At 30 September 2022
Accumulated depreciation
At 1 October 2020
Charge for the year
At 30 September 2021
Charge for the year
At 30 September 2022
Net book value - 2020
Net book value - 2021
Net book value - 2022
8 Shares in Group undertakings (listed on pages 130 to 132)
At 1 October 2020
Additions
Impairment charge
At 30 September 2021
Additions
Impairment charge
At 30 September 2022
Analysis of movements in the year:
Daily Mail and General Holdings Ltd
DMGB Ltd
Note
(i)
Cost
£m
3,581.0
110.4
-
3,691.4
8.4
-
3,699.8
Cost
£m
8.4
-
8.4
Provision
£m
(412.6)
-
(364.4)
(777.0)
-
(1,572.6)
(2,349.6)
Provision
£m
(1,149.2)
(423.4)
(1,572.6)
(i)
The impairment charge arose as a result of dividends paid by subsidiaries together with value in use reductions during the year.
9 Financial assets at fair value through Other Comprehensive Income
At 1 October 2020
Disposal
Fair value movement
At 30 September 2021
Additions
Cazoo dividend in specie
Fair value movement
At 30 September 2022
Note
(i)
(ii)
(ii)
£m
0.9
1.2
2.1
(0.6)
(0.3)
(0.9)
-
(0.9)
0.3
-
1.2
Net book
value
£m
3,168.4
110.4
(364.4)
2,914.4
8.4
(1,572.6)
1,350.2
Total
£m
(1,140.8)
(423.4)
(1,564.2)
£m
1.0
(1.4)
0.4
-
827.2
(109.8)
(713.8)
3.6
(i)
The disposal in the prior year relates to the Companys investment in Financial Network Analytics Ltd which was transferred to DMGV Ltd, a subsidiary
undertaking, during the year.
143
Daily Mail and General Trust plc Annual Report 2022
(ii)
The additions during the year relate to the Companys investments in Stem, Inc. and Cazoo Group Ltd (Cazoo). Cazoo was distributed as dividend
in specie from Daily Mail and General Holdings Ltd, a subsidiary undertaking. The investment in Cazoo was later distributed as dividend in specie
to the Companys shareholders.
Details of the Company's financial assets at fair value through Other Comprehensive Income are included in Note 25 and the financial instruments
disclosures are set out in Note 33 of the Group's Annual Report.
10 Trade and other receivables
Amounts falling due after more than one year
Derivative financial assets
Amounts falling due within one year
Amounts owed by Group undertakings
Other financial assets
Prepayments and accrued income
Other receivables
Corporation tax
Derivative financial assets
Note
(i)
Note
(ii)
(i)
At 30
September
2022
£m
At 30
September
2021
£m
11.9
0.4
At 30
September
2022
£m
At 30
September
2021
£m
108.2
5.1
0.6
0.6
-
-
114.5
11.2
9.2
0.5
9.0
12.5
0.4
42.8
(i) Details of the Company's derivative financial assets are set out in Note 33 of the Group's Annual Report.
(ii)
The Company 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.
11 Other financial assets
Escrow
(i) See Note 28 of the Groups Annual Report for further details.
12 Cash at bank and in hand
Cash at bank and in hand
13 Deferred tax
Movements on the deferred tax asset were as follows:
At start of year
Share-based payments
Tax charge for the year
At end of year
144
At 30
September
2022
£m
-
At 30
September
2021
£m
120.7
Note
(i)
At 30
September
2022
£m
25.1
At 30
September
2021
£m
1,246.4
At 30
September
2022
£m
12.2
(4.4)
(6.2)
1.6
At 30
September
2021
£m
6.7
3.6
1.9
12.2
Financial Statements
Financial Statements
Notes to the Company Statement
of Financial Performance
In the opinion of the Directors, it is more likely than not that the Company will be able to recover the deferred tax asset against suitable future taxable profits
generated by its subsidiary undertakings.
14 Creditors: amounts falling due within one year
Bank overdrafts
Interest payable
Amounts owing to Group undertakings
Accruals and deferred income
Other payables
Note
(i)
At 30
September
2022
£m
0.4
3.6
6.3
13.2
0.1
23.6
At 30
September
2021
£m
1.0
3.6
254.1
38.3
0.2
297.2
(i)
Amounts owing to Group undertakings are repayable on demand and bear interest of UK bank base rate plus 0.5%.
15 Creditors: amounts falling due after more than one year
6.375 % Bonds 2027
Derivative financial liabilities
The nominal values of the bonds are as follows:
6.375 % Bonds 2027
Note
(i)
At 30
September
2022
£m
194.6
19.5
214.1
At 30
September
2021
£m
199.5
17.2
216.7
At 30
September
2022
£m
200.0
At 30
September
2021
£m
200.0
(i)
Details of the Company's derivative financial liabilities are set out in Note 33 of the Group's Annual Report.
The Company's bonds have been adjusted from their nominal values to take account of direct issue costs, discounts and movements in hedged risks. The
issue costs and discounts are being amortised over the expected lives of the bonds using the effective interest method. The unamortised issue costs
amount to £0.3 million (2021 £0.3 million) and the unamortised discount amounts to £0.5 million (2021 £0.6 million).
The Company used interest rate swaps designated as hedges of a proportion of the change in fair value of the Companys bonds. Following termination of
the last remaining interest rate swap on 21 June 2022, the residual bond fair value adjustment of £4.9 million is required to be amortised over the period to
21 June 2027 being the maturity of the bond. Amortisation charged in the year amounts to £0.3 million leaving an unamortised residual fair value adjustment
of £4.6 million.
Following the year end the Company bought back and cancelled £50.0 million nominal of its outstanding £200.0 million 2027 bonds for cash consideration
of £46.6 million.
Details of the fair value of the Company's bonds are set out in Note 32 of the Group's Annual Report.
The bonds are subject to fair value hedging using derivatives as set out in Note 33 of the Group's Annual Report. Consequently, their carrying value is also
adjusted to take into account the effects of this hedging activity.
The book value of the Company's other borrowings equates to fair value.
145
Daily Mail and General Trust plc Annual Report 2022
The maturity profile of the Company's borrowings is as follows:
Year ended 30 September 2022
Within one year
Between two and five years
Year ended 30 September 2021
Within one year
Over five years
16 Provisions
Other provisions
Movements on other provisions were as follows:
At start of year
Additions
At end of year
Overdrafts
£m
0.4
-
0.4
1.0
-
1.0
Bonds
£m
-
194.6
194.6
Owed to group
undertakings
£m
6.3
-
6.3
Total
£m
6.7
194.6
201.3
-
254.1
255.1
199.5
199.5
-
254.1
199.5
454.6
At 30
September
2022
£m
34.5
At 30
September
2021
£m
23.1
Note
(i)
23.1
11.4
34.5
-
23.1
23.1
(i)
The provision above relates to the EPA claim against the Groups Energy Information segment (Genscape). Notwithstanding the sale of Genscape
to Verisk during 2019, DMGT plc is responsible for any costs, claims or awards and all settlement negotiations with the EPA. See Note 18 of the
Groups Annual report for further details.
17 Capital and Reserves
Share premium account:
At start and end of year
Reserve for own shares:
At start of year
Additions
Own shares released on vesting of share options
Own shares cancelled
At end of year
At 30
September
2022
£m
17.8
At 30
September
2021
£m
17.8
At 30
September
2022
£m
(35.5)
-
6.6
28.9
-
At 30
September
2021
£m
(59.3)
(1.0)
24.8
-
(35.5)
The Company's investment in its own shares represented shares held in treasury and shares held by an employee benefit trust to satisfy incentive schemes.
At 30 September 2022, this investment comprised the cost of nil A Ordinary Non-Voting Shares (2021 4,115,021 shares) held in treasury and nil A Ordinary
Non-Voting Shares (2021 875,450 shares) held in the employee benefit trust. The market value of the Treasury Shares at 30 September 2022 was £nil
(2021 £44.1 million) and the market value of the shares held in the employee benefit trust at 30 September 2022 was £nil (2021 £9.4 million).
146
Financial Statements
Financial Statements
Notes to the Company Statement
of Financial Performance
The employee benefit trust is independently managed and purchased shares in order to satisfy outstanding share options and potential awards under
equity-settled long-term incentive plans.
The Reserve for own shares is considered to be a realised loss for the purposes of calculating distributable reserves.
18 Capital redemption reserve
At start of year
On cancellation of A Ordinary Non-Voting Shares
At end of year
19 Profit and loss account
At start of year
Net (loss)/profit for the year
Dividends paid
Cazoo dividend in specie
Fair value movement of financial assets at fair value through Other Comprehensive Income
On cancellation of A Ordinary Non-Voting Shares
Other movements on share option schemes
At end of year
At 30
September
2022
£m
21.2
0.5
21.7
At 30
September
2022
£m
3,767.1
(400.6)
(1,356.4)
(109.8)
(713.8)
(28.9)
10.0
1,167.6
At 30
September
2021
£m
21.2
-
21.2
At 30
September
2021
£m
2,668.6
1,134.7
(55.0)
-
0.4
-
18.4
3,767.1
Total reserves
1,207.1
3,770.6
The Directors estimate that £113.4 million of the Company's profit and loss account reserve is not distributable (2021 £1,807.3 million).
20 Contingent liabilities and guarantees
At 30 September 2022 the Company had guaranteed subsidiaries' outstanding derivatives which had a mark to market liability valuation of £nil (2021 £nil)
and letters of credit with a principal value of £2.0 million (2021 £3.3 million).
21 Ultimate holding company
The Companys immediate parent company is Rothermere Continuation Limited (RCL), a company incorporated in Jersey, in the Channel Islands.
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 DMGTs issued Ordinary Shares and DMGT issued 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 is 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.
22 Post balance sheet events
Details of the Company's post balance sheet events can be found within Note 44 of the Group's Annual Report.
147