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Chairman
Charles Sinclair
Managing Director
Martin Morgan
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850%
Hobsons
unrivaled access to a world-wide student audience. The database
has grown by 850% in 2 years to 2.4 million students. |
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DMGI's two divisions produced
contrasting trading results. The Business to Business division had
an outstanding year, nearly doubling profits over the prior year,
whilst the Careers division suffered from a very weak graduate recruitment
market and the adverse impact of the events of September, 2001 on
its US English language training market.
Business
to Business
Risk Management Solutions (RMS) recovered quickly from the hiatus
amongst its insurance clients following the events of 11th September,
2001, and achieved a record level of new sales bookings. Particularly
noteworthy were sales to the newly created Bermudan based (re)insurance
companies, all of which adopted RMS models and information.
RMS had an active year in new product development. A new model was
launched in response to insurers' heightened interest in evaluating
the risks associated with workers compensation aspects of catastrophes.
A consortium of clients was formed to underwrite a significant investment
being made by RMS to build a geographic database to measure US urban
risk concentration, a project being undertaken jointly with DMGI's
Sanborn company. A terrorism model was launched for the US market.
The Catalyst catastrophe modelling unit of the reinsurance broker,
Benfield Blanch, was acquired and merged into RMS operations, with
the vendor becoming, together with other major brokers, one of RMS's
top worldwide clients. DMGI's real estate information companies
also had a good year, albeit in rather different market conditions
on either side of the Atlantic. In the USA, Environmental Data Resources
saw the US commercial real estate market continue its decline in
transaction volumes, but tight cost controls and investment in product
development paid off by enabling the company to increase profits
and gain market share. The assets of the environmental property
information unit of a competitor were acquired and integrated successfully.
Shortly after the year end, Boston-based Portfolio & Property Research
(PPR) was acquired to expand DMGI's investment in commercial real
estate information. PPR's market trend information and forecasting
models will complement EDR's extensive databases of property specific
information. In the UK, EDR Landmark Information Group grew strongly,
as the market for property related environmental due diligence expanded
in the home conveyancing market, and as the company introduced new
database products, such as on planning.
Dolphin Software had a good year and achieved respectable growth
in what was a tight market with US companies constraining capital
expenditure. The recently launched subscription business model has
been well received and increased outsourcing to India has been a
success. RMSI maintained profits in a market which experienced a
downturn in the second half, partly as a result of weaker demand
in geographic information markets and partly due to caution on the
part of potential new customers in outsourcing to India following
the tensions over Kashmir.
Rapidly weakening demand was experienced by Sanborn in its geographic
information and photogrammetry markets, mainly caused by the tightening
of fiscal conditions amongst State and municipal governments in
the USA and their changed priorities following the terrorist attacks.
This adverse trend was partially offset by increased Federal government
agency security related work, although budget appropriations have
been slow to materialise.
Careers
Weak demand for graduate recruitment in the UK and Germany had a
significant adverse impact on Hobsons' results. Advertising and
other recruitment related revenue fell by approximately 20%, compared
to an already depressed prior year.
As a result, a restructuring of UK operations was announced at the
end of September with the closure of Hobsons' Cambridge office and
a consolidation into the London office. Redundancies equivalent
to approximately 35% of the UK workforce are being made. A reduction
of the product range has been carried out to enable a concentration
on the more profitable titles with good long-term prospects.
The performance of editions Go in France, which completed its first
full year under Hobsons' management, was pleasing. In Germany and
Switzerland, VerlagsGruppe Forum maintained its market leading position,
albeit on lower revenues, and a second graduate recruitment exhibition
was launched in Germany. Hobsons invested in a German student market
research company, Trendence GmbH. In the US, profits were maintained
in a market affected by budget cuts at State funded universities,
whilst Australia made satisfactory progress.
At Study Group the events of September, 2001 had a severe and immediately
negative impact on student volumes in US language programmes. Costs
were cut back rapidly and a recovery in booking trends was experienced
in the second half, but not enough to recoup the short falls in
the first half. By contrast, the UK posted record trading profits,
benefiting in part from a diversion of business from the US, but
also due in part to improvements in operating efficiencies and overseas
marketing. In Australia, profits were maintained at the prior year's
record level, despite Australian government changes to student visa
regulations which negatively affected the vocational training market.
The investment programme in the worldwide sales and marketing operation
was maintained and helped the company improve its competitive position.
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