Final Results
Centaur Holdings PLC
28 September 2004
28th September 2004
Centaur Holdings plc
Preliminary Results for the year ended 30 June 2004
Centaur Holdings plc (Centaur), the specialist business publishing and
information company, announces results for the year ended 30 June 2004. Centaur,
which was listed on AIM on 10 March 2004, operates in 14 distinct vertical
business communities. These mainly comprise Centaur's reported segments
Marketing & Creative, Legal & Financial, Engineering & Construction and Perfect
Information, whose core market is the Corporate Financial Advisor community.
Centaur's strategy has been principally focused on establishing market-leading
weekly periodicals in high-value professional service communities. It currently
publishes 8 weekly magazines (with a 9th due to launch in November), and further
serves its communities through multiple additional platforms, including internet
services, exhibitions, conferences, monthly magazines and a number of other
publications and events. Centaur's market-leading brands include Marketing Week,
Design Week, Creative Review, Money Marketing, The Lawyer, The Engineer, New
Media Age and Homebuilding & Renovating.
Highlights
•Turnover up 9% to £68.3m (2003: £62.6m)
•Normalised EBITDA (see note 2 to this announcement) at £9.6m, giving a
margin of 14.1% (2003: £6.7m; 10.7%)
•EBITDA up 33% to £8.8m (2003: £6.7m)
•EBITDA margin ahead at 12.9% (2003: 10.6%)
•Profit before tax of £3.4m (2003: £16.2m, including exceptional gain on
disposal of subsidiary of £13.6m, net of related reorganisation costs).
•Strong second half advertising growth with 6 month advertising revenues
up 13% on prior year period led by 23% increase in recruitment advertising
•Continued growth in exhibitions, including 3 new shows launched during
the year
•EPS before amortisation and exceptional items 3.04p (2003: 1.47p)
•Proposed dividend of 1p per share
•Strong balance sheet and cash generation with net cash at £5.7m
•Positive start to new financial year
•The first news weekly for corporate accountants - Finance Week to be
launched in November.
•The Company plans a move to the Official List before the end of 2004
Commenting on the preliminary results, Graham Sherren, Chairman and Chief
Executive Officer of Centaur Holdings plc said:
'I am pleased to announce that Centaur's first reported results as a listed
company demonstrate strong growth in both turnover and profits in the 12 months
to 30 June 2004.
I believe that our success in the past year and our expectations for strong
growth in the future reflect the value of the strategy which Centaur has pursued
since its formation. This strategy is based principally on establishing
market-leading weekly magazines to serve distinct business communities and then
extending our service to those communities through other media, most notably
exhibitions, conferences and internet services.
I am also pleased to be able to report that the recovery in the advertising
cycle that started towards the end of 2003 is continuing. Trading in the first
quarter is comfortably ahead of the same period last year. The outlook is at
present encouraging and we remain on track to deliver growth in EBITDA margins
over the next two years to a planned level of 20%.'
Enquiries:
Centaur Holdings plc Graham Sherren Tel: 020 7970 4506
Geoff Wilmot
Gavin Anderson & Company Richard Constant Tel: 020 7554 1400
Laura Hickman
Janine Brewis
Chairman's Statement
Overview
I am pleased to announce that Centaur's first reported results as a listed
company demonstrate strong growth in both turnover and profits in the 12 months
to 30 June 2004. Reported EBITDA increased by 33% to just over £8.8million,
after taking into account operating losses of £0.7million related to new product
development within the recently acquired Synergy Software Group. Turnover
increased by 9% to £68.3million, resulting in a reported EBITDA margin of 12.9%
(10.6% in the prior year), an important first step in our plans to increase
margins to an average target level of 20% over the next two years.
Profit Before Tax (PBT) amounted to £3.4million compared with £16.2million in
the year ended 30 June 2003. The 2003 result included an exceptional net gain of
£13.6million arising from the sale of a subsidiary business (the online legal
service Lawtel) and related restructuring costs. The 2004 result is stated after
charging within administrative expenses £2.4million of goodwill amortization
(2003 £0.2million), principally relating to the goodwill arising on the purchase
of the Centaur Communications Ltd Group (CCL) by the Company on 10 March 2004.
PBT in the year to 30 June 2004 also included deductions of £0.2million of
exceptional administrative costs associated with the purchase of CCL. Finally,
cash balances at 30 June 2004 net of loan note creditors stood at £5.7million.
In light of this performance, the Board is recommending a dividend of 1p per
share, which will be paid to shareholders on the register as at 5 November 2004.
It is proposed that the dividend will be paid on 3 December 2004. The Company
will not be proposing any Scrip Dividends or Dividend Reinvestment Plan Options.
In advance of Centaur's Admission to AIM in March, there was evidence of the
start of a recovery in the advertising cycle, which we expected to benefit
Centaur. I am pleased to report that we have indeed seen an encouraging increase
in demand for advertising in the 6 months to June 2004, with total advertising
revenues during this period increasing by 13% over the equivalent prior year
period. In line with past experience, this recovery has been led by growth in
recruitment advertising, and in the second half recruitment advertising revenues
rose by 23% on the prior year.
Largely reflecting this recovery in the advertising cycle, most of the profits
growth in the year was generated by magazines. However, I am also pleased to
report that in the period we continued to see promising growth in other areas of
the business, most notably our exhibitions and our online businesses.
The second half of the year is generally stronger for Centaur as our first half
encompasses July, August and December which are traditionally quieter months for
both magazines and events. The profits growth achieved in the 12 month results
to 30 June 2004 occurred in the second half of the year, reflecting this
pattern, but also that of the recovery in advertising revenue, which contributed
significantly to Centaur's overall profits growth for the year.
The three most significant new business developments of the past year were:
• The London Homebuilding & Renovating Show was launched in September 2003
and was a great success, attracting nearly 15,000 visitors. The continued
success of this brand, both of the magazine and its six related shows,
reflect the significant importance of self-build in the residential homes
market in the UK, not least due to ongoing concerns of affordability. The
2004 London Show, held in mid September, attracted a similar number of
visitors, but of an even higher quality in terms of lead generation.
• Secondly, in October 2003, we completed the acquisition of Synergy
Software Solutions Ltd by our subsidiary Perfect Information Ltd. The
essence of this transaction was the acquisition of Synergy's recently
developed charting and analysis tool, Hydra, which fitswell with Perfect
Information's core service of providing a searchable electronic library of
corporate filings. Since October 2003, we have continued development of
Hydra andadded further content. We have now launched the service as Perfect
Analysis, a highly flexible, easy to use and cost-effective equity research
tool.
• Thirdly, in February 2004, we launched the Travel Technology Show, which
was co-located with our national Business Travel Show in London. This was
also a success, contributing additional exhibition stand sales to the main
London Show of about 15%.
As part of our ongoing portfolio review, we decided not to continue with two
products that had been loss-making in the last year. Firstly, we will not repeat
the Period Living Show, which we ran in May 2004 under contract with its related
magazine, which is published by EMAP. Secondly, we decided to sell the monthly
magazine, European Fund Strategy, to IPE International Publishers Ltd (IPE), in
which we own 34% of the equity. IPE is a successful publisher of international
pension and related titles and we believe that European Fund Strategy will be a
useful addition to their portfolio.
About 18% of revenues generated in the last financial year were from products or
events launched within the past three years and 1% of revenues were from
businesses acquired within the same period. The new products generated an EBITDA
margin of 13.3%, reflecting the success of our strategy of concentrating our
recent development effort within currently served communities. Losses from
acquisitions were generated by the new product development costs in Perfect
Information arising from the acquisition of Synergy. Overall established
products achieved an EBITDA margin of 14.3%, registering strong growth over the
10.6% recorded in the previous year.
Divisional Review
Marketing, Creative & New Media
Our leading magazines in this sector, Marketing Week, Design Week and Creative
Review all achieved modest revenue growth in the year as a whole. The steep
advertising downturn, which commenced in 2001, started to recover towards the
end of 2003 and a strong second half recruitment advertising performance offset
the declines experienced in the first half.
Our three exhibitions in this sector - the DM, Insight and InStore shows - all
consolidated their positions and we increased the number of marketing
conferences, including the launch of two conferences in the USA - Brands and NPD
Food and Drink, building on the success of existing branded events in the UK
Our internet portal, mad.co.uk, which serves the marketing, advertising and
design communities, continued to deliver strong revenue growth, a high
proportion of which was converted to profit.
Legal & Financial
This division's three leading titles, Money Marketing, Mortgage Strategy and The
Lawyer, each ended the year strongly. Mortgage Strategy, which was launched in
autumn 2001, continued the rapid pace of growth that it has achieved since
launch. Money Marketing, principally reliant on display advertising of retail
financial products to IFA's, saw the start of an advertising recovery in the 3rd
quarter and achieved strong growth in the final quarter. The Lawyer, which draws
most of its revenues from recruitment advertising, achieved modest growth in the
year as a whole, benefiting from a strong second half.
Most of the events revenues in this sector currently derive from exhibitions in
the financial community. The decline in these revenues in the year reflected a
reduction in the number of small roadshow-style events that have been partially
replaced by larger regional events leading to improved profitability. We also
achieved growth in revenues and profit contribution from our two newer award
events - Headline Money Awards and Mortgage Strategy Awards as well as from the
new European Legal Summit held for the first time in Barcelona in October 2003.
Online, Headline Money and TheLawyer.com) grew strongly and each of these
business units is now making a positive contribution before central overheads,
with significant potential for further growth.
Construction & Engineering
The major title in the Construction sector, the monthly publication Homebuilding
& Renovating, continued to deliver strong growth in both advertising volumes and
circulation (both on subscription and through bookstalls). The continuing
buoyancy in this market was also reflected by the growth in exhibition revenues,
which were boosted by the successful launch of the 6th show in this sector, held
in London in September 2003.
The engineering magazines continued to reflect the difficulties of the market
they serve. We secured further cost reductions during the year and with some
recovery in sales in the second half, they traded close to break-even in the
last 6 months. The leading title in this portfolio is The Engineer, one of the
longest established and most respected business magazines in publication in the
UK. Since its launch in 1856, The Engineer has undergone a number of
metamorphoses, reflecting the significant structural changes in its served
community. We are currently in the process of re-positioning The Engineer to be
the news magazine for technology and innovation. Much of the UK's manufacturing
base has moved offshore in the past two decades, but we believe that this
country will remain a centre of excellence for original engineering design,
assembly and project management. The Engineer is now published principally for
those involved in the development of new applications and transferable
technology. We believe that this re-positioning will generate a marked recovery
in its financial performance.
Perfect Information
As noted at the time of the pre-close statement, Perfect Information's principal
focus in the second half of the year was to continue the integration of the
Synergy acquisition. Perfect Information's core corporate filings business
continued to grow in the year, despite relatively tight market conditions in its
key investment banking client base. The first stage of redevelopment and
marketing of its newly acquired equity research tool, Perfect Analysis, has been
completed successfully. A number of clients have now taken a subscription to the
service and several important trials are underway with other current and
prospective clients. As highlighted in the pre-close statement, Perfect Analysis
is expected to achieve profitability during the year to June 2005, although not
for the year as a whole. However, we expect it to deliver significant returns
thereafter.
Other
Other Communities comprise Business Travel, for which Centaur delivered three
exhibitions during the year, Antique Rugs and Textiles (magazine, website and
exhibition) and Public Private Finance (newsletter, online service, conferences
and an awards event). Overall, these products experienced a small decline in
revenues and profits for the year to June 2004. This was due primarily to the
effect of global security concerns on the business travel community and
reflected difficulties experienced during the year within the Islamic antique
rugs market.
Strategy
Centaur's success in the past year and our expectations for growth in the future
reflect the value of the strategy which Centaur has pursued since its formation
in 1981. This strategy has been based principally on establishing market-leading
weekly magazines to serve distinct business communities and then extending our
service to those communities through other media, most notably exhibitions,
conferences and internet services.
To date, Centaur has developed most of its business organically. As a result,
virtually all of our portfolio was created and launched within the business as
opposed to being acquired. Where acquisitions have been made, they have tended
to be early stage acquisitions, rather than the purchase of established
businesses or products.
Centaur's vision is to be the UK's leading specialist provider of news,
information and related services to its chosen business communities. Its
organization reflects this community focus, operating as it does as a federation
of small businesses, supported by a strong central infrastructure of common
services such as Finance, Circulation, IT Operations and HR.
Our culture is entrepreneurial, innovative and highly customer-focused, with
each community served by discrete profit centres. We strongly encourage
innovation in pursuit of customer satisfaction.
Current Development activity
In the new financial year, we are continuing to develop new products at a steady
pace. In mid-September this year we ran the Business Travel Show in Dusseldorf
for the first time. This show is the only one of its kind serving the largest
business travel market in Europe. Also in September, we ran the Motivation Show
at Olympia, a show designed for all those involved in the incentivisation of
customers and staff. In April 2005, we will be running the Digital Homes Show
alongside our national Homebuilding Show in the NEC, Birmingham, which attracted
over 45,000 visitors at the 2004 show.
We recently announced the launch of Data Strategy, a specialist monthly
publication for data professionals, borne out of our weekly magazine Precision
Marketing. The first issue will be published in October with a target readership
of about 5,000.
In November 2004, we will also be publishing the first issue of Finance Week,
which we believe will be the first weekly magazine for the corporate accountant
and targeting an important gap in this market. There is currently no weekly
periodical that is published specifically for senior accountants working in the
corporate sector and this is a time of unprecedented change and challenge for
these professionals, particularly from a regulatory perspective. Finance Week
will be circulated free of charge to the top 15,000 corporate accountants in the
UK, working at Financial Controller level and above. Copies will be sold on
subscription to all those working in accountancy, audit and tax practices and to
more junior corporate accounting staff. We expect Finance Week to become the
market leader in recruitment and display advertising in this important sector.
People
The key to Centaur's success in the past year and our greatest strength today is
our people. Centaur's culture has been built on the key qualities of integrity,
energy and entrepreneurship. I believe that our staff are the best in the
business and demonstrate these qualities to an exceptional degree. I would like
to take this opportunity to thank them all for their hard work and creativity
this year and to say that, because of them, I have great confidence in Centaur's
future.
I would also like to take this opportunity to welcome Patrick Taylor and Colin
Morrison, our two independent Non-Executive Directors. They both come with a
wealth of relevant experience and have already made an important contribution to
the Company.
Outlook
I am pleased to be able to report that the recovery in the advertising cycle
that started towards the end of 2003 is continuing. Trading in the first quarter
is comfortably ahead of the same period last year. The outlook is at present
encouraging and we remain on track to deliver growth in margins to our planned
level of 20% over the next two years.
Notes to preliminary results
1. Centaur Holdings plc was admitted to AIM on 10th March 2004 via a
placing to fund the contemporaneous acquisition of Centaur Communications Ltd.
References to trading performance that pre-dates the acquisition on 10th March
are therefore to the performance of Centaur Communications Ltd. The publication
of Centaur's interim results to 31st December 2003 were included in the
prospectus accompanying the Company's admission to AIM.
2. Centaur's key measure of profit is earnings before interest, tax,
depreciation and amortisation and excluding exceptionals (EBITDA). In addition,
'normalised' results of continuing operations are presented to provide a better
indication of overall financial performance. The 'normalised' results exclude
the impact of acquisitions or disposals, as well as that of amortisation of
intangibles and of exceptional items.
3. Centaur's product portfolio currently comprises 8 weekly magazines, 1
fortnightly magazine, 10 monthly magazines, 5 magazines of a quarterly or
bi-monthly frequency, 2 monthly newsletters, 14 annual showcases, 11 internet
portals, 4 online information services, 25 awards or other sponsored events, 25
exhibitions and 100 conferences.
4. Centaur reports its results within 5 distinct business community
segments, namely Marketing and Creative, Legal and Financial, Engineering and
Construction, Perfect Information and Other. The first 3 segments comprise
principally the following vertical business communities in which Centaur
publishes market-leading magazine titles: Marketing Services, Creative Services,
New Media, Retail Financial Products, Legal Services, Engineering, Private
Homebuilding.
5. It also enjoys first or second position in a number of other specialist
communities, namely HR, Visual Arts Production, Construction, Antique Rugs and
Textiles and Public/Private Finance. In addition, it serves the Business Travel
community with 4 leading trade shows in the UK and overseas.
Consolidated profit and loss account for the year ended 30 June 2004
-------- -------- --------
Note Pro forma Pro forma Actual
1 Year ended Year ended 30 Oct 2003 to
30 June 2004 30 June 30 June 2004
2003
-------- -------- --------
£'000 £'000 £'000
Turnover
- continuing activities 2 67,637 61,995 -
- acquisitions 617 - 25,493
- discontinued activities - 650 -
--------------------------------------------------------------------------------
2 68,254 62,645 25,493
Cost of sales (38,017) (35,743) (13,609)
--------------------------------------------------------------------------------
Gross profit 30,237 26,902 11,884
Distribution costs (4,287) (4,254) (1,259)
Administrative expenses (22,468) (19,201) (8,983)
--------------------------------------------------------------------------------
EBITDA before
exceptional costs 3 8,823 6,655 4,905
Depreciation of tangible
fixed assets (2,676) (2,835) (987)
Amortisation of goodwill (2,437) (245) (2,186)
Exceptional administrative costs (228) - (90)
Operating profit /(loss)
- continuing activities 4,226 3,575 -
- acquisitions (744) - 1,642
--------------------------------------------------------------------------------
Operating profit on
continuing activities 3,482 3,575 1,642
- discontinued activities - (128) -
--------------------------------------------------------------------------------
Total operating profit 3 3,482 3,447 1,642
Profit on disposal of subsidiary
undertakings - 15,385 -
Costs arising from reorganisation - (1,777) -
--------------------------------------------------------------------------------
Profit on ordinary activities
before interest 3,482 17,055 1,642
Interest receivable and
similar income 196 57 71
Amounts written off investments (274) - -
Interest payable and similar
charges (7) (935) (4)
-------------------------------------------------------------------------------
Profit on ordinary activities
before taxation 3,397 16,177 1,709
Tax on profit on ordinary
activities 4 1,222 (671) ( 1,169)
--------------------------------------------------------------------------------
Profit on ordinary
activities after taxation 4,619 15,506 540
Equity minority interests - 32 -
--------------------------------------------------------------------------------
Profit for the Financial year 4,619 15,538 540
Dividends (1,480) - (1,480)
Retained
profit /loss) for the period 3,139 15,538 (940)
--------------------------------------------------------------------------------
Earnings per share 5
Basic earnings per share (pence) 3.12 10.50 0.79
Fully diluted earnings per share
pence) 3.00 10.10 0.73
Adjusted earnings per
share (pence) 3.04 1.47 4.13
Fully diluted adjusted
earnings per share (pence) 2.93 1.41 3.80
--------------------------------------------------------------------------------
Consolidated Balance Sheet at 30 June 2004
Group Group Company
Actual Pro forma Actual
30 June 2004 30 June 2003 30 June 2004
----------------------------------------------
£'000 £'000 £'000
Fixed assets
Intangible fixed assets 138,701 2,595 -
Tangible fixed assets 5,311 5,921 -
Investments 185 459 147,798
--------------------------------------------------------------------------------
144,197 8,975 147,798
Current assets
Stocks 1,185 1,260 -
Debtors 14,771 13,758 221
Cash at bank and in hand 9,132 4,085 5,554
--------------------------------------------------------------------------------
25,088 19,103 5,775
Creditors: amounts falling due
within one year (23,426) (18,564) (6,746)
--------------------------------------------------------------------------------
Net current assets 1,662 539 (971)
--------------------------------------------------------------------------------
Total assets less current liabilities 145,859 9,514 146,827
Provisions for liabilities and charges (3,387) (1,997) -
--------------------------------------------------------------------------------
142,472 7,517 146,827
================================================================================
Capital and reserves
Called up share capital 14,879 1,549 14,879
Share premium account 127,047 13,531 127,047
Non-distributable reserve - - 1,486
Other reserves 1,486 483 -
Profit and loss account (940) (7,998) 3,415
--------------------------------------------------------------------------------
Equity shareholders funds 142,472 7,565 146,827
Equity minority interests - (48) -
142,472 7,517 146,827
--------------------------------------------------------------------------------
Group cash flow statement for the year ended 30 June 2004
Pro forma Pro forma Actual
Year ended 30 Year ended 30 Oct 2003
June 2004 30 June 2003 to 30 June 04
£'000 £'000 £'000
Net cash inflow from operating
activities 7,770 6,936 4,937
--------------------------------------------------------------------------------
Returns on investments and servicing
of finance
Interest received 196 57 71
Interest paid (174) (362) (61)
Dividends paid to minority interests - (54) -
--------------------------------------------------------------------------------
Net cash inflow (outflow) from
returns on investments and
servicing of
finance 22 (359) 10
Taxation (671) (287) (356)
--------------------------------------------------------------------------------
Capital expenditure and financial
investment
Purchase of tangible fixed assets (2,166) (1,651) (667)
Sale of tangible fixed assets 24 44 11
Purchase of intangible fixed assets (195) (55) (120)
--------------------------------------------------------------------------------
Net cash outflow for capital expenditure
and financial investment (2,337) (1,662) (776)
Acquisitions and disposals
Proceeds from the disposal of
subsidiary undertakings - 20,020 -
Acquisition / disposal expenses paid (2,921) (796) (2,780)
Cash at bank and in hand acquired
with subsidiary undertakings 9 - 6,274
Cash at bank and
in hand disposed with subsidiary
undertakings 49 (6,662) -
Purchase of subsidiary undertakings (128,736) (515) (127,634)
--------------------------------------------------------------------------------
Net cash
(outflow) / inflow from
acquisitions and disposal of
subsidiary undertakings (131,599) 12,047 (124,140)
Net cash (outflow) / inflow before
financing (126,815) 16,675 (120,325)
Financing
Issue of ordinary share capital 134,445 105 131,994
Cash received in respect of loan notes 3,429 - 3,429
Issue Costs (5,968) - (5,968)
Repayment of bank and other borrowings - (16,000) -
--------------------------------------------------------------------------------
Net cash inflow /
(outflow) from financing 131,906 (15,895) 129,455
Increase in cash 5,091 780 9,130
--------------------------------------------------------------------------------
Notes to the Accounts
1 Basis of Preparation
Actual
The Company was incorporated on 30 October 2003 as a private limited company.
Between 30 October 2003 and 10 March 2004 the Company did not trade.
On 10 March 2004, the Company acquired Centaur Communications Ltd and its
subsidiaries.
The consolidated financial statements therefore include all the Groups'
activities, applying acquisition accounting principles, from 10 March 2004,
being the date of their acquisition by the Company. Profits or losses on
intra-Group transactions are eliminated in full.
Within these financial statements references to '2004 Actual' refers to the
period 30 October 2003 to 30 June 2004.
Pro forma
The Pro forma results for 2004 are based on a full 12 months trading for the
Centaur Communications Group that became part of Centaur Holdings plc on 10
March 2004.
Within these financial statements references to 'Pro forma 2004' refers to the
period 1 July 2003 to 30 June 2004.
The Pro forma comparative results for 2003 are based on the audited results for
the twelve months to 30 June 2003 for the Centaur Communications Group.
Within these financial statements references to 'Pro forma 2003' refers to the
period 1 July 2002 to 30 June 2003.
2 Segmental analysis
The Group is involved in the single activity of the creation and dissemination
of business and professional information in the UK. There is therefore no
segmental reporting required. However, set out below are business analyses of
Group turnover and EBITDA before exceptional costs ('EBITDA') from continuing
activities.
For comparability, prior year's discontinued operations turnover and EBITDA
amounts have been eliminated.
Analysis by community
Pro forma Year Pro forma Year
ended ended
30 June 2004 30 June 2003
Turnover from EBITDA Turnover from EBITDA
continuing continuing
activities activities
£'000 £'000 £'000 £'000
Marketing, creative and
New Media 23,911 3,624 23,278 3,734
Legal and Financial 19,677 3,385 18,127 2,322
Construction and
Engineering 12,530 967 9,993 (723)
Perfect Information 6,099 749 4,455 1,018
Other 6,037 98 6,142 304
--------------------------------------------------------------------------------
68,254 8,823 61,995 6,655
--------------------------------------------------------------------------------
Analysis by source
Pro forma Year Pro forma Year
ended ended
30 June 2004 30 June 2003
----------------------------------------------
Turnover from Turnover from
continuing continuing
activities activities
£'000 £'000
Recruitment advertising 9,989 8,963
Other advertising 25,359 24,797
Circulation revenue 5,108 5,334
Electronic subscriptions 6,303 4,823
Events 19,722 16,475
Other 1,773 1,603
--------------------------------------------------------------------------------
68,254 61,995
--------------------------------------------------------------------------------
2 Segmental analysis (continued)
Analysis by product Type
Pro forma Year Pro forma Year
ended ended
30 June 2004 30 June 2003
-------------------------------------------------------
Turnover from EBITDA Turnover from EBITDA
continuing continuing
activities activities
£'000 £'000 £'000 £'000
Magazines 37,224 6,432 36,361 4,504
Events 19,722 1,338 16,475 1,049
Electronic Products 9,981 894 7,811 975
Other 1,327 159 1,348 127
-------------------------------------------------------------------------------
68,254 8,823 61,995 6,655
--------------------------------------------------------------------------------
Analysis by Maturity
Pro forma Year Pro forma Year
ended ended
30 June 2004 30 June 2003
-------------------------------------------------------
Turnover from EBITDA Turnover from EBITDA
continuing continuing
activities activities
£'000 £'000 £'000 £'000
Existing 55,560 7,948 52,203 5,544
New product development 12,077 1,608 9,792 1,111
Acquisitions 617 (733) - -
--------------------------------------------------------------------------------
68,254 8,823 61,995 6,655
--------------------------------------------------------------------------------
New product development is defined as any product launched in the last three
years and is reported by reference to the three years preceding each reporting
date. Acquisitions are also reported by reference to the three years preceding
each reporting date.
Substantially all net assets are located and all turnover and EBITDA are
generated in the United Kingdom.
3 Operating profit /(loss)
The table below provides an analysis of operating profit / (loss) by continuing
activities and acquisitions for the Pro forma year ended 30 June 2004:
Continuing Acquisitions Pro forma Year
activities ended
30 June
2004
-------------------------------------------------
£'000 £'000 £'000
Turnover 67,637 617 68,254
Cost of sales (37,142) (875) (38,017)
--------------------------------------------------------------------------------
Gross profit 30,495 (258) 30,237
Distribution costs (4,287) - (4,287)
Administrative expenses (21,982) (486) (22,468)
--------------------------------------------------------------------------------
EBITDA before exceptional
costs 9,556 (733) 8,823
Depreciation of tangible fixed
assets (2,665) (11) (2,676)
Amortisation of goodwill (2,437) (2,437)
Exceptional administrative
costs (228) (228)
--------------------------------------------------------------------------------
Operating profit /(loss) 4,226 (744) 3,482
--------------------------------------------------------------------------------
EBITDA before exceptional costs on continuing activities (excluding
acquisitions) is described elsewhere in this document as 'normalised' EBITDA of
£9,556,000 for the Pro forma year ended 30 June 2004 ( 2003: £ 6,655,000)
4 Tax on profit on ordinary activities
Pro forma Pro forma Actual
Year ended 30 Year ended 30 30 Oct 2003 to
June 2004 June 2003 30 June 2004
----------------------------------------------------
£'000 £'000 £'000
Analysis of charge in period
UK corporation tax at 30% (2003: 30%):
- current year - 543 -
- over provision in previous
periods (156) (416) -
--------------------------------------------------------------------------------
Total current tax (156) 127 -
--------------------------------------------------------------------------------
Deferred taxation
Current year (origination and reversal of
timing differences) (287) (311) (96)
Deferred tax credit in respect of the
exercise of share options in
Centaur Communications Ltd (3,057) - -
Deferred tax credit in respect of the
exercise of share options in
Centaur Communications
Ltd utilised during the year 2,278 - 1,265
Adjustment in respect of prior years - 855 -
--------------------------------------------------------------------------------
Total deferred tax (1,066) 544 1,169
--------------------------------------------------------------------------------
Tax on profit/(loss) on ordinary
activities (1,222) 671 1,169
================================================================================
The factors affecting the tax charge
for the period were as follows:
Profit on ordinary activities
before tax 3,397 16,177 1,709
Profit on ordinary activities
multiplied by standard rate of
corporation tax in the UK 2004: 30% 1,019 4,854 513
(2003: 30%)
Effects of:
Expenses not deductible for
tax purposes 972 164 656
Deferred tax deductible for
credit in respect of the
exercise of share options in
Centaur Communications Ltd utilised
during the year (2,278) - (1,265)
Capital allowances for
the period less than / (in
excess of) depreciation 722 127 219
Utilisation of tax losses (435) (145) (123)
Difference between accounting
profit and capital gain on - (4,615) -
disposal of subsidiaries
Pre-disposal results of subsidiaries - 50 -
Other timing differences - 96 -
Difference in rate of tax on
overseas earnings - (7) -
Adjustment in respect of
provisions - 19 -
Adjustments to tax charge in
respect of previous periods (156) (416) -
--------------------------------------------------------------------------------
Total current tax (156) 127 -
================================================================================
Tax on profit on ordinary activities for the period 30 October 2003 to 30 June
2004 is £1,169,000.
This includes the partial utilisation of a deferred tax asset acquired as part
of the net assets of the Centaur Communications Group on 10 March 2004. The
deferred tax asset arises primarily from the exercise of share options in
Centaur Communications Ltd.
5 Earnings per share
The calculations of earnings per share are based on the following profits and
numbers of shares:
Pro forma Pro forma Actual
Year ended Year ended 30 Oct 2003 to
30 June 30 June 30 June
2004 2003 2004
---------------------------------------------------------
£'000 £'000 £'000
Profit for the financial
year 4,619 15,538 540
Amortisation of goodwill 2,437 245 2,186
Profit on disposal of
subsidiary undertaking - (15,385) -
Costs arising
from reorganisation - 1,777 -
Amount written off investment 274 - -
Exceptional deferred tax
credit (see note 4) (3,057) - -
Exceptional
administrative costs 228 - 90
--------------------------------------------------------
Adjusted profit for the
financial year 4,501 2,175 2,816
--------------------------------------------------------
Weighted average number
of ordinary shares 147,994,118 147,994,118 68,223,627
Dilutive effect of
share options 5,807,266 5,807,266 5,807,226
---------------------------------------------------------
Weighted average number
of shares in issue taking
account of applicable
outstanding
share options 153,801,384 153,801,384 74,030,853
-----------------------------------------------------------
Basic earnings per share
(pence) 3.12 10.50 0.79
Diluted earnings per share
(pence) 3.00 10.10 0.73
Earnings per share
(pence) using adjusted
profit for the financial
year 3.04 1.47 4.13
Diluted earnings per
share (pence)using adjusted
profit for the financial
year. 2.93 1.41 3.80
During the same period, on a fully diluted basis, the actual earnings per share
were 0.35 pence (being profit for the financial year of £540,000 divided by
153,801,384 shares).
The adjusted earnings per share has been provided on a basic and fully diluted
basis in order that the effect of goodwill amortisation, the exceptional
deferred tax credit together with the other items listed above can be fully
appreciated.
The earnings per share for the Pro forma year ended 30 June 2003 has been
calculated on the basis of the actual number of shares in issue during the year
ended 30 June 2004 to provide a more meaningful comparative following the
flotation of the Company on 10 March 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
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