Preliminary Results

RNS Number : 3483D

ITE Group PLC

01 December 2009

 



1 December 2009

ITE GROUP PLC

PRELIMINARY RESULTS ANNOUNCEMENT

Financial highlights

	Year to  30 September  2009	Year to  30 September  2008	% change
Revenue	£116.7m	£109.8m	+6%
Profit before tax	£41.5m	£34.4m	+21%
Headline pre-tax profit*	£45.8m	£37.0m	+24%
Diluted earnings per share	12.7p	9.3p	+37%
Headline diluted earnings per share**	14.2p	10.1p	+41%
Dividend per share	5.5p	5.3p	+4%
Net cash	£23.1m	£29.1m

• Strong financial performance - record revenue of £116.7m and headline pre-tax profit of £45.8m. 

• Strong operational performance in difficult trading conditions with improved margins.

• New acquisitions integrated and performing well. 

• Strong balance sheet with net cash of £23.1m to support further acquisitions and organic growth.

• Dividend increased to 5.5p (2008: 5.3p) reflecting the Board's confidence in the future.

• £56m of revenues already booked for 2010 financial year.

Russell Taylor, CEO of ITE Group plc, commented:

"Exhibitions around the world have been impacted by the challenging trading conditions seen in the last 12 months. ITE has weathered the storm better than most of its competitors due to a combination of the "must do" nature of its market leading events, tight cost management and the successful implementation of our strategy of acquiring complementary businesses.  The Group has reported strong financial results for the year and is well positioned to benefit from a recovery with a strong balance sheet and new opportunities to expand the business" 

* Headline pre-tax profit is defined as profit before tax, amortisation of acquired intangible and impairment of goodwill (including associates) and profits or losses arising on disposal of group undertakings - see note 3 for details, 

**Headline diluted earnings per share is calculated using profit for the financial year attributable to equity holders of the parent before amortisation of acquired intangibles and impairment of goodwill (including associates) and profits or losses arising on disposal of group undertakings - see note 9 for details, 

Enquiries:

Russell Taylor, Chief Executive  Neil Jones, Group Finance Director	ITE Group plc	020 7596 5000
Charles Palmer/Matt Dixon/Emma Appleton	Financial Dynamics	020 7831 3113

Chairman's Statement

Group performance

The Group has delivered a record financial performance, reporting revenues of £116.7 million and Headline pre-tax profits of £45.8 million. Reported pre-tax profits were £41.5 million, a 21% increase from last year and diluted earnings per share increased by 37% from 9.3p to 12.7p. There were several factors influencing these results, notably the downturn in the world economy which had a growing impact on trading conditions throughout our markets as the year progressed, the benefit of our stronger biennial pattern of events, newly acquired events and beneficial currency movements. The economic downturn reduced the Group's like-for-like* volume sales by more than 20%, the effect of which was largely offset by changes in the Sterling-Euro exchange rate. The Group's balance sheet at the beginning of the year was well positioned to deal with the effects of the economic downturn with £29.1 million of net cash and, after investing £8.0 million in expanding the business, the Group's net cash position at 30 September 2009 was £23.1 million. 

Strategic Progress

ITE's primary strengths are its strong exhibition brands in the markets of Russia and the CIS allied to the reputation and breadth of its international sales network. Together these assets have given the Group a unique opportunity to capitalise on the strong growth experienced by the Russian and CIS economies over the last five years. More recently the strategy has been to leverage those strengths by both expanding the portfolio of events in other emerging markets and by enhancing the reach and effectiveness of our international sales network. This year saw a continuation of this strategy with the addition of the Eastern Mediterranean International Travel and Tourism exhibition based in Istanbul which has enhanced the Group's portfolio of travel events. 

Board and Management

Neil Jones joined the Board as Group Finance Director last November. He has been able to make an immediate contribution with his existing knowledge of the industry. There were no further changes to the Board during the year. The success of the business largely depends on the relationships that our staff build and maintain with our customers, and I should like to extend my thanks to all the staff who have worked so hard to make this year's result achievable.

Dividend  

The Board has a progressive dividend policy and is recommending a final dividend of 3.9p per share which, together with the interim dividend of 1.6p, makes a total dividend of 5.5p (2008: 5.3p) for the year. The increase reflects the Group's strong cash position and its confidence in the future prospects of the business. The payment date of the proposed final dividend is being brought forward to February 2010 to achieve a better spread of returns to shareholders during the year. 

Outlook

The current trading conditions in our core markets are now stable, albeit at a lower level than this time a year ago, although the Group has yet to experience an upturn in booking patterns. The economic prospects in the Group's core markets are for a return to economic growth over the course of calendar year 2010, with stronger growth expected thereafter. The nature of the exhibition business is such that this economic recovery is not expected to feed into the Group's financial results until the middle of next year. As anticipated, this 'late-cycle' characteristic means that like-for-like volume sales for 2010 could be up to 10% lower than 2009. At 27 November forward bookings for 2010 stand at £56 million.

The Group has reported strong financial results for the year, has a strong balance sheet, and is well positioned to benefit from a recovery and capitalise on new opportunities to expand the business. Accordingly the Board remains confident of ITE's future prospects.  

Iain Paterson 

Chairman

30 November 2009

* Like-for-like excludes the effect of significant non-annual events, acquisitions and disposals.  

Chief Executive's Statement 

Results for the 2009 Financial Year

Reported revenues for the year of £116.7 million are a 6% improvement over last year's £109.8 million and were earned from volume sales of 423,000m2 (2008: 500,000m2). The volume sales pattern gives a better indication of the trading conditions experienced during the year. The Group's like-for-like volume sales on 1 October 2008 were circa 10% ahead of the previous year's figures. By the end of December the onset of the financial crisis had caused like-for-like volume sales to fall marginally behind the previous year's, and over the full year were more than 20% below the comparable 2008 figure. The mitigating factors that helped reported revenues increase despite the deterioration in underlying trading were a first time contribution from acquisitions of £9.4 million, a net biennial revenue contribution of £3.7 million and an estimated £10.5 million of benefit from the reporting of Dollar and Euro revenues in Sterling. Average exchanges rates for the year reflected Sterling being circa 12% weaker against our principal currency revenues compared to the previous year. 

Against this backdrop of reducing volume sales, costs were reduced in line with the size of exhibitions. Reducing venue commitments and staffing costs were the main focus, resulting in a gross margin for the year of 52%, consistent with the margins we normally report in our biennially stronger year. Overheads were also reduced and are maintained this year at 15% of revenue producing an operating margin of 37% for the year. Headline profits before tax of £45.8 million are comfortably ahead of last year's £37.0 million, helped by, acquisitions, the biennial pattern and net foreign exchange gains made in the year. 

The Group reduced its ongoing tax rate to 26% from 32% last year, reflecting improved tax management and falling tax rates in the Group's principal trading regions, notably Russia.

The improved financial position, lower tax rate and lower average number of shares in issue resulted in diluted headline earnings per share rising 41% to 14.2p (2008: 10.1p). This is a strong financial result in a year where actual trading activity was more than 15% down on the previous year. The integration of new acquisitions, the reduction and control of costs and the successful management of its events leave the Group on an excellent footing from which to progress next year. 

Trading and operating performance in 2009

The principal factors affecting individual shows and sector performance this year were the proportion of international exhibitors in an event and when the event took place in the calendar. International customers reacted less severely than smaller local market customers and different regions reflected the economic downturn at different times and with varying levels of severity. The strongest performing events all took place in the first quarter of the year where bookings were mostly made in pre-crisis conditions, contrasting with events taking place in the final quarter where bookings were all made into a post-crisis environment. The revenues earned in the Group are largely denominated in Euros and the relative strength of this currency against local currencies and against Sterling meant that all regions reported better revenue results than volume results. 

The construction sector has been the biggest contributor to ITE's growth over the last five years, and unsurprisingly was particularly exposed to a tightening of credit facilities and international investment. However, the biggest event in our portfolio, Mosbuild, benefited from high levels of early bookings from international customers. Across the Group, the sector experienced a reduction of 25% in volume sales representing a balance between the Spring events which had some pre-crisis bookings in their figures and the Autumn events which reported larger reductions in volume sales. The oil and gas sales portfolio of events reported sales volumes circa 20% lower than last year on a like-for-like basis. The low oil price detrimentally affected sentiment in the sector for the Spring events, and for the important biennial Moscow International Oil and Gas Exhibition. Latterly a recovery in oil prices to circa $70 per barrel has improved the mood of the sector and helped support the performance of the Kazakhstan International Oil and Gas Exhibition which took place in the first part of the 2010 financial year. The Group's travel exhibitions were a relative out-performer with sales volumes reducing by only 15%, reflecting both their Spring season timing and high proportion of international customers.

In 2009 the Group ran 179 events (2008: 159), the increase largely being attributable to the acquired portfolio of smaller events in our Novosibirsk office. New launch activity was mostly stalled in this year though there will now be opportunities to step into gaps where competitors have failed. A detailed analysis of revenues and gross profits from our exhibition and conference business is set out below.  

		Sq metres sold 000's	Revenue £m	Gross profit £m	Average Yield per m2
2008	All events	500	108	55
	Non annual	(51)	(3)	(1)
2008	Annually recurring	449	105	54	£234
	Acquisitions	67	9	6
	Net reduction	(110)	(5)	(5)
2009	Annually recurring	406	109	55	£268
	Non annual	17	7	5
2009	All events	423	116	60

The Group's annually recurring exhibition business (on a volume basis) is 10% less than last year, but through the beneficial movement in currency rates together with good cost control, the Group has been able to report higher revenues and gross profits from this lower annually recurring volume base. The Group's average sales rate in Sterling terms of £268 per m2 is a 15% increase on last year's average sales rate reflecting changes in currency and mix of events. The average sales rates for the year were €1.21: £1 and $1.57: £1 reflecting the fact that a large proportion of our business was booked relatively early in the year before Sterling reached its lowest point.  

ITE's Strategy 

ITE's primary business objectives are to:

• Create sustainable growth in headline earnings per share; and 

• Create and maintain sustainable positions of market leadership.

ITE's strategy for achieving these objectives is to continue to strengthen its existing positions of market leadership by investing in the quality of it's events, and to expand the business model into other market areas or geographies where there is the potential to create strong market positions. In the Group's existing markets this means searching out new sectors and regions in which to acquire or develop businesses. ITE's strengths lie in its proven ability to deliver international sales and its search is focused around those businesses where there is potential for the participation of international exhibitors, and also look to develop new complementary geographies.

The key performance indicators that ITE uses to measure progress against its objectives and performance this year are set out below:

To increase revenues from existing exhibition portfolio	Sterling revenues from existing ('like-for-like') products has fallen by 6% in the year under review. This reflects both the economic crisis which has led to exhibitions worldwide reducing in size this year, mitigated by weakness in Sterling against our principal invoicing currencies.
To increase the (annually) recurring volume base of our exhibition business	The annually recurring volume base of the exhibition business fell by 10% from 449,000 square metres to 406,000 square metres. This reflected the severity of the economic crisis in our markets leading to a reduction of 24% in our existing business, but offset by the acquisition of new events which added a 67,000 square metres to the portfolio.
To make incremental bolt on acquisitions in support of our objectives	This year the Group acquired the leading travel exhibition in the Eastern Mediterranean region, EMITT, which has potential for growth in its international sales base. Subsequent to the year end, the Group has acquired a small exhibition business in India, which will position the Group to grow its business there.
Secure forward venue rights for significant exhibitions	Of ITE's top ten exhibitions and conferences, 3 have secured rights for 3 years, 6 for 2 years and 1 for 1 year. The Group's management are in an ongoing process of agreeing venue terms in compliance with this objective. These ten exhibitions represent 58% of revenues.

ITE has sought to develop and build upon its main business strengths:

International sales reach

ITE's discerning quality in its business is its reputation with its international exhibiter base. ITE is unique in owning several sales offices which exist solely to make 'outbound sales' to its exhibitions and events in Russia and the CIS. The Group focuses its staff on selling its own exhibitions, which has created a specialist skill base in promoting sales into the Russian and CIS economies. In 2009 international sales accounted for 43% of total square metres sold in the year (2008: 43%); through its London office (17%), its German office (4%), its Chinese office (3%) and its Turkish office (3%). This international sales reach differentiates us from locally based competitors. ITE's ability to add value to acquired businesses relies on it being able to promote the sale of new exhibitions to its existing international customer base. ITE has recently invested in the development of its international sales network by launching new offices in Spain, USA, Poland and Dubai. 

Established market leading brands

ITE has established strong brand identity in certain sectors of exhibitions. In particular the 'build' brand in construction, the 'International Oil and Gas Events'('IOGE') brand, the 'International Travel and Tourism' ('ITT') and World Food brands have a strong reputation and identity with customers, earned through more than fifteen years of sustained good performance. These brands and their attached reputation are not restricted to the Russian and CIS markets and the Group can, and aspires to, expand the use of these brands into new markets.

Local presence

ITE's brands have built their reputation through sustained delivery of successful exhibitions to customers. The foundation of this is our local office presence, with 8 principal offices running more than 170 events per year. ITE's offices, like its exhibitions and brands, have been in place for over 15 years and today employ over 800 people. The local offices both organise all details of staging an exhibition, but critically own and manage the databases of visitors necessary for making an exhibition successful for our customers. ITE's local office skills in Russia and the CIS are a differentiating factor from other international organisers - and building a local office remains a barrier to entry for new organisers wishing to establish themselves in these markets.  

Venue relationships

ITE has established special relationships with the venues that host its exhibitions. Historically, ITE has supported the development of venue facilities - which in turn has helped the Group's exhibitions to grow. This 'partnership' relationship has established for ITE the rights to run its main exhibition themes in its chosen venues at the time of its choice. The Group's track record in developing good quality exhibitions also makes it the 'organiser of choice' for venues.

ITE's international sales expertise, brand identity, local office strength and venue relationships give it a unique position in Russia and the CIS market place. To run successful international exhibitions, which are generally the 'must do' events in a country, an organiser needs both local presence and international sales strength. ITE has established this position in its main sectors in its core markets, and its brands and venue relationships make it hard for new entrants to successfully compete with ITE's events in these markets. Two of these assets - the brand and the international sales skills are portable and can help ITE to establish itself in other emerging markets.

Russell Taylor

Chief Executive Officer

30 November 2009

Business Review

Russia 

The Russian economy is expected to have contracted by circa 8% by the end of 2009, and during our financial year the Ruble has fallen by 20% against the Euro and 18% against the dollar. These changes are a measure of the impact the world's financial crisis and the ensuing drop in the price of oil, Russia's primary export, have had on the Russian economy. The recent increase in the oil price to around $70 per barrel has helped stabilise the situation with the Ruble recovering some of its earlier loses and the economy forecast to return to growth during 2010. 

In 2009, the combination of reduced foreign investment, less international finance and a softening real estate market led to an abrupt slowdown of construction activity. Construction accounts for circa 6% of the Russian economy and for 46% of ITE's exhibition activity in Russia and the slowdown in this industry has had consequences for expenditure in other sectors such as travel and food. Against this difficult trading backdrop ITE has the market leading exhibitions in construction, travel, oil & gas and food, and in difficult times exhibitors have always focussed on the market leading exhibitions.

In Russia ITE operates through three offices in Moscow, St Petersburg and Novosibirsk. During the year the Group ran 86 events, with total sales of 256,000m2, 4% more than 2008. This increase was achieved thanks to the contributions from newly acquired businesses and the biennial occurrence of the Moscow International Oil and Gas Exhibition. Comparable like-for-like volume sales in Russia were circa 22% less than last year though like-for-like revenues were only 4% lower due mainly to favourable currency movements. The regional businesses in St Petersburg and Novosibirsk suffered more than the Moscow market, which attracts a greater number of international customers. With the abruptness of the slowdown being unexpected, the main focus of management throughout the three offices has been on reducing costs in line with the reduced levels of sales. 

In Moscow and St. Petersburg, the Group, has strong relationships with established venues offering sufficient international quality space for the Group's needs. A new pavilion of 23,000m2 was opened this year in the old State exhibition park in Moscow, and at current activity levels there is now a sense of underutilised venue capacity in Moscow. Novosibirsk's business is currently constrained by existing facilities and the various proposals in place to build new facilities have been slowed by the availability and increased cost of bank finance. ITE has therefore, extended its lease to stay in its existing venue and is still actively promoting new projects to construct purpose built modern exhibition facilities. 

In Moscow, where six of the Group's top 10 events are held, the larger more international events proved to be more resilient than the smaller more local events. Performance was also sector specific, with travel in particular faring better than construction, automotive and food. The Moscow International Travel and Tourism event was held in March and despite the economic backdrop delivered space sales of 20,200m2, only 3% smaller than was achieved in 2008. This resilient performance illustrates the strength of a market leading position together with a strong franchise of international exhibitors. The largest and most important event in the Group's portfolio is the Moscow construction event, MosBuild, held in the first week of April. Although the Group had booked sales of more than 80,000m2 before the onset of the economic crisis the eventual out turn was 74,900m2, a reduction of 14% on the 2008 event, with bookings from local exhibitors more severely affected than from international exhibitors.  The slowdown in general economic activity also affected Moscow's other three main April events to differing degrees, with again, the more international events proving more resilient. TransRussia, the international transport and logistics exhibition delivered a good sales performance this year, given the prevailing trading conditions, with sales of 7,300m2 (2008: 8,200m2) and the Moscow International Protection and Security exhibition delivered sales of 6,400m2 (2008: 7,600m2). Expo-Electronica, the electrical components exhibition, is largely comprised of local exhibitors and suffered a 41% reduction year on year to 5,500m2.  The biennial Moscow International Oil and Gas Exhibition was held in June, and with little in the way of pre-crisis bookings, performed ahead of expectations selling 17,300m2 and increasing the number of visitors. The fourth quarter events had no pre-crisis bookings and accordingly found sales harder to achieve than the shows held earlier in the year. The Moscow International Motor Show sold 10,100m2 and Worldfood Moscow 16,600m2 both shortfalls of more than 30% compared to the 2008 events. 

In St. Petersburg, the trading pattern mirrored that of Moscow's, with a strong performance in the first quarter of the year and the weakest sales performance in the last quarter of the year. Again the construction portfolio was particularly affected. The first Interstroyexpo event under ITE's ownership took place in April, and sold 10,100m2 despite very difficult trading conditions. Balticbuild, ITE's other St Petersburg construction event was held in September and was more affected than the April event. 

Sibfair, the Novosibirsk operation acquired in April 2008, now integrated into the Group's sales processes, contributed a full twelve months results for the first time. During the year Sibfair held 43 exhibitions and sold a total of 40,500m2 (19,100m2 in April to September 2008). Whilst performing in line with our expectations, the business incurs a fixed rent for the whole venue, and as such has a less flexible cost structure than our other offices. 

Central Asia  

ITE's principal offices in Central Asia are in Kazakhstan, Azerbaijan and Uzbekistan. In total ITE organised 64 events with total sales of 61,900 m2 in the region, which was 33% less than last year. Despite this fall in volume sales, revenues were only 16% less than in 2008 reflecting the relative increase in strength of the Euro and Dollar against Sterling over the year. Kazakhstan, like Russia is heavily dependent on oil for its overseas earnings, and its economy contracted by circa 2% in GDP terms over the year. Tenge, its currency, devalued against $/€ by circa 25% in February. Azerbaijan and Uzbekistan also depend heavily on oil and gas exports for their overseas earnings, but their economies are less exposed to the international banking system. The growth of their economies slowed from their previous strong growth rates to growth of 7% in 2009. Nonetheless, trade exhibitions in both countries were still negatively affected by the general downturn in international trade. 

Kazakhstan

The economic crisis had an earlier affect on ITE's Kazakhstan business than other regions. Tightening credit conditions and an over inflated property market in mid 2008 combined to create falling property prices; this negative effect "rippled" through the economy, such that it was in full recession before the 1 October 2008. With no pre-crisis mitigation in its trading results, ITE's volume sales were 39% down on the previous year, although again the revenues were helped by changes in relative currency rates. Oil & gas exhibitions are the main contributor the Group's Kazakhstan business and, as in other regions this sector proved relatively resilient to the economic crisis. The Kazakhstan Oil & Gas Exhibition took place early in the year and delivered sales of 10,300m2, just 8% less than was achieved in the equivalent 2008 event. The other important sector in the Kazakhstan portfolio is construction, which experienced extremely difficult trading conditions, with sales contracting by 50% across the portfolio compared to last year.  ITE works closely with Atakent, the principal venue in Almaty to develop the existing facilities, although the economic circumstances have delayed the construction of the proposed venue extension. The Group's relationship with Atakent continues to be strong and ITE enjoy rate and theme protection to 2017.

Azerbaijan

Later into the economic crisis than other territories, the Azerbaijan business started the year very strongly with Bakubuild, the regional construction event, held in October 2008 achieving strong volume growth. Exhibitions held in the second half of the year fell back as the economic crisis began to impact. Overall the Group sold 14,500m2, representing only a 10% decline in like-for-like volumes over the previous year. The proposed new 28,000m2  venue remains on track for completion in mid 2010 and will present ITE with an opportunity to participate in the growth of exhibition business which will follow. 

Uzbekistan

ITE's Uzbekistan business experienced a similar pattern of trading to the Azerbaijan business with a strong first quarter and a slowdown later in the year. Overall, the Group sold 9,900m2 of exhibition space this year, an 11% decrease on a like-for-like basis compared to last year. 

Eastern and Southern Europe

The Eastern and Southern Europe region is represented by the Group's offices in Turkey, Ukraine and the recently opened sales office in Warsaw, Poland. In total like-for-like volume sales from these offices were circa 35% less than in 2008, though again the effect on revenues, (-10% like for-like) was mitigated by relative currency movements. The Ukrainian economy was the most seriously effected of all the Group's core territories given its heavy reliance on international investment, and experienced a 14% contraction over the year. The Turkish economy suffered a relatively mild recession, contracting by 6% over the year. 

Ukraine

The Group's Ukrainian business started the year well, with 10%+ growth in the largest first quarter events, Public Health and World Food Ukraine. However, the severity of the economic downturn severely affected the business from the second quarter onwards resulting in the business selling only 33,200m2 this year compared to 56,000m2 last year.  The two large spring events serving the agricultural industry and the construction industry both reported volume sales more than 50% lower than last year's events.  Despite the significant space shortfalls, the flexibility of our business model allowed management to execute cost savings across the business and together with favourable exchange rates resulted in the region reporting a similar contribution to last year.

Turkey

ITE's wholly-owned subsidiary sold 17,600m2 this year, a 24% decrease on last year on a like-for like basis. In January, the Group furthered its strategic aims by acquiring an initial 75% of the Eastern Mediterranean International Travel and Tourism exhibition. The event, which took place in February, exceeded initial expectations in selling 23,000m2 and as with the Moscow travel exhibition illustrated the relative resilience of the sector. ITE will buy the remaining 25% over the coming three editions of the event. ITF, the Group's 50% associate also experienced difficult trading, but its results included a strong biennial contribution from its Autoshow event, which took place in the first quarter of the financial year, thus avoiding the worst of the economic crisis. ITF contributed £0.7m against £0.2m last year.

UK and Western Europe

The fashion business in the UK continued to be affected by the slowdown in the UK economy, with volume sales declining by 12% on a like-for-like basis to 29,000m2. This year includes results from the recently acquired Bubble, childrenswear exhibition, which contributed 1,900m2, showing good growth over last year. MODA remains the leading UK event for mid-market "ready to wear" fashion, covering womenswear, menswear, footwear and accessories. This market strength and continued quality of execution, has allowed MODA management to secure industry support to launch a Lingerie and Swimwear exhibition alongside the existing MODA event planned for February 2010. 

Rest of World

ITE closed its Urumqi office in China earlier in the year and its presence in China is now focused on its Beijing outbound sales office, which continues to show good growth in its sales to the Group's exhibitions. ITE has recently acquired a small exhibition business in India comprising an office and two established exhibitions - one serving the paper mill industry and one serving the mining and metallurgy industry. These exhibitions are both biennial and are the beginning of the Group's presence in India. ITE has sought to establish a base in India as the exhibition industry is sub-size for its economy, and its economy is expected to show good growth over the coming years. However the growth of the exhibition industry is currently constrained by the lack of suitable large international venue facilities. 

ITE was successful in its tender for the contract to manage the Liquefied Natural Gas Congress in Algeria. The event which will take place in April 2010, builds on our experience of running events for third parties and is supported by the Group's international oil and gas sales teams. 

Finance

Revenue and gross profit 

Revenue for the year was £116.7 million (2008: £109.8 million). On a like-for-like basis this represents a 6% decline over last year's revenue. 

The Group achieved a gross margin of 52% (2008: 50%). The current year included the biennial Moscow International Oil & Gas exhibition which is a high margin event and this replaces the biennial Ankomak event held in Istanbul which has space sales of over 45,000m2 but with lower margins. This affect was complimented by the Group's focus on maintaining event margins through reducing venue commitments and staff costs.

Administrative expenses across the Group decreased to £18.3 million from £18.8 million in the previous year. Administrative expenses include significant non-cash items, including an amortisation charge of £4.3 million (2008: £2.6 million) reflecting the impact of the acquisitions made in the year together with a full-years charge for acquisitions made during 2008, and a charge for share-based payments of £1.1 million (2008: £0.9 million). Offsetting these items are foreign exchange gains of £3.9 million (2008: £0.3 million) arising on the translation of foreign currency denominated assets held by overseas group companies.  Overall, Group administrative expense represented 16% of revenue (2008: 17%), resulting in net operating margins of 37% (2008: 33%) for the year.  

Operating profit was £42.9 million against a prior year profit of £36.4 million. Headline pre-tax profit this year was £45.8 million (2008: £37.0 million).

Other operating income

Other operating income represents rental income earned from subletting surplus office space, principally at ITE's London offices.

Finance income 

Finance income derived from interest on bank deposits decreased significantly during the year to £0.6 million (2008: £1.9 million) as the Group held lower average cash balances throughout the year of £23.1 million (2008: £36.5 million) and worldwide interest rates were reduced to historically low levels.

Finance costs

Finance costs of £2.1 million (2008: £3.9 million) represent the interest cost of the Group's borrowings in Euro and US Dollar, bank charges and the loss on settlement of the Group's derivative financial instruments not in hedging relationships of £1.7 million (2008: £3.3 million). The Group enters into currency borrowing arrangements as part of its currency hedging activity and at 30 September 2009 the Group had currency borrowings of €7.5 million, and US$2.0 million, a total of £9.5 million (2008: £6.6 million). 

Tax charge

The tax charge of £10.8 million represents 26% (2008: 32%) of profit before tax. The reduction in tax rate results from a lowering of underlying corporation tax rates within our main operating economies, with the most significant effect coming from Russia, which reduced its headline corporation tax rate to 20%(previously 24%) from 1 January 2009, together with improved management of the Group's overall tax structure. 

Earnings per share

Basic earnings per share increased to 12.8p (2008: 9.4p). Diluted earnings per share increased to 12.7p (2008: 9.3p).

The Group achieved headline diluted earnings per share of 14.2p (2008: 10.1p). Headline diluted earnings per share is based upon profit for the financial year attributable to equity holders of the parent, before amortisation of acquired intangible assets and any profits or losses on disposal of Group undertakings.

Dividends

The Group has recommended a final dividend of 3.9p for 2009, to bring the total dividend for the year to 5.5p (2008: 5.3p).

Return to shareholders

ITE is committed to maximising shareholder return and is a leading performer in its sector over recent years. ITE is committed to a long-term progressive dividend and since 2004 the dividend has increased on a compound basis by 20% per year. 

Cash flow

Cash generated from operations in the year was £37.4 million (2008: £52.9 million). The principal applications of cash were £3.2 million on purchasing shares on the open market for the Employees Share Option Trust ("ESOT") (2008: £7.8 million), £5.4 million applied to new venue loans and advances (2008: £0.8 million); £11.9 million was paid in tax (2008: £7.0 million); £8.0 million was applied to acquisitions in the year (2008: £13.5 million) and £12.6 million was distributed as dividends (2008: £12.1 million). The net decrease in cash balances over the year was £6.0 million, with the Group holding £23.1 million in net cash at 30 September 2009 (2008: £29.1 million).

Acquisitions 

On 23 January 2009, ITE acquired 100% of the issued share capital of Newex Marketing Limited (Newex) for a cash consideration of $5.1 million (£3.7 million) and contingent consideration of £0.6 million, based upon the performance of the business over 2009 and 2010. Newex owns 75% of the company which owns the East Mediterranean International Travel and Tourism exhibition (EMITT), Turkey and the leading Hotel guide for the Turkish market.

During the year the Group paid £3.8 million in deferred consideration in relation to acquisitions made in 2008, bringing the liability on its balance sheet as at 30 September 2009 to £1.1 million, which it expects to pay during 2010. 

Balance Sheet

The Group's consolidated balance sheet at 30 September 2009 is summarised in the table below:

	Assets	Liabilities	Net assets
	£m	£m	£m
Goodwill and intangibles	60.6	0.0	60.6
Property, plant and equipment	1.4	0.0	1.4
Associates	1.8	0.0	1.8
Venue advances	4.9	0.0	4.9
Cash	32.6	(9.5)	23.1
Current assets and liabilities excluding cash and venue advances	32.3	(63.0)	(30.7)
Provisions	0.0	(0.8)	(0.8)
Deferred tax	1.3	(4.1)	(2.8)
Other non current assets and liabilities	0.1	(0.9)	(0.8)
Total as at 30 September 2009	135.0	(78.3)	56.7
Total as at 30 September 2008	141.8	(97.8)	44.0

Net assets increased by £12.7 million to £56.7 million. The main changes are in goodwill and intangibles (an increase of £3.5 million), deferred income (a decrease of £19.8 million) and deferred consideration (decrease of £3.8 million), offset by a decrease in net cash (£6.0 million), and a decrease in trade receivables (£10.9 million).

Investment and capital expenditure

The Group's capital expenditure on plant and equipment for the year was £0.4 million (2008: £1.1 million) and included exhibition equipment, computer equipment and associated software. 

Venue arrangements

The Group has long term arrangements with its principal venues in our main markets setting out ITE's rights over future venue use and pricing.

Expocentr is ITE's principal venue in Moscow and hosts some of its largest exhibitions including MosBuild, Moscow International Oil & Gas exhibition, Moscow International Travel & Tourism, World Food Moscow, TransRussia and Moscow International Protection & Security exhibition. ITE has an agreement with Expocentr which secures the Group's rights to conduct its exhibitions until 2011.

Crocus Exhibition Centre is located on the outskirts of Moscow city centre and hosts MosBuild+, Expoelectronica, Moscow International Motor Show and the Moscow International Boat Show.  ITE has an agreement with Crocus which secures the Group's rights to conduct its exhibitions until 2015.

Lenexpo is located in St Petersburg and hosts the recently acquired Interstroyexpo and Baltic Building Week events.  ITE has an agreement with Lenexpo, providing rights to hold its exhibitions and agreed rates to 2011.

Atakent Exhibition Centre is the largest venue in Almaty, Kazakhstan and hosts the Kazakhstan International Oil & Gas events and KazBuild exhibitions. ITE's agreement with Atakent confirms its rights to hold its exhibitions on agreed rates until 2017.

The Group funds the development of venues and facilities where improved facilities will enhance the prospects and profitability of its organising business. The funding can take the form of a prepayment of future venue fees ('advance payment'), or a loan which can be repaid by cash or by offset against future venue fees ('venue loan'). Generally the funding brings rights over future venue use and advantageous pricing arrangements through long term agreements. Venue loans and advance payments are included in the Balance Sheet under non-current and current assets.

At 30 September 2009, the Group's Sterling value of the outstanding balances of advance payments and venue loans was £4.9million (2008: £2.4million) as follows:

	30-Sep-08	New	Repayments	Forex	30-Sep-09
	£m	£m	£m	£m	£m
Kyiv	0.9	0.0	-	0.1	1.0
Almaty	0.4	3.4	(2.2)	(0.2)	1.4
St Petersburg	0.5	-	(0.2)	-	0.3
Uzbekistan	0.5	-	(0.1)	-	0.4
Bulgaria	0.1	-	(0.1)	-	0.0
Crocus (Moscow)	0.0	1.3	-	-	1.3
CNR (Istanbul)	0.0	0.5	-	-	0.5
Total	2.4	5.2	(2.6)	(0.1)	4.9

Capital

During the year the Company issued 199,800 ordinary shares of 1p in the year. All of the total new issues were pursuant to the exercise of options and yielded aggregate consideration of £11,500.  The Company also purchased 5,000,000 shares for the Employees Share Option Trust ("ESOT") and at 30 September 2009 ESOT held 10,602,886 (4.3%) of the Company's issued share capital (2008: 6,967,783; 2.8%).

Post balance sheet events

On 27 November 2009, the Group purchased 70% of Airgate Holdings ltd, a Cypriot company, which in turn owns 100% of the shares in an Indian exhibition organiser based in Delhi. The initial purchase consideration paid on completion was €2.2m, with further consideration to be paid in 2010, once the results for the latest financial year are confirmed. 

Due to the proximity to the date of signing these accounts, the IFRS 3 acquisition accounting has not been finalised and the associated IFRS 3 disclosures are therefore not completed.

Treasury

During the year, the Group experienced net foreign exchange gains of £2.2 million (2008: loss of £3.1 million). The exchange rate for the Euro at 30 September 2009 was €1.09:£1 (30 September 2008: €1.26:£1); the exchange rate for the US Dollar at 30 September 2008 was $1.59:£1 (30 September 2009: $1.82:£1).

During the year, 77% of the Group's sales were priced in Euros, 9% in GBP and 1% in US Dollars, the balance being in local currency. Overall 51% of the Group's cash receipts for the period were collected in "hard" currency (Sterling, Dollars or Euros) and 49% was collected in various local currencies, the majority being Rubles.

The Group uses derivative instruments and currency borrowings to protect itself against the effect of currency fluctuations on a proportion of its sales and its balance sheet. The Group's policy on derivative instruments is that:

• it will hedge no more than 75% of the value of anticipated hard currency collated sales; and

• it will only enter into derivative transactions up to 36 months ahead.

At 30  September 2009, the Group had entered into forward contracts to sell Euros for Sterling between October 2009 and September 2012. The value of the contracts is €64.5 million at an average rate of €1.10:£1. These instruments are designated as hedging instruments.

Over the year, the Group has entered into currency borrowing arrangements to minimise its exposure to foreign exchange risk on trade receivables. At 30 September 2009 the Group had borrowings of €7.5 million, and US$2.0 million. The cash balance of £23.1 million at 30 September 2009 is net of these borrowings.

The Group finances its operations through cash holdings. The objective of the Group is to maximise investment income and minimise interest costs, bearing in mind its liquidity requirements. 

For short-term debt, such as overdraft facilities or debt with a term of less than six months, fixed or floating rates of interest are used. For debt with a term of greater than six months, it is policy that at least 75% must have fixed rates of interest so as to minimise the Group's exposure to interest rate movements.  As at 30 September 2009 all of the Group's borrowing requirements were in the form of overdraft facilities. 

It is Group policy that its cash balances are not invested in instruments that would put the capital value at risk. All invested funds have a determinable rate of interest.

Liquidity risk

The Group policy is to ensure continuity of funding for operational needs through cash deposits and debt facilities as appropriate. The key requirement for the business is to maintain flexibility to allow the Group to take advantage of opportunities that could arise over the short term. The needs of the business are determined on a rolling cash flow forecast basis, covering weekly, monthly and twelve monthly requirements. Short-term flexibility is maintained by holding cash in current accounts and high liquidity money market funds. The Group has overdraft facilities in place both to permit currency borrowing as part of its foreign exchange management and to allow flexibility in where it holds its cash balances.

Recent events in the world financial markets have highlighted the risks associated with holding deposits in foreign domiciled banks. The territories in which ITE operates do not all have internationally recognised banks and the Group has relationships with a number of domestic banks. The Group seeks to use the territory's leading bank and to minimise the level of cash held in such banks. Of the Group's total cash balance of £32.6 million as at 30 September 2009, 78% was held in institutions with a rating of grade A or above and 9% in B to BBB+.

Going concern

The Group's and Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Business Review. The financial position of the Group and Company, its cash flow, liquidity position and borrowing facilities are described above. 

After making enquiries, the Directors have a reasonable expectation that the Group and Company has adequate resources to continue its operations for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the Annual Report and Financial Statements.

Consolidated Income Statement For the year ended 30 September 2009		2009		2008*  Restated
	Notes	£000		£000
Continuing operations
Revenue	4	116,730		109,792
Cost of sales		(56,432)		(55,014)
		__________		__________
Gross profit		60,298		54,778
Other operating income		283		292
Administrative expenses before amortisation		(13,992)		(16,222)
Amortisation of acquired intangibles		(4,311)		(2,596)
Total administrative expenses		(18,303)		(18,818)
Share of results of associate		663		173
		__________		__________
Operating profit		42,941		36,425
Finance income	5	619		1,907
Finance costs	6	(2,108)		(3,917)
		__________		__________
Profit on ordinary activities before taxation		41,452		34,415
Tax on profit on ordinary activities	7	(10,790)		(11,049)
		__________		__________
Profit for the period		30,662		23,366
		__________		__________
Attributable to:
Equity holders of the parent		30,435		23,389
Minority interests		227		(23)
		__________		__________
		30,662		23,366
		________		__________
Earnings per share (p)
Basic	9	12.8		9.4
Diluted	9	12.7		9.3
		__________		__________

• Restated for the change in revenue recognition policy. See note 2 for details.

Consolidated statement of recognised income and expense   For the year ended 30 September 2009		2009	2008* Restated
		£000	£000
Currency translation difference on net investment in subsidiary undertakings		(1,254)	2,921
(Decrease)  in fair value on cash flow hedge		(1,745)	(51)
Tax on items taken directly to equity		13	(246)
		__________	__________
Net  income recognised directly in equity		(2,986)	2,624
Put option at fair value		(1,351)	(3,269)
Profit for the year attributable to the shareholders		30,662	23,366
		__________	__________
Total recognised income and expense for the year		26,325	22,721
		__________	__________
Attributable to:
Equity holders of the parent		26,552	22,744
Minority interests		(227)	(23)
		__________	__________
		26,325	22,721
		__________	__________

* Restated for the change in revenue recognition policy. See note 2 for details.

Consolidated Balance Sheet 30 September 2009		2009	2008* Restated
		£000	£000
Non-current assets
Goodwill		44,619	40,982
Other intangible assets		16,007	16,115
Property, plant and equipment		1,449	1,727
Investments in associates		1,840	1,381
Venue advances and other loans		1,994	1,001
Deferred tax asset		1,268	1,594
Derivative financial instruments		68	-
		___________	___________
		67,245	62,800
Current assets
Trade and other receivables		33,859	42,871
Tax prepayment		1,056	389
Cash and cash equivalents		32,587	35,709
Derivative financial instruments		226	-
		___________	___________
		67,728	78,969
Total assets		134,973	141,769
Current liabilities
Bank overdraft		(9,480)	(6,568)
Trade and other payables		(13,395)	(18,022)
Deferred income		(44,567)	(64,402)
Derivative financial instruments		(5,020)	(4,257)
Provisions		(203)	(264)
		___________	___________
		(72,665)	(93,513)
Non-current liabilities
Provisions		(610)	(653)
Deferred tax liabilities		(4,134)	(3,617)
Derivative financial instruments		(857)	-
		___________	___________
		(5,601)	(4,270)
Total liabilities		(78,266)	(97,783)
		___________	___________
Net assets		56,707	43,986
		___________	___________

* Restated for the change in revenue recognition policy. See note 2 for details.

Consolidated Balance Sheet 30 September 2009		2009 £'000	2008* Restated £000
Equity
Share capital		2,481	2,479
Share premium account		2,678	2,669
Merger reserve		2,746	2,746
Capital redemption reserve		457	457
ESOT reserve		(10,241)	(8,390)
Retained earnings		60,519	42,686
Translation reserve		2,160	3,414
Hedge reserve		(1,745)	-
Put option reserve		(4,620)	(3,269)
		___________	___________
Equity attributable to equity holders of the parent		54,435	42,792
Minority interests		2,272	1,194
		___________	___________
Total equity		56,707	43,986
		___________	___________

* Restated for the change in revenue recognition policy. See note 2 for details.

The financial statements were approved by the Board of Directors and authorised for issue on 30 November 2009. They were signed on their behalf by:

Russell Taylor	Neil Jones
Chief Executive Officer	Finance Director

Consolidated cash flow statement For the year ended 30 September 2009	Notes	2009 £000	2008* Restated £000
Cash flows from operating activities
Operating profit from continuing operations	4	42,941	36,425
Adjustments for:
Depreciation and amortisation	4	5,062	3,315
Share-based payments		1,100	931
Other non-cash expenses		121	(654)
Loss/(profit) on sale of fixed asset		-	1
Share of associate profit		(663)	(173)
(Decrease)/increase in provisions		(105)	1,146
		__________	__________
Operating cash flows before movements in working capital		48,456	40,991
Decrease/(increase) in receivables		7,956	(10,164)
(Decrease)/ increase in deferred income		(19,835)	18,245
Increase in payables		775	3,785
		__________	__________
Cash generated from operations		37,352	52,857
Tax paid		(11,887)	(7,043)
Venue advances and loans		(5,352)	(830)
		__________	__________
Net cash from operating activities		20,113	44,984
Investing activities
Interest received		619	1,902
Loss on derivative financial instruments		(1,696)	(2,990)
Dividends received from associates		204	198
Acquisition of businesses		(8,012)	(13,508)
Purchase of property, plant and equipment and computer software		(449)	(1,075)
		__________	__________
Net cash (utilised) from investing activities		(9,334)	(15,473)
Financing activities
Dividends paid	8	(12,600)	(12,050)
Interest paid		(412)	(598)
Net cash flow in relation to ESOT shares		(3,193)	(7,793)
Purchase of own shares		-	(8,078)
Proceeds from issue of share capital		11	1,810
		__________	__________
Net cash flows from financing activities		(16,194)	(26,709)
Net (decrease)/increase in cash and cash equivalents		(5,415)	2,802
Net cash and cash equivalents at beginning of period net of overdrafts		29,141	26,657
Effect of foreign exchange rate changes		(619)	(318)
		__________	__________
Net cash and cash equivalents at end of period net of overdrafts		23,107	29,141
* Restated for the change in revenue recognition policy. See note 2 for details.		__________	__________

Consolidated cash flow statement (continued) For the year ended 30 September 2009		2009 £000	2008* Restated £000
Comprising:
Cash and cash equivalents		32,587		35,709
Bank overdrafts		(9,480)		(6,568)
		__________		__________
		23,107		29,141
		__________		__________
Cash generated from the business:
Cash generated from operations		37,352			52,857
Interest received		619			1,902
Interest paid		(412)			(598)
Dividends earned from associates		204			198
		__________			__________
		37,763			54,359
		__________			__________
Free cash flow from the business:
Cash generated from the business		37,763			54,359
Tax paid		(11,887)			(7,043)
		__________			__________
		25,876			47,316
		__________			__________

Notes

1.    Basis of preparation

Whilst the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS"), this announcement does not contain sufficient information to comply with IFRS's.

The Company expects to publish full financial statements that comply with IFRS in December 2009.

 The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2009 or 2008, but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation. 

2.    Change in accounting policies

IAS 18 'Revenue'

In the current financial year, ITE Group plc has changed its accounting policy on event revenue recognition. Previously, the Group recognised revenue on a straight line basis, evenly over the days over which an event was being held. As a result of the change in policy, revenue is now recognised on completion of the event. Management judges that the new policy provides a more accurate representation of the revenue earned as the Company's obligations can only be fully discharged on completion of an event, and a partial service can not be provided. The comparative financial statements for 2008 have been restated. The effects of these changes on the comparative figures are:

• Year ended 30 September 2008: Decrease in 'Revenue' of £271,000, a decrease in 'Cost of Sales' of £159,000 and a decrease in 'Tax on profit on ordinary activities' of £22,000. On the balance sheet at 30 September 2008, 'Trade and other receivables' increased by £159,000, 'Deferred Income' by £271,000, 'Trade and other payables' decreased by £22,000 and 'Retained earnings' decreased by £90,000.

The 2009 full year effect of the above accounting policy change is the reversal of the effects described above.

Impact of new accounting standards

In addition the following new standards, amendments to standards and interpretations are mandatory for the year ending 30 September 2009, and these have been adopted but have had no impact on the 2009 Group financial statements:

• IFRIC 12 Service Concession Agreements; 

• IFRIC 13 Customer Loyalty Programmes; 

• IFRIC 14 The Limit on a Defined Benefit Asset Minimum Funding Requirements and their Interaction; and

• IFRIC 16 Hedges of a Net Investment in a Foreign Operation .

3.    Reconciliation of headline pre-tax profit to profit on ordinary activities before taxation

Profit on ordinary activities before taxation	2009 £'000 41,452	2008 Restated £'000 34,415
Amortisation of acquired intangibles	4,311	2,596
	__________	__________
Headline pre-tax profit	45,763	37,011
	__________	__________

Profit on ordinary activities before taxation

Profit on ordinary activities before taxation is stated after charging/(crediting):

	2009		2008
	£000		£000
Staff costs	20,052		18,906
Depreciation of property, plant and equipment	507		498
Amortisation of computer software	244		220
Amortisation of purchased intangible assets	4,311		2,596
Operating lease rentals - other	3,224		2,227
Impairment loss recognised on trade receivables	-		251
Loss on derivative financial instruments	1,696		3,319
Foreign exchange gain on operating activities	(3,922)		(266)
	__________		__________
Auditors' remuneration
Fees payable to the Company's auditor for the audit of the Company's annual accounts		191	192
Fees payable to the Company's auditor and its associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation		105	99
- Other services pursuant to legislation		34	42
- Other services		107	16
Tax services		35	162
	__________		__________
	472		511
	__________		__________

4.    Segmental Analysis

The revenue and profit before taxation are attributable to the Group's one principal activity, the organisation of trade exhibitions, conferences and related activities and can be analysed by geographic segment as follows.

Year ended 30 September 2009	UK & Western Europe	Central Asia & Caucasus	Russia	Eastern & Southern Europe	Rest of World	Total Group
	£000	£000	£000	£000	£000	£000
By geographical location of events/activities
Revenue	7,016	19,031	80,863	9,585	235	116,730
Result (excluding share of results of associates)	(6,188)	6,451	39,731	3,473	(1,189)	42,278
	________	________	________	________	________	_______
By origin of sale
Revenue	57,002	9,092	44,833	5,803	-	116,730
Result (excluding share of results of associates)	16,752	2,570	22,445	669	(158)	42,278
	_______	________	________	_______	________
Share of results of associates						663
						_______
Operating profit						42,941
Finance income						619
Finance costs						(2,108)
						_______
Profit before tax						41,452
Tax						(10,790)
						_______
Profit after tax						30,662
						________
Capital expenditure	223	28	163	35	-	449
Depreciation and amortisation	1,868	6	2,423	756	-	5,062
Balance Sheet
Assets*	74,081	7,941	46,912	1,875	-	130,809
	________	________	________	________	________	_______
Interest in associates						1,840
Consolidated total assets						132,649
						________
Liabilities*	46,116	3,914	19,490	1,939	196	71,655
	________	________	________	________	________	_______
* Segment assets and segment liabilities exclude current and deferred tax assets and liabilities.

The revenue in the year of £116.7 million includes £0.5 million (2008: £0.2 million) of barter sales.

   4.     Segmental Analysis (continued)

Year ended 30 September 2008 Restated	UK & Western Europe	Central Asia & Caucasus	Russia	Eastern & Southern Europe	Rest of World	Total Group Restated
	£000	£000	£000	£000	£000	£000
By geographical location of events/activities
Revenue  **	12,280	22,646	65,529	8,735	602	109,792
Result **	(7,480)	9,277	33,684	1,820	(1,049)	36,252
	________	________	________	________	________	_______
By origin of sale
Revenue	55,787	11,096	36,811	5,971	128	109,792
Result	18,645	2,107	15,044	485	(30)	36,252
	_______	________	________	_______	________
Share of results of associates						173
						_______
Operating profit						36,425
Finance income						1,907
Finance costs						(3,917)
						_______
Profit before tax						34,415
Tax						(11,049)
						_______
Profit after tax						23,366
						________
Capital expenditure	535	75	444	22	-	1,076
Depreciation and amortisation	2,430	115	752	17	-	3,314
Balance Sheet
Assets*	83,775	7,852	44,957	1,819	2	138,405
	________	________	________	________	________	_______
Interest in associates						1,381
Consolidated total assets						139,786
						________
Liabilities*	49,605	5,967	33,849	1,703	42	91,166
	________	________	________	________	________	_______

* Segment assets and segment liabilities exclude current and deferred tax assets and liabilities.

** Revenue by geographical location of events has been restated to reflect more accurately the geographical location of the revenue streams. Revenue in Central Asia and Caucasus has increased by £0.7 million, revenue in Russia has declined by £0.2 million and revenue in Eastern and Southern Europe by £0.5 million. The effect on the Result is an increase in Central Asia and Caucasus of £0.4 million and a decline in Eastern and Southern Europe of £0.4 million. 

5.    Finance Income

	2009	2008
	£000	£000
Interest receivable from bank deposits	619	1,874
Interest receivable from Inland Revenue repayments	-	15
Interest receivable on advances to venues	-	13
Unwind of fair value discount on venue advances	-	5
	__________	__________
	619	1,907
	__________	__________

The investment revenue earned on financial assets is from loans and receivables and cash balances.

6.    Finance Costs

	2009	2008
	£000	£000
Interest on overdrafts	148	360
Bank charges	264	238
Loss on derivative financial instruments	1,696	3,319
	__________	__________
	2,108	3,917
	__________	__________

7.    Tax on profit on ordinary activities

	2009	2008
	£000	Restated £000
Analysis of tax charge for the year:
Group taxation on current year profit
UK corporation tax on profit for the year	5,049	5,136
Adjustment to UK tax in respect of previous years	(131)	51
	__________	__________
	4,918	5,187
Overseas taxation - current year	5,891	5,489
Overseas taxation - previous years	(70)	419
	__________	__________
	5,821	5,908
Current tax	10,739	11,095
	__________	__________
Deferred tax
Origination and reversal of timing differences	51	(46)
	__________	__________
	10,790	11,049
	__________	__________

  7.    Tax on profit on ordinary activities (continued)

The tax charge for the year can be reconciled to the profit per the income statement as follows:	2009	2008 Restated
	£000	£000
Profit on ordinary activities before tax	41,452	34,415
	__________	__________
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 28% (2008: 29%)	11,607	9,980
Effects of:
Expenses not deductible for tax purposes	165	481
Deferred tax assets not recognised	290	62
Withholding tax and other irrecoverable taxes	194	400
Adjustments to tax charge in respect of previous years	(467)	393
Deferred tax provision in respect of proposed dividends from overseas subsidiaries	1,130	801
Effect of different tax rates of subsidiaries operating in other jurisdictions	(1,943)	(1,018)
Associate tax	(186)	(50)
	__________	__________
	10,790	11,049
	__________	__________

8.    Dividends	2009	2008
	£000	£000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 30 September 2008 of 3.7p (2007 - 3.2p) per ordinary share	8,809	8,045
Interim dividend for the year ended 30 September 2009 of 1.6p (2008 -1.6p) per ordinary share	3,791	4,005
	__________	__________
	12,600	12,050
	__________	__________
Proposed final dividend for the year ended 30 September 2009 of 3.9p (2008 - 3.7p) per ordinary share	9,262	8,915
	__________	__________

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

Under the terms of the trust deed dated 20 October 1998, the ITE Group Employees Share Trust, which holds 10,602,886 (2008: 6,967,783) ordinary shares representing 4% of the Company's called up ordinary share capital, has agreed to waive all dividends due to it each year. 

9.    Earnings per share

The calculation of basic, diluted and headline diluted earnings per share is based on the following earnings and the numbers of shares: 

Number of shares	2009	2008
	Number of shares ('000)	Number of shares ('000)
Weighted average number of shares:
For basic earnings per share	238,030	249,647
Effect of dilutive potential ordinary shares	1,352	2,493
	___________	___________
For diluted and headline diluted earnings per share	239,382	252,140
	___________	___________

Basic and diluted earnings per share
The calculations of basic and diluted earnings per share are based on the profit for the financial year attributable to equity holders of the parent of £30.4 million (2008: £23.4 million). Basic and diluted earnings per share were 12.8p and 12.7p respectively (2008: 9.4p and 9.3p respectively).

Headline diluted earnings per share
Headline diluted earnings per share is intended to provide a consistent measure of Group earnings on a year-on-year basis and is 14.2p per share (2008: 10.1p).  Headline basic earnings per share is 14.2p per share (2008: 10.2p).

	2009 £000	2008 Restated  £000
Profit for the financial year attributable to equity holders of the parent	30,435	23,389
Amortisation of acquired intangible assets	4,311	2,596
Tax effect of amortisation of acquired intangible assets	(848)	(713)
	________	________
Headline earnings for the financial year	33,898	25,272
	________	________

Financial calendar

Final dividend 2009

Ex date	6 January 2010
Record date	8 January 2010
Annual General Meeting	28 January 2010
Payment date	15 February 2010

Interim dividend 2010

Ex date	7 July 2010
Record date	9 July 2010
Payment date	12 August 2010

 

END

 

 

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