dmg information
KEY DEVELOPMENTS
- Operating profit* increased by 4% with margins* constant
- Strong performance from financial, education and energy companies.
- Property affected by lower transaction volumes in U.S. and U.K. but well positioned.
It was a year of turbulence for dmgi's markets with the financial crisis and tightening of credit making conditions difficult for both our Property Information and Financial Information businesses. Given this background the robustness of our portfolio has been demonstrated and overall performance of dmgi has been resilient. We are well placed to benefit in particular from a recovery in property transaction volumes and have used these tougher economic conditions to strengthen our market positions through continuing to enhance and develop products across all our markets.
dmgi's revenues increased by 6% year-on-year to £230 million and operating profits* were 4% higher at £46 million. The businesses comprising dmgi are primarily U.S. based and therefore the reported results benefit from year-on-year exchange rate movements. On a like-for-like basis, underlying revenue and operating profit* reduced by 6% and 7% respectively.
KEY FIGURES††
PROPERTY
Operating profit* from the property information companies fell by 23% to £18 million, with revenues being 9% lower at £84 million. Despite this, margins* were still around 20% due to tight cost control. Underlying† revenues and operating profits reduced by 19% and 36% respectively.
The volume of housing transactions in the U.K. was at all-time low levels throughout the year, having plunged dramatically in early 2008, and, whilst we saw some positive signs of recovery towards the end of the financial year, at times the monthly volumes were less than half of their historical norm. This affected Landmark Information Group revenues, albeit our market position is as strong as ever. The commercial property market volumes also declined significantly in both the U.S. and U.K., affecting Environmental Data Resources and Landmark respectively. Both companies continue to be innovative and expand their product offerings, whilst managing costs effectively in the current conditions.
During the year we sold Property & Portfolio Research, our commercial real estate forecasting business, to CoStar, Inc in exchange for an equity stake in CoStar, a provider of real estate information in the U.S. and U.K.
10x Increase in Landmark’s turnover over the last 10 years.
Landmark Information Group
Britain’s leading supplier of land and property information, Landmark Information Group, has seen its annual turnover increase more than tenfold over the last decade.
Growing its existing operations, moving into adjacent markets and entering new ones via acquisitions both domestically and in Europe, has been key to the company’s success.
Looking ahead, further integration of its market-leading acquisitions, Quest Associates and Metropix, within the Landmark product portfolio is high on the agenda, as is exploring European public sector geospatial opportunities and continuing the product expansion within the existing businesses in Utrecht and Dortmund.
OTHER MARKETS
63% of dmgi's revenue comes from its companies operating in the financial, education, energy and geospatial markets. Revenue in these other markets was 17% higher year-on-year at £146 million and they contributed operating profits* of £32 million representing 26% growth. The underlying revenue and operating profits were higher by 3% and 16% respectively.
In the financial information market, Trepp is the market leader of information to the Commercial Mortgage-Backed Securities (CMBS) market and, in turbulent market conditions, the value of its data and analytics has been proven by the increasing frequency of use and growing revenues. Trepp was also selected by the Federal Reserve Bank of New York as the collateral monitor for CMBS as part of the 'Term Asset-Backed Securities Loan Facility' (TALF). Trepp grew its underlying† revenues by 17%.
Our other company serving the financial information market, Lewtan Technologies, also had a good year, with record profits* and significant product enhancements in its offerings to the ABS investor market.
Hobsons, the education information business, grew underlying† revenues by 6% and improved margins. Hobsons continues to pursue an aggressive growth strategy, focused on providing products to education professionals to assist in the preparation, recruitment, management and advancement of students. Naviance, the company providing solutions in the U.S. high school segment, grew particularly strongly.
Genscape, the leading provider of real-time information to the energy trading markets, grew its underlying† revenues by 12%. Whilst continuing to expand its geographic coverage of electricity supply data in the U.S. and continental Europe, the company also successfully launched new offerings to traders in the oil market and, during the forthcoming year, will grow products serving the natural gas markets.
Sanborn's revenues are primarily sourced from U.S. local, state and municipal budgets and funding has tightened significantly. Sanborn has performed well in the circumstances, and remains both profitable and in a market-leading position.
Throughout all the companies, costs have been managed aggressively and effectively as circumstances have demanded.
OUTLOOK
The past couple of years have demonstrated the quality and resilience of dmgi companies in uncertain and turbulent market conditions. There now seems to be some cautious optimism of the early signs of a gradual recovery.
* Adjusted operating profit (before exceptional items and amortisation and impairment of intangible assets).
† Underlying revenue or profit* is revenue or profit* on a like-for-like basis, adjusted for acquisitions and disposals made in the current and prior year and at constant exchange rates.
†† Percentages are calculated on actual numbers to one decimal place.