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Taylor Nelson Sofres (TNS)

  Print      Mail a friend       Annual reports

Monday 04 September, 2006

Taylor Nelson Sofres

Interim Results

Taylor Nelson Sofres PLC
04 September 2006


Press information for release at 07.00                          4 September 2006



                             Taylor Nelson Sofres plc


         Unaudited interim results for the six months ended 30 June 2006


Highlights

• Majority of business performing well; results impacted by US custom

• Underlying revenue growth 3.0%; adjusted operating margin 8.7%

• US custom business restructured in line with group strategy to drive
  growth

• Operational review outside US confirms significant cost savings

• Net debt £287.2m (December 2005 £295.4m; June 2005 £342.9m)

• £100m share buy back over next 18 months

• Interim dividend increased by 12%

• Full year outlook remains unchanged from July trading update

-----------------------             ----------       ----------       ----------
Business performance*                   2006             2005           Change %

Revenue                               £480.5m          £460.0m             4.5

Adjusted operating profit              £41.7m           £41.8m            (0.2)

Adjusted operating margin                8.7%             9.1%

Adjusted profit before tax             £34.1m           £34.1m               -

Adjusted earnings per share              4.9p             5.0p            (2.0)

Interim dividend per share               1.4p            1.25p            12.0

Statutory results

Operating profit                       £37.6m           £41.4m            (9.2)

Profit before tax                      £30.0m           £33.7m           (11.0)

Earnings per share                       3.9p             4.6p           (15.2)
-----------------------             ----------       ----------       ----------

*Adjusted results exclude amortisation of acquired intangible assets and
restructuring costs. Adjusted earnings per share are also shown before deferred 
tax on goodwill. Underlying revenue is defined on page 7.

Chief Executive, David Lowden, said:

"In the first half, TNS continued to perform particularly well across its three
syndicated services and in Asia Pacific, Latin America and MEA. The group
recorded a steady performance in its European custom business but a decline in
US custom has held back overall revenue growth and impacted group operating
margin, despite good margin performance elsewhere. Excluding US custom, the rest
of the group achieved organic revenue growth of almost 6 per cent.

"There has been a lot of change in the past six months. We have taken action
where required and we are accelerating the implementation of our strategy right
across the group. The 12 per cent increase in the interim dividend reflects the
board's confidence in this strategy and in the future prospects of the
business."

On 4 September, all enquiries to +44 (0)20 7404 5959

Thereafter:

David Lowden, Chief Executive                               +44 (0)20 8967 4950

Andy Boland, Finance Director                               +44 (0)20 8967 4950

Janis Parks, Head of Investor Relations                     +44 (0)20 8967 1584

Lucie Ann Brailsford/Ash Spiegelberg, Brunswick             +44 (0)20 7404 5959


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

A webcast of the results presentation made to analysts will be broadcast live on
the Investors section of the group's website, at www.tns-global.com, from 9.00am
on Monday 4 September 2006.

An interview with David Lowden, CEO is available in video, audio and text on

www.tns-global.com and www.cantos.com.


Note to editors


About TNS


TNS is a market information group:

   •The world's largest provider of custom research and analysis
   •A leader in political and social polling
   •A major supplier of consumer panel, media intelligence and internet,TV
    and radio audience measurement services.


TNS operates across a global network in over 70 countries, allowing us to
provide internationally consistent, up-to-the-minute and high quality
information and analysis.

The group's employees deliver innovative thinking and excellent service to local
and multi-national clients worldwide. In the custom business, they combine
in-depth sector knowledge with expertise in the areas of new product
development, positioning and segmentation research, brand and advertising
research and stakeholder management.

TNS' strategic goal is to be recognised as the global leader in delivering value
added information and insights that help our clients to make more effective
decisions.

TNS is the sixth sense of business.


www.tns-global.com


CHIEF EXECUTIVE'S STATEMENT


First half results

TNS continued to perform particularly well across its three syndicated services
and in Asia Pacific, Latin America and MEA. The group recorded a steady
performance in its European custom business but a decline in US custom has held
back organic revenue growth to 3.0 per cent. It has also resulted in a fall in
adjusted operating margin to 8.7 per cent, despite good margin performance
elsewhere in the group. The board remains confident about the future prospects
for the group and, accordingly, has declared an interim dividend of 1.4 pence,
an increase of 12.0 per cent.


Turning round US custom business

Action has been taken to improve our performance in US custom which, as
announced in July, has had a significant impact on the group revenue and margin
outlook for the full year. Although there have been some specific revenue
losses, we believe that the US custom business has not had the appropriate
service offering and cost structure to meet clients' needs in today's market. In
May, we appointed a new President of TNS North America, Kimberly Till, who has
restructured the organisation to address these issues. She is also speeding up
the implementation in the US of the TNS strategy, which focuses on orientation
around global clients and sectors, service excellence and cost efficiency,
innovation and expertise, and people development. We anticipate that these
actions will deliver a return to growth during 2007.


The actions address three key areas:

Management and organisation

A simpler, more streamlined organisational structure has been introduced and
headcount has already been reduced to align costs with revenue projections. A
new management team has been put in place and additional talent is being
recruited with the skills and expertise required to execute our strategy.

Review of business processes

A detailed review is underway to introduce new processes that will enable the
business to strengthen client relationships, respond more quickly to client
needs and operate on a more profitable basis.

Orientation to faster growth segments of the market

Reliance on the consumer sector is being reduced by placing additional resource
into higher growth segments of the market. At the same time, extra resource is
being allocated to the sale of added-value services, using the TNS expertise in
key research areas and based on our portfolio of proprietary Business Solutions.

Strong custom research network in Europe and developing markets

TNS continues to make good progress in the rest of its custom business, where it
has well established and highly regarded businesses, with strong management and
a high proportion of added-value services. These businesses have leading
positions in markets that differ quite significantly from the US. One specific
area of difference is the slower pace of transition, outside the US, to the use
of internet in data collection, due mainly to the greater prevalence of
face-to-face interviewing, which does not transition easily to the internet.
TNS continues to build its online access panels in line with market development,
as part of its strategic focus on achieving efficient and consistent data
production and analysis.


While the consumer and automotive markets in Europe remain challenging,
additional emphasis is being placed on building the faster-growing specialist
sectors of Technology, Financial Services, Media, Healthcare and Polling &
Social. Our performance in the developing markets, especially Asia, is
outstanding, as we take the group's added-value services into these growth
markets and use our regional support services to service an increasing number of
pan-regional contracts.


Good performance in syndicated services

The group's three syndicated services: TNS Worldpanel, TNS Media Intelligence
and iTRAM, continue to perform very well, benefiting from the investments made
into these businesses over recent years.


TNS Worldpanel is seeing fastest growth in those countries that have invested in
increasing the size of existing consumer panels and introducing new services.
Innovation and excellent client service help the business to build on its strong
competitive position.


TNS Media Intelligence has also introduced a number of new services and expanded
its activities in all its major markets. In the US, where TNS is the leading
provider of strategic advertising intelligence, there has been a continued focus
on upgrading monitoring technology and products. Developments include the launch
of Creative Services - the first all-digital advertisement identification and
retrieval service in the US, which uses automated ad pattern recognition to
identify, capture, store and deliver the highest quality TV, radio, internet and
print creative.


iTRAM, a leading provider of internet, TV and radio audience measurement
services, has had a very successful first half, with a number of contract wins.
We are making good progress in measuring audiences for digital TV and recently
signed a contract with Charter TV, to launch a video audience measurement
service in the Los Angeles area.


In the UK, Sky has started to use the data gained from the panel we run for
them, to give advertisers insights into the effectiveness of interactive
advertising. Also in the UK, TNS has won the contract to manage an electronic
measurement panel for RAJAR and BARB, while in Norway we have launched the
world's first official electronic radio audience measurement panel.


Implementation of strategy

In the past six months, we have made good progress with our strategic
initiatives. Our focus on 13 global partnership accounts, which represent around
14 per cent of group custom revenue, should allow us to take an increasing
proportion of the research spend among these major multi-nationals, particularly
as we improve our processes for delivering multi-country projects.


We are placing an increased emphasis on innovation to deliver growth. This
includes the continued development of our Areas of Expertise. In response to the
growing demand for predictive market research, we have purchased a new tool,
FutureView, which measures and classifies consumers according to how 'future
influential' they are, providing clients with insights to help shape new product
and service developments. Two of the challenges being faced by our clients are
the pressure on the consumer sector in the US and Europe, and media
fragmentation. The introduction of new, added-value services to help our clients
to address these significant issues should contribute to future revenue growth
for TNS.


Investing for faster growth

There is potential to achieve faster rates of growth across the custom business,
through investment into a more aggressive implementation of group strategy. In
order to create the resource to fund these investments, and to meet client
demand for cost-effective data collection and analysis, we have undertaken a
review of our group-wide operating structure.


This review has focused on cost efficiency initiatives in key markets,
particularly the custom research business in Europe. The actions to be taken
will accelerate initiatives in off-shoring, rationalisation of telephone
interviewing and building internet access panels. In addition, there is scope to
deliver client services more efficiently and to rationalise the group's property
portfolio in major cities.


Outside the US, we can confirm expected annualised cost savings of around £10
million, which will be achieved progressively through 2007. Restructuring costs
are expected to be approximately £10 million, the majority of which will be
recognised in 2006.


The reorganisation in the US is expected to deliver annualised gross savings
estimated at £10 million.
The associated one-off cost of around £8 million will be incurred in 2006.
Approximately £4 to £5 million of the savings are expected to be reinvested in
the talent, products and services required to meet clients' demand for
added-value services and return the business to required rates of revenue growth
and profitability.


Following the operational review, the group intends to combine its streamlined
operations into a global operations structure, to drive ongoing cost
efficiencies and service excellence.


Ahead of this review, we have recently sold French company LH2 to its
management. This business did not have the potential to develop in line with
group strategy of focusing on added-value services.


Efficient capital structure to support strategic objectives

A share buy back will commence shortly, in order to maintain the most efficient
capital structure for our strongly cash generative business, while at the same
time retaining the financial flexibility to invest in organic development and
bolt-on acquisitions that support the group's strategic goals. This open market
programme will be used to buy back shares up to a value of £100 million, over a
period of approximately 18 months.

Full year outlook unchanged

A similar level of revenue growth is anticipated for the group in the second
half as achieved in H1. As in previous years, the proportion of orders secured
at the end of July represented over 80 per cent of our internal forecast for the
year, supporting our outlook. Europe is expected to maintain its steady revenue
performance and Asia Pacific to continue to achieve strong growth. Visibility
for the US custom business is more limited.


The results of the cost reduction measures taken in the US custom business are
not expected to show through fully until 2007 and that business' profitability
in the current year remains sensitive to small changes in revenue. Despite good
margin performance elsewhere in the group, therefore, and as outlined in July,
it is possible that group operating margin, before exceptional costs, could
decline by more than one per cent for full year 2006. Actions taken should lead
to operating margin recovery in 2007.





FINANCIAL REVIEW


Revenue

Reported revenue increased by 4.5 per cent to £480.5 million (2005 £460.0
million). Foreign exchange movements had a 2.0 per cent positive impact on
reported revenue. At constant exchange rates and after taking into account the
impact of acquisitions and disposals, the group increased underlying revenue by
3.0 per cent.


Calculation of underlying growth

The group's calculation of underlying revenue growth remains consistent with
that published in 2005.
Underlying revenue growth is calculated by taking the increase in 2006 revenue
over 2005 pro forma revenue, at constant exchange rates. The pro forma revenue
assumes that any acquisitions were owned, and discontinued operations excluded,
for the comparable period in the prior year.


Definition of adjusted results

To assist understanding of the underlying performance of the business, operating
profit, profit before tax and earnings per share have been disclosed on an
adjusted basis. Adjusted operating profit excludes amortisation of acquired
intangible assets and restructuring costs. Adjusted earnings per share also
excludes deferred tax on goodwill (see Taxation below).


Operating profit and margin

Adjusted operating profit decreased by 0.2 per cent to £41.7 million (2005 £41.8
million). Despite good margin performance elsewhere in the group, adjusted
operating margin was 8.7 per cent, down from 9.1 per cent in the first six
months of 2005, reflecting the under performance in the US custom business.
Reported operating profit, after restructuring costs, declined by 9.2 per cent
to £37.6 million, (2005 £41.4 million).


Share based payments

The charge for share based payments only applies to options granted on or after
7 November 2002. In the first half of 2006, the charge was £2.3 million (2005
£1.8 million). For the full year it is expected that the charge will be
approximately £6.0 million (2005 £4.5 million).


Amortisation of intangible assets

The charge for amortisation of intangible assets is £0.4 million (2005 £0.4
million). In accordance with its accounting policies, the group will conduct a
goodwill impairment review in preparation of its financial statements for the
full year.


Restructuring costs

Restructuring costs for the group totalled £3.7 million in the first six months,
consisting primarily of serverance costs in the US custom business. The group
estimates that total restructuring costs will be approximately
£18.0 million, of which approximately £16.0 million will be taken in 2006.



Interest

Despite interest rate increases in major markets such as the US, the net
interest charge showed a modest reduction to £7.8 million (2005 £7.9 million),
reflecting reduced debt levels. Interest cover against EBITDA, excluding other
finance charges, was 9.0x (2005 7.9x). Interest cover is calculated on net
interest expense of £14.8 million (excluding other finance charges) and EBITDA
of £132.5 million for the 12 months ended
30 June 2006.


Associates

Income from associates was £0.2 million, in line with the previous year.


Profit before tax

Adjusted profit before tax was flat at £34.1 million (2005 £34.1 million).
Reported profit before tax declined by 11.0 per cent to £30.0 million (2005
£33.7 million), after restructuring costs.


Taxation

Excluding deferred tax on goodwill, the tax charge for the first six months of
2006 was £9.5 million, representing an underlying tax rate of 31.5 per cent
(2005 31.5 per cent). Under IFRS, where goodwill is deductible against tax, a
deferred tax liability is recognised, even if such a liability would only unwind
on the eventual sale or impairment of the business in question. This has led to
a charge for deductible goodwill of £1.6 million in the first half. Including
this charge, the total reported tax charge is £11.1 million.


Minority interests

Minority interests increased to £1.5 million (2005 £1.2 million) due to the
improved performance in Russia and the inclusion of TNS Interscience in Brazil,
acquired in March 2005, for the whole of the reporting period.


Earnings and dividend per share

Based on a weighted average of 445.3 million shares, adjusted earnings per share
were 4.9 pence (2005 5.0 pence), a decline of 2.0 per cent. Basic earnings per
share were 3.9 pence (2005 4.6 pence).
See note 3.


The board remains confident about the future prospects for the group and
accordingly has declared an increase of 12.0 per cent in the interim dividend,
to 1.4 pence (2005 1.25 pence). Dividend cover remains strong with the interim
dividend covered by over three times adjusted EPS. The dividend will be paid on
11 December 2006 to shareholders on the register on 10 November 2006.


Cash flow and net debt

Net debt at 30 June 2006 was £287.2 million compared with £295.4 million at 31
December 2005 and
£342.9 million at 30 June 2005.



The movement in working capital generated a net outflow of £29.6 million (2005
£33.1 million) in the first half. Based on the usual seasonal movement in
working capital, this outflow is broadly expected to reverse in the second half.
Operating cash flow was £23.9 million (2005 £21.3 million). Net capital
expenditure was
£12.6 million (2005 £8.5 million). Net debt to EBITDA at 30 June 2006 was 2.2x,
based on adjusted EBITDA of £132.5 million.


Share buy back

As announced in July, in order to maintain an efficient capital structure, the
group will shortly commence a programme to return cash to shareholders via a
share buy back of £100 million on the open market.
It is anticipated that the group will buy back these shares over an 18 month
period.



REVIEW OF OPERATING ACTIVITIES

Regional revenue performance

                        6 months to 30 June                   Change
                          2006           2005        Reported        Underlying
                           £m             £m                %                 %
                       ------------------------     ----------------------------
UK                       71.4           69.6           2.6                 2.1
France                   77.1           73.7           4.6                 7.5
Rest of Europe          169.3          162.7           4.1                 3.8
                       --------        -------
Europe                  317.8          306.0           3.9                 4.3
Americas                108.5          109.2          (0.6)               (5.8)
Asia Pacific             54.2           44.8          21.0                15.8
                       --------        -------
             Total      480.5          460.0           4.5                 3.0
                       --------        -------


Europe

Underlying revenue growth for Europe as a whole was 4.3 per cent, representing a
good performance in a market that remains relatively flat.


In the UK, underlying revenue grew by 2.1 per cent, largely driven by a good
performance in all of the syndicated business units. TNS Worldpanel has
continued to grow well based on the expansion of the consumer panel to 25,000
households. TNS Media Intelligence has benefited from a more active news
environment and the launch of new digital measurement services. Although there
has been good progress for TNS in the Financial Services sector, the market for
custom research in the UK remains very competitive, particularly in the Consumer
sector.


In France, underlying revenue growth was ahead of the market, at 7.5 per cent.
This performance was strong across all of the French business, especially TNS
Media Intelligence. The custom business in France has also grown well,
particularly in Healthcare, benefiting from the strength of its market position.


In the Rest of Europe, underlying revenue growth was 3.8 per cent. Operations in
most of the region, including Spain and Central and Eastern Europe have all
performed well. However this has been offset by some weakness in Germany, where
market conditions, especially in the Consumer and Automotive sectors, have been
challenging.


Americas

In the Americas, underlying revenue declined by 5.8 per cent. This decline is
due to the disappointing performance in the US custom business. As explained
above, this business now has a new management and operations have been
restructured in order to improve growth and profitability. TNS remains a leading
player in the US custom research industry, with strong assets, including its
managed access panel. TNS Media Intelligence in the US has been steady and Latin
America continues to grow strongly.



Asia Pacific

Underlying revenue growth in Asia Pacific was 15.8 per cent, ahead of estimated
market growth. TNS Worldpanel and TNS Media Intelligence achieved good growth in
the region. In January, iTRAM started its new TV audience measurement service in
Hong Kong and renewed its service in Singapore. TNS has recently been
commissioned to set up a new PeopleMeter service in the Philippines and
continues to extend its City coverage in China. The custom business again
performed very well, using its strong network across the region to provide
pan-regional services to global clients.



Sector revenue performance

                         6 months to 30 June                     Change
                                          
                         2006             2005       Reported        Underlying
                           £m               £m              %                 %
                      ------------------------     -----------------------------
Consumer                157.2            158.6         (0.9)               0.6
Media                   102.3             90.8         12.7                8.2
Business Services        64.9             56.4         15.1                6.5
Technology               48.2             50.7         (4.9)              (7.4)
Healthcare               42.3             38.2         10.7                6.2
Other                    65.6             65.3          0.5                3.9
                      ---------         --------
            Total       480.5            460.0          4.5                3.0
                      ---------         --------


Consumer

With recent trends in the Consumer sector continuing, the sector showed only
slight growth in underlying revenue in the first six months of the year. Growth
in TNS Worldpanel has again been strong, based on the demand for consumer
purchasing information and the increased value that can be delivered to
customers from enhanced panel sizes and new services. The market for Consumer
custom research remains more difficult, especially in the more mature markets of
the US and Europe. TNS is focusing its activities in this area on global
partnership accounts and in the growth markets of Asia Pacific, Latin America
and the Middle East, as well as developing new services to assist clients in
their highly competitive markets.


Media

With TNS Media Intelligence and iTRAM both growing strongly, underlying revenue
growth in Media was 8.2 per cent in the first half. As well as several new
contracts in Asia, iTRAM has made strong progress, winning regional contracts in
Spain and expanding panels in China and Russia. In the US, there has been good
progress with the commercialisation of new services to measure digital
television. TNS Media Intelligence has shown good growth across most markets,
especially France, Spain and Russia.


Business Services

Against a weaker comparative from the first half of 2005, underlying growth in
Business Services was 6.5 per cent. This strong performance was driven by good
progress with Financial Services clients in Europe and
Asia Pacific.



Technology

The demand for research services from Technology clients remains strong and one
of the fastest growing sectors of the market. For TNS, Asia Pacific has again
shown strong growth. However, as anticipated, performance in the sector overall
has been impacted by the previously reported client specific decline in the US
and underlying revenue fell by 7.4 per cent. Excluding the client-specific
impact, the sector would have improved by 5.6 per cent.


Healthcare

At 6.2 per cent, underlying growth in Healthcare has been very positive,
especially with multi-country projects. The provision of innovative new services
that use TNS proprietary Business Solutions, such as Conversion Model and TNS'
new Brand Equity Framework, is also contributing to significant gains. In
addition to measurement of customer commitment and brand effectiveness, there is
also an increased focus on specialist areas such as biotechnology and
diagnostics.


Other

Growth in Polling & Social has been strong. In Europe, there have been elections
and referenda in Germany, Finland, Italy, Slovakia and Ukraine. Additional
contracts have been won with the EU and European Central Bank and other
multi-national organisations. In Automotive, although there has been good growth
in North America and Asia Pacific, the sector has been held back by weaker
performance in Europe where market conditions with major manufacturers are
tough. In aggregate, underlying revenue in Other grew by 3.9 per cent.



Ends

The results of the group are shown on the following pages.


CONSOLIDATED UNAUDITED INTERIM INCOME STATEMENT

Continuing operations                               6 months to June  Full year
                                                   2006       2005       2005
                                                     £m         £m         £m

Revenue (note 2)                                  480.5      460.0      999.0
Cost of sales                                    (164.1)    (156.0)    (336.5)
---------------------------------------           -------    -------    -------

Gross profit                                      316.4      304.0      662.5
Administrative expenses                          (278.8)    (262.6)    (562.7)
---------------------------------------           -------    -------    -------
      
Operating profit before exceptional items          41.7       41.8      108.1
Restructuring costs                                (3.7)         -          -
Goodwill impairment                                   -          -      (10.3)
Amortisation of intangibles identified on
acquisitions                                       (0.4)      (0.4)      (0.9)
Pension curtailment credit                            -          -        2.9
---------------------------------------           -------    -------    -------
Operating profit (note 2)                          37.6       41.4       99.8
Finance income                                      0.9        0.7        1.0
Finance costs                                      (8.7)      (8.6)     (16.2)
Share of post tax profit of associates              0.2        0.2        0.4
---------------------------------------           -------    -------    -------

Profit before taxation                             30.0       33.7       85.0
Taxation - excluding deferred tax on goodwill      (9.5)     (10.6)     (30.1)
Taxation - deferred tax on goodwill                (1.6)      (1.6)      (0.1)
---------------------------------------           -------    -------    -------
Taxation (note 6)                                 (11.1)     (12.2)     (30.2)
---------------------------------------           -------    -------    -------

Profit for the period                              18.9       21.5       54.8
=======================================           =======    =======    =======

Attributable to:
Equity holders of the parent company               17.4       20.3       52.1
Minority interests                                  1.5        1.2        2.7
--------------------------------------            -------    -------    -------
                                                   18.9       21.5       54.8
======================================            =======    =======    =======

Basic earnings per share (note 3)                   3.9p       4.6p      11.8p
--------------------------------------            -------    -------    -------

Diluted earnings per share (note 3)                 3.8p       4.5p      11.6p
--------------------------------------            -------    -------    -------

Dividends proposed for the period were £6.3m (6 months to 30 June 2005 £5.4m,
full year 2005 £17.6m). No dividends were paid in the period (6 months to 30
June 2005 £nil, full year 2005 £16.0m).

CONSOLIDATED UNAUDITED INTERIM BALANCE SHEET
                                                       At 30 June      At 31 Dec
                                          2006             2005           2005
                                            £m               £m             £m
Assets
Non-current assets
Goodwill                                 381.1            394.4          393.6
Intangible assets                         15.1             17.8           16.6
Plant, property and equipment             71.1             69.4           73.1
Investments in associates                  3.3              2.2            2.5
Available for sale investments             0.5              0.2            0.4
Deferred tax assets                       32.6             27.6           29.6
-------------------------------         --------        ---------      ---------
                                         503.7            511.6          515.8
-------------------------------         --------        ---------      ---------

Current assets
Inventories                               74.1             82.4           59.1
Trade and other receivables              260.1            258.3          260.1
Current tax receivable                     3.1             13.3            2.5
Available for sale investments             0.9              0.7            0.8
Cash and cash equivalents                 28.8             36.0           45.8
-------------------------------         --------        ---------      ---------
Total current assets                     367.0            390.7          368.3
-------------------------------         --------        ---------      ---------
Total assets                             870.7            902.3          884.1
-------------------------------         --------        ---------      ---------

Liabilities
Current liabilities
Borrowings                                (3.9)            (2.8)          (0.5)
Trade and other payables                (299.9)          (304.8)        (298.7)
Current tax payable                      (30.3)           (30.3)         (27.0)
Provisions                                (8.9)            (7.9)         (11.7)
-------------------------------         --------        ---------      ---------
Total current liabilities               (343.0)          (345.8)        (337.9)
-------------------------------         --------        ---------      ---------
Net current assets                        24.0             44.9           30.4
-------------------------------         --------        ---------      ---------

Non-current liabilities
Borrowings                              (312.1)          (378.2)        (340.7)
Trade and other payables                  (1.6)            (2.4)          (2.3)
Deferred tax liabilities                 (29.1)           (30.5)         (27.0)
Retirement benefit obligations           (10.0)           (17.3)         (15.3)
Provisions                               (15.4)           (14.6)         (13.0)
-------------------------------         --------        ---------      ---------
Total non-current liabilities           (368.2)          (443.0)        (398.3)
-------------------------------         --------        ---------      ---------
Total liabilities                       (711.2)          (788.8)        (736.2)
-------------------------------         --------        ---------      ---------

Total net assets                         159.5            113.5          147.9
===============================         ========        =========      =========

Equity
Issued share capital                      22.6             22.4           22.4
Share premium                            133.3            125.9          126.7
Other reserves                             1.8              1.4            1.8
Retained earnings                         (7.3)           (44.8)         (13.0)
-------------------------------         --------        ---------      ---------
Total shareholders' equity               150.4            104.9          137.9
Minority interests in equity               9.1              8.6           10.0
-------------------------------         --------        ---------      ---------

Total equity                             159.5            113.5          147.9
===============================         ========        =========      =========


CONSOLIDATED UNAUDITED INTERIM CASH FLOW STATEMENT

                                                       6 months to 30  Full year
                                                                 June
                                                    2006       2005       2005
                                                      £m         £m         £m

Cash flows from operating activities
Cash generated from operations (note 4)             23.9       21.3      128.4
Income tax paid                                    (10.3)     (11.6)     (24.2)
--------------------------------                 ---------  ---------   --------

Net cash generated from operating activities        13.6        9.7      104.2
--------------------------------                 ---------  ---------   --------

Cash flows from investing activities
Acquisition of subsidiaries (net of cash
acquired)                                           (2.5)      (6.0)      (5.7)
Sale of subsidiaries (net of cash disposed)          1.7          -        0.7
Proceeds from sale of property, plant and            0.5        0.5        2.6
equipment
Purchase of property, plant and equipment           (9.9)      (7.4)     (20.0)
Purchase of intangible assets                       (2.7)      (1.1)      (3.3)
Purchase of associates and investments              (0.7)      (0.9)      (0.8)
Interest received                                    0.9        0.7        1.0
--------------------------------                 ---------  ---------   --------

Net cash used in investing activities              (12.7)     (14.2)     (25.5)
--------------------------------                 ---------  ---------   --------

Cash flows from financing activities
Net proceeds from issue of ordinary share            4.9        1.0        2.5
capital
Dividends paid to company's shareholders               -          -      (16.0)
Dividends paid by subsidiaries to minority
interests                                           (1.3)      (0.8)      (1.7)
Arrangement fee paid on restructuring
group finance                                          -       (1.4)      (1.4)
Decrease in debt                                   (12.8)     (13.5)     (65.7)
Interest paid                                       (8.6)      (8.0)     (13.9)
--------------------------------                 ---------  ---------   --------

Net cash used in financing activities              (17.8)     (22.7)     (96.2)
--------------------------------                 ---------  ---------   --------

Net decrease in cash and cash equivalents          (16.9)     (27.2)     (17.5)

Cash and cash equivalents at beginning of           45.8       63.3       63.3
period
Exchange loss on cash and cash equivalents          (0.1)      (0.1)         -
--------------------------------                 ---------  ---------   --------

Cash and cash equivalents at end of period          28.8       36.0       45.8
================================                 =========  =========   ========

Net debt* (note 4)                                 287.2      342.9      295.4
================================                 =========  =========   ========

* Net debt is defined as bank borrowings net of arrangement fees and obligations
under finance leases, less cash.



CONSOLIDATED UNAUDITED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE

                                                       6 months to 30  Full year
                                                                 June
                                                     2006      2005       2005
                                                       £m        £m         £m

Profit for the period                                18.9      21.5       54.8
---------------------------------                  --------  --------   --------

Actuarial gains/(losses) on pensions                  3.9      (5.1)      (5.4)
Tax on actuarial gains/(losses) on
pensions                                             (1.1)      1.5        1.6

Gain in fair value of financial instruments           1.1       0.4        1.8
Tax on gain in fair value of financial
instruments                                          (0.5)        -          -

Translation differences on foreign
currency net investments less translation
differences on foreign currency loans
taken out to fund those investments                  (7.6)      4.1        6.0
Tax on the above item                                 2.4      (1.2)      (1.4)
---------------------------------                  --------  --------   --------

Net gains and losses not recognised in the
income statement                                     (1.8)     (0.3)       2.6
---------------------------------                  --------  --------   --------

Total recognised income and expense relating to      17.1      21.2       57.4
the period

Prior year adjustment following adoption
of IAS 32 and IAS 39                                    -      (5.4)      (5.4)
---------------------------------                  --------  --------   --------

Total recognised income and expense since last       17.1      15.8       52.0
annual report                                      ========  ========   ========
=================================

Attributable to:
Equity holders of the parent company                 15.6      14.6       49.3
Minority interests                                    1.5       1.2        2.7
---------------------------------                  --------  --------   --------
                                                     17.1      15.8       52.0
=================================                  ========  ========   ========




1.       Basis of preparation

This financial information comprises the consolidated unaudited interim income
statement, cash flow statement and statement of recognised income and expense
for the six months ended 30 June 2006, the consolidated unaudited interim
balance sheet as at 30 June 2006 and the related notes of Taylor Nelson Sofres
plc (hereinafter referred to as 'financial information'). This financial
information has been prepared in accordance with the Listing Rules of the
Financial Services Authority, and using the principal accounting policies as set
out on pages 55 to 59 of the group's annual financial statements for the year
ended 31 December 2005. The group has chosen not to early adopt IAS 34, 'Interim
financial statements', in preparing its 2006 interim statements.


The financial information has not been audited and does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
statutory accounts for 2005 have been delivered to the Registrar of Companies.
The auditors' opinion on those accounts was unqualified and did not contain a
statement made under Section 237(2) or Section 237(3) of the Companies Act 1985.


2.       Segmental reporting

Primary reporting format - geographic segments
                                             Europe   Americas     Asia  Total
                                                                Pacific
                                               £m         £m       £m       £m
6 months to 30 June 2006
Revenue                                     317.8      108.5     54.2    480.5
===============================             =======    =======  =======  =======

Segment operating result before
exceptional items                            34.4        0.5      6.8     41.7
-------------------------------             -------    -------  -------  -------
Restructuring costs                          (0.8)      (2.9)       -     (3.7)
Goodwill impairment                             -          -        -        -
Amortisation of intangibles identified on
acquisitions                                 (0.2)      (0.1)    (0.1)    (0.4)
Pension curtailment credit                      -          -        -        -
-------------------------------             -------    -------  -------  -------
Total exceptional items                      (1.0)      (3.0)    (0.1)    (4.1)
-------------------------------             -------    -------  -------  -------
Segment operating result                     33.4       (2.5)     6.7     37.6
===============================             =======    =======  =======  =======

6 months to 30 June 2005
Revenue                                     306.0      109.2     44.8    460.0
===============================             =======    =======  =======  =======

Segment operating result before
exceptional items                            29.1        8.7      4.0     41.8
-------------------------------             -------    -------  -------  -------
Restructuring costs                             -          -        -        -
Goodwill impairment                             -          -        -        -
Amortisation of intangibles identified on
acquisitions                                 (0.2)      (0.1)    (0.1)    (0.4)
Pension curtailment credit                      -          -        -        -
-------------------------------             -------    -------  -------  -------
Total exceptional items                      (0.2)      (0.1)    (0.1)    (0.4)
-------------------------------             -------    -------  -------  -------
Segment operating result                     28.9        8.6      3.9     41.4
===============================             =======    =======  =======  =======

Year ended 31 December 2005
Revenue                                     660.8      238.7     99.5    999.0
===============================             =======    =======  =======  =======

Segment operating result before
exceptional items                            72.0       23.7     12.4    108.1
-------------------------------             -------    -------  -------  -------
Restructuring costs                             -          -        -        -
Goodwill impairment                          (0.3)     (10.0)       -    (10.3)
Amortisation of intangibles identified on
acquisitions                                 (0.6)      (0.1)    (0.2)    (0.9)
Pension curtailment credit                    1.6        1.3        -      2.9
-------------------------------             -------    -------  -------  -------
Total exceptional items                       0.7       (8.8)    (0.2)    (8.3)
-------------------------------             -------    -------  -------  -------
Segment operating result                     72.7       14.9     12.2     99.8
===============================             =======    =======  =======  =======

3.       Earnings per share

Basic earnings per share of 3.9p (2005 4.6p) have been calculated on the profit
for the period attributable to equity holders of the parent company of £17.4m
(2005 £20.3m) and on 445.3 million shares (2005 440.6 million), being the
weighted average number of shares in issue during the period, 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 IAS 33, 'Earnings Per Share', with the weighted average number of
shares in issue being adjusted to assume conversion of all dilutive potential
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 weighted average number of ordinary shares in issue during the period for
the purpose of these calculations is as follows:
                                                   6 months  to 30     Full year
                                                              June
                                              2006          2005          2005
                                            millions      millions      millions
Share capital                                450.1         447.2         447.4
Shares held by ESOP                           (0.2)         (0.6)         (0.4)
Shares held by EBT                            (4.6)         (6.0)         (5.4)
----------------------------------           -------     ---------     ---------
Basic earnings per share denominator         445.3         440.6         441.6
Dilutive effect of share options              11.1           8.2           8.3
----------------------------------           -------     ---------     ---------
Diluted earnings per share denominator       456.4         448.8         449.9
==================================           =======     =========     =========


An adjusted earnings per share using an adjusted profit for the period
attributable to equity holders of the parent company is also presented, as the
directors believe that this assists in understanding the underlying performance
of the group. The adjusted earnings per share is based on the profit as adjusted
for the items shown below.
                                                      6 months  to 30  Full year
                                                                 June
                                                     2006      2005       2005
                                                       £m        £m         £m
Profit for the period attributable to equity         17.4      20.3       52.1
holders of the parent company (after share-based
payment charge)
Adjusted for exceptional items:
Restructuring costs                                   3.7         -          -
Goodwill                                                -         -       10.3
impairment
Amortisation of intangibles identified on             0.4       0.4        0.9
acquisitions
Pension                                                 -         -       (2.9)
curtailment                                       ---------  --------   --------
credit

                                                      4.1       0.4        8.3
Tax on                                               (1.3)     (0.1)       0.8
exceptional items
Deferred tax on                                       1.6       1.6        0.1
goodwill                                          ---------  --------   --------

                                                      4.4       1.9        9.2
                                                  ---------  --------   --------
Adjusted profit for the period attributable to       21.8      22.2       61.3
equity holders of the parent company              =========  ========   ========
               

Adjusted earnings per share                           4.9       5.0       13.9
                                                  =========  ========   ========



                       Profit used for            Weighted    Earnings per share
                          EPS purposes      average number          
                                                 of shares 
6 months to
June                  2006      2005      2006      2005      2006      2005
                        £m        £m    millions  millions       p         p
Basic                 17.4      20.3     445.3     440.6       3.9       4.6
Diluted               17.4      20.3     456.4     448.8       3.8       4.5
Adjusted              21.8      22.2     445.3     440.6       4.9       5.0
================    ========  ========  ========  ========  ========  ========

4.       Cash flow
                                                            6 months to 30  Full year
                                                                      June
                                                          2006      2005       2005
Reconciliation of operating profit to cash                  £m        £m         £m
generated from operations

Operating profit                                          37.6      41.4       99.8
Amortisation of intangible assets                          2.8       3.4        5.8
Impairment of goodwill                                       -         -       10.3
Depreciation of property, plant and equipment              9.9       9.3       19.6
Profit on sale of property, plant
and equipment                                                -      (0.1)      (1.2)
Profit on disposal of investment
in subsidiaries                                           (0.7)        -          -
Share based payments                                       2.3       1.8        4.5
(Increase)/decrease in
inventories                                              (17.2)     (8.0)      16.0
(Increase) in trade and other
receivables                                               (8.3)     (4.5)      (2.8)
(Decrease) in trade and other
payables                                                  (3.1)    (25.5)     (21.6)
(Decrease)/increase in pension
liabilities                                               (1.0)      4.9       (3.4)
Increase/(decrease) in                                     1.6      (1.4)       1.4
provisions                                              --------  --------   --------

Cash generated from                                       23.9      21.3      128.4
operations                                              ========  ========   ========


                                                                              2006
Reconciliation of net cash flow to movement in net debt                         £m

Decrease in cash in the period                                               (16.9)
Cash outflow from decrease in debt                                            12.8
-----------------------------------                                        --------
Change in net debt resulting from cash flows                                  (4.1)
Non-cash movement                                                             (0.1)
Translation difference                                                        12.4
-----------------------------------                                        --------
Movement in net debt in the period                                             8.2
At 1 January 2006                                                           (295.4)
-----------------------------------                                        --------
At 30 June 2006                                                             (287.2)
===================================                                        ========

                                At 1                                       At 30
                             January              Exchange    Non-cash      June
                              2006     Cash flow  movement   movements    2006
Analysis of net debt            £m          £m        £m          £m        £m

Cash at bank and in hand      45.8       (16.9)     (0.1)          -      28.8
Loans repayable within 1
year                          (0.5)       12.8         -       (16.2)     (3.9)
Loans repayable after
more than 1 year            (340.7)          -      12.5        16.1    (312.1)
----------------------      --------    --------  --------   ---------  --------
                            (295.4)       (4.1)     12.4        (0.1)   (287.2)
======================      ========    ========  ========   =========  ========


5.       Acquisitions and disposals

On 9 June 2006, the group acquired the French media research company Exactitude
S.A. and a further 8% of the group's subsidiary in the Czech Republic, AISA, was
purchased on 31 March 2006, taking the group's holding to 84%.


On 29 June 2006, the group disposed of French custom research subsidiary LH2.
The subsidiary generated £4.1m of revenue in the six months to 30 June 2006.


6.       Taxation

The tax charge for the period was £11.1m, representing a reported rate of 36.8%.
Under IFRS, where goodwill is deductible against tax, a deferred tax liability
is recognised even if such a liability would only unwind on the eventual sale or
impairment of the business in question. This has led to a tax charge for
deductible goodwill of £1.6m for the period.

7.       Consolidated statement of changes in shareholders' equity

                            Share    Share     Other  Retained            Minority  Total
                          capital  premium  reserves  earnings  Total    interests   Equity
                             £m       £m        £m        £m       £m         £m       £m

At 1 January
2005                       22.3    123.8       1.5     (57.3)    90.3        9.1     99.4
Profit for the period         -        -         -      20.3     20.3        1.2     21.5
Actuarial
losses on
pensions net
of tax                        -        -         -      (3.6)    (3.6)         -     (3.6)
Currency translation          -        -         -       2.9      2.9          -      2.9
differences net of tax
Marked-to-market gain in      -        -         -       0.4      0.4          -      0.4
fair value of financial
instruments
New share capital issued    0.1      2.1         -         -      2.2          -      2.2
net of expenses
Minority
interest
dividends and
disposals                     -        -         -         -        -       (1.7)    (1.7)
Net proceeds
on exercise of
options                       -        -      (0.1)      1.3      1.2          -      1.2
Share based payments          -        -         -       1.8      1.8          -      1.8
Equity
dividends                     -        -         -     (10.6)   (10.6)         -    (10.6)
------------------------   ------  -------   -------   -------   ------    -------   ------

At 30 June 2005            22.4    125.9       1.4     (44.8)   104.9        8.6    113.5
Profit for the period         -        -         -      31.8     31.8        1.5     33.3
Actuarial
losses on
pensions net
of tax                        -        -         -      (0.2)    (0.2)         -     (0.2)
Currency translation          -        -         -       1.7      1.7          -      1.7
differences net of tax
Marked-to-market gain in      -        -         -       0.8      0.8          -      0.8
fair value of financial
instruments
Financial instrument          -        -         -       0.6      0.6          -      0.6
fair value taken to
income statement
New share capital issued      -      0.8         -         -      0.8          -      0.8
net of expenses
Minority
interest
dividends and
disposals                     -        -         -         -        -       (0.1)    (0.1)
Net proceeds
on exercise of
options                       -        -       0.4      (0.2)     0.2          -      0.2
Share based payments          -        -         -       2.7      2.7          -      2.7
Equity
dividends                     -        -         -      (5.4)    (5.4)         -     (5.4)
------------------------   ------  -------   -------   -------   ------    -------   ------

At 31 December
2005                       22.4    126.7       1.8     (13.0)   137.9       10.0    147.9
Profit for the period         -        -         -      17.4     17.4        1.5     18.9
Actuarial gains on            -        -         -       2.8      2.8          -      2.8
pensions net of tax
Currency
translation
differences
net of tax                    -        -         -      (5.2)    (5.2)      (0.4)    (5.6)
Marked-to-market gain in      -        -         -       0.6      0.6          -      0.6
fair value of financial
instruments net of tax
New share capital issued    0.2      6.6         -         -      6.8          -      6.8
net of expenses
Minority
interests
acquired by
group                         -        -         -         -        -       (0.7)    (0.7)
Minority
interest
dividends and
disposals                     -        -         -         -        -       (1.3)    (1.3)
Net proceeds on exercise      -        -         -       0.1      0.1          -      0.1
of options
Share based payments          -        -         -       2.3      2.3          -      2.3
Equity
dividends                     -        -         -     (12.3)   (12.3)         -    (12.3)
------------------------   ------  -------   -------   -------   ------    -------   ------

At 30 June 2006            22.6    133.3       1.8      (7.3)   150.4        9.1    159.5
========================   ======  =======   =======   =======   ======    =======   ======


Goodwill arising on consolidation prior to 1 January 1998 of £144.7m (30 June
and full year 2005 £144.7m) has been eliminated against reserves.



8.       Currency conversion

The 2006 consolidated unaudited interim income statement has been prepared
using, among other currencies, an average exchange rate of US$1.7914 to the
pound (period ended 30 June 2005 US$1.8727; year ended 31 December 2005
US$1.8195) and €1.4547 to the pound (period ended 30 June 2005 €1.4583; year
ended 31 December 2005 €1.4624).


The 2006 consolidated unaudited interim balance sheet as at 30 June 2006 has
been prepared using the exchange rate on that day of US$1.8475 to the pound (30
June 2005 US$1.7918; 31 December 2005 US$1.7211) and €1.4454 to the pound (30
June 2005 €1.4818; 31 December 2005 €1.4531).



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