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Euromoney Ins.InvPLC (ERM)

  Print      Mail a friend       Annual reports

Thursday 17 May, 2007

Euromoney Ins.InvPLC

Interim Results

Euromoney Institutional InvestorPLC
17 May 2007


 

17 May 2007

 

                      Euromoney Institutional Investor PLC                      

          Interim Results Results for the six months to March 31 2007           

 

 
Highlights                       2007     2006     change  
                                                           
Revenue                        £144.2 m £103.1 m     +40%  
Operating profit                £22.4 m  £15.8 m     +42%  
Adjusted operating              £34.2 m  £17.6 m     +95%  
profit*                                                    
Profit before                   £18.8 m  £13.5 m     +40%  
tax                                                        
Adjusted profit before          £24.8 m  £13.9 m       +78%
tax*                                                       
Diluted earnings a               13.3 p   10.8 p     +23%  
share                                                      
Adjusted diluted earnings a      19.2 p   11.3 p     +70%  
share *                                                    
Dividend                          6.0 p    5.4 p     +11%  
                                                           
* see glossary                                             

 

Results reflect strong organic growth and successful integration of acquisitions

 

Revenues up 40% to £144 million, the highest ever

• Adjusted profit before tax up 78% to record £24.8 million

• Adjusted operating margin improves from 17% to 24%

• Strong growth across all divisions and revenue streams

• Metal Bulletin integration successfully completed and synergies ahead of
  expectations

• Investment in new businesses stepped up

• Interim dividend increased by 11% to 6p

• Capital Appreciation Plan continues to drive record performance

• Encouraging outlook for the full year

 

Commenting on the results, chairman Padraic Fallon, said:

 

'Above all, these results reflect very strong real growth across all our
businesses, as well as the success of our acquisitions. The integration of Metal
Bulletin has been completed ahead of plan, and is generating better than
expected synergies.'

 

'The healthy economic and financial environment experienced in the first half
looks set to continue into the second. Current trading is encouraging and
forward bookings for advertising, sponsorship and delegates are all ahead of the
same time last year. Comparatives for the second half will be more challenging
but the enlarged group is well positioned for further growth.'


Highlights

 

Euromoney Institutional Investor PLC (Euromoney), the international publishing,
events and electronic information group, achieved adjusted operating profit for
the six months to March 31 2007 of £34.2 million, nearly double that achieved in
2006. Adjusted profit before tax increased by 78% to £24.8 million and adjusted
diluted earnings a share increased 70% to 19.2p. The board has approved an
interim dividend of 6p, against 5.4p, to be paid to shareholders on June 25
2007.

 

These record interim results reflect the company's successful strategy to build
a leading international business information group. The group operating margin
improved and all divisions achieved strong organic growth, based on:

- advertising revenues increasing at the highest rate for some time;

- subscription revenues for both print and electronic products continuing to
  show double digit growth;

- the benefit of past investment in marketing and new products

 

In addition, Metal Bulletin plc, which was acquired on October 5 2006, has
traded in line with expectations at the time of acquisition and has been
successfully integrated into the group ahead of plan. Better than expected cost
synergies have been generated from the elimination of duplicate functions; all
non-core businesses have been sold; and the investment in new products and
marketing is already beginning to generate rewards.

 

 

Trading Background

 

The positive trading background experienced in 2006 has extended into the first
half of 2007 as global financial institutions continue to invest in new
products, markets and headcount, driving increased demand for quality business
information through a variety of media. Capital markets worldwide continue to
see record activity levels, fuelled by a surplus of liquidity and low interest
rates. Markets also remain strong across all geographies, particularly emerging
markets such as the Middle East and Asia which are so important to the group's
products.

 

Subscription revenues, which for this period include Metal Bulletin's BCA
research business, nearly doubled to £50.3 million. The group's strategy of
investing in premium subscription products, particularly those delivered
electronically, has driven strong organic growth over the past two years and the
investment in subscription marketing and new products has been stepped up.
Subscription revenues accounted for more than a third of total revenues in the
first half and are now the largest revenue stream in the group. More than £1
million was invested in new products during the period.

 

Advertising revenues increased by 20% to £28.3 million, the highest increase for
some years. Titles such as Euromoney and the international edition of
Institutional Investor have achieved increases in advertising in excess of 20%.

 

Sponsorship and delegate revenues increased by 28% to £58.9 million, driven by
strong demand for the networking opportunities and training expertise the
group's events and training courses offer.


Acquisition of Metal Bulletin

 

The acquisition of Metal Bulletin was completed at the start of the financial
year and the focus of management in the first half has been the integration of
Metal Bulletin's businesses within the Euromoney Institutional Investor group.
This integration is now largely complete. The emphasis going forward will be to
invest in and grow the Metal Bulletin businesses to deliver the revenue
synergies set out at the time of acquisition. Metal Bulletin contributed
revenues from continuing operations of £27.2 million and adjusted operating
profits from continuing operations of £9.1 million to the group in the period
between the date of acquisition and March 31. The programme to dispose of those
Metal Bulletin businesses identified for sale at the time of acquisition has
been successfully completed. These businesses contributed operating profits of
some £1 million in the first half.

 

Following the restructuring of Metal Bulletin the board has identified
annualised cost synergies of £5 million, of which £3.5 million will be realised
in the current financial year. For the six months to March 31, the synergies
amounted to £1 million, and exceptional costs of £4.7 million were incurred,
including £2.5 million for the elimination of duplicate functions and systems,
and £2.2 million for onerous property leases.

 

In March, the Remuneration Committee approved an increase in the hurdle for the
group's profit target under its long-term incentive scheme, the Capital
Appreciation Plan, from £50 million to £57 million to reflect the effect of the
Metal Bulletin acquisition.

 

Business Review

 

Revenues from Financial Publishing increased by 20% to £35.4 million reflecting
strong growth in both advertising and subscription revenues. Operating margins
improved from 15% to 21% producing a rise in adjusted operating profits of 71%
to £7.5 million. Growth was achieved by both the general capital markets titles
such as Euromoney and the international edition of Institutional Investor, as
well as specialist titles such as Alpha, Project Finance and Global Investor.
Within Metal Bulletin, the publishing activities of Managed Account Reports
(MAR) were merged with the hedge fund publishing activities of Euromoney, while
Futures & Options World has been integrated within the Euromoney specialist
finance group and restructured with a view to restoring its profitability.

 

The group's print products are increasingly migrating to an electronic platform
which provides excellent opportunities to enhance growth through the launch of
new products, widening the reach of the subscriber base, and more targeted
marketing efforts. The group's strategy of investing in subscription-based
electronic information services led to the acquisition in October of Total
Derivatives, a leading provider of real-time news and analysis on the global
fixed income derivatives markets. Total Derivatives made a first half
contribution of £0.6 million and provides an excellent platform for the launch
of similar services in other niche financial verticals. In line with this
strategy, Total Securitisation, an online news service dedicated to the global
securitisation markets was launched in March and further products are planned.

 

The contribution from the Business Publishing division increased sharply
following the acquisition of Metal Bulletin. Adjusted operating profits
increased from £1.9 million to £4.8 million after revenues nearly doubled to £20
million. Among the other businesses in this division, the energy publishing
companies Petroleum Economist and Gulf Publishing were the best performers, with
the higher oil price driving increased investment in both downstream and
upstream activities.


The Metals, Minerals and Mining (MMM) division of Metal Bulletin, which
comprises the eponymous UK-based title and the US-based American Metal Market,
is now the largest component of Business Publishing. The Euromoney and Metal
Bulletin businesses in this sector have been brought together more closely with
the objective of increasing the cross-marketing of products, and building a more
substantial events business using Euromoney's expertise in this area. This
strategy is unlikely to have a significant impact on revenues until 2008. In the
meantime investments are being made in people, marketing and product
development. The MMM publishing business contributed revenues of £8.5 million
and adjusted operating profits of £2.3 million, in line with forecasts at the
time of acquisition.

 

The strong growth achieved in the Conferences and Seminars division over the
past few years continued with revenues up 20% to £45.9 million, and adjusted
operating profits improved 31% to £13.5 million. The growth in this division
continues to reflect the group's strategy of building existing events as well as
launching new ones. Areas such as hedge funds, real estate finance, air finance
and Islamic finance have provided opportunities for new events, particularly in
emerging markets.

 

The Institutional Investor conference business, which has been a significant
driver of growth with its attractive subscription-based membership model,
increased the number of members by 11%. It launched a new legal institute
earlier in the year and plans to launch another four institutes over the next 18
months. The hedge fund events previously run by Metal Bulletin's MAR business
have been absorbed by Institutional Investor. The MMM events business has been
restructured and Euromoney events expertise added, with a view to significantly
expanding the number of events run in 2008. In the first half the MMM events
business contributed revenues of £2.6 million and adjusted operating profits of
£1 million to the Conferences and Seminars division.

 

The performance of the Training division extended the excellent results achieved
in the second half of 2006. Revenues increased by 23% to £16.5 million and
adjusted operating profits by 63% to £4.6 million. This business is very
sensitive to the number of courses run and the average number of delegates per
course. In the first half of 2006 the Training division invested heavily in
revenue growth at the expense of the margin. This problem was quickly identified
by management and rectified in the second half. As a result, profit growth in
the second half of 2007 will be more challenging. However, the business
continues to invest in new products and is experiencing an increase in delegate
numbers across all its markets.

 

Total revenues for the Database and Information Services division, including
BCA, the largest and fastest growing division of Metal Bulletin, increased from
£9.3 million to £25.5 million, and adjusted operating profits increased nearly
fourfold to £8.8 million. BCA is one of the world's leading independent
providers of high quality global investment research for financial institutions,
hedge funds and private wealth managers. In its first six months under Euromoney
ownership, BCA's subscription revenues increased by 20% to $24.7 million,
consistent with forecasts at the time of acquisition. The Euromoney strategy for
BCA has been to accelerate the investment in new products, and help build its
global sales resource using the Euromoney infrastructure. Since acquisition, new
sales teams have been installed in Euromoney's New York and Hong Kong offices,
while a new Commodity and Energy Strategy product is being launched this month
and BCA is investing in a Global Equities product for launch in 2008.

 

The other key driver of growth in the Database and Information Services division
is ISI, the emerging markets information provider, which experienced its best
six month performance for a long time with record sales, subscription revenues
up 17% to $14.3 million, and a customer retention rate over 90%. In addition,
ISI's recently acquired subsidiary CEIC, which provides time-series economic
data covering Asian markets, has been integrated within ISI and increased
subscription revenues by 26%.

 

Financial Review

 

The acquisition of Metal Bulletin was completed on October 5 2006 for a cash
consideration including costs of £240 million, plus assumed net debt of £15
million, funded by the issue of 13.8 million new shares for £65 million and
borrowings of £175 million. In October 2006 the group also acquired a 67%
interest in Total Derivatives for a cash consideration of £7.4 million. Further
investments totalling £7.5 million were made in a number of the group's
associates and subsidiaries during the period. The first half contribution to
adjusted operating profits from these acquisitions and increases in equity
interests was £11.2 million.

 

At the end of 2006 the group identified a number of businesses which no longer
satisfied its strategic requirements. The programme to dispose of businesses
identified for sale at the time of the acquisition of Metal Bulletin has already
been completed: Atalink, the specialist and direct response marketing publisher
was sold in March for £3.1 million, of which £1.3 million is expected to be
received over the next 12 months; Energy Information Centre, the provider of
integrated energy information data and services, was sold for £4.7 million in
April; and the sale of Systematics to its management was completed in May. No
profit or loss was made on the disposal of any of these businesses. In addition,
in March the group sold Raven Fox, a leading duty-free and luxury goods
publisher, for cash proceeds of £1.9 million giving rise to an exceptional gain
on sale of £2 million. Further disposals of a number of small publishing titles
were also completed in the period.

 

Net debt at March 31 was £239.6 million compared to £73.4 million at year end,
reflecting the increased debt taken on to finance the acquisition of Metal
Bulletin. The strong operating cash flows of Metal Bulletin helped increase
group operating cash flows for the six months to £37.0 million and generated an
adjusted operating profit to cash conversion rate of 127%. The net cost of
funding the group's debt increased from £1.8 million to £7.2 million, with
interest cover based on adjusted operating profit at March 31 a comfortable 4.7
times. Net finance costs of £3.6 million also include a charge of £0.9 million
for the imputed interest on acquisition option commitments and a credit of £4.5
million for the net movement in the value of acquisition option commitments.

 

Outlook

 

The healthy economic and financial environment experienced in the first half
looks set to continue into the second. Current trading is encouraging and
forward bookings for advertising, sponsorship and delegates are all ahead of the
same time last year. The investment in marketing and new products will leave the
group well positioned for further growth. Meanwhile the success in integrating
Metal Bulletin during the first half leaves the group well placed to concentrate
on delivering the revenue synergies and growth identified at the time of
acquisition.

 

The second half traditionally accounts for more than half of group profits,
although Metal Bulletin, whose profits are weighted towards the first half, will
help redress the balance. In addition, after an exceptionally strong second half
in 2006, growth comparisons for the second half of 2007 will be more
challenging, and the impact of the recent fall in the US currency through the
two dollar threshold will also have a negative impact.

 

After a first half of strong organic growth and the successful integration of
Metal Bulletin, the board of Euromoney remains confident in its clear long-term
strategy to deliver consistent top-line growth from new and existing products;
invest in increasing revenues from high quality subscription products,
particularly electronic data and information services; continue to improve the
operating margin; and to make selective acquisitions to strengthen the group's
market positions. Overall, the enlarged group is well positioned for further
growth.

 

 

 

Padraic Fallon

Chairman

May 16 2007

 

 

Glossary

Adjusted operating profit = Operating profit before acquired intangible
amortisation, share option expense, exceptional items and share of results in
associates and joint ventures as set out in the income statement.

 

Adjusted profit before tax = Profit before tax from continuing operations,
acquired intangible amortisation, exceptional items, net movements in
acquisition option commitment values, and imputed interest on acquisition option
commitments as set out in the income statement and note 4.

 

Adjusted earnings a share = Diluted earnings a share before acquired intangible
amortisation, exceptional items, net movements in acquisition option
commitments, imputed interest on acquisition option commitments and deferred tax
assets recognised as set out in note 7.

 

END

 

 

NOTE TO EDITORS

 

About Euromoney Institutional Investor PLC

 

Euromoney Institutional Investor PLC is listed on the London Stock Exchange and
a member of the FTSE-250 share index. It is a leading international
business-to-business media group focused primarily on the international finance,
metals and commodities sectors. It publishes more than 70 magazines, newsletters
and journals, including Euromoney, Institutional Investor, and Metal Bulletin.
It also runs an extensive portfolio of conferences, seminars and training
courses and is a leading provider of electronic information and data covering
international finance, metals and emerging markets. Its main offices are in
London, New York and Hong Kong and approximately half its revenues and profits
are managed from the United States.

 

For further information please contact:

 

Euromoney Institutional Investor PLC

Padraic Fallon Chairman 020 7779 8556 pfallon@euromoneyplc.com

Richard Ensor Managing Director 020 7779 8845 rensor@euromoneyplc.com

Colin Jones Finance Director 020 7779 8666 cjones@euromoneyplc.com

 

Financial Dynamics 020 7831 3113

Charles Palmer charles.palmer@fd.com

Tim Spratt tim.spratt@fd.com

 

Or visit our website at www.euromoneyplc.com

 

 

Group Income Statement

for the six months ended March 31 2007

 
                                    Unaudited    Unaudited        Audited
                                   six months   six months     year ended
                                        ended        ended   September 30
                                     March 31     March 31               
                                         2007         2006           2006
                             Note      £000's       £000's         £000's
                                                                         
                                                                         
Continuing operations           2     144,658      104,973        222,276
Less: share of revenue of               (441)      (1,848)        (1,800)
joint ventures                                                           
Total revenue                         144,217      103,125        220,476
                                                                         
Operating profit before         2      34,187       17,559         43,812
acquired intangible                                                      
amortisation, share option                                               
expense and exceptional                                                  
items                                                                    
Acquired intangible                   (6,882)            -          (144)
amortisation                                                             
Share option expense                  (2,611)      (2,542)        (4,428)
Exceptional items               3     (2,683)            -          (716)
Operating profit before                22,011       15,017         38,524
associates and joint                                                     
ventures                                                                 
                                                                         
Share of results in                       414          733          1,208
associates and joint                                                     
ventures                                                                 
                                                                         
Operating profit                       22,425       15,750         39,732
                                                                         
Finance income                  4       6,691          444            772
Finance costs                   4    (10,293)      (2,711)        (5,270)
Net finance costs                     (3,602)      (2,267)        (4,498)
                                                                         
Profit before tax                      18,823       13,483         35,234
Tax on profit                         (4,030)      (3,257)       (10,137)
Deferred tax asset                          -            -         13,649
recognition                                                              
Tax (charge)/credit on          5     (4,030)      (3,257)          3,512
profit on ordinary                                                       
activities                                                               
                                                                         
Profit after tax from           2      14,793       10,226         38,746
continuing operations                                                    
                                                                         
Discontinued operations                                                  
Profit for the period from     10         419            -              -
discontinued operations                                                  
                                                                         
Profit for the period                  15,212       10,226         38,746
                                                                         
Attributable to:                                                         
Equity holders of the                  13,918        9,620         37,430
parent                                                                   
Equity minority interests               1,294          606          1,316
                                       15,212       10,226         38,746
                                                                         
Basic earnings per share -      7       13.32        10.83          42.11
continuing operations                                                    
Basic earnings per share -      7       13.73        10.83          42.11
continuing and                                                           
discontinued operations                                                  
Diluted earnings per share      7       13.28        10.81          41.90
- continuing operations                                                  
Diluted earnings per share      7       13.69        10.81          41.90
- continuing and                                                         
discontinued operations                                                  
Adjusted diluted earnings       7       19.18        11.31          28.61
per share                                                                
Dividend per share              6       6.00p        5.40p         17.00p
(including proposed                                                      
dividends)                                                               

 

 

Group Balance Sheet

as at March 31 2007

 
                                        Unaudited Unaudited       Audited
                                            as at     as at         as at
                                         March 31  March 31  September 30
                                             2007      2006          2006
                                           £000's    £000's        £000's
Non-current assets                                                       
Intangible assets                                                        
 Goodwill                                 260,184    68,536        68,452
 Other intangible                         144,405       486         3,146
 assets                                                
                                                                   
Property, plant and                        17,333    12,697        14,643
equipment                                                                
Investments                                    84    10,511        25,846
Deferred tax assets                        26,298    11,030        22,917
                                          448,304   103,260       135,004
                                                                         
Current assets                                                           
Trade and other                            64,391    48,734        73,512
receivables                                                              
Cash and cash                              27,562    18,083        27,503
equivalents                                                              
Derivative                                  5,720     2,424         3,069
financial                                                                
instruments                                                              
                                           97,673    69,241       104,084
                                                                         
Total assets of                10           6,582         -             -
subsidiaries held                                                        
for sale                                                                 
                                            6,582         -             -
                                                                         
Current liabilities                                                      
Trade and other                          (44,958)  (72,156)      (95,515)
payables                                                                 
Accruals                                 (30,507)  (18,100)      (29,478)
Deferred income                          (72,784)  (46,678)      (45,324)
Bank overdrafts                           (7,073)     (185)       (1,235)
                                        (155,322) (137,119)     (171,552)
                                                                         
Net current                              (51,067)  (67,878)      (67,468)
liabilities                                                              
                                                                         
Total assets less                         397,237    35,382        67,536
current liabilities                                                      
                                                                         
Non-current liabilities                                                                                              
Acquisition option                       (34,396)  (20,537)      (24,332)
commitments                                                              
Other non-current                           (625)         -         (597)
liabilities                                                              
Committed                               (247,340)  (67,927)      (65,530)
borrowings                                                               
Deferred tax                             (48,285)   (1,802)       (3,074)
liabilities                                                              
Derivative                                  (166)         -             -
financial                                                                
instruments                                                              
Provisions                                (2,628)   (1,552)         (777)
Loan notes                               (12,711)         -             -
Post retirement                           (2,980)         -             -
benefits                                                                 
                                        (349,131)  (91,818)      (94,310)
                                                                         
Total liabilities              10         (1,557)         -             -
of subsidiaries                                                          
held for sale                                                            
                                          (1,557)         -             -
                                                                         
Net assets/                                46,549  (56,436)      (26,774)
(liabilities)                                                            
                                                                         
Shareholders'                                                            
equity                                                                   
Called up share                               258       223           223
capital                                                                  
Share premium                             103,398    38,028        38,081
account                                                                  
Capital redemption                              8         8             8
reserve                                                                  
Own shares                                   (74)      (74)          (74)
Liability for share                         8,518     3,592         5,907
based payments                                                           
Fair value reserve                          7,585     1,119         6,618
Translation reserve                         9,591   (3,160)         (244)
Retained earnings                        (86,879)  (96,715)      (78,642)
Equity                                     42,405  (56,979)      (28,123)
shareholders'                                                            
surplus/(deficit)                                                        
Equity minority                             4,144       543         1,349
interests                                                                
Total equity                               46,549  (56,436)      (26,774)

 

 

Group Cash Flow Statement

for the six months ended March 31 2007

 
                           Unaudited  Unaudited        Audited
                          six months six months           year
                               ended      ended          ended
                            March 31   March 31   September 30
                                2007       2006           2006
                              £000's     £000's         £000's
Cash flow from operating                                      
activities                                                    
Operating profit              22,425     15,750         39,732
Share of results in            (414)      (733)        (1,208)
associates and joint                                          
ventures                                                      
Operating profit from            801          -              -
discontinued operations                                       
Profit on sale of            (1,972)          -          1,483
business                                                      
Intangible amortisation        6,882          -            381
Goodwill impairment                -          -            519
Share option expense           2,611      2,542          4,428
Depreciation of property,      1,479      1,336          2,925
plant and equipment                                           
Movement in property           1,851      (170)          (348)
rental provision                                              
Gain on disposal of                -          -        (1,286)
property, plant and                                           
equipment                                                     
Operating cash flows          33,663     18,725         46,626
before movements in                                           
working capital                                               
Increase in receivables      (4,394)      (133)        (9,822)
Increase in payables           7,741      6,387         22,753
Cash generated by             37,010     24,979         59,557
operations                                                    
                                                              
Income taxes paid            (7,275)    (3,629)        (6,884)
Net cash from operating       29,735     21,350         52,673
activities                                                    
                                                              
Investing activities                                          
Dividends paid to            (1,432)    (1,724)        (1,724)
minorities                                                    
Dividends received from          348        354            756
associates                                                    
Dividends received from          111          -              -
assets held for resale                                        
Interest received              1,034        442            662
Purchases of property,       (1,591)    (3,253)        (7,694)
plant and equipment                                           
Proceeds on disposal of            2          -          1,975
property, plant and                                           
equipment                                                     
Purchase of available for          -          -       (19,740)
sale investments                                              
Purchase of additional       (7,546)          -       (14,507)
interest in subsidiary                                        
undertakings                                                  
Acquisition of associate           -    (3,048)        (3,424)
and joint ventures                                            
Acquisition of subsidiary  (152,587)    (9,263)              -
undertakings                                                  
Disposal of business           1,865          -            150
Net cash used in           (159,796)   (16,492)       (43,546)
investing activities                                          
                                                              
Financing activities                                          
Dividends paid              (11,933)    (9,760)       (14,563)
Interest paid                (5,450)    (1,698)          (696)
Issue of new share               400        677            730
capital                                                       
(Repayment)/increase in     (78,136)      2,727          3,336
borrowings                                                    
Loan repaid to DMGT group   (34,109)   (21,472)       (71,991)
company                                                       
Loan received from DMGT      253,894     17,393         76,399
group company                                                 
Net cash used in             124,666   (12,133)        (6,785)
financing activities                                          
                                                              
Net (decrease)/increase      (5,395)    (7,275)          2,342
in cash and cash                                              
equivalents                                                   
                                                              
Cash and cash equivalents     26,268     24,932         24,932
at beginning of period                                        
Effect of foreign              (384)        241        (1,006)
exchange rate movements                                       
Cash and cash equivalents     20,489     17,898         26,268
at end of period                                              

 

 

 

Group Statement of Recognised Income and Expense

for the six months ended March 31 2007

 
                             Unaudited    Unaudited    Audited
                            six months   six months       year
                                 ended        ended      ended
                              March 31     March 31  September
                                                            30
                                  2007         2006       2006
                                £000's       £000's     £000's
                                                              
Gains on sale of                     -            -        405
available-for-sale                                            
investments taken to                                          
equity                                                        
Gains on cash flow hedges        2,530            -      3,629
Net exchange differences         9,835      (1,730)      1,056
on translation of foreign                                     
operations                                                    
Net exchange difference          (607)        1,718      3,183
on foreign currency loans                                     
Actuarial gains on                 882            -          -
defined benefit pension                                       
schemes                                                       
Tax on items taken               3,678        (130)      (265)
directly to equity                                            
Other movements                      -            -       (23)
                                                              
Net income recognised           16,318        (142)      7,985
directly in equity                                            
                                                              
Transfers                                                     
Transfer of gain on cash         (956)            -          -
flow hedges from fair                                         
value reserves to the                                         
income statement                                              
                                                              
Profit for the period           15,212       10,226     38,746
                                                              
Total recognised income         30,574       10,084     46,731
and expense for the                                           
period                                                        
                                                              
Attributable to:                                              
Equity holders of the           29,280        9,478     45,415
parent                                                        
Minority interests               1,294          606      1,316
                                30,574       10,084     46,731
                                                              

 

 

Notes to the Unaudited Interim Report

 

1. Basis of preparation

 

This interim report was approved by the board of directors on May 16 2007.

The financial information contained in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985 and
should be read in conjunction with the 2006 annual report. The comparative
financial information is based on the interim results for the six months ended
March 31 2006.

The figures for the year to September 30 2006 are an abridged statement from the
group's accounts, which have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain a
statement under section 237(2) or 237(3) of the Companies Act 1985.

Accounting policies

The condensed set of financial statements has been prepared using accounting
policies consistent with International Financial Reporting Standards (IFRS). The
group has not yet adopted IAS 34 'Interim Financial Reporting' but intends to do
so from October 1 2007.

 

The same accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in the Group's
latest annual audited financial statements. In addition, for defined benefit
schemes, the cost of providing benefits is determined using the Projected Unit
Credit Method, with actuarial valuations being carried out at each balance sheet
date. Actuarial gains and losses are recognised in full in the period in which
they occur. The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as adjusted for
unrecognised past service cost, and as reduced by the fair value of scheme
assets.

 

2. Segmental analysis

 

Primary reporting format

Segmental information is presented in respect of the group's business divisions
and represent the group's management and internal reporting structure. The group
is currently organised into five business divisions: Financial publishing;
Business publishing; Training; Conferences and seminars; and Databases and
information services. This is considered to be the primary reporting format.
Financial publishing and Business publishing consist primarily of advertising
and subscription revenue. The Training division consists primarily of delegate
revenue. Conferences and seminars consists of both sponsorship income and
delegate revenue. Databases and information services consists of subscription
revenue. A breakdown of the group's revenue by type is set out below.


Secondary reporting format

The group divides the operation of its businesses across three main geographical
areas: United Kingdom; North America; and Rest of World (which primarily
includes Asia). These geographical areas are considered as the secondary
reporting format.


Inter segment sales are charged at prevailing market rates.
 

 

 

                      Unaudited six months ended March 31                       

                                                                                
                United Kingdom  North America   Rest of World    Elimination         Total     
                   2007   2006    2007    2006    2007    2006     2007    2006    2007    2006
                 £000's £000's  £000's  £000's  £000's  £000's   £000's  £000's  £000's  £000's
Revenue                                                                                        
By division and                                                                                
source:                                                                                        
Financial        18,571 14,047  16,670  15,358     694     477    (520)   (419)  35,415  29,463
publishing                                                                                     
Business         13,655  5,969   5,961   3,764     586     634    (167)   (149)  20,035  10,218
publishing                                                                                     
Training         11,968  9,198   3,530   3,365   1,395   1,188    (348)   (263)  16,545  13,488
Conferences and  18,121 14,251  23,045  18,805   6,691   6,790  (1,971) (1,710)  45,886  38,136
seminars                                                                                       
Databases and     3,497  2,595  15,398   2,387   6,708   4,353     (73)    (19)  25,530   9,316
information                                                                                    
services                                                                                       
Sold/closed         836  2,135       5     248       -     146     (35)    (25)     806   2,504
businesses                                                                                     
Total revenue    66,648 48,195  64,609  43,927  16,074  13,588  (3,114)  (2,585 144,217 103,125
Joint ventures        -    963       -       -     441     885        -       -     441   1,848

                 66,648 49,158  64,609  43,927  16,515  14,473  (3,114) (2,585) 144,658 104,973

 

The joint venture revenues of £441,000 (2006: £1,848,000) can be allocated as
follows; Business publishing £nil (2006: £963,000); Databases and information
services £nil (2006: £885,000); Conferences and seminars £353,000 (2006: £nil);
Training £88,000 (2006: £nil).

 

Revenue of £27,190,000 from Metal Bulletin is included within the figures above.
This has been allocated as follows: Financial publishing £905,000; Business
publishing £8,453,000; Conferences and seminars £4,585,000; Databases and
information services £13,247,000.

 

 

Notes to the Unaudited Interim Report
   
 2. Segmental analysis continued

 
                                      2007          2006
                                    £000's        £000's
Revenue by type:                                        
Subscriptions                       50,344        26,622
Advertising                         28,290        23,480
Sponsorship                         21,168        17,788
Delegates                           37,685        28,061
Other                                5,924         4,670
Sold/closed businesses                 806         2,504
Total revenue                      144,217       103,125
Investment income (note 4)           1,773           444
Total revenue and investment       145,990       103,569
income                                                  

 

                      Unaudited six months ended March 31                       
                 United Kingdom  North America  Rest of World        Elimination        Total          
                     2007   2006    2007   2006   2007   2006       2007    2006    2007    2006
                   £000's £000's  £000's £000's £000's £000's     £000's  £000's  £000's  £000's
Revenue                                                                                         
By destination:                                                                                 
Continuing         26,074 18,568  72,609 48,146 47,842 36,467    (3,114) (2,560) 143,411 100,621
businesses                                                                                      
Sold/closed           181    590     123    601    502  1,338          -    (25)     806   2,504
businesses                                                                                      
Total revenue      26,255 19,158  72,732 48,747 48,344 37,805    (3,114) (2,585) 144,217 103,125
Joint ventures          -     59       -    152    441  1,637          -       -     441   1,848
Total revenue      26,255 19,217  72,732 48,899 48,785 39,442    (3,114) (2,585) 144,658 104,973
(including share                                                                                
of joint                                                                                        
ventures                                                                                        
revenue)                                                                                        
Investment          1,540    444     191      -     42      -          -       -   1,773     444
income                                                                                          
Total revenue      27,795 19,661  72,923 48,899 48,827 39,442     (3114) (2,585) 146,431 105,417
(including share                                                                                
of joint                                                                                        
ventures                                                                                        
revenue) and                                                                                    
investment                                                                                      
income                                                                                          

 

                      Unaudited six months ended March 31                       

                                                                                
                 United Kingdom  North America   Rest of World        Total          
                    2007    2006    2007    2006   2007   2006    2007    2006
                  £000's  £000's  £000's  £000's £000's £000's  £000's  £000's
Operating profit                                                              
1                                                                             
By activity and                                                               
source::                                                                      
Financial          5,045   3,012   2,476   1,535   (21)  (169)   7,500   4,378
publishing                                                                    
Business           3,873   1,622   1,077     413  (133)   (98)   4,817   1,937
publishing                                                                    
Training           3,411   1,974     772     557    390    281   4,573   2,812
Conferences and    5,813   4,184   6,585   4,465  1,066  1,613  13,464  10,262
seminars                                                                      
Databases and      2,149   2,021   5,488     183  1,152    130   8,789   2,334
information                                                                   
services                                                                      
Sold/closed          210    (11)     (1)       -    (1)     37     208      26
businesses                                                                    
Unallocated      (4,723) (3,814)   (435)   (376)    (6)      - (5,164) (4,190)
corporate costs                                                               
Operating profit  15,778   8,988  15,962   6,777  2,447  1,794  34,187  17,559
before                                                                        
Acquired         (2,484)       - (4,217)       -  (181)      - (6,882)       -
intangible                                                                    
amortisation 2                                                                
Share option     (1,321) (1,519)  1,146)   (898)  (144)  (125) (2,611) (2,542)
expense                                                                       
Exceptional        (953)       - (1,730)       -      -      - (2,683)       -
items (note 3)                                                                
Operating profit  11,020   7,469   8,869   5,879  2,122  1,669  22,011  15,017
before                                                                        
associates and                                                                
joint ventures                                                                

 
Share of results in associates and joint                           414    733  
ventures                                                           
Net financing                                                  (3,602)(2,267)
costs                                                              
Profit                                                          18,823 13,483  
before tax                                                         
Tax                                                            (4,030) (3,257)  
Profit after                                                    14,793  10,226  
tax                                                                

 

 

The exceptional items of £2,683,000 (2006: £nil) can be allocated as follows:
Sold/closed businesses £1,972,000 income; Unallocated corporate costs £4,655,000
(expense).

 

Share option expense of £2,611,000 (2006: £2,542,000) can be allocated as
follows: Financial publishing £650,000 (2006: £688,000); Business publishing
£265,000 (2006: £266,000); Training £327,000 (2006: £331,000); Conferences and
seminars £570,000 (2006: £719,000); Databases and information services £234,000
(2006: £173,000); Sold/closed business £132,000 (2006: £nil); Unallocated
corporate costs £433,000 (2006: £365,000).

 

Acquired intangible amortisation of £6,882,000 (2006: £nil) can be allocated as
follows: Financial publishing £682,000; Business publishing £1,968,000;
Conferences & seminars £37,000; Databases & information systems £4,195,000.

 

Operating profit of £9,116,000 from Metal Bulletin is included within the
figures above. This has been allocated as follows: Financial publishing £54,000;
Business publishing £2,349,000; Conferences and seminars £1,858,000; Databases
and information services £5,701,000; Unallocated corporate costs £846,000
(expense).

 

1. Operating profit before acquired intangible amortisation, share option
expense and exceptional items.

2. Acquired intangible amortisation represents amortisation of acquisition
related non-goodwill assets such as trade marks, subscriber relationships,
advertiser relationships, and databases.

 

Notes to the Unaudited Interim Report continued

 

3. Exceptional items

 

Exceptional items are items of income or expense considered by the directors,
either individually or if of a similar type in aggregate, as being either
material of significant and which require disclosure in order to provide a view
of the group's results excluding these items.

 
                    Unaudited     Unaudited     Audited   
                    six months    six months    year      
                    ended         ended         ended     
                    March 31      March 31      Sept 30   
                          2007          2006          2006
                        £000's        £000's        £000's
                                                          
Profit on sale of            -             -         1,286
property                                                  
Profit / (loss) on       1,972             -       (1,483)
disposal of                                               
business                                                  
Goodwill impairment          -             -         (519)
Reorganisation and     (4,655)             -             -
restructuring costs                                       
                       (2,683)             -         (716)

 

In March 2007 the group sold Raven Fox, a leading duty-free and luxury goods
publishing and events business (note 11).

 

Subsequent to the acquisition of Metal Bulletin in October 2006 (note 9) the
group has begun the restructuring and reorganisation of the acquired group's
operations and incurred associated costs of £4.7 million. This primarily
includes restructuring costs and provisions for onerous property leases. This
results in a tax credit for the group of £1.1 million.

 

4. Finance income and expense

 
                          Unaudited     Unaudited     Audited 
                          six months    six months    year    
                          ended         ended         ended   
                          March 31      March 31      Sept 30 
                          2007          2006          2006    
                          £000's        £000's        £000's  
Finance income                                                
Interest receivable from  1,773         444           623     
short-term investments                                        
Dividends receivable from -             -             110     
assets held for sale                                          
Ineffectiveness of        -             -             39      
interest rate swaps                                           
Net movements in          4,455         -             -       
acquisition option                                            
commitment values                                             
Expected return on        463           -             -       
pension scheme assets                                         
                          6,691         444           772     
Finance expense                                               
Committed borrowings      (8,414)       (2,036)       (4,020) 
Imputed interest on       (886)         (448)         (916)   
acquisition option                                            
commitments                                                   
Notional interest on      (96)          (227)         (334)   
deferred consideration                                        
Ineffectiveness of        (76)          -             -       
interest rate swaps                                           
Interest payable on loan  (267)         -             -       
stock                                                         
Interest on pension       (554)         -             -       
scheme liabilities                                            
                          (10,293)      (2,711)       (5,270) 
                                                              
Net finance costs         (3,602)       (2,267)       (4,498) 

 

5. Tax on profit on ordinary shares

 
                           Unaudited  Unaudited  Audited 
                           six months six months year    
                           ended      ended      ended   
                           March 31   March 31   Sept 30 
                           2007       2006       2006    
                           £000's     £000's     £000's  
Current tax expense                                      
UK corporation tax         3,297      2,715      6,119   
Foreign tax                2,734      673        1,533   
Adjustments in respect of  18         -          107     
prior years                                              
                           6,049      3,388      7,759   
Deferred tax (credit)/                                   
expense                                                  
Current year               (1,983)    (131)      (11,361)
Adjustments in respect of  (36)       -          90      
prior years                                              
Total tax (credit)/expense 4,030      3,257      (3,512) 
in income statement                                      

 

The effective tax rate for the interim period is 21%. The underlying tax rate,
after adjusting profit before tax for exceptional items (note 3) and the net
movements in acquisition option commitment values (note 4), and their tax effect
is 29%. This is lower than the full year forecast underlying tax rate of 32% due
to a different regional mix of profits over the full year.

 

6. Dividends

 
                           Unaudited  Unaudited  Audited  
                           six months six months year     
                           ended      ended      ended    
                           March 31   March 31   Sept 30  
                                2007       2006      2006
                               £000's     £000's    £000's
Amounts recognisable as                                   
distributable to equity                                   
holders in period                                         
Final dividend for the         11,943      9,767     9,767
year ended September 30                                   
2006 of 11.6p (2005:                                      
11.0p)                                                    
Interim dividend for year           -          -     4,806
ended September 30 2006 of                                
5.4p                                                      
                               11,943      9,767    14,573
Employees' Share Ownership       (10)        (7)      (10)
Trust dividend                                            
                               11,933      9,760    14,563
                                                          
Interim dividend for the        6,177      4,806          
period ended March 31 2007                                
of 6.0p (2006: 5.4p)                                      
Employees' Share Ownership        (4)        (3)          
Trust dividend                                            
                                6,174      4,803          
                                                          

 

The final dividend was approved by shareholders at the Annual General Meeting
held on February 1 2007 and paid on February 6 2007.

 

The interim dividend of 6.0p (2006: 5.4p) is anticipated to be paid on June 25
2007 to shareholders on the register on May 25 2007. It is expected that the
shares will be marked ex-dividend on May 23 2007. Holders of International
Depositary Receipts can receive their dividend on May 25 2007 by presentation of
coupon number 40 to Dexia Banque Internationale a Luxembourg or to one of their
agents. The interim dividend has not been included as a liability in these
financial statements in accordance with IAS 10 'Events after the balance sheet
date'.

 

7. Earnings per share

 
                             Unaudited Unaudited Audited  
                             six       six       year     
                             months    months    ended          
                             ended     ended        
                             2007      2006      2006     
                                £000's    £000's    £000's
                                                          
Earnings attributable to        13,918     9,620    37,430
equity holders of the parent                              
Less earnings from               (419)         -         -
discontinued operations                                   
Basic earnings - continuing     13,499     9,620    37,430
operations                                                
                                                          
Intangible amortisation          6,882         -       144
Exceptional items                2,683         -       716
Deferred tax assets                  -         -  (13,649)
recognition                                               
Imputed interest on                886       448       916
acquisition option                                        
commitments                                               
Net movements in acquisition   (4,455)         -         -
option commitment values                                  
                                                          
Adjusted earnings               19,495    10,068    25,557
                                                          
                                                          
Basic earnings - continuing     13,918     9,620    37,430
and discontinued operations                               
                                                          
                                Number    Number    Number
                                 000's     000's     000's
                                                          
Weighted average number of     101,424    88,862    88,943
shares                                                    
Shares held by the                (59)      (59)      (59)
Employees' Share Ownership                                
Trust                                                     
                               101,365    88,803    88,884
Effect of dilutive share           303       197       456
options                                                   
Diluted weighted average       101,668    89,000    89,340
number of shares                                          
                                                          
                                                          
                                                          
                             Pence per Pence per Pence per
                                 share     share     share
Basic earnings per share -       13.32     10.83     42.11
continuing operations                                     
Effect of dilutive share        (0.04)    (0.02)    (0.21)
options                                                   
Diluted earnings per share -     13.28     10.81     41.90
continuing operations                                     
                                                          
Effect of intangible              6.77         -      0.16
amortisation                                              
Effect of exceptional items       2.64         -      0.80
Effect of deferred tax               -         -   (15.28)
assets recognition                                        
Effect of imputed interest        0.87      0.50      1.03
on acquisition option                                     
commitments                                               
Effect of net movements in      (4.38)         -         -
acquisition option                                        
commitment values                                         
                                                          
Adjusted diluted earnings        19.18     11.31     28.61
per share                                                 
                                                          
                                                          
                                                          
Basic earnings per share -       13.73     10.83     42.11
continuing and discontinued                               
operations                                                
Effect of dilutive share        (0.04)    (0.02)    (0.21)
options                                                   
Diluted earnings per share -     13.69     10.81     41.90
continuing and discontinued                               
operations                                                

 

The adjusted diluted earnings per share figure has been disclosed since the
directors consider it to give a more meaningful indication of the underlying
trading performance.

 

8. Net debt

 
                           Unaudited  Unaudited  Audited      
                           six months six months year         
                           ended      ended      ended        
                           March 31   March 31   September 30 
                                 2007       2006          2006
                               £000's     £000's        £000's
                                                              
Net debt at beginning of     (73,438)   (66,430)      (66,430)
period                                                        
(Decrease)/increase in        (5,395)    (7,275)         2,342
cash and cash equivalents                                     
Increase/(decrease) in        112,245      8,346      (15,716)
loans                                                         
(Increase)/decrease in      (253,894)    (6,994)         7,972
amounts owed to DMGT group                                    
company                                                       
Debt acquired on             (12,606)          -             -
acquisition of Metal                                          
Bulletin                                                      
Other non cash changes       (12,711)    (1,729)       (4,973)
Effect of foreign exchange      6,237    (1,430)         3,367
rate movements                                                
Net debt at end of period   (239,562)   (75,512)      (73,438)

 

Net debt comprises cash at bank and in hand, bank overdrafts, committed
borrowings and loan notes. Debt acquired on acquisition of Metal Bulletin
excludes cash at bank and bank overdrafts acquired which are presented in the
cash flow statement as part of the acquisition of subsidiary undertakings.

 

Cash and cash equivalents in the cash flow statement includes banks overdrafts.

 

The group has a dedicated £300 million three year multi-currency facility with a
subsidiary of DMGT. Interest is payable on this facility at a variable rate of
between 0.4% and 1.6% above LIBOR. At September 30 2006, the group had not drawn
down on this facility but remained a borrower under its existing five year
committed facility. During October 2006 the group, funded by the new
multi-currency facility, repaid all monies owing on its existing committed
facility and drew down further amounts to fund the purchase of Metal Bulletin
Plc and to settle related acquired debt.

 

9. Acquisitions

 

Metal Bulletin

On October 6 2006, the group acquired 100% of the issued share capital of Metal
Bulletin plc for cash consideration of £239.6 million. Metal Bulletin plc is the
parent company of a group of companies operating as a leading global information
provider of 'must have' market sensitive data in niche, business-to-business
markets. Its revenues are derived from a range of publications, electronic
products and services, conferences and research. This transaction has been
accounted for using the purchase method of accounting.

 

The directors have adjusted the consolidated balance sheet of Metal Bulletin plc
at October 6 2006 for the following adjustments that they believe more
accurately represent the fair value of the assets at acquisition. At March 31
2007 these adjustments are provisional and will be finalised during the second
half of the year.

 
                     Book     Accounting Fair value  Provisional
                     value    policy     adjustments fair value 
                              alignment                         
                       £000's     £000's      £000's      £000's
Net assets acquired:                                            
Goodwill               38,618   (38,618)           -           -
Intangible assets       5,456          -     133,043     138,499
Software                1,092          -           -       1,092
Other non-current       3,226        180       5,189       8,595
assets                                                          
Current assets         10,704       (47)       (277)      10,380
Trade creditors and  (29,930)      (398)     (4,080)    (34,408)
other payables                                                  
Other current         (6,033)          -        (81)     (6,114)
liabilities                                                     
Non-current          (15,364)    (1,593)    (43,502)    (60,459)
liabilities                                                     
                                                                
                        7,769   (40,476)      90,292      57,585
                                                                
Goodwill                                                 182,006
                                                                
Total consideration                                      239,591
                                                                
Consideration                                                   
satisfied by:                                                   
Cash                                                     156,410
Shares                                                    65,016
Loan notes                                                12,711
Directly                                                   5,454
attributable costs                                              
                                                                
                                                         239,591

 

Intangible assets represent trade marks, subscriber relationships, advertiser
relationships, and databases for which amortisation of £6.2 million has been
charged in the period. Goodwill is attributable to the deemed value of the
workforce and anticipated future operating synergies. Non-current liabilities
includes primarily a deferred tax liability arising on the intangible assets.

 

Metal Bulletin plc contributed £27.2 million to the group's revenue, £9.1
million to the group's operating profit and £2.5 million to the group's profit
before tax for the period between the date of acquisition and March 31 2007.

 

Total Derivatives

In October 2006, the group signed an agreement to acquire 67% of Total
Derivatives, a leading provider of real-time news and analysis about the global
fixed income derivatives markets. The price was £7.4 million including
acquisition costs and a working capital adjustment resulting in provisional
goodwill and intangible assets of £4.5 million and £6.9 million respectively. In
addition, the management team will stay with the business and have options to
sell their remaining shares to Euromoney at prices linked to profits for the
financial years 2007, 2008 and 2009. The transaction is subject to a maximum
consideration of 24.9% of Euromoney's market capitalisation at the date of
completion.

 

Payments of deferred consideration

In March 2007, in accordance with the purchase agreement, the group paid the
final instalment of $12.3 million (£6.2 million) for Information Management
Network, the 80% owned financial conference organiser purchased in February
2004.

 

Increase in equity holdings

In January 2007, the group exercised its option to purchase the second tranche
of Asia Business Forum increasing its equity holding from 47.5% to 90%. The
payment is dependant on audited results to December 31 2006 and is anticipated
to be £3.1 million, payable after the period end and resulting in a provisional
additional goodwill of £3.8 million bringing total goodwill to £4.6 million.

 

In February 2007, the group purchased a further 1.2% of the equity share capital
of Internet Securities, Inc for a cash consideration of $2.6 million (£1.3
million) resulting in additional goodwill of £1.0 million bringing total
goodwill to £4.2 million.

 

In February 2007, the group purchased a further 15% of the equity share capital
of Telcap Limited for a cash consideration of £1.7 million payable in April 2007
and resulting in additional goodwill of £1.6 million bringing total goodwill to
£3.3 million.

 

10. Discontinued operations

 

Part of the Metal Bulletin reorganisation and integration plan involved the
disposal of three of the non-core Metal Bulletin businesses. In accordance with
IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' these are
classified as discontinued operations. For the two businesses disposed of after
the period end their assets and liabilities are separately identified on the
balance sheet. Revenue and profit after tax arising from the three operations to
March 31 2007 is £4,911,000 and £419,000 respectively. These discontinued
operations relate to the Business publishing and Database and information
services segments.

 

11. Disposals

 

The first of the non-core Metal Bulletin operations above, Atalink Limited, a
specialist and direct response publication company, was sold on March 30 2007
for £1.8 million. A further payment, anticipated to be £0.8 million, will be
received for the net current assets of the company on agreement of the
completion accounts. An additional final payment of £0.5 million is payable on
March 30 2008. No profit or loss was made on disposal.

 

The remaining entities have been sold subsequent to the period end and have been
classified as subsidiaries held for sale and presented separately in the balance
sheet.

 

On March 12 2007, the group disposed of Raven Fox, a leading duty-free and
luxury goods publishing and events business for cash consideration of £1.9
million. Raven Fox's liabilities on disposal were £0.2m resulting in a profit on
sale, after related sale costs, of £2.0 million. This results in a tax charge of
£0.6 million. The results of Raven Fox are included in the consolidated accounts
up to the date of their disposal as part of closed businesses.

 

Post balance sheet date disposal

On April 12 2007 the group sold Energy Information Centre Limited, a leading
company in the provision of wholesale and retail market intelligence, outsourced
procurement and energy risk management strategy. The group received £4.7 million
on completion with a further payment, anticipated to be £0.3 million, to be
received for the net current assets of the company on agreement of the
completion accounts.

 

On May 15 2007 the group sold certain assets of Systematics International
Limited, a database business principally in the farm machinery and construction
sector, for a nominal sum.

 

Independent Review Report to Euromoney Institutional Investor PLC

 

Introduction

 

We have been instructed by the company to review the financial information for
the six months ended March 31 2007 which comprise the group income statement,
the group balance sheet, the group cash flow statement, the group statement of
recognised income and expense and related notes 1 to 11. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.

 

This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.

 

Directors' responsibilities

 

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

 

Review work performed

 

We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.

 

Review conclusion

 

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended March 31 2007.

 
Deloitte & Touche LLP

Chartered Accountants

London

May 16 2007

 

Directors and Advisors

 

Chairman PM Fallon ++

 

Managing Director PR Ensor ++

 

Finance Director CR Jones

 

Executive Directors

NF Osborn

DC Cohen

CR Brown

SM Brady

RT Lamont

D Alfano

G Mueller

MJ Carroll

CHC Fordham

JLE Wilkinson

 

Non-executive Directors

The Viscount Rothermere +

Sir Patrick Sergeant ++(S)

CJF Sinclair +++

JP Williams (S)

JC Botts +++(S)

JC Gonzalez (S)

 
+ member of the remuneration                                                                         
committee                                                                                            
++ member of the nominations                                                                         
committee                                                                                            
(S) member of the audit committee                                                                    
                                                                                                     
President Sir Patrick Sergeant                                                                       
                                                                                                     
Company Secretary CR Jones                                                                           
                                                                                                     
Registered Office Nestor House, Playhouse Yard, London EC4V                                          
5EX                                                                                                  
                                                                                                     
Registered Number 954730                                                                             
                                                                                                     
Auditors Deloitte & Touche LLP, London                                                               
                                                                                                     
Solicitors Nabarro Nathanson, Lacon House, Theobald's Road, London WC1X 8RW                          
                                                                                                     
Joint brokers UBS, 1 Finsbury Avenue, London EC2M 2PP and Dresdner Kleinwort, 30 Gresham Street,     
London EC2V 7PG                                                                                      
                                                                                                     
Depositary Banque Internationale a Luxembourg SA, 69 route d'Esch, 2953 Luxembourg                   
                                                                                                     
Agents of the Depositary                                                                             
Citicorp Investment Bank (Switzerland), Bahnhofstrasse 63, PO Box 224, CH 8021                       
Zurich                                                                                               
Citibank NA, Citibank House, 336 Strand, London WC2R                                                 
1HB                                                                                                  
                                                                                                     
Registrars Capita IRG plc, Northern House, Woodsome Park, Fenay Bridge, West Yorkshire,              
HD8 0LA                                                                                              
                                                                                                     

 

 

Internet Sites

 
Euromoney Institutional                                                                  
Investor                                                                                 
Internet Sites (all www.)                                                                
                                                                                         
                                                                                         
abf-asia.com                                 iimemberships.com                           
abf.com.sg                                   iinews.com                                  
absolutereturn.net                           iiresearchgroup.com                         
adhes.com                                    iisearches.com                              
airfinancejournal.com                        imn.org                                     
airtrafficmanagement.net                     indmin.com                                  
amm.com                                      institutionalinvestor.com                   
asialaw.com                                  internationaltaxreview.com                  
asiamoney.com                                isfmagazine.com                             
ceicdata.com                                 latinfinance.com                            
chinalawandpractice.com                      legalmediagroup.com                         
coaltrans.com                                managingip.com                              
dcgtraining.com                              medadnews.com                               
dealogic.com                                 metalbulletin.com                           
emergingmarkets.org                          metalbulletin.plc.uk                        
euromoney.com                                misti.com                                   
euromoneybooks.com                           mistieurope.com                             
euromoneyconferences.com                     petroleum-economist.com                     
euromoneyleasetraining.com                   pharmalive.com                              
euromoneyplc.com                             projectfinancemagazine.com                  
euromoneyseminars.com                        reactionsnet.com                            
euromoneytraining.com                        securities.com                              
euromoney-yearbooks.com                      sfinews.net                                 
euroweek.com                                 telcap.co.uk                                
expertguides.com                             totalderivatives.com                        
financialdirectories.com                     tradefinancemagazine.com                    
fow.com                                      worldoil.com                                
fowevents.com                                                                            
fowtradedata.com                                                                         
globalinvestormagazine.com                                                               
globaltelecomsbusiness.com                   For further information on                  
                                             all Euromoney                               
gulfpub.com                                  Institutional Investor                      
                                             products, call the Hotline                  
                                             on:                                         
hedgefundintelligence.com                                                                
hydrocarbonprocessing.com                    (UK)   44 (0) 207 779 8999
                                                                                     
iflr.com                                     (US)   +1 800 437 9997  
                                                 or +1 212 224 3570              
iflr1000.com                                                              
iiconferences.com                                                                        
iievents.com                                 or e-mail:                                  
iijournals.com                               hotline@euromoneyplc.com                    

 

 



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