Interim Results

ITE Group PLC 23 May 2005 23 May 2005 ITE GROUP PLC INTERIM RESULTS ANNOUNCEMENT ITE Group plc, the international exhibitions specialist, today announces interim results for the six months ended 31 March 2005 and the proposed return of up to Â£30 million to shareholders via a share buy-back plan. Highlights: â€¢ Turnover: Â£22.7 million (2004: Â£20.2 million) up 12% â€¢ Headline profit before tax of Â£3.8 million (2004: Â£2.1 million) â€¢ Reported profit before tax Â£2.2 million (2004: Â£0.8 million) â€¢ Cash reserves: Â£38.0 million (2004: Â£29.4 million) up 30% â€¢ Increased interim dividend of 0.9p per share (2004: 0.55p) â€¢ Core markets performing well with strong trading performance from ten leading events â€¢ Strong forward sales for the second half of financial year â€¢ Proposed return of up to Â£30 million of cash to shareholders through a share buy back Commenting on the results, Iain Paterson, Chairman, said: 'We are pleased to deliver another good trading result for the half-year, with strong operating performance from the growth of our existing events, new launches and acquisitions. The Board has determined the present level of cash balances is surplus to requirements and intends to buy back and cancel up to Â£30 million of its own shares. The Board has approved an increase in the interim dividend following the re-basing of last year's final dividend.' - Ends - Enquiries: Ian Tomkins / Russell Taylor 020 7596 5000 ITE Group plc Bridget Fury / David Simonson 020 7653 6620 Merlin Interim statement ITE has delivered a strong trading result for the first six months with turnover of Â£22.7m (2004: Â£20.2m) and Headline profit before tax of Â£3.8m (2004: Â£2.1m). Reported pre-tax profits for the six months were Â£2.2m (2004: Â£0.8m). Cash flow remains strong and our core markets continue to perform well. Net cash expended on acquisitions and venue loans for the 6 month period amounted to Â£3.0m. Dividend The Board has approved an interim dividend of 0.9p per share (2004 - 0.55p). The increase in the interim dividend follows the re-basing of last year's final dividend. The Board aims to increase future dividends progressively in line with earnings. This dividend will be paid on 23 June 2005 to shareholders on the register on 3 June. Board and Management As previously announced Ross Stobie, General Manager of our Moscow office, will be resigning from his current role and from the ITE Board on 9 August 2005. The Board extends its thanks to Ross for his contribution over the last three years and for his part in steering the Moscow operation through a significant period of growth and expansion. A new General Manager has been appointed and will be joining the Group in June. Share buy-back The Board sees significant opportunities in the Group's markets and intends to pursue its growth strategy both organically and through acquisition. In addition, having regard to the Group's strong cash flow and potential debt capacity the Board has determined that the present level of cash balances are surplus to its requirements. At 31 March 2005 the Group has Â£38.0m in cash, an increase of Â£8.6m over the same time last year. The Board intends to buy back and cancel up to Â£30m of its own shares and has today sent a circular to shareholders requesting their approval for the Company to cancel its share premium account and for a new authority to make market purchases of its own shares. Subject to these approvals and to Court approval being granted for the cancellation of its share premium, the Company will issue a tender document for a share buy-back in July. Financial Performance Turnover for the first six months of the year was Â£22.7m (2003: Â£20.2m). Gross profits of Â£8.6m (2004: Â£7.2m) were earned at a margin of 38% (2004: 36%) on revenue. Â£1.6m of the increase in revenue and Â£0.8m of the increase in gross profit is attributable to acquisitions made in 2004. Operating profit for the first six months was Â£1.0m (2004: Â£0.4m). Operating costs before amortisation charges were Â£6.0m (2004: Â£5.6m) and included foreign exchange losses of Â£0.4m (2004: Â£1.0m). The increase in underlying costs was largely attributable to higher staff costs, including the costs of expensing Performance Share Plans and the additional overhead of the RAS Publishing acquisition. Net interest receipts of Â£0.9m (2004: Â£0.4m) were earned on higher average cash balances and better interest rates. ITE's share of associate profits was Â£0.3m (2004: Â£0.1m). Profit before tax of Â£2.2m (2004: Â£0.8m) represents an improvement of Â£1.4m over the comparable result for the same period last year. Set out below is an analysis of the Group's sales and profits for the first six months: Square metres Revenue Gross profits 000's Â£m. Â£m. First Half 2004 85.3 20.2 7.2 Timing differences (6.7) (0.9) (0.4) Core growth 7.8 1.2 1.0 New events launched 9.1 1.8 0.1 Acquisitions 6.5 1.6 0.8 Non - recurring (5.0) (1.2) (0.1) First half 2005 97.0 22.7 8.6 ------ ------ ----- After making adjustment for events which have changed datelines and excluding the effect of acquisitions the Group's 'like for like' revenues increased by 9% for the period and its 'like for like' gross profits increased from Â£7.2m to Â£8.2m. Average yields per square metre sold fell marginally as they were affected by new launch activity and by the weaker US Dollar. Trading highlights During the period to 31 March 2005, ITE organised 69 events (2004: 58 events). The following events were the top ten contributors to interim gross profits: Area (m2) Area (m2) 2004/2005 2003/2004 Moscow International Travel and Tourism Russia Travel 19,300 17,000 Kazakhstan Oil & Gas Kazakhstan Oil & Gas 7,400 6,200 Ingredients Russia Russia Food 5,500 4,700 MODA UK Spring UK Fashion 12,100 10,300 TransRussia Russia Motor/Transport 4,600 3,100 Moscow International Sports Show Russia Other 3,300 4,000 Kievbuild Ukraine Construction 5,000 4,100 Public Health Ukraine Other 3,500 n.a. Informatica Technology (ITC) Ukraine IT & Telecoms 3,000 n.a. Worldfood Ukraine Ukraine Food 2,400 2,800 Public Health and Informatica Technology represent acquisitions made in 2004. Overall growth in the eight other 'top ten' events for the period was 14% in terms of space sales and 17% in terms of revenue. Russia The Moscow team organised 14 events in the first half of the year. The most significant events were the Moscow International Travel Show, Ingredients Russia, TransRussia and the Moscow International Sports event. The Travel show grew by 13% in space sales, but less in revenue while Ingredients Russia's 16% growth in space sales was translated into 20% revenue growth. TransRussia, affected last year by competitor activity rebounded strongly and the 10th edition of the TransRussia event was the most successful ever in revenue, space, visitor attendance and profit terms. The Moscow Sports show reduced in size this year as the market was disturbed by a new competitive launch. The St Petersburg office organised 3 events in the first six months each of which performed to expectations. Central Asia The annual Kazakhstan Oil and Gas exhibition grew in size by 20%, making use of the new exhibition pavilion built in Almaty with assistance from ITE. The conference which is organised concurrently with the exhibition grew modestly and contributed to an overall increase in revenues from the whole event of 10%. Overall there were 22 events (including 9 new launches) organised by the teams in Kazakhstan, Uzbekistan and Azerbaijan over the period. Two promising events, Worldfood Kazakhstan and Atyrau Build both showed good growth on the previous editions. Ukraine The Kyiv team organised 14 events over the six month period including the successful integration of the two acquisitions in the Health and Information technology sectors. Both new shows benefited from a move to the IEC venue, with which ITE has a close co-operation, and overall realised a 20% increase on the 2004 pre-acquisition events. Worldfood Kiev, held in November 2004 partially suffered from political events at the time. Following the resolution of political events Kievbuild, held in February 2005, enjoyed excellent support and delivered strong growth. Turkey ITF, our 50% associate operating in Istanbul delivered improved profits over the first six months with good contribution from the two automotive shows. The second half has begun well with a very successful re-branding and re-launch initiative on the Furniture event. UK The MODA UK fashion exhibition in Birmingham continued its strong performance with another 16% growth in space sales, further consolidating its market leading position in the sector. The RAS Publication acquisition has integrated well with the exhibition team and achieved its revenue expectations. During the period RAS acquired the title to a new magazine, Fashion Extras, focussing on the accessories market. Outlook Since 31 March the Group has organised some of its other major exhibitions. The 2005 edition of MosBuild expanded into the new Crocus exhibition facility in Moscow and was an unprecedented success. The additional exhibition space made available facilitated an increase in size of the overall MosBuild Building and Construction event (including Windows and Doors) from last year's 44,600 net square metres to over 54,000 net square metres this year. The Moscow International Boat Show, Moscow International Protection and Security Show and Expoelectronica all substantially improved their performances with overall growth of 14% in square metres sold. At 13 May 2005 Â£64.1m of revenue (14 May 2004: Â£53.3m) has been contracted for the 2005 financial year. The World Petroleum Congress, which ITE is organising and which is due to take place in September 2005, has to date achieved its sales targets and should make a significant additional contribution to this financial year. Among our remaining top ten events still to take place are the Moscow International Oil and Gas Exhibition in June, the Moscow International Motor Show taking place in August, World Food Moscow and Baltic Building Week both taking place in September and forward sales on each event are well advanced. The Board remains positive with respect to the prospects for the remainder of the year. Ian Tomkins Iain Paterson Chief Executive Officer Chairman Consolidated Profit and Loss Account Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Notes Unaudited Unaudited Audited Â£000 Â£000 Â£000 Turnover 22,666 20,153 60,750 Cost of sales (14,116) (12,938) (33,542) __________ __________ __________ Gross profit 8,550 7,215 27,208 ----------- --------- --------- Net operating expenses before goodwill (5,993) (5,566) (10,883) amortisation Goodwill amortisation (1,535) (1,274) (2,528) ---------. --------- --------- Total operating expenses (7,528) (6,840) (13,411) __________ __________ __________ Operating profit 1,022 375 13,797 ---------- ---------- --------- Share of associates' operating profit before goodwill 370 134 676 amortisation Goodwill amortisation (76) (76) (221) --------- --------- --------- Share of associates' operating profit 294 58 455 Profit on disposal of group undertakings - - 323 __________ __________ __________ Profit on ordinary activities before interest 1,316 433 14,575 Investment income 1,098 365 1,148 Interest payable (187) (2) (16) __________ __________ __________ Profit on ordinary activities before taxation 2,227 796 15,707 Tax on profit on ordinary activities (1,077) (528) (4,955) __________ __________ __________ Profit on ordinary activities after taxation 1,150 268 10,752 Minority interests - (1) (31) __________ __________ __________ Profit for the financial period 1,150 267 10,721 Dividends (2,544) (1,448) (5,984) __________ __________ __________ Retained(loss)/earnings (1,394) (1,181) 4,737 ========== ========== ========== Earnings per share Basic 3 0.4p 0.1p 3.9p Diluted 3 0.4p 0.1p 3.8p Headline diluted 3 1.0p 0.6p 4.7p __________ __________ __________ All results derived from the continuing operations of the Group. Consolidated Balance Sheet 31 March 2005 31 March 2004 30 September 2004 Notes Unaudited Unaudited Audited Â£000 Â£000 Â£000 Fixed assets Goodwill 30,459 26,961 29,348 Tangible assets 1,808 2,007 1,862 Associates 1,161 1,075 1,377 Other investments 85 56 74 ___________ ___________ ___________ 33,513 30,099 32,661 Current assets Debtors due within one year 4 22,643 16,942 23,426 Debtors due after one year 2,699 2,966 4,060 Cash at bank and in hand 38,009 29,356 33,546 ___________ ___________ ___________ 63,351 49,264 61,032 Creditors: amounts falling due within one year 4 (51,953) (40,118) (47,773) ___________ ___________ ___________ Net current assets 11,398 9,146 13,259 Total assets less current liabilities 44,911 39,245 45,920 Provisions for liabilities and charges (1,499) (940) (1,498) ___________ ___________ ___________ Net assets 43,412 38,305 44,422 ============= ============= ============= Capital and reserves Called-up share capital 2,887 2,851 2,852 Share premium account 29,877 29,018 29,036 Merger reserve 2,746 2,746 2,746 ESOT reserve (3,580) (2,303) (2,792) Option reserve - 23 23 Profit and loss account 11,254 5,973 12,329 ___________ ___________ ___________ Equity shareholders' funds 43,184 38,308 44,194 =========== =========== =========== Minority interests 228 (3) 228 ___________ ___________ ___________ Total capital employed 43,412 38,305 44,422 ============= ============= ============ Company Balance Sheet 31 March 31 March 30 September 2005 2004 2004 Unaudited Unaudited Audited Â£000 Â£000 Â£000 Fixed assets Investments 1,034 1,022 1,024 ___________ ___________ ___________ 1,034 1,022 1,024 Current assets Debtors due within one year 675 508 653 Debtors due after one year 13,866 30,404 19,270 Cash at bank and in hand 25,789 5,024 21,188 ___________ ___________ ___________ 40,330 35,936 41,111 Creditors: amounts falling due within one year (2,866) (1,639) (4,889) ___________ ___________ ___________ Net current assets 37,464 34,297 36,222 ___________ ___________ ___________ Total assets less current liabilities 38,498 35,319 37,246 ___________ ___________ ___________ Net assets 38,498 35,319 37,246 =========== =========== =========== Capital and reserves Called-up share capital 2,887 2,851 2,852 Share premium account 29,877 29,018 29,036 Merger reserve 2,746 2,746 2,746 ESOT reserve (3,580) (2,303) (2,792) Option reserve - 23 23 Profit and loss account 6,568 2,984 5,381 ___________ ___________ ___________ Equity shareholders' funds 38,498 35,319 37,246 =========== =========== =========== Consolidated Cash Flow Statement Note Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited Â£000 Â£000 Â£000 Net cash inflow from operating activities 5 14,202 9,196 21,754 Dividends received from associates 437 - 172 Returns on investments and servicing of finance 911 345 1,132 Taxation (4,510) (2,017) (3,363) Capital expenditure and financial investment 258 (73) (2,858) Acquisitions and disposals (2,347) 1,818 (1,345) Equity dividends paid (4,560) (3,012) (4,545) __________ __________ __________ Cash inflow before management of liquid resources and financing 4,391 6,257 10,947 Management of liquid resources (2,500) (5,049) (19,336) Financing 72 995 495 __________ __________ __________ Increase/(decrease)in cash in the period 1,963 2,203 (7,894) =========== =========== =========== Analysis of net funds 30 September 31 March 2004 Cash flow 2005 Â£000 Â£000 Â£000 Cash at bank and in hand 9,046 1,963 11,009 __________ __________ __________ Net funds 9,046 1,963 11,009 Cash held on deposit 24,500 2,500 27,000 __________ __________ __________ Cash shown on balance sheet 33,546 4,463 38,009 ========== ========== ========== Notes 1. The interim results have been prepared on the historical cost basis, are unaudited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The interim results are prepared on the basis of accounting policies set out in the annual financial statements of the Group for the year ended 30 September 2004. These interim results were approved by the Board on 20 May 2005 and copies of this document are being sent to shareholders. Further copies are available from the Company's registered office. 2. The results for the year ended 30 September 2004 have been extracted from the statutory accounts, which have been reported on by the Group's auditors and have been delivered to the Registrar of Companies. The auditors' report was unqualified and did not contain any statement under section 237 (2) or (3) of the Companies Act 1985. 3. The calculations of earnings per share are based on the following results and numbers of shares. Headline diluted Basic and diluted 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 Profit for the financial period 1,150 267 1,150 267 Amortisation of goodwill 1,611 1,350 - - ________ ________ ________ ________ 2,761 1,617 1,150 267 ======== ========= ======== ======== 2005 2004 Number of Number of shares ('000) shares ('000) Weighted average number of shares: For basic earnings per share 276,479 273,716 Exercise of share options 8,762 7,059 ___________ ___________ For diluted earnings per share 285,241 280,775 =========== ========== Headline diluted earnings per share is intended to provide a consistent measure of group earnings on a year on year basis. Headline diluted earnings per share is calculated using profit for the financial year before amortisation and impairment of goodwill and profits or losses arising on disposal of group undertakings. 4. Debtors include trade debtors of Â£14.6m (31 March 2004: Â£11.5m; 30 September 2004: Â£19.3m) . Creditors: amounts falling due within one year include deferred income of Â£43.5m (31 March 2004: Â£32.9m; 30 September 2004: Â£31.1m). 5. Reconciliation of operating profit to operating cash flows Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited Â£000 Â£000 Â£000 Operating profit 1,022 375 13,797 Depreciation charges 224 232 471 Amortisation 1,535 1,274 2,528 (Profit)/loss on sale of fixed assets - (6) 103 Decrease/(increase) in debtors 1,569 1,880 (2,638) Increase in creditors 9,330 5,604 6,546 Increase/(decrease) in provisions 522 (163) 947 __________ __________ __________ Net cash inflow from operating activities 14,202 9,196 21,754 ============ ============ ============ 6. Reconciliation of Headline profit before taxation to Profit on ordinary activities before taxation Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited Â£000 Â£000 Â£000 Profit on ordinary activities before taxation 2,227 796 15,707 Amortisation of goodwill and trade investments (including associates) 1,611 1,350 2,749 Loss on disposal of subsidiary undertakings - - (323) __________ __________ __________ Headline profit before taxation 3,838 2,146 18,133 ============ ============ ============ Financial Calendar Interim dividend Record date 3 June 2005 Payment date 23 June 2005 Final dividend Record date January 2006 Payment date March 2006 This information is provided by RNS The company news service from the London Stock Exchange

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