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Taylor Nelson Sofres (TNS)

  Print      Mail a friend       Annual reports

Monday 08 March, 2004

Taylor Nelson Sofres

Final Results

Taylor Nelson Sofres PLC
08 March 2004








Press information for release at 07.00                        8 March 2004






                              Platform for growth


•  Integration of NFO with TNS progressed ahead of plan in 2003; continues to go 
   well

•  Focus in 2004 increasingly on revenue synergies

•  Strong cash performance in 2003


Highlights for the year ended 31 December 2003


Business performance                                                       2003           2002          Change

Turnover including joint ventures                                       £805.2m        £618.9m           30.1%

Operating profit*                                                        £80.8m         £59.8m           35.1%


Operating margin*                                                         10.0%           9.7%

Profit before tax*                                                       £65.3m         £48.8m           33.8%

Adjusted earnings per share*                                              10.5p           8.6p           22.1%

Total dividend per share                                                   3.0p           2.6p           15.4%

Statutory results

Turnover excluding joint ventures                                       £789.5m        £603.2m           30.9%

Operating profit before joint ventures and associates                    £45.7m         £38.3m           19.3%

Profit before tax                                                        £32.4m         £28.6m           13.3%

Basic earnings per share                                                   3.1p           3.3p          (6.1)%

* including joint ventures, before goodwill charges and integration costs



Chief Executive, Mike Kirkham, said:



"The worldwide market for market information is expected to continue its gradual
improvement during 2004 and industry commentators anticipate that it will grow
by around 3-4 per cent.  With respect to our performance in 2004, TNS expects to
see continued growth coming out of the US and Asia Pacific and gradual
improvement in Europe.  The group overall is expected to achieve growth broadly
in line with the market.



"The group's confidence in an improved performance in 2004 is supported by the
order book, which is ahead of the same time in 2003, as well as by the pick-up
in activity seen towards the end of 2003.  Looking beyond 2004, as we experience
the full benefits of both cost and revenue synergies, as well as the
developments in which we are investing, we believe that TNS will achieve
turnover growth ahead of the market."


On 8 March, all enquiries to +44 (0)20 7638 9571



Thereafter:

Mike Kirkham, Chief Executive                                +44 (0)20 8967 4022
Andy Boland, Finance Director                                +44 (0)20 8967 1472
Janis Parks, Head of Investor Relations                      +44 (0)20 8967 1584
Margaret George, Citigate Dewe Rogerson                      +44 (0)20 7638 9571

Email to: Janis.Parks@tns-global.com



A webcast of the results presentation made to analysts will be available on the
Investor Centre of the group's website, at www.tns-global.com, from 16.00 on
Monday 8 March 2003.



Note to editors

About TNS

TNS is a leading global provider of market information. We collect, analyse and
interpret information to help our clients better understand the needs and wants
of their customers.  We provide research, advice and insight on market
segmentation, advertising and communications, new product development, brand
performance and stakeholder management.  We are also one of the leading
providers of social and political polling.



From our global network, which spans 70 countries, we provide local expertise
and knowledge, together with internationally consistent information and analysis
to multi-national organisations.



TNS is listed on the London Stock Exchange (TNN). Further information can be
found on www.tns-global.com.



High resolution images of management are available for the media to view and
download (free of charge) from www.vismedia.co.uk.




PRELIMINARY RESULTS



Taylor Nelson Sofres plc (TNS), a world leader in market information, today
announces its preliminary results for the year ended 31 December 2003.
Commentary is given on results before goodwill charges, as this is the primary
basis on which the business is managed.  Commentary is also given on statutory
numbers.  The results of NFO WorldGroup, Inc. (NFO) were consolidated from 10
July 2003, the date the acquisition was completed.



Acquisition of NFO

On 10 July 2003, TNS completed the acquisition of NFO from The Interpublic Group
of Companies, Inc. (IPG) for an initial consideration of $425 million, which
comprised $400 million cash and $25 million satisfied by the issue of 11,688,218
million shares.  A further $10 million is payable in cash to IPG on the first
anniversary of the date of completion, if TNS' share price is above 146 pence at
that time.  On 13 May 2003, the group signed new banking facilities of £490
million in anticipation of the acquisition of NFO, and on 14 May completed a £51
million share placing.



Given the extent of integration that had occurred by the end of 2003, it has
become increasingly difficult to isolate the results for the original TNS and
NFO businesses, particularly with respect to costs.  Consequently, it is not
possible to give operating profit numbers for the original businesses.  While
separate commentary on turnover for each of the TNS and NFO businesses has been
provided, this is based on management information and represents management's
best estimates of the breakdown of revenue between the businesses.



Turnover

During 2003, the enlarged group's reported turnover including joint ventures
increased by 30.1 per cent to £805.2 million (2002 £618.9 million).
Acquisitions contributed growth of 26.6 per cent, substantially all of which
came from NFO (£162 million).  Turnover excluding joint ventures was £789.5
million (2002 £603.2 million).



With a strengthened performance in the second half, underlying growth in the
original TNS business for the full year, excluding the effect of currency
translation, acquisitions and discontinued operations, was 1.7 per cent.
Currency had a positive impact of 1.8 per cent, which was partially offset by
the negative impact of 1.0 per cent from discontinued operations.



Operating profit and margin

For the enlarged group, operating profit including joint ventures and operating
synergies, before goodwill charges and integration costs grew by 35.1 per cent
to £80.8 million (2002 £59.8 million).  Operating margin was 10.0 per cent
compared with 9.7 per cent in 2002.


In 2003, operating synergies arising from the integration of NFO were
approximately £2 million.  Integration costs charged in 2003 to achieve these
and additional ongoing synergies were £9.0 million.  Goodwill charges of £23.9
million (2002 £20.2 million) comprise amortisation of £17.4 million (2002 £13.9
million) and impairments of £6.5 million (2002 £6.3 million).



Group operating profit before joint ventures, after goodwill charges and
integration costs increased by 19.3 per cent to £45.7 million (2002 £38.3 
million).



Profit before tax

Profit before tax including operating synergies, before goodwill charges and
integration costs grew by 33.8 percent to £65.3 million (2002 £48.8 million). 
Profit before tax increased by 13.3 per cent to £32.4 million (2002 £28.6
million).



Earnings and dividend per share

Based on a weighted average of 413.1 million shares, adjusted earnings per share
before goodwill charges and integration costs were 10.5p, an increase of 22.1
per cent (2002 8.6p).  Basic earnings per share decreased by 6.1 per cent to
3.1p (2002 3.3p).  The board is recommending a final dividend of 2.05p
(2002 1.7p), giving a 15.4 per cent increase in total dividend for the year of
3.0p (2002 2.6p).



Associates

Income from associates rose to £0.6 million (2002 £0.2 million), due to the
inclusion of associates acquired with NFO.



Net debt, interest and cash flow

On 13 May 2003, TNS signed new banking facilities of £490 million in
anticipation of the acquisition of NFO.  Since the acquisition, the group has
steadily reduced debt, as it has benefited from strong cash flows and improved
working capital management, as well as favourable currency movements.  Net debt
as at 31 December 2003 was £367.7 million (2002 £204.8 million).



The net interest charge was £16.1 million (2002 £11.2 million).  Net interest
includes a finance charge representing the amortisation of bank facility
arrangement fees of £0.9 million, as well as an additional £0.7 million charge
for the write-off of arrangement fees for the previous facility.  It also
includes notional interest relating to deferred consideration on acquisitions of
£0.1 million (2002 £0.4 million).  Notional interest is not a cash item, but is
recognised in accordance with FRS 7.  The blended interest rate at the end of
the year was approximately 4.5 per cent and interest cover against EBITDA was
6.5x (2002 7.6x).



Net cash inflow from operating activities was £104.9 million (2002 £67.0
million).  Net cash outflow from acquisitions and disposals was £268.8 million
(2002 £19.4 million), which largely related to the consideration of $425 million
(£261 million) for NFO, of which $400 million (£245 million) was paid in cash on
completion.  TNS received £50.9 million of cash, net of expenses, in respect of
the placing of 39.1 million shares on 14 May 2003.



Effective tax rate

The group's effective tax rate before goodwill charges was 32.0 per cent (2002
31.5 per cent), reflecting the increase in profits generated from countries with
higher tax rates, following the acquisition of NFO.



Minority interests

Minority interests increased to £1.5 million (2002 £0.7 million), due to
improved profitability in Russia and the inclusion of minorities acquired with
NFO.



Capital expenditure

Total capital expenditure for 2003 amounted to £22.7 million (2002 £16.2
million).  The main category of asset expenditure was IT.



Goodwill

Goodwill additions in the year amounted to £242.9 million, of which £241.8
million arose on the acquisition
of NFO.



Pensions

Pension provisions provided in the balance sheet amount to £7.8 million (2002
£2.2 million).





Commenting on the benefits of the integration and future prospects, Chief
Executive Mike Kirkham said:



Progress of integration

"During 2003, TNS took a major step forward in achieving its strategic goals,
with the acquisition of NFO, which was completed in July.  The merger of NFO
with the TNS business is progressing well and to plan.  With the integration in
Asia and the US largely completed in 2003, we are now bringing together the two
businesses in Europe, under the TNS brand.  The integration is due to be
completed in 2004 and our focus is increasingly on realising the revenue
opportunities presented by the merger.



Cost synergies

"As indicated in the group's pre-close trading update issued in January,
operating cost synergies of approximately £2 million were achieved in 2003.  We
continue to believe that operating cost synergies in 2004 should amount to at
least £15 million, rising to £20 million in 2005 on an annualised basis.
Integration costs incurred in 2003 amounted to £9.0 million and we anticipate
incurring further costs of approximately £5 million in the current year.  The
operating cost synergies are being achieved in a number of areas, as discussed
below.



Data collection

"As part of our integration planning, we reviewed the data collection capacity
of the enlarged group and identified a number of opportunities.  In several
countries in Europe, North America and Asia we have either closed call centres
or are in the process of closing them.  In some cases, the work has been moved
to more cost-efficient facilities.  We have also taken advantage of the
increased levels of consumer research performed by the enlarged group to make
more effective use of our call centre assets.

"The reduction in call centres is also a reflection of the general industry
trend towards increased levels of interactive data collection.  Industry experts
believe that US online spending in 2003 increased by 24 per cent over the
previous year, with Europe up 15 per cent from a lower base.  We expect this
trend to continue.
In 2003, almost 70 per cent of our US access panel's turnover came from online
data collection, up from 44 per cent in 2002 and just 10 per cent in 1999.
Within the enlarged group we are successfully migrating previously outsourced
online projects on to our own access panel.  Online research allows us to
provide data and analysis more quickly and cost-effectively.  While this may
impact individual contract values, it is leading to an increase in the number of
projects being commissioned by clients and typically delivers higher margins
than conventional customised projects.



Data processing

"We are moving rapidly in the development of our data processing and IT support
facility in Hyderabad and will have more than doubled capacity by the middle of
this year.  Initially, this unit will handle work primarily for our businesses
in the UK and US.  We believe, however, that there is considerable potential to
migrate additional work to this facility from elsewhere in the group.  While we
will make significant cost savings, we are also of the view that we can achieve
higher quality standards by pooling these activities.



Combining offices and reducing corporate costs

"As we have brought entities together in Asia and North America, we have
released office space.  This process will continue in Europe during 2004.  The
timing of these synergies varies case by case, depending on the length of leases
and other related issues.  As part of the integration, we are combining back
office functions, such as finance, human resources and IT.  In North America, we
are moving to a shared services system and we are reviewing similar
opportunities for Northern and Southern Europe.  The activities previously
undertaken by the NFO corporate offices in the US and Europe have been absorbed
into our existing corporate structure.  We anticipate that the workforce for the
combined group will have declined by around 4 per cent at the end of 2004.  In
Europe, changes are being made in consultation with Works Councils.



Revenue synergies

"While the group has worked hard to achieve significant cost synergies, the main
reason for bringing NFO into the TNS group was to create a platform from which
we can grow.  We believe the enlarged group has the geographic scale, together
with the range and depth of expertise, to take full advantage of the current
developments in the market information industry.  These include the growing need
for consistent information on a global scale and the move by our clients to
rationalise supplier relationships.  Furthermore, the group is of a size that it
can invest in the appropriate technological and operational initiatives, such as
extending the use of internet panels for data collection.



"The integration has significantly strengthened the expertise and skills
available within the group.  Having brought together the best elements of the
two companies' Business Solutions, we now have what we believe to be the
strongest portfolio in our industry.  This provides support to our extensive
expertise in the key marketing issues: market segmentation, product development
and brand performance, advertising and communications evaluation, and
stakeholder management.  The combination of this stronger portfolio with TNS
sector expertise, as well as our increased geographic coverage, has already
resulted in a number of good contract wins.

"Clients are increasingly looking to partner with a small number of suppliers to
meet their market information needs.  In recognition of this trend, TNS is
putting added resource into its key account development, with these clients
expected to show higher revenue growth.



Outlook for the enlarged group

"The US market is showing signs of recovery, there are expectations of a modest
upturn in Europe and the positive environment in Asia Pacific is ongoing.  The
worldwide market for market information is therefore expected to continue its
gradual improvement during 2004 and industry commentators anticipate that it
will grow by around 3-4 per cent.



"We estimate that revenue for the enlarged group in 2003, on a pro forma basis,
including a full year of NFO under TNS accounting policies, would have been £954
million.  With respect to our performance in 2004, TNS expects to see continued
growth coming out of the US and Asia Pacific and gradual improvement in Europe.
The group overall is expected to achieve growth broadly in line with the market.




"We anticipate that our Consumer activities, incorporating consumer panels, the
US access panel and customised research, will show further growth during 2004.
The outlook for Media Intelligence is more positive than in 2003, with a
stronger order book going into 2004 and expectations of a pick-up in activity as
the year progresses.  TV and Radio Audience Measurement should continue its
steady growth.  The timing of recovery in Business Services is difficult to
predict, given the range of services included in this sector.  IT/Telecoms is
expected to achieve another year of good progress, although not at the level
seen in 2003, given the strong comparative.  With a new structure in place,
Healthcare should start to improve during
the year.



"The group's confidence in an improved performance in 2004 is supported by the
order book, which is ahead of the same time in 2003, as well as by the pick-up
in activity seen towards the end of 2003.



"Further improvement in margin performance is anticipated in 2004, as we benefit
from operating synergies relating to the integration of NFO and continue to
improve margins across our services.  We remain committed to investing in the
future of our business, particularly in the development of our access panel
operations.  Bringing these factors together, the group expects to show an
improvement in operating margin, before integration costs and goodwill, of
between 50 - 100 basis points in 2004.



"Looking beyond 2004, as we experience the full benefits of both cost and
revenue synergies, as well as the developments in which we are investing, we
believe that TNS will achieve turnover growth ahead of the market."


                         REVIEW OF OPERATING ACTIVITIES



TURNOVER



REGIONAL TURNOVER PERFORMANCE


                                             Year to 31 December                        Change
                                              2003            2002           Reported        Underlying
                                               £m               £m                  %                 %
UK                                          121.5            125.4               (3.1)              1.3
France                                      121.5            109.3               11.2               1.9
Rest of Europe                              196.3            178.9                9.7              (1.0)
Total Europe                                439.3            413.6                6.2               0.4
Americas                                    146.6            150.4               (2.5)              3.0
Asia Pacific                                 57.0             54.9                3.8               8.4
Original TNS total                          642.9            618.9                3.9               1.7
NFO contribution from 10 July               162.3                -
Group total                                 805.2            618.9



Note:  While separate commentary on turnover for each of the TNS and NFO
businesses has been provided, this is based on management information and
represents management's best estimates of the breakdown of revenue between the
businesses.



Regional commentary for original TNS business



UK

The UK delivered underlying revenue growth of 1.3 per cent for the full year, as
the group continued to consolidate its position as the leading provider of
consumer panel data in the UK, increasing business with existing clients and
successfully launching new products.  Consumer customised and Telecoms
activities also performed well, benefiting from the group's focus on major
accounts.  Overall performance in the UK, however, was held back by pressure on
international healthcare activities, caused by a significant reduction in new
product launches, and on Media Intelligence activities.  The generally weak
business environment impacted Business Services.  During the year the group
discontinued its direct sales marketing and promotions related activities in the
UK.



France

With a stronger performance in the second half, France achieved underlying
growth of 1.9 per cent for the full year.  Benefiting from new client wins,
Consumer Panels continued to grow and the group is expanding the size of its
household panel during 2004, from 8,000 to 12,000 households.  Underlying growth
in Healthcare resulted from a large biennial study and in IT from a focus on key
clients.  Media Intelligence remained under pressure in difficult markets and,
without election activity on the scale seen in 2002, Polling showed an
underlying decline year on year.


Rest of Europe

Turnover in the Rest of Europe declined on an underlying basis by 1.0 per cent,
although good growth was achieved in Spain and Russia.  Weak economic conditions
continued to impact custom activities in Northern Europe and Germany.



Americas

The Americas region as a whole grew by 3.0 per cent on an underlying basis.  The
group's custom business in the US achieved underlying growth of around 5 per
cent, again outperforming the market, which is thought to have remained flat in
2003.  Consumer customised and IT/Telecoms were the strongest areas, both
delivering double-digit growth.  Increased activity in these sectors was driven
by the strong combination of the group's key account focus and leading range of
Business Solutions, which are an important differentiating factor in winning
major contracts.  Cinema trailer tracking activities performed well during the
year, with good growth in the core business as well as from new services.
However, soft advertising markets in the US during the year adversely affected
other Media Intelligence activities.



Asia Pacific

Although the integration process impacted performance in Asia Pacific to some
degree during the second half, the region ended the year strongly and delivered
underlying growth of 8.4 per cent for the full year, benefiting in particular
from the group's strong position in China.


SECTOR TURNOVER PERFORMANCE


                                              Year to 31 December                     Change
                                              2003            2002          Reported         Underlying
                                               £m               £m                 %                  %
Consumer                                    209.2            187.8              11.4                6.7
Media                                       162.9            160.9               1.2                0.6
Business Services                            84.7             92.1              (8.0)              (7.1)
IT/Telecoms                                  74.2             69.8               6.3                7.2
Healthcare                                   47.1             47.3              (0.4)              (1.0)
Other activities                             64.8             61.0               6.2               (2.1)
Original TNS total                          642.9            618.9               3.9                1.7

NFO contribution from 10 July               162.3                -

Group total                                 805.2            618.9




Note:  While separate commentary on turnover for each of the TNS and NFO
businesses has been provided, this is based on management information and
represents management's best estimates of the breakdown of revenue between the
businesses.



Sector commentary for original TNS business



Consumer

Consumer turnover rose by 6.7 per cent on an underlying basis, as demand for
insights into consumer behaviour continues to increase.  Panels delivered good
growth in the UK and France, benefiting from an expanded range of products, new
client wins and increased volumes with key accounts.  Superpanel won contracts
with two new clients in food retailing, further strengthening its position in
the UK market.  The group's pan-regional sales approach and focus on key clients
drove strong growth in Asia Pacific.  Panel activities in Latin America were
strengthened by the acquisition of Data Advanced Research in August, which added
six countries to the regional panel.  The scope of TNS' panel coverage and the
ability to provide clients with information and analysis on an internationally
consistent basis, resulted in Unilever appointing the group as its preferred
supplier of consumer panel data globally.



Underlying growth in consumer customised activities was also strong during 2003,
particularly in the US. Performance improved in Europe, especially in the UK
following three large new contract wins with major international clients and in
Spain, driven by increased activity with key accounts.



Media

Media Intelligence activities showed slight underlying growth for the year.
Softness in advertising spend put pressure on advertising expenditure
measurement and editorial monitoring activities were impacted by the media's
focus on dominant news stories.  The sector started to show improvement towards
the end of 2003 and is expected to gain momentum during 2004, particularly in
the second half, in response to activity around the US Presidential Election and
the Olympic Games.  The group has invested in a number of new services in the
US, which should drive growth as advertising markets start to recover.
Investment has primarily focused on enhancement of data collection and delivery
capabilities, as well as diversification into new areas; for example, services
for the Hispanic market, an area where there is fast-growing interest from
advertisers.

The TV and Radio Audience Measurement sector achieved a number of successes
during the year, with contract extensions in Norway, Denmark and Israel.  The
group extended TV measurement to new cities in China and during 2004 plans
further expansion of the national panel.  The first commercial application of
Portable People Meter technology was launched in Belgium under licence from
Arbitron.  TNS has exclusive use of this technology for TV and radio measurement
in 28 countries.  Sales of InfoSysTV(TM), the value added audience analysis
system for TV and radio, continued to grow during the year, boosted by a
contract with the BBC.



Business Services

Business Services were under pressure during the year impacted by difficult
market conditions, particularly in Northern Europe and in the US.  France,
however, delivered a solid underlying improvement, benefiting from large
transport and energy contracts.  For the full year the sector showed an
underlying decline of 7.1 per cent.



IT/Telecoms

IT/Telecoms achieved underlying growth of 7.2 per cent in 2003.



Key account management, expertise in online research, the strength of the
group's global network and Business Solutions all helped to deliver good growth
in IT during the year, particularly in the US.  TNS' ability to provide insights
about branding and customer satisfaction is also helping to win new business, as
branding is becoming increasingly important for IT clients.  The group is making
good progress in other regions, in particular Asia Pacific.



Telecoms enjoyed a year of strong growth in 2003.  The group's focus on building
relationships with larger accounts helped to drive increased volumes in the US,
UK and the Netherlands.  TNS was also successful in securing a number of major
new clients during the year.  Growth in Asia Pacific was boosted by the launch
of new syndicated services: a 3G monitor and the Asia Pacific Telecoms index.



Healthcare

After a weak start to the year, the Healthcare sector performed more strongly in
the second half, showing an underlying decline of 1.0 per cent for the full
year.  The main factor impacting performance was the slowdown in international
new product development work, caused by a reduction in drug approvals by the
FDA.  However, the group made good progress in developing its services in local
markets.  In the UK, the domestic business continued to grow as a result of the
focus on syndicated tracking services, such as transact, which won a number of
new clients.  Sales of healthcare monitors in Spain also increased steadily.
Healthcare activities in the US domestic market delivered a solid second half
performance.




Other activities

Boosted by the renewal of a major customer satisfaction tracking study in France
and a new client win in Germany in the second half, Automotive achieved a modest
underlying improvement for the full year.  In February 2004, the Automotive
sector was strengthened by the acquisition of a majority interest in the leading
provider of automotive research in Spain, Area Investigacion SA.



Despite a strong performance in Asia Pacific, the Polling sector showed a small
underlying decline year on year, against the strong 2002 comparative, which
reflected significant election related activity in a number of countries.



Commentary on NFO

Many of the market related factors that impacted the custom activities of the
original TNS business during the year, discussed in the regional and sector
commentary above, similarly affected NFO's business during 2003.



NFO's post-acquisition contribution to revenue was £162 million on a completion
accounting basis, in line with TNS accounting policies.



The US access panel business achieved good growth during the year, driven by its
focus on key client relationships, as well as further expansion of online
research.  In difficult market conditions, the US healthcare business was under
pressure, having been significantly weakened in the first half, during the
prolonged disposal process, by the loss of a number of key sales personnel who
were not replaced.  The business has been integrated with TNS' healthcare
activities, which are being restructured under the leadership of a new global
head of Healthcare.



NFO's performance in Europe was flat, impacted by weakness in certain markets.
The integration process affected Asia Pacific but, with the integration almost
complete by the end of the year, the enlarged group began to realise the value
creating opportunities of the merger.




GROUP PROFIT AND LOSS ACCOUNT

For the year ended 31 December

                                                                                                             
                                                                                              2003           2002
                                                                               Notes            £m    restated £m       
       
                                                                                                               

Turnover - continuing activities*                                                            805.2          618.9
Less share of joint ventures                                                                 (15.7)         (15.7)
Turnover excluding joint ventures                                                  2         789.5          603.2

Cost of sales                                                                               (275.6)        (212.3)

Gross profit                                                                                 513.9          390.9
Administrative expenses                                                                     (459.2)        (352.6)
Integration costs                                                                             (9.0)             -
                                                                                            (468.2)        (352.6)
Operating profit before joint ventures and associates
Continuing activities (after goodwill charges of £23.3m, 2002 £19.6m)              2          45.7           38.3
Share of operating profit of joint ventures (after goodwill charges of                         2.2            1.3
£0.6m, 2002 £0.6m)

Operating profit including joint ventures before goodwill charges and              2
integration costs                                                                             80.8           59.8
Integration costs                                                                             (9.0)             -
Goodwill charges                                                                             (23.9)         (20.2)

Operating profit including joint ventures                                          2          47.9           39.6
Share of operating profit of associates                                                        0.6            0.2

Profit on ordinary activities before interest and taxation                                    48.5           39.8
Interest receivable and similar income                                                         1.2            0.8
Interest payable                                                                             (15.6)         (11.3)
Other finance charges                                                                         (1.7)          (0.7)

Profit on ordinary activities before taxation                                                 32.4           28.6
Taxation on profit on ordinary activities                                                    (18.0)         (15.5)

Profit on ordinary activities after taxation                                                  14.4           13.1
Minority interests                                                                            (1.5)          (0.7)

Profit for the year                                                                           12.9           12.4
Dividends                                                                                    (13.1)         (10.0)

Retained (loss)/profit for the year                                                           (0.2)           2.4

Adjusted earnings per share before goodwill charges and
integration costs                                                                  3          10.5p           8.6p

Basic earnings per share                                                           3           3.1p           3.3p

Diluted earnings per share                                                         3           3.1p           3.2p

Dividend per share                                                                             3.0p           2.6p



There is no difference between the profit on ordinary activities before taxation
and the retained (loss)/profit for the year stated above, and their historical
cost equivalents.



*On 10 July 2003, the group acquired NFO WorldGroup, Inc. (NFO).  Given the
extent of integration that had occurred by the end of 2003, it is not possible
to accurately identify turnover and operating profit relating to the acquired
business separately from the existing TNS business. For this reason, the results
of NFO have been included within continuing activities.

GROUP BALANCE SHEET

At 31 December
                                                                                                             2002
                                                                                              2003       restated
                                                                                                £m             £m
Fixed assets
Intangible assets                                                                            371.1          178.6
Tangible assets                                                                               81.0           56.1
Investments
     Share of gross assets of joint ventures                                                  24.6           22.3
     Share of gross liabilities of joint ventures                                             (4.6)          (3.7)
                                                                                              20.0           18.6
     Associates                                                                                7.1            0.9
     Other investments                                                                         5.5            8.3
                                                                                              32.6           27.8
                                                                                             484.7          262.5
Current assets
Stock                                                                                         64.5           28.8
Debtors                                                                                      265.0          159.3
Current asset investments                                                                      0.9              -
Cash at bank and in hand                                                                      32.2           35.6
                                                                                             362.6          223.7

Creditors:  amounts falling due within one year                                             (426.4)        (228.4)

Net current liabilities                                                                      (63.8)         (4.7)

Total assets less current liabilities                                                        420.9          257.8
Creditors:  amounts falling due after more than one year                                    (294.3)        (202.5)
Provisions for liabilities and charges                                                       (44.7)         (23.6)

Net assets                                                                                    81.9           31.7

Capital and reserves
Called up share capital                                                                       22.2           19.6
Share premium                                                                                120.0          105.3
Other reserves                                                                                 1.4            1.2
Profit and loss account                                                                      (68.6)         (99.7)

Equity shareholders' funds                                                                    75.0           26.4
Minority interests                                                                             6.9            5.3

                                                                                              81.9           31.7




GROUP CASH FLOW STATEMENT

For the year ended 31 December
                                                                                              2003           2002
                                                                               Notes            £m             £m       
       
Cash flow from operating activities
Net cash inflow from continuing operating activities                               4         104.9           67.0

Dividends received from joint ventures and associates                                          3.5            0.1
Returns on investments and servicing of finance
Interest received                                                                              1.1            0.9
Interest paid                                                                                (13.1)         (10.7)
Capitalised arrangement fees                                                                  (5.6)             -
Dividends paid to minority interests                                                          (0.9)          (0.4)

Net cash outflow from returns on investments and servicing of finance                        (18.7)         (10.2)

Taxation
Taxation paid                                                                                (19.4)         (15.3)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                                            (22.7)         (16.2)
Purchase of investments                                                                          -           (0.1)
Purchase of own shares                                                                           -           (2.2)
Sale of tangible fixed assets                                                                  4.4            1.0

Net cash outflow from capital expenditure and financial investment                           (18.3)         (17.5)

Acquisitions and disposals
Purchase of subsidiary undertakings                                                4        (279.8)          (5.9)
Purchase of businesses                                                             4             -          (13.6)
Net cash acquired with subsidiary undertakings and businesses                      4          10.9            0.2
Purchase of joint ventures and associates                                                        -           (0.2)
Sale of subsidiary undertakings and businesses                                                 0.3              -
Sale of joint ventures                                                                           -            0.1
Net cash disposed of on sale of business                                                      (0.2)             -


Net cash outflow from acquisitions and disposals                                            (268.8)         (19.4)

Equity dividends paid                                                                        (10.7)          (9.5)

Cash outflow before financing                                                               (227.3)          (4.8)
Financing
Issue of shares                                                                               52.0              -
Proceeds on exercise of share options                                                          2.9            3.8
Expenses arising on the issue of shares                                                       (1.1)             -
Increase in debt                                                                   4         170.5           12.5

(Decrease)/Increase in cash in the year                                            4          (3.0)          11.5


STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

For the year ended 31 December
                                                                                                             2002
                                                                                              2003       restated
                                                                                                £m             £m
                                                                                                               
Profit for the year                                                                           12.9           12.4
Amounts arising on the exercise of share options                                               0.2            0.3
Disposal of goodwill in reserves                                                               0.7              -
Translation differences on foreign currency net investments less translation                 (19.4)          (7.3)
differences on foreign currency loans taken out to fund those investments
Tax on gains on foreign currency borrowings hedging foreign investments                          -            0.7
Profit on redemption of shares following placement of share capital                           50.0              -
Total recognised gains and losses relating to the year                                        44.4            6.1
Prior year adjustment (note 1)                                                                (9.2)

Total gains and losses since last annual report                                               35.2















RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS

For the year ended 31 December
                                                                                                             2002
                                                                                              2003       restated
                                                                                                £m             £m
                                                                                                               
Profit for the year                                                                           12.9           12.4
Dividends                                                                                    (13.1)         (10.0)
                                                                                              (0.2)           2.4
Amounts deducted in respect of shares issued to a qualifying employee share
ownership trust                                                                                  -           (1.1)
Amounts arising on the exercise of share options                                               0.2            0.3
Disposal of goodwill in reserves                                                               0.7              -
Translation differences on foreign currency net investments less translation
differences on foreign currency loans taken out to fund those investments (net of            (19.4)          (6.6)
taxation)
Profit on redemption of shares following placement of share capital                           50.0              -
New share capital issued (including share premium) net of expenses                            17.3            2.7

Net addition/(reduction) to equity shareholders' funds                                        48.6           (2.3)
Opening equity shareholders' funds as previously reported                                     35.6           37.9
Prior year adjustment (note 1)                                                                (9.2)          (9.2)
Opening equity shareholders' funds as restated                                                26.4           28.7

Closing equity shareholders' funds                                                            75.0           26.4






1         Accounting policies

Basis of accounting

The financial statements have been prepared under the historical cost convention
in accordance with the Companies Act 1985 and applicable UK Accounting
Standards.  Application note G to FRS 5 'Reporting the substance of
transactions' which deals specifically with revenue recognition, was issued in
November 2003 and is applicable to the year ended 31 December 2003.  This has
resulted in a change to the accounting policy for revenue recognition for the
Media Intelligence businesses, with revenue for products being recognised on
delivery to the client rather than in line with data collection activities.
Accordingly, the 2002 results have been restated and a prior year adjustment has
been made, increasing payments received on account and reducing reserves by
£9.2m as at 1 January 2002.  The impact on the 2002 revenue and operating profit
is nil.  The impact of this change in 2003 has been to increase revenue and
operating profit by £0.9m.



2         Geographic analysis

In the opinion of the directors, the group has only one class of business, which
is the provision of market information services.



On 10 July 2003, the group acquired NFO WorldGroup, Inc. (NFO).  Given the
extent of integration that had occurred by the end of 2003, it has been
increasingly difficult to isolate the results for the original TNS and NFO
businesses, particularly with respect to costs. Consequently it is not possible
to give operating profit numbers for the original businesses.  For this reason,
the results of NFO have been included within continuing activities.  An
indication of the level of turnover attributable to NFO since the acquisition is
£162m.  Other acquisitions have contributed £2.3m to turnover and £0.3m to
operating profit before goodwill charges and integration costs.


                                                                                                      2002
                                                                                   2003           restated
Turnover - continuing activities                                                     £m                 £m
                                                                                                        
Sales by origin
Europe and Middle East
   - group                                                                        526.5              411.4
   - joint ventures                                                                 1.8                2.2
Americas
   - group                                                                        204.8              148.8
   - joint ventures                                                                 2.0                1.6
Asia Pacific
   - group                                                                         58.2               43.0
   - joint ventures                                                                11.9               11.9
Total                                                                             805.2              618.9
   - group                                                                        789.5              603.2
   - joint ventures                                                                15.7               15.7

Sales by destination
Europe and Middle East
   - group                                                                        515.1              393.3
   - joint ventures                                                                 1.8                2.2
Americas
   - group                                                                        216.7              165.8
   - joint ventures                                                                 2.0                1.6
Asia Pacific
   - group                                                                         57.7               44.1
   - joint ventures                                                                11.9               11.9
Total                                                                             805.2              618.9
   - group                                                                        789.5              603.2
   - joint ventures                                                                15.7               15.7

Intra-group turnover between geographic segments is not considered material.
                                                                                                   2002
                                                                               2003            restated
                                                                                 £m                  £m
Operating profit before goodwill charges and integration costs

Europe and Middle East
   - group                                                                     47.7                40.5
   - joint ventures                                                             0.3                 0.1
Americas
   - group                                                                     29.0                16.4
   - joint ventures                                                             0.1                   -
Asia Pacific
   - group                                                                      1.3                 1.0
   - joint ventures                                                             2.4                 1.8
Total                                                                          80.8                59.8
   - group                                                                     78.0                57.9
   - joint ventures                                                             2.8                 1.9

Profit on ordinary activities
before taxation
Europe and Middle East
   - group                                                                     28.0                32.5
   - joint ventures                                                             0.3                 0.1
Americas
   - group                                                                     17.9                 5.0
   - joint ventures                                                               -                (0.2)
Asia Pacific
   - group                                                                     (0.2)                0.8
   - joint ventures                                                             1.9                 1.4
Operating profit including joint ventures                                      47.9                39.6
   - group                                                                     45.7                38.3
   - joint ventures                                                             2.2                 1.3
Share of operating profit of associates                                         0.6                 0.2
                                                                                                    
Interest receivable                                                             1.2                 0.8
Interest payable and other finance charges                                    (17.3)              (12.0)
                                                                               32.4                28.6



                                                                                                      2002
                                                                                    2003          restated
                                                                                      £m                £m
Net assets
Europe and Middle East
   - group                                                                         51.2               29.1
   - joint ventures                                                                 0.5                0.4
Americas
   - group                                                                         25.9               (2.3)
   - joint ventures                                                                 3.1                2.8
Asia Pacific
   - group                                                                         (2.0)              (0.9)
   - joint ventures                                                                16.4               15.4
Net operating assets                                                               95.1               44.5
   - group                                                                         75.1               25.9
   - joint ventures                                                                20.0               18.6
                                                                                   
Unallocated amounts:
Current and deferred
taxation                                                                           (4.2)              (6.2)
Dividends payable                                                                  (9.0)              (6.6)
Net assets                                                                         81.9               31.7



The net assets for 2002 have been restated due to a change in accounting policy
for revenue recognition (see note 1). This has resulted in a reduction in net
assets of £9.2m, £4.0m of which is in Europe and £5.2m in the Americas.




3         Earnings per share



Basic earnings per share have been calculated on the profit after taxation and
minority interests of £12.9m (2002 £12.4m) and on 413.1 million shares (2002
380.6 million), being the weighted average number of shares in issue during the
year, excluding those held in the ESOP and the EBT, which are treated as
cancelled.  The diluted earnings per share have been calculated in accordance
with the provisions of FRS 14, with the weighted average number of shares in
issue being adjusted to assume conversion of all potentially dilutive shares for
the period they were outstanding.  Shares held by the ESOP and the EBT, which
are under performance-based options, are included in the diluted weighted
average number of shares as the performance conditions are deemed to have been
met for the purposes of this calculation.  The diluted weighted average number
of shares is 419.0 million (2002 386.6 million).



Adjusted earnings per share before goodwill charges and integration costs have
been calculated on the profit after taxation and minority interests of £43.5m
(2002 £32.6m), which excludes goodwill charges of £23.9m (2002 £20.2m) and
integration costs of £6.4m net of tax, and on the basic weighted average number
of shares.  The directors believe that earnings per share before goodwill
charges and integration costs assists in understanding the underlying
performance of the group.



The weighted average number of ordinary shares in issue during the year for the
purpose of these calculations is as follows:


                                                                                   2003               2002
Weighted average number of shares (millions)
Share capital                                                                     421.6              390.4
Shares held by ESOP                                                                (1.9)              (2.6)
Shares held by EBT                                                                 (6.6)              (7.2)
Basic earnings per share denominator                                              413.1              380.6

Dilutive effect of share options                                                    5.9                6.0
Dilutive earnings per share denominator                                           419.0              386.6


4         Consolidated statement of cash flow

Reconciliation of operating profit to net cash inflow from operating activities


                                                                             2003              2002
                                                                               £m                £m
Operating profit                                                             45.7              38.3
Amortisation and impairment of intangible fixed assets                       23.8              20.0
Depreciation of tangible fixed assets                                        22.5              19.3
Profit on sale of fixed assets                                               (1.2)             (0.3)
Decrease in stock - work-in-progress                                          8.5               6.1
(Increase) in debtors                                                       (16.5)            (12.5)
Increase/(decrease) in creditors                                             20.0              (4.4)
Increase in provisions                                                        2.1               0.5
Net cash inflow from continuing operating activities                        104.9              67.0




Operating cashflows from continuing activities include an outflow of £5.5m
relating to integration costs of £9.0m.



Reconciliation of net cash flow to movement in net debt


                                                                                               2003
                                                                                                 £m
Decrease in cash in the year                                                                  (3.0)
Cash inflow from increase in debt                                                           (170.5)
Change in net debt resulting from cash flows                                                (173.5)
Translation difference                                                                         9.2
Non-cash movement                                                                             (1.7)
Capitalised arrangement fees                                                                   5.6
Loans and finance leases acquired                                                             (2.5)
Movement in net debt in the year                                                            (162.9)
Net debt at 1 January 2003                                                                  (204.8)
Net debt at 31 December 2003                                                                (367.7)








Analysis of net debt


                        At 1 Jan                   Exchange                       Non-cash    At 31 Dec
                            2003     Cash flow     movement    Acquisitions      movements         2003                 
                              £m            £m           £m              £m             £m           £m                 
                          
                                            
Cash at bank and in
hand                        35.6        (14.3)        (0.4)             11.3            -         32.2
Loans repayable
within 1 year              (40.8)       (68.3)         3.5              (1.4)           -       (107.0)
Loans repayable
after more than 1
year                      (199.6)       (96.6)         6.0                 -         (1.7)      (291.9)
Obligations under
finance leases                 -            -          0.1              (1.1)           -         (1.0)
                          (204.8)      (179.2)         9.2               8.8         (1.7)      (367.7)



The net non-cash movement represents the amortisation of arrangement fees.



Analysis of the net cash outflow in respect of the purchase of subsidiary
undertakings and businesses


                                                                                                    2003

                                                                                                      £m
Cash consideration
   prior year acquisitions                                                                         (14.0)
   2003 acquisitions including £2.2m recoverable                                                  (265.8)
                                                                                                  (279.8)
Net cash acquired                                                                                   10.9
Net cash outflow in respect of the purchase of subsidiary undertakings and businesses             (268.9)
                                                                                                  




5                                 Financial Information

The preliminary results were approved by the board on 8 March 2004.  The
financial information contained in this announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2002, together with an
unqualified auditors' report thereon, have been delivered to the Registrar of
Companies.  Statutory accounts for the year ended 31 December 2003 have not yet
been delivered to the Registrar of Companies.  The group's annual report and
accounts for 2003 will be delivered to shareholders in early April and will be
filed with the Registrar of Companies, together with an unqualified auditors'
report thereon, following the annual general meeting.  It will be available
electronically from the Investor Centre of the group's website at
www.tns-global.com in early April.





Additional information



Subject to approval by shareholders at the annual general meeting on Wednesday
12 May 2004, the final dividend will be paid on 5 July 2004 to shareholders on
the register on 28 May 2004.



Copies of this release are available from the Head of Investor Relations, Taylor
Nelson Sofres plc, Westgate, London W5 1UA.  Email:  Janis.Parks@tns-global.com.
It can also be found in the Investor Centre of the group's website at
www.tns-global.com.






                      This information is provided by RNS
            The company news service from the London Stock Exchange