.Corporate review

corporate review

.Corporate Profile & Financial Highlights

.Chairman's Statement

.The Group at a Glance

.Chief Executive's Review

.Associated Newspapers

.Northcliffe Newspapers

.Euromoney Institutional Investor

.DMG Broadcasting: Television

.DMG Broadcasting: Radio

.dmg world media

.DMG Information

.Corporate Social Responsibility

.Financial and Treasury Review

.Board of Directors

financial review

.Directors' Report

.Corporate Governance

.Remuneration Report

.Auditors' Report

.Group Profit and Loss Account

.Group Cash Flow Statement

.Group Balance Sheet

.Group Total Recognised Gains and Losses

.Company Balance Sheet

.Accounting Policies

.Notes to the Profit and Loss Account

.Notes to the Cash Flow Statement

.Notes to the Balance Sheet

.Principal Subsidiaries

.Five Year Financial Summary

.Shareholder Information

.Websites and Products

.Financial review

1 Segmental Information

By activity
The Group’s main businesses are segmented below. Each segment includes its respective associated electronic products. Broadcasting comprises the Group’s television and radio interests.

Turnover comprises Group sales excluding value added tax, less discounts and commission where applicable.
The share of the turnover of joint ventures has not been disclosed separately on the face of the Profit and Loss Account since it is immaterial.

Turnover of regional newspapers and related activities excludes intra–Group turnover of £12.8 million (2002 £11.4 million).

Associates and joint ventures together comprise more than 20% of Group net assets and hence have been segmented in accordance with SSAP 25,
as follows:

The Group’s results have not been segmented below total operating profit since such analysis would not be meaningful.

By geographical area
The figures for each geographical area show the net operating assets owned by, and the turnover and profits made by, companies located in that area; export sales and related profits are included in the areas from which those sales are made. Turnover in each geographical market in which customers are located is not disclosed as there is no material difference between the two.

Comparative figures have been reanalysed to achieve a more consistent presentation.

2 Operating profit

There were no material discontinued activities in the year.

The Group audit fee includes £27,000 (2002 £34,000) in respect of the Company’s audit.

Other fees earned by the Group’s auditors arise principally from circulation audits £0.1 million, tax advice £0.6 million and other audit related services of £0.1 million.

Turnover and operating profit for 2003 are analysed further by segment as follows:

Turnover of business to business information and careers comprises £119.9 million (2002 £107.7 million) from business to business information and £104.1 million (2002 £101.3 million) from careers.

View the Turnover and operating profit for 2003 analysed by segment table.
The table will open in a new window.

Operating profit before amortisation of intangible assets and exceptional items within the business to business information and careers division comprised £23.3 million from business to business information and £3.5 million at careers, offset by unallocated central costs of £3.0 million.

The Directors do not consider these results to be sufficiently material to require the presentation of a separate segment, but have provided this additional information to assist the understanding of the performance of the business to business information and careers division.

The Group regularly performs a review of its portfolio of investments which has led to an impairment charge of £9.4 million. This includes a write down of £6.8 million for goodwill which was previously written off against reserves relating to businesses where the goodwill is now no longer separately identifiable, as a result of a business merger, or where the immediate prospects for the businesses are uncertain.

Operating profit for 2002 is analysed further by segment as follows:

In the prior year exceptional operating items comprised redundancy and reorganisation costs of £8.8 million.

Operating profit before amortisation and impairment of intangible assets and exceptional items within the business to business information and careers division comprised £16.6 million from business to business information, a loss of £0.6 million at careers and unallocated central costs of £2.0 million.

3 Employees

4 Share of Operating Profits and Losses of Joint Ventures and Associates

5 Profit on Sale of Fixed Assets

6 Profit on Disposal and Closure of Businesses including Associates

The profit on sale of businesses comprises profits on the sale of Central Press Features by Northcliffe Newspapers, the sale of China Law Titles by Euromoney and the sale of 4BH by DMG Radio Australia, offset by the loss on disposal of a South American business by dmg world media.

The profit on sale of businesses in the prior year comprised a final tranche of unprovided, contingent proceeds on Euromoney’s sale of 100% Design Limited, combined with a profit on sale of Eastern Counties Radio Limited.

The share of associates’ loss on sale of businesses relate to the Group’s share of losses on the disposal of Euronews by ITN together with the Group’s share of losses from GWR on its disposal of Medien 2000 Holdings AG, offset by its profit on sale of Vibe Radio Services Limited.

The share of associates’ profit on sale of businesses in the prior year comprised the Group's share of the profits on the disposal of London News Radio Limited and Vibe Radio Services Limited by GWR, offset by the loss on disposal by GWR of its 25% interest in DMG Radio Australia to the Group.

7 Income from Other Fixed Asset Investments

8 Net Interest Payable

9 Other Finance Charges (Net)

The finance charge on the discounting of deferred consideration and the prior year finance credit on the discounting of deferred proceeds, arise from the requirement under FRS 7 to discount deferred proceeds and deferred consideration back to current values.

The prior year premium on repurchase of exchangeable bonds arose as a result of their being acquired for a price in excess of their par value.

No premium or discount arose on the repurchase of the exchangeable bonds in October 2002.

10 Taxation on Profit on Ordinary Activities

(i) The tax charge for the year is higher than the standard rate of corporation tax in the UK of 30% (2002 30%). The differences are explained below:

(ii) The underlying tax on profits before amortisation and impairment of intangible assets and exceptional items amounted to £47.0 million (2002 £49.5 million) (Note 14) and the resulting rate is 25.3% (2002 27.1%). There was a tax credit of £1.5 million (2002 £31.7 million) relating to exceptional items in the current and prior years. This included a credit of £4.1 million (2002 £0.8 million) which arose on the sale of fixed assets, a charge of £0.7 million (2002 £Nil) on the disposal and closure of businesses, a credit of £Nil (2002 £2.7 million) in respect of exceptional operating items, a credit of £4.9 million (2002 £27.4 million) following the agreement of certain prior year open issues with the UK Inland Revenue in relation to the Group’s international structure, a charge of £6.8 million (2002 £Nil) in respect of increased provisions for certain prior year open issues and a credit of £Nil million (2002 £2.4 million) relating to the prior year effect of discounting deferred tax.

(iii) The net current tax prior year charge of £1.0 million (2002 credit £29.8 million) arose largely from a reassessment of the level of tax provisions required.

(iv) In subsequent years the Group’s tax charge may be affected by the movement in currently unrecognised deferred tax assets, the largest of which relates to the Group’s accumulated tax losses in the US.

11 Profit for the Financial Year

As permitted by section 230 of the Companies Act 1985, a separate profit and loss account for the Company has not been included in these accounts.

The Company’s profit after tax for the year was £28.3 million (2002 £10.7 million).

12 Dividends

All shares in issue are equity shares.

13 Earnings per Share

Basic earnings per share of 15.2p (2002 20.8p) are calculated, in accordance with FRS 14, on Group profit for the financial year of £60.4 million (2002 £82.8 million) and on the weighted average number of ordinary shares in issue during the year, as set out below.

Diluted earnings per share of 15.2p (2002 20.8p) are calculated, in accordance with FRS 14, on an unchanged earnings numerator and on the weighted average number of ordinary shares in issue during the year, as set out below.

As in previous years, adjusted earnings per share have also been disclosed since the Directors consider that this alternative measure gives a more comparable indication of the Group’s underlying trading performance. Adjusted earnings per share of 33.2p (2002 31.0p) are calculated on profit before amortisation and impairment of intangible assets and exceptional items, after charging the taxation and minority interests associated with those profits, of £131.9 million (2002 £123.4 million), as set out in Note 14 below, and on the basic weighted average number of ordinary shares in issue during the year.

The weighted average number of ordinary shares in issue during the year for the purpose of these calculations is as follows:

14 Adjusted profit

(before amortisation and impairment of intangible assets and exceptional items, after taxation and minority interests)

(i) The adjusted minority charge for the year of £6.6 million (2002 £9.6 million) is stated after eliminating a credit of £4.5 million (2002 £3.3 million), being the minority share of amortisation, and a charge of £Nil (2002 £0.5 million) on exceptional items.

* See Note 34