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Taylor Nelson Sofres (TNS)

  Print      Mail a friend       Annual reports

Monday 13 September, 1999

Taylor Nelson Sofres

Interim Results

13 September 1999
                          Taylor Nelson Sofres plc
            One of the world's leading market information groups
                Strong performance leads to record first half

Highlights from the interim results for the six months ended 30 June 1999:

*  Turnover increases by 10% to £175.7m with underlying growth recorded
   in all sectors

*  Profit before tax up by 34% from £9.4m to £12.6m

*  Earnings per share up 28% to 2.3p

*  Operating margin improves by 0.7% to 7.7% as syndicated panel businesses
   enjoy robust first half

*  Strategic and financial benefits of merger continue to flow through

The Chairman, Tony Cowling, said:

'The first half of 1999 represents another strong performance in line with
expectations, and we are satisfied with the level of organic growth.  The
acquisitions made over the past couple of years have come together well and
our network is demonstrating its considerable potential.  Our rate of margin
improvement has been enhanced in the first half by the growth in our
syndicated panel business.  In the second half we normally see a greater
proportion of the increased turnover coming from the custom side of our

'We expect that our markets will maintain recent growth rates in the
foreseeable future and that our strategy and the structure of our operations
will enable us to take full advantage of those increased levels of activity.
Our focus on the development of new branded research products and our
expertise in consumer panels is bringing in encouraging levels of new
business.  We have made a good start to the second half of the year and we
are on track to deliver expected levels of performance.'

For further information, please contact:
Tony Cowling, Executive Chairman                +44 (0) 1372 803403
David Lowden, Finance Director                  +44 (0) 181 967 4009
Janis Parks, Investor Relations Manager         +44 (0) 181 967 1584
Margaret George, Citigate Dewe Rogerson         +44 (0) 171 638 9571

On 13 September, all enquiries to               +44 (0) 171 638 9571

Note to editors
Through its international network of more than 100 offices in over 35
countries, Taylor Nelson Sofres provides market information services in over
80 countries to national and multi-national organisations.  It is ranked as
the fourth largest market information group in the world.

Interim results

Taylor Nelson Sofres, one of the world's leading market information groups,
today announces its interim results for the six months ended 30 June 1999.
Profit before tax has grown by 34.3% to £12.6 million (1998:£9.4 million), on
turnover of £175.7 million, a 10.1 per cent increase on the previous year
(1998: £159.5 million).  Earnings per share were 2.3p (1998: 1.8p), an
improvement of 28.0 per cent and the board proposes an interim dividend of
0.6p per share (1998: 0.5p).

Operating profit was up 20.4 per cent to £13.5 million (1998: £11.2 million).
Further realisation of the benefits of the merger and a robust performance in
the first half by the group's syndicated panel businesses led to an increase
in operating margin from 7.0 per cent to 7.7 per cent.

Net interest paid in the first half was £1.2 million (1998: £2.0 million).
Net debt at 30 June 1999 stood at £42.4 million (1998: £47.2 million) and
interest cover was 11.2 times (1998: 5.6 times). Group Treasury operations in
the period have focused on cash and interest rate management, resulting in
improving cash control and a reduction in interest cost.  The group's cash
generative position will allow it to continue with its policy of reinvesting
in the business through acquisitions and the development of new services.

The group's tax rate for the period was 32.6 per cent (1998: 32.3 per cent).
It is expected that the group's tax rate will move gradually closer to the UK
headline corporation tax rate of 30 per cent.

Commenting on the six months' results and the future, Chairman Tony Cowling

'The first half of 1999 represents another strong performance in line with
expectations, and we are satisfied with the level of organic growth.  The
acquisitions made over the past couple of years have come together well and
our network is demonstrating its considerable potential.  Our rate of margin
improvement has been enhanced in the first half by the growth in our
syndicated panel business.  In the second half we normally see a greater
proportion of the increased turnover coming from the custom side of our

Investing in a dynamic market

'We remain a leader in our market, which is maintaining its uninterrupted
pattern of steady growth, estimated currently to be 8 to 9 per cent overall.
The continued strengthening of syndicated panel research can be identified
across the market and the new specialist sectors, such as IT/Telecoms, are
providing increased opportunities from which we are well positioned to

'Our industry is going through a period of consolidation and we have the
resources and commitment to take full advantage of these developments.  To
date this year we have made a number of acquisitions, in line with our
strategy to reinforce our specialist sectors and extend our global
capabilities.  We will continue to invest in companies that provide a good
fit with our existing operations and meet our performance criteria.

'In 1998, we substantially increased our R&D expenditure to two per cent of
group turnover.  This year we are benefiting from the results of that
investment.  One example is the launch of Miriad(TM), our new,
state-of-the-art integrated marketing information system.  Miriad is already
in use in over 20 countries and in one of the largest continuous brand and
advertising studies in the world, which is being conducted in 27 countries for
Telecoms multi-national, Ericsson.

'It is our intention next year to increase R&D expenditure by up to one per
cent of turnover, with much of this investment being into additional Internet-
related developments.

Seizing the Internet opportunity

'The fast-growing use of the Internet is impacting our business in three
ways.  It allows us to collect data more efficiently and more speedily and
gives us access to some sections of the population that it has previously
been difficult to reach.  It also enables us to improve data delivery to our
clients - we are using electronic delivery systems to provide them with the
information they need with greater immediacy and in interactive formats.
Thirdly, the Internet has opened up new business opportunities in the areas
of web site auditing, measurement of PC/Internet usage, e-commerce and banner
and advertisement tracking.  Here we are transferring our proven expertise in
panel operations, customer satisfaction measurement and creative tracking to
this exciting medium.

Steady progress set to continue

'We expect that our markets will maintain recent growth rates for the
foreseeable future and that our strategy and the structure of our operations
will enable us to take full advantage of those increased levels of activity.
Our focus on the development of new branded research products and our
expertise in consumer panels is bringing in encouraging levels of new
business.  We have made a good start to the second half of the year and we
are on track to deliver expected levels of performance.'

Review of operating activities

Turnover grew by 10.1 per cent to £175.7 million, with an underlying increase
of 6.8 per cent.

Turnover increases in all geographic regions

                 Half year to   Half year to        Increase
                 30 June 1999   30 June 1998               %
                           £m             £m
Europe                  141.1          130.7             8.0
Americas                 22.6           18.2            24.1
Asia Pacific             12.0           10.6            12.7
Total                   175.7          159.5            10.1

Turnover in Europe increased by 8.0 per cent or 6.9 per cent on an underlying
basis.  The UK and France saw a slow first quarter in customised business,
but achieved underlying growth of 3.8 per cent and 4.7 per cent respectively.
This was driven by a good performance from the syndicated panel businesses,
which continue to benefit from an exchange of expertise and products and an
ongoing increase in the demand for added-value services, such as category
management.  In the second half, orders received indicate that custom
business will come through more strongly, in line with the seasonal pattern.
In the rest of Europe the underlying performance was up 14.1 per cent,
reflecting particularly good growth in Spain, Germany, Italy and Portugal.

The Americas achieved underlying growth of 6.2 per cent, having also had a
slow first quarter.  The successful integration of Chilton Research, acquired
in May 1998, contributed to an overall improvement of 24.1 per cent.
Acquisitions made in the first half have reinforced the group's position in
the important Hispanic research market and in healthcare.  Current
performance indicates that continued improvements will be seen in the second

While turnover is increasing steadily in Asia Pacific, this continues to be a
difficult market for customised business, where pricing pressures persist.
The group is looking to the long term to see an acceptable level of return in
this region, where its expertise allows it to gain the maximum benefit from
increased volumes of customised, syndicated research.  Already well
positioned with consumer panel operations in China, Korea, Taiwan and
Thailand and television audience measurement in China, Korea and India, the
group will continue to invest in these developing markets.

Strong revenue performance

                 Half year to   Half year to          Change
                 30 June 1999   30 June 1998               %
                           £m             £m
Consumer                 66.7           62.2             7.2
Media                    32.7           28.2            15.9
Business                 18.7           17.1             9.8
Healthcare               14.5           14.5               -
IT/Telecoms              14.4           12.8            12.3
Other activities         28.7           24.7            16.0
Total                   175.7          159.5            10.1

During 1998, the group made significant progress in the strategic development
of its business into specialist sectors operating globally, allowing it to
focus its growth in these key areas.  This involved the reallocation of some
activities at the 1998 year end and the 1998 half year figures have been
redefined accordingly.

The consumer sector was marked by a good performance in the syndicated panel
business, particularly in France, Spain and the UK, where the group maintains
its market leading position.  The group's consumer panel in France, in
particular, saw a number of important client wins as it profited from its
improved processes and IT system. Acquisitions over the past year in the
media sector, including OBOP in Poland and DMas in Spain, have performed well
as the group reinforced its position at the forefront of television audience
measurement, advertising tracking and broadcast monitoring.

In the healthcare sector underlying growth, excluding the disposal of John
Richardson Computers, was 7.5 per cent.  New contracts were won based on the
group's multi-national capabilities, including an eleven country study in
Asia Pacific for two major pharmaceutical companies.  IT/Telecoms is reported
as a separate sector for the first time, reflecting the increasing importance
of these growing industries.

Year 2000

Taylor Nelson Sofres has substantially completed the testing of its IT
systems and products for the Year 2000 date change, in line with the
programme described in the 1998 annual report.  The group has continuity
plans in place, which are designed to minimise any business disruption that
may arise and is monitoring the Year 2000 compliance of its suppliers and
clients.  While the group believes it has taken all reasonable precautions
to minimise the effects of the Millennium date change, it is unable to give
a guarantee that its business will not be affected by events beyond its
control.  The costs relating specifically to the Year 2000 project,
incurred in the current year, are not expected to exceed £1 million.

The unaudited results of the group as extracted from the financial statements
are shown on the following pages.


                                                    Unaudited      Audited
                                        6 months to   30 June    Full year
                                               1999      1998         1998
                                                 £m        £m           £m
Turnover                                      175.7     159.5        342.0
Cost of sales                                 (64.9)    (59.7)      (124.9)
                                              -----     -----        ----- 
Gross profit                                  110.8      99.8        217.1
Administrative expenses                       (97.3)    (88.6)      (188.8)
                                              -----     -----        ----- 
Operating profit                               13.5      11.2         28.4
Income from interests in associated            
undertakings                                    0.3       0.2          0.2
Profit on sale of discontinued activities         -         -          3.0
                                              -----     -----        -----
Profit on ordinary activities before interest  13.8      11.4         31.6
Interest receivable and similar income          0.5       0.2          0.5
Interest payable and similar charges           (1.7)     (2.2)        (3.9)
                                              -----     -----        -----
Profit on ordinary activities before taxation  12.6       9.4         28.2
Taxation (note 3)                              (4.1)     (3.1)        (8.0)
                                              -----     -----        -----
Profit on ordinary activities after taxation    8.5       6.3         20.2
Minority interests                             (0.2)     (0.1)        (1.1)
                                              -----     -----        ----- 
Profit for the period                           8.3       6.2         19.1
Dividends                                      (2.1)     (1.8)        (5.2)
                                              -----     -----        -----
Retained profit for the period                  6.2       4.4         13.9
                                              =====     =====        =====    
Earnings per share (note 1)                     2.3p      1.8p         5.2p
                                              -----     -----        -----    
Earnings per share before exceptional items     2.3p      1.8p         4.4p
                                              -----     -----        -----    
Fully diluted earnings per share (note 1)       2.1p      1.6p         4.9p
                                              -----     -----        -----    
Dividend per share                              0.6p      0.5p         1.4p
                                              -----     -----        -----


                                                  Unaudited        Audited
                                                 At 30 June      At 31 Dec
                                                 1999      1998       1998
                                                   £m        £m         £m
Fixed assets                                                       
Intangible assets                                14.1       2.5        8.0
Tangible assets                                  39.9      42.5       40.0
Investments                                      13.1      12.9       12.6
                                                -----     -----      -----    
                                                 67.1      57.9       60.6
                                                -----     -----      -----    
Current assets                                                
Stocks and work-in-progress                      34.1      33.0       30.7
Debtors                                         100.6      94.4       89.2
Cash at bank and in hand                         23.4      20.2       31.7
                                                -----     -----      -----
                                                158.1     147.6      151.6
Creditors:  amounts falling due within one      
year                                           (137.9)   (128.8)    (129.1)   
                                                -----     -----      -----
Net current assets                               20.2      18.8       22.5
                                                -----     -----      -----    
Total assets less current liabilities            87.3      76.7       83.1
Creditors:  amounts falling due after more      
than one year                                   (65.3)    (66.0)     (70.9)   
Provisions for liabilities and charges 
(note 2)                                         (8.3)     (9.2)      (6.9)
                                                -----     -----      -----
Net assets                                       13.7       1.5        5.3
                                                =====     =====      =====    
Capital and reserves                                          
Called up share capital                          19.3      19.1       19.2
Share premium                                    98.8      98.1       98.6
Other reserves                                    0.4       0.4        0.4
Profit and loss account (note 2)               (109.1)   (119.6)    (117.4)
                                                -----     -----      -----
Shareholders' funds                               9.4      (2.0)       0.8
Minority interests                                4.3       3.5        4.5
                                                -----     -----      -----    
                                                 13.7       1.5        5.3
                                                =====     =====      =====


                                                      Unaudited    Audited
                                            6 months to 30 June  Full year  
                                                 1999      1998       1998
                                                   £m        £m         £m
Cash flow from operating activities (note 4)     13.1       9.4       38.4
Returns on investment and servicing of                        
Interest received                                 0.5       0.2        0.5
Interest paid                                    (1.9)     (2.2)      (3.9)
Interest element of finance leases                  -         -       (0.1)
                                                -----     -----      -----    
Net cash outflow from returns on investment        
and servicing of finance                         (1.4)     (2.0)      (3.5)
                                                -----     -----      -----    
Taxation paid                                    (3.7)     (1.8)      (9.3)
                                                -----     -----      -----
Capital expenditure and financial investment                  
Purchase of tangible fixed assets                (6.6)     (4.5)     (10.9)
Purchase of intangible fixed assets              (0.1)     (1.0)      (0.7)
Development expenditure capitalised              (1.5)        -       (0.8)
Purchase of investments                          (0.2)     (8.3)      (8.6)
Sale of investments                                 -         -        0.2
Sale of tangible fixed assets                     0.5         -        1.0
                                                -----     -----      -----    
Net cash outflow from capital expenditure and  
financial investment                             (7.9)    (13.8)     (19.8)
                                                -----     -----      -----    
Acquisitions and disposals                                    
Purchase of undertakings                         (7.5)     (8.7)     (12.3)
Net cash acquired with subsidiaries               1.1         -       (0.5)
Proceeds from sale of business                      -         -        3.1
                                                -----     -----      -----    
Net cash outflow from acquisitions and         
disposals                                        (6.4)     (8.7)      (9.7)
Dividends paid                                      -         -       (3.7)
                                                -----     -----      -----    
Cash outflow before use of liquid resources    
and financing                                    (6.3)    (16.9)      (7.6) 
Issue of shares                                   0.1      68.1       68.6
Decrease in debt                                 (1.4)    (65.2)     (63.8)
                                                -----     -----      -----
Decrease in cash in the period                   (7.6)    (14.0)      (2.8)
                                                =====     =====      =====


                                                      Unaudited    Audited
                                            6 months to 30 June  Full year   
                                                   1999    1998       1998
                                                     £m      £m         £m
Profit for the period                               8.3     6.2       19.1
Translation differences on foreign currency                   
net investments less translation differences   
on foreign currency loans taken out to fund           
those investments                                   2.4    (1.7)      (1.5)
                                                  -----   -----      -----    
Total recognised gains                             10.7     4.5       17.6
                                                  =====   =====      =====    


     Earnings per share have been calculated on the profit
     after tax and minority interests of £8.3 million
     (1998:£6.2 million) and on 367.1 million shares 
     (1998:351.3 million), being the average number of shares in
     issue fully ranking for dividends in the period.  This
     excludes the shares held in trust for employee share
     schemes as it is considered that the dividend waiver of
     all but 0.001p per share constitutes a full waiver for
     these purposes.  The fully diluted earnings per share
     have been calculated in accordance with the provisions of
     FRS 14 after assuming the conversion of all outstanding
     share options.  The fully diluted average number of
     shares in issue was 396.7 million (1998:379.5 million).
     The financial statements have been prepared on the basis
     of the accounting policies set out in the group's 1998
     annual report, except that the group has adopted the
     provisions of FRS 12 Provisions, Contingent Liabilities
     and Contingent Assets and FRS 15 Tangible Fixed Assets.
     This has led to the restatement of provisions as at 31
     December 1998, which have been reduced by £1.7 million
     from £8.6 million to £6.9 million. The impact of this change
     has been to increase the profit and loss reserve by the
     same amount.  There has been no change in presentation as
     a result of the adoption of FRS 15 and the group will
     continue to record fixed assets at cost.
     The interim financial statements, which were approved by
     the directors on 13 September 1999, are unaudited and
     have not been reviewed by the auditors in accordance with
     APB 1993/1.  The interim report does not comprise full
     financial statements within the meaning of Section 240 of
     the Companies Act 1985.  The figures for the year ended
     31 December 1998 are an extract from the full financial
     statements for that period, restated for the changes in
     accounting policy detailed in this note, which have been
     delivered to the Registrar of Companies.  The auditors'
     opinion on those accounts was unqualified and did not
     contain a statement under Section 237(2) or (3) of the
     Companies Act 1985.

     The tax charge of £4.1 million (1998:£3.1 million)
     includes £2.4 million relating to overseas taxation 
     (1998: £2.0 million).

                                                    Unaudited       Audited
                                          6 months to 30 June     Full year
                                                 1999    1998          1998
                                                   £m      £m            £m
Reconciliation of operating profit to net                          
cash inflow from operating activities
Operating profit                                 13.5    11.2          28.4
Amortisation of intangible fixed assets           0.7     1.3           1.3
Depreciation of tangible fixed assets             5.2     4.6          10.5
Increase in stocks and work-in-progress          (4.6)   (2.1)         (1.7)
(Increase)/decrease in debtors                  (15.0)   (4.4)          0.9
Increase/(decrease) in creditors                 12.0    (1.2)          0.2
Provisions                                        1.3       -          (1.2)
                                                -----   -----         -----   
Net cash inflow from operating activities        13.1     9.4          38.4
                                                =====   =====         =====   
Analysis of net debt                                          
Opening net debt                                (40.7)  (97.9)        (97.9)
Cash flow                                        (6.2)   51.2          61.5
Exchange movement                                 4.5    (0.5)         (3.7)
Acquisitions                                        -       -          (0.6)
                                                -----   -----         -----   
Closing net debt                                (42.4)  (47.2)        (40.7)
                                                =====   =====         =====
Analysed in balance sheet                                     
Cash at bank and in hand                         23.4    20.2          31.7
Bank loans repayable within 1 year               (0.4)   (1.3)         (1.4)
Bank loans repayable after more than 1 year     (64.2)  (64.6)        (69.5)
Finance leases repayable within 1 year           (0.4)   (0.3)         (0.4)
Finance leases repayable after more than 1 year  (0.8)   (1.2)         (1.1)
                                                -----   -----         -----
                                                (42.4)  (47.2)        (40.7)
                                                =====   =====         =====

     The group has made the following acquisitions in the year
     to date
      Business    Month   Principal              Sector      1998   Net assets
                         country of                      turnover     acquired
      CSS       January          UK   Business services     £0.8m        £0.1m
      Lit Tout     June      France               Media     £1.6m        £1.3m
      Developments June          US            Consumer   US$7.0m*     US$0.7m
      QCR          June          US          Healthcare   US$0.5m     US$0.02m
      NIPO       August Netherlands        Cross-sector    £22.0m        £3.9m
      WHF     September          UK            Consumer     £0.3m        £1.4m

     * turnover for year ending 31 March 1999


The interim dividend will be paid on 17 December 1999 to shareholders on the
register on 19 November 1999.

Copies of this release are available from the Investor Relations Manager,
Taylor Nelson Sofres plc, Westgate, London W5 1UA and it is on the group's
Internet site at