DMGT DB surplus increases by £88m

The Daily Mail and General Trust (DMGT) defined benefit (DB) pension schemes’ surplus has increased from £236m to £332m in six months, its latest financial report has revealed.

The £88m increase follows a fall of £8m in the schemes’ surplus in the first half of the year, and was attributed to an increase in the value of the assets, including a £117m payment from DGMT.

Following DMGT’s pledge to pay £117m into its DB schemes in March, this payment has been made available to the schemes but remains as cash on the DMGT balance sheet.

While the schemes valuation is still in process, as at 31 March 2019, it is expected to conclude that the scheme remains in deficit on an actuarial basis.

The group also made an actuarial loss of £45.3m on its DB pension schemes, but stated that “potential revisions to the existing funding plan are currently being discussed with the trustees”.

The DB schemes are closed to new entrants, though the group also operates a number of defined contribution schemes.

The total net pension charge of the group for the year, ending 30 September 2019, was £7.3m, a £2m decrease on 2018 (£9.3m). Included in this is a non-cash past service charge of £3.1m, representing the potential impact of GMP equalisation.

The pension scheme was listed as a potential operational risk within the report should external factors, such as inflation and investment performance, cause the funding of the DB deficit to be greater than expected.

However, the report has also outlined a number of ways in which the company intends to mitigate these risks, including an agreed funding plan, monitoring of potential risks by the DMGT pension sub-committee and utilising company-appointed trustees.

Commenting on the report, DMGT CEO, Paul Zwillenberg, said: “DMGT has delivered a robust financial performance, achieving 2 per cent underlying revenue growth and 10 per cent underlying cash operating income growth.

“We have continued to deliver successfully against our three strategic priorities of increasing portfolio focus, improving operational execution and maintaining financial flexibility.

“In April 2019, we returned almost £900m of capital to our shareholders in the form of Euromoney shares and a £200m special dividend."

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