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ITE Group PLC (ITE)

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Tuesday 02 December, 2008

ITE Group PLC

Final Results

RNS Number : 3345J
ITE Group PLC
02 December 2008
 




2 December 2008

For Immediate Release        

                

ITE GROUP PLC

PRELIMINARY RESULTS ANNOUNCEMENT


Strong events portfolio and balance sheet support future growth 

Highlights



Year ended

30 September 2008


Year ended

30 September 2007



Change


Revenue

£110.1m

£99.1m

11%

Profit before tax

£34.5m

£33.7m

2%

Headline pre-tax profit*

£37.1m

£35.3m

5%

Diluted earnings per share

9.3p

9.0p

3%

Headline diluted earnings per share**

10.1p

9.4p

7%

Dividend per share

5.3p

4.5p

18%

 


  • Like-for-like revenue growth of 13% reflects strength of events portfolio

  • Strong balance sheet with net cash of £29.1m (2007: £26.7m) 

  • Dividend up 18% to 5.3p reflecting ongoing confidence in future 

  • Acquisitions in St Petersburg and Novosibirsk add to core portfolio of events

  • £75m of revenues already booked for 2009 financial year

  • Like-for-like advance revenues: 10%+ ahead of last year and in line with expectations


Russell Taylor, CEO of ITE Group, commented:


'These results reflect the strong market positions and the cash generative nature of ITE's business. During the year, the Russian and CIS economies continued to show good growth and remain important markets for our international exhibitors. The four complementary acquisitions made in the year have strengthened our portfolio of events and will make a full contribution in 2009. 


The macro-economic climate will present new and different challenges for the Group this year and we continue to monitor the situation closely. With a strong balance sheet and market leading events the Group is in an excellent position to weather market conditions. Like-for-like volume sales are expected to show little or no growth this year, but revenue growth is expected to be positive. Trading is in line with expectations and advance revenues booked to date of £75m are more than 10% ahead of last year's comparable figures. Overall, the Board remains confident for the future.'



Notes:

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

** Headline diluted earnings per share is calculated using profit before amortisation of acquired intangibles and 

    impairment of goodwill (including associates) and profits or losses arising on disposal of group undertakings - see note

    9 for details.

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




Enquiries:


Russell Taylor, Chief Executive
Neil Jones, Group Finance Director
 
ITE Group plc
020 7596 5000
Charles Palmer/Helen Thomas
Financial Dynamics
020 7831 3113


 

ITE Group plc


Preliminary statement for the year ended 30 September 2008


Chairman's statement


Group Performance


ITE Group plc has produced another strong set of financial results for the year ending 30 September 2008. In the lesser year of our biennial pattern, revenues increased by 11% to £110.1 million (2007: £99.1 million). Headline pre-tax profit increased by 5% to £37.1 million and reported Profit before tax has increased to £34.5 million (2007: £33.7 million). Fully diluted earnings per share have increased to 9.3p per share (2007: 9.0p per share). These results have been achieved alongside mixed trading conditions in some of our markets and are a good indication of the resilience of the Group's business model. The Group generated cash flow from operations of £52.9 million in the year, from which it applied £13.5 million to investment in new businesses, £12.1 million to dividends and £15.9 million to share buy backs. The Group's cash balances at the year end were £29.1 million (2007: £26.7million).


Strategic Progress


The Group's primary strategy over the past few years has been to maximise the organic growth opportunities available through its strong market positions in Russia and Central Asia. The Group has an established management structure and a business model which is capable of replication both in our existing markets and in other emerging market countries. The Group continues with its strategy of seeking opportunities for ITE to leverage its international sales network onto local products.


In Russia and in Central Asia, ITE has the unique assets of strong local infrastructure and an effective international sales network. The Group has recently made good progress in expanding its international sales reach by opening offices in China, and more recently SpainDubai and Malaysia. Progress has also been made this year to expand the Group's product range by acquiring the Interstroyexpo construction event in St Petersburg, the Sfitex security event in St Petersburg and a complete portfolio of exhibitions in NovosibirskSiberia. The businesses are performing to plan and the benefit of these acquisitions will have their first impact on our profits in 2009.


We continue to maintain excellent relationships with our venue partners. In Kazakhstan we have agreed to support the Almaty venue in its plans to expand the total gross exhibition space by 20,000m2. In BakuAzerbaijan, construction has started on a new 28,000m2 exhibition centre where ITE will become the anchor tenant in a country whose economy is still showing robust growth.


The recent change in the world economic climate will present new and fresh challenges for the Group in the markets in which it operates. We are well positioned to benefit from the changed circumstances having £29.1 million of cash on the balance sheet, low operational gearing and continuing strong cash generation. We are able to take advantage of any opportunities that will help us to achieve our strategy as and when they arise.



Board and Management


There have been a number of changes to the Board. Russell Taylor was appointed as Acting Chief Executive in addition to his existing duties as Finance Director, following the departure of Bill Dye in January. The Board were pleased to confirm Russell's appointment as Chief Executive in May. Neil Jones joined the Board as Finance Director on 4 November 2008. Neil was previously the Finance Director at Tarsus Group plc, a UK listed international exhibition company. He brings to the Board experience of making acquisitions in new emerging market territories and extensive knowledge of the exhibition industry outside Russia and the CIS.


Sir Jeremy Hanley stepped down from the Board at the AGM in March after having served as a non-executive Director for nine years from the flotation of the Group as a listed company. The Board is deeply grateful for his wise counsel and commitment during the years of the development of ITE. Neil England was appointed a non-executive Director in March. Neil has first-hand experience of managing businesses in Russia and the CIS and brings valuable perspectives to bear on our current business. Michael Hartley has been appointed the Senior Independent Director and has replaced Sir Jeremy as Chairman of the Audit Committee. Malcolm Wall has become Chairman of the Remuneration Committee.


Dividend


The Board is recommending to shareholders a final dividend of 3.7p per share (2007: 3.2p), making a total dividend for the year of 5.3p per share (2007: 4.5p). The dividend for the year represents an increase of 18% over last year's dividend, reflecting both the strong cash position of the Group and the Board's confidence in its positioning and future.


Outlook


Overall the Group's trading is in line with the Board's expectations. Current bookings indicate that like-for-like volume sales will show little or no growth in 2009, but overall volumes will be improved by non-annual events and the acquisitions made in this year. Revenue growth is expected to be positive reflecting pricing policy, product mix and the beneficial effect of exchange rates on reported revenues. At 28 November 2008 like-for-like bookings are for volume sales slightly down on last year but for revenue growth in excess of 10% over last year. Advance bookings already made for this financial year are £75 million (2007: £61 million at the same date). 


The global economy is experiencing uncertain and difficult times and we continue to monitor local market conditions closely. Currently the principal economies in which ITE operates in Russia and Central Asia are still expected to grow, albeit at lower levels than previously forecast. Our strong exhibition brands enjoy leading positions in their markets and access a broad customer base across international and local markets. Accordingly we expect our exhibitions will prove to be resilient in this testing environment. The Board remains confident that ITE with its advance bookings, strong cash flow, leading exhibition brands and experienced management team is well positioned for the future.



Iain Paterson

Chairman

1 December 2008

Chief Executive's statement



 

Results for 2008 financial year


Revenue for the year was £110.1 million, an increase of 11% over last year (2007: £99.1 million) and an improvement in like-for-like revenues of 13%. Growth in revenue was largely driven by yield improvement with more sales in higher priced products, a reduction in marginal business activity, price increases and favourable currency movements all contributing to the improvement. The gross margin haremained at 50% reflecting the Group's biennial pattern of events. 


Headline pre-tax profit of £37.million was an absolute improvement on last year's result of £35.3 million, and was underpinned by a 16% improvement in like-for-like figures. This result was achieved after making a £3.3 million charge against derivative currency hedges which offset much of the beneficial effect of exchange rate movement on the Group's reported revenues for the year. The like-for-like increase in headline profits of circa £5.0 million was largely driven by growth in higher margin products.  


The business activity has again provided strong cash flow in the year. Headline profit before tax of £37.million has translated to an operational cash flow figure of £52.9 million. The Group applied £13.5 million of cash to the acquisition of businesses and £15.9 million to share buy backs (including ESOT purchases) over the course of the year. Net cash balances of £26.7 million at the beginning of the year rose to £29.million at the 30 September 2008.


This strong set of financial results for the year was achieved despite the early impact of the global financial downturn affecting some of our markets and serves to demonstrate the resilience of strong market positions in economies showing good domestic growth.


Trading and operating performance in 2008


ITE's revenue growth has again been strong in its major sectors especially construction, oil and gas and travelAcross its principal sectors ITE experienced resilience in its major international brands and was active in thinning out low margin activity in its portfolio. 


There were five new launches in the construction sector and like-for-like revenue growth from this sector was 17% from a 4% volume growthIn the Oil and Gas sector there were two new launches in Turkmenistan and a highly successful sales performance on World Petroleum Congress 2008. The cancellation of an event in Algeria improved profits but dampened revenue and yield growth. Like-for-like revenue growth in the oil and gas sector was 4% from a marginally smaller volume base. In the Travel and Leisure sector there was one new launch in Kazakhstan and an 11% revenue growth earned from similar sales volumes. 



In the 2008 financial year the Group ran 159 exhibitions (2007: 148) including 15 new launches (2007: 17). The details of our exhibitions and conferences business (excluding publishing) are:





Sq metres sold

000's


Revenue

£m

Gross profit

£m

Average

Yield per m2

 

2007

 

All events

455

97

49



 

Non annual

(23)

(6)

(4)


2007

Annually recurring

432

91

45

£210


 

Acquisitions

19

2

1



 

Growth

(2)

12


2008

Annually recurring

449

105

54

£234


 

Non annual

51

3

1


 

2008

 

All events

500

108

55









The Group's like-for-like volume sales for the year were affected by the cancellation of some unprofitable events (circa 7,000 m2) and were marginally less than last year. However, a combination of sales mix, price increases and favourable currency movements yielded a net 13% increase in like-for-like revenues. Approximately half of the improvement in revenues arose from beneficial currency movements. 


Russia


Russia has enjoyed real growth in Gross Domestic Product of 7-8% for the last two years, and trading conditions in the year to 30 September 2008 were not significantly affected by the world's financial crisis or by the withdrawal of foreign investment from RussiaLike-for-like revenue growth from exhibitions and events in Russia was 12% from total space sold of 247,000m2 (2007: 250,000m2).

  

International quality venue space in Moscow is now circa 300,000m2, which is sufficient for the current size of the Moscow exhibition business though the fixture list remains congested at peak times.  The biggest influence on the Moscow result is always the size and pricing of the construction event, MosBuild. Although volume growth this year suffered from a date clash with another international event which reduced overall growth to 3%, pricing, discount control and beneficial currency movement supported good revenue improvement. For other events, trading remained strong with good demand from the international customers of our major events being a recurring feature. In St Petersburg there has been no marked change in the trading environment and the exhibition industry still awaits a definitive statement on future exhibition venuesITE has this year established a third Russian office through the acquisition of Siberian Fairs in Novosibirsk which since its acquisition has traded in line with management's expectations. There is good interest from our international exhibitor base in the Novosibirsk exhibitions, but development of a new venue is key to the future growth of the business. There are presently two potential venue projects in varying stages of advancement, and planned for 2010.


Central Asia & Caucasus


Overall, revenues increased by 22% in Central Asia & Caucasus from a volume sales increase of 6%. The Group's most notable impact from the current financial crisis was the downturn in the Kazakhstan property market, which in turn led to the reduction in size of the Autumn construction event, KazBuild. The Kazakhstan economy has a relatively high exposure to foreign debt and bank lending had supported a property and construction boom over recent years, which was an early victim of the international liquidity crisis.  


In Azerbaijan the economy is still enjoying growth in Gross Domestic Product of more than 13% and with a relatively low exposure to foreign debt there has been no marked change in market conditions since last year. ITE's business performance was strong with revenues from the Baku office increasing by over 20% year-on-year.  Construction has now started on a new 28,000m2 venue in Baku and ITE are in advanced discussions to be an anchor tenant for the new venue. Our other Central Asian market is Uzbekistan where again exposure to foreign debt as a proportion of Gross Domestic Product has been relatively low and real economic growth remains forecast to be circa 7% for next year. The recently constructed new pavilion at the venue has supported good revenue growth this year to £2.8m, a 50% increase in like-for-like revenues.


Eastern and Southern Europe


In Eastern and Southern Europe like-for-like volume sales growth was 2% yielding revenue growth of 12%. Our two main markets are in Ukraine and Turkey. Both countries are exposed to high levels of foreign debt relative to the size of their economy and both have had political uncertainty in the year. Encouragingly in both Turkey and Ukraine our offices have enjoyed good demand for their exhibition products over the last twelve monthsThe new financial year has started well in both countries with good bookings to date but volatility in their domestic currencies is expected to make domestic sales more challenging in the future.  

  

UK and Western Europe


Moda's performance in the last financial year has been excellent, maintaining a good financial result in difficult market conditions. In the UK our fashion business is affected by the slowdown in the UK retail market, but the ability to offer a complete marketing solution across publishing and exhibitions brings added value to our customers. 


Strategy


ITE's primary business objectives remain:

  • The creation of sustainable growth in headline earnings per share; and

  • The creation and maintenance of sustainable market leadership in its markets.


ITE's strategy for achieving its objective is based on enhancing its existing business strengths and gaining incremental synergy through expansion. ITE aims to extend its existing business model in its current markets by diversifying its exhibition portfolio, but also to 'leverage' its strengths both through expansion of its international sales network and of its product base to other similar markets.


The business strengths which ITE aims to build upon are:


International sales network


ITE has offices making sales in territories where historic and political trading relationships between exporters and the Russian and CIS economies have long existed. ITE's offices in Turkey and Western Europe account for circa 50% of its sales into its core Russian and CIS exhibition products. There are also strong trading links between the Russian and CIS states which ITE is able to access through its local office infrastructure.


ITE has this year expanded its international sales network to reflect new trading relationships and to improve its performance in countries where in the past agents have been used to make its sales. ITE's Beijing office is a growing source of sales, accounting for 3% of sales into the core markets this year. Nascent sales offices have been opened recently in SpainMalaysia and Dubai. These new sales offices will be more effective than the existing agency structure in delivering sales across the complete range of ITE's products and in focusing on the right quality of exhibitors and content for our events.


Market leading events


ITE already has market leading exhibitions and conferences in its portfolio of events. However, there are industry sectors where ITE does not yet have a strong enough product in the market place. ITE is well positioned to build or acquire strong events in new sectors by using its local sales force, its international sales network and its good venue relationships. This year ITE acquired Sfitex, a 3,000m2 security event in St Petersburgwith the support of ITE's existing international sales teams it produced growth of over 50% in its first year of ownership. In April, ITE announced the acquisition of Interstroyexpo, the leading St Petersburg construction event. Again the Group is able to bring its international sales forces to focus on the new event, which will next take place in April 2009.


Local presence


ITE has well established offices in the markets where it holds its exhibitions. The knowledge, experience and contacts of the staff built up over the last 15 years enables ITE's to sell to domestic exhibitorsto manage the professional staging of the event and to deliver reliably a targeted visitor audience to the exhibition.


In April ITE acquired a new exhibition portfolio in NovosibirskEastern Russia. Siberian Fairs runs 30 exhibitions across all industry sectors and has market leading exhibitions in Novosibirsk. This extension of ITE's office infrastructure will provide a platform for future growth of the exhibition portfolio in Novosibirsk.


Venue relationships


ITE's venue relationships are key to its business model, providing continuity, theme protection and growth for our key events.


ITE has continued to extend its working relationships with its principal venues in the year.  In Kazakhstan ITE has reached agreement with Atakent to support the construction of a new pavilion that will double the current available international quality exhibition space to circa 40,000m2 Construction is expected to be completed by the end of 2010. ITE is also in discussions with to support the development of a 28,000m2 venue in BakuAzerbaijan which is due to complete by 2010.  In Novosibirsk ITE is in discussion with potential developers of new exhibition space in the city.   




Russell Taylor
Chief Executive Officer

1 December 2008



Business review - Divisional review 2008 


ITE's divisional performance is summarised in the table below.



2008

£m

2007

£m

Actual 

change

Like-for-like

growth

Russia

66.0

61.7

7%

12%

Central Asia & Caucasus

22.0

18.1

22%

22%

Eastern & Southern Europe

9.3

7.1

31%

12%

UK & Western Europe

12.3

10.6

16%

16%

Rest of World

0.6

1.7

(64%)

(64%)


----------

-----------

------------

-----------

Total

110.1

99.1

11%

13%



Russia

Offices: MoscowSt PetersburgNovosibirsk


Staff employed:
2008:
416
 
2007:
198
 
 
 
Exhibitions organised:
2008:
52
 
2007:
44
 
 
 
Square metres sold (000s):
2008:
247
 
2007:
250


 

Following the acquisition this year of Siberian Fairs in Novosibirsk, Siberia ITE now has over 400 staff based in the three largest cities in Russia. The sales and revenue figures above include the activity for Siberian Fairs since its acquisition in April this year and the 180 employees of the business explain the increase in ITE's staff numbers in Russia. Overall the Russian business has seen steady demand for its products during the year, although events taking place in the final quarter of the year showed little volume growth, probably reflecting the early effects of tighter financial markets in Russia. Overall like-for-like volume sales in Russia were 2% less than last year, but like-for-like revenues improved by 12%.


The exhibition market in Moscow has expanded considerably over recent years alongside the expansion in venue facilities. This year the Group sold 208,000m2 of net exhibition space in the year which was 1% less than last year on a like-for-like basis. ITE's decision to cancel its participation in some marginal activity accounts for this small drop in volume sales. Most of the main events in Moscow take place in the spring season, and in March the Moscow International Travel and Tourism exhibition delivered a strong sales performance with an increase in space sold of 11% to 20,800m2. The most important event in ITE's portfolio is the Moscow construction event, held in the first week of April across the two main Moscow venues. The Mosbuild sectors based in Expocentr are wallbound and volume sales this year were 40,600m2 (2007: 39,740m2). MosBuild+ comprises the sectors based at the Crocus venue and this year achieved sales of 46,500m2. This represents an increase of 4% over the prior year - achieved despite the impact of a competitive date clash. Two events re-located this year to the Expocentr venue and both were able to show substantial growth over previous versions. The Moscow International Protection and Security event achieved a 13% increase in space sales to 7,600m2, and TransRussia, the international transport and logistics event, achieved a growth of over 30% in space sales to 8,200m2. This latter event is now established as a market leader in the sector and in its new venue has the potential to develop further. Expo-Electronica, the electrical components event takes place in April and performed well in improving its sales from 8,900m2 to 9,200m2. The Moscow International Motor Show (17,100m2) and World Food Moscow (24,100m2) both take place in the final quarter of the year and both were similar in size to last year's events. 

 


In St Petersburg the business enjoyed steady demand for its products and its volume sales figures were slightly below last year's figures. It was however a progressive year in developing the portfolio of events starting with the acquisition of the local security event Sfitex, announced in January. The first event under ITE's ownership took place in October 2008, and grew from 3,000m2 to 5,000m2. In April ITE announced the acquisition of 75% of Interstroyexpo, the largest construction event in St Petersburg. This event will next take place in April 2009 and the combined strength of ITE's construction offering will help the Group to maximise growth opportunities for both events. ITE's own construction event, BalticBuild, was held in September and produced a consistent sales performance delivering sales of 9,600m2.


ITE became the largest exhibition organiser in Novosibirsk following the acquisition of Siberian Fairs LLC in April this year. This business organises exhibitions in Construction, Furniture & Interiors, Motor, Food Products & Packaging and Agriculture. Since April it has staged 15 events which have performed in line with expectations. There are plans to develop a modern purpose built exhibition venue which will facilitate growth for Siberian Fairs' largest events. 


Central Asia & Caucasus

Offices:     Kazakhstan (Almaty, Astana, Atyrau) Azerbaijan (Baku), Uzbekistan (Tashkent), Kyrgyzstan (Bishkek), Tajikistan (Dushanbe)


Staff employed:
2008:
182
 
2007:
191
 
 
 
Exhibitions organised:
2008:
74
 
2007:
65
 
 
 
Square metres sold (000s):
2008:
92
 
2007:
86


In Central Asia & Caucasus this year ITE's businesses sold 92,300m2 representing growth of 6% over last year. Revenues of £22 million earned from the region represented a 22% like-for-like improvement over last year and again reflected changes in pricing and in exchange rates, each making a broadly equal contribution to the yield improvement.


Kazakhstan

ITE's business in Kazakhstan sold 61,200m2 in the year, a 2% decrease from last year. This does not properly reflect the trading conditions over the year and is disproportionally influenced by the KazBuild construction event held in September, which at 9,200m2 was 30% smaller than last year. Tightening credit conditions together with an inflated property market combined to create falling property values and an oversupply of residential property development. The change in market sentiment was quick as ITE had enjoyed good growth of 10%+ in the Spring version of the same event. The other construction events in Astana and Atyrau performed in line with the prior year and a new regional event, KaragandaBuild, was launched and held twice in the year.


The other main event in Kazakhstan is the Kazakhstan International Oil & Gas Exhibition which successfully grew its space sales by 16% to 11,200m2, and delivered a similar increase in the size of its conference. The Oil and Gas events in Aktau and Atyrau also contributed strong performances. Other events continued to perform well; the food exhibition grew by 15% to 4,200m2 and the travel event grew by 9% to 3,200m2.


ITE continues to work closely with Atakent, the principal venue in Almaty and is now supporting the construction of a new 30,000m2 pavilion which will double the international quality exhibition space available in Almaty to 40,000m2 (after de-commission some older pavilions). This new venue facility will support the further development of ITE's exhibition business in Kazakhstan.


Azerbaijan
The exhibition industry has continued to show growth and the Group sold 18,500m2 of space in the year representing like-for-like volume growth of 20% over last year. The construction event, BakuBuild, held in October 2007 achieved a growth in space sales of 5% and the Autoshow held in March delivered a 4% growth over last year. The Caspian Oil & Gas Exhibition and Conference took place in June and performed strongly across both the conference and the exhibition. The largest events in oil & gas and in construction are currently space constrained and will both benefit from the development of a new 28,000m2 venue due for completion in 2010. ITE, with its established exhibition brands is in a good position to participate in the future growth in the Azerbaijan exhibition industry that the new venue will help to promote.



Uzbekistan

ITE's business in Uzbekistan enjoyed strong trading conditions and in selling 12,500m2 of exhibition space in the year realised an improvement of 31% in volume sales over last year. This year saw the return of the textile event, CAITME, and there were strong sales performances from World Food Uzbekistan, UzBuild, Tashkent International Healthcare exhibition and the Oil & Gas exhibition-conference, OGU.



Eastern and Southern Europe

Offices:     Ukraine (Kyiv), Turkey (Istanbul)


Staff employed:
2008:
102
 
2007:
99
 
 
 
Exhibitions organised:
2008:
25
2007:
28
 
 
 
 
Square metres sold (000s):
2008:
125
 
2007:
78


ITE's principal offices in Southern and Eastern Europe are in Kyiv, Ukraine and in Istanbul, Turkey. The combined sales of these offices (excluding ITE's 50% owned associate business in Turkey) for this year was 124,400m2, which includes the biennial construction machinery event, Ankomak, in Turkey. On a like-for-like basis sales volumes from the region grew by 2% in the year yielding a like-for-like increase in revenues of 12%.   


Ukraine

The Ukraine office has performed well under its new management team. Total exhibition space sales of 56,000m2 in the year represented a like-for-like increase of 6% over the prior year. In the first quarter of the year Public Health, ITE's strongest healthcare event, delivered only a small increase in its space sales. The other key events taking place in the second and third quarters of the year all delivered good growth in space sales with the construction event, KievBuild, growing in size by 30%, the agricultural event, Kiev AgriHort by 20% this year and the Ukraine International Travel and Tourism event by 25% to 7,100m2.  


Turkey

The 68,500m2 of exhibition space sold by ITE's wholly owned subsidiary was boosted by its biennial construction machinery event, Ankomak. This event sold over 45,000m2 but has less impact on revenues as it has a relatively low yield. The main recurring events are in the optical and stationery sectors, and both performed in line with the last year in space sales. The Turkish outbound sales team made a valuable contribution to the Group's overall sales in Russia and the CIS.


The contribution from ITF, the Group's 50% associate was £0.1 million lower than last year's result of £0.2 million. This reflected the irregular timing of two large biennial events, one of which normally takes place in each year, but neither took place in this financial year. Otherwise performance in the associate was consistent with last year. 


UK & Western Europe

Offices:     UK (London, Huddersfield), Germany (Hamburg), Holland (Utrecht)Spain (Valencia)


*Staff employed:
2008:
164
 
2007:
158
 
 
 
*Exhibitions organised:
2008:
5
 
2007:
6
 
 
 
*Square metres sold (000s):
2008:
33
 
2007:
36


*of the total staff London and Germany international sales account for 85 staff; 43 staff are London corporate and 36 staff manage the UK fashion magazines and exhibitions.


The fashion business in the UK has continued to be affected by the downturn in the retail sector and ITE's total space sales from the sector fell this year from 35,900m2 to 33,300m2. This was a good sales result in a challenging environment and with careful cost management,  the financial results of the business were impressive. The related publishing business suffered a decline in revenue which impacted on its net operating margin. However the fashion magazines are important enabling the Group to offer a complete marketing solution to the industry.


At the end of the year Moda announced the acquisition of 'Bubble', a Childrenswear event held twice a year in London. This is a small event that has potential to grow and will benefit from the support of the Childrenswear Buyer magazine, part of ITE's portfolio of fashion publications. 


The Group has been the sales agent and consultant on the 19th World Petroleum Congress for the last three years. The 2008 event was held in Madrid in June this year and was a huge success with 15,800m2 of space sold at the exhibition and over 4,100 delegates attending the conference. This event showcased ITE's strengths as an organiser of large scale congresses and further developed its reputation in the oil and gas industry.


ITE has recently opened an outbound sales office in Valencia to maximise its sales from the Spanish market.  


Rest of the World 

Offices:     Algeria (Algiers), China (BeijingUrumqi)Malaysia (Kuala Lumpur), UAE (Dubai


ITE was involved in three small events this year, with a construction event in West China and two events in Algeria, one of which has since been discontinued. ITE has in the year also opened offices in Malaysia and the UAE which, like the Spanish office will focus on outbound sales for the Group's events. 

Business review - Finance


Revenue and gross profit 

Turnover for the year was £110.1 million (2007: £99.1 million). On a like-for-like basis this is a 13% improvement over last year's comparable turnover. 


The Group achieved a gross margin of 50% (2007: 50%). The current year included the biennial Ankomak event in Turkey which has space sales of over 45,000m2 but is a low margin event, and together with the trading result from Siberian Fairs since its acquisition, has had the effect of dampening margin growth this year.


Administrative expenses across the Group increased to £18.8 million, up from £17.million in the previous year. Administrative expenses include an amortisation charge of £2.6 million (2007: £1.6 million) reflecting the acquisitions made in the year and a charge for share-based payments of £0.9 million (2007: £1.6 million). Overall, Group administrative expense represented 17% of revenue (2007: 17%), resulting in net operating margins of 33% (2007: 33%) for the year.  


Operating profit was £36.5 million against a prior year profit of £33.1 million.


Headline pre-tax profit this year was £37.1 million (2007: £35.3 million); on a like-for-like basis this is a 16% increase over the previous year.


Other operating income

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


Finance income 

Finance income for the year was £1.9 million (2007: £1.8 million). Interest from bank deposits increased to £1.9 million in the year (2007: £1.8 million) as the Group held higher average cash balances throughout the year of £36.5 million (2007: £29.9 million). The average interest rate for the Group was marginally higher than the prior year.


Finance costs

Finance costs of £3.9 million (2007: £1.1 million) represent the interest cost of the Group's borrowings in Euro and US Dollar, bank charges and the net foreign exchange costs of the Group's derivative instruments of £3.3 million (2007: £0.4 million).  The Group enters into currency borrowing arrangements as part of its currency hedging activity and at 30 September 2008 the Group had borrowings of €5.9 million, and US$3.3 million.


Tax charge

The tax charge of £11.1 million represents 32% of profit before tax. This effective rate is in line with the prior year, reflecting the withholding tax burden on repatriating cash from our Russian businesses in the year. 


Earnings per share

Basic earnings per share increased to 9.4p (2007: 9.1p). Fully diluted earnings per share increased to 9.3p from 9.0p in the prior year.


The Group achieved headline diluted earnings per share of 10.1p per share (2007: 9.4p). Headline diluted earnings per share is based upon profit for the financial year attributable to equity holders of the parent, before amortisation of acquired intangible assets and any profits or losses on disposal of Group undertakings.


Dividends

The Group has recommended a final dividend of 3.7p for 2008, to bring the total dividend for the year to 5.3p (2007: 4.5p).


Return to shareholders

ITE is committed to maximising shareholder return and is a leading performer in its sector. ITE's progressive dividend policy has resulted in total dividends in 2008 of 5.3 pence per share, up 18% over 2007 (4.5p). Since 2004 the dividend has increased on a compound basis by 25% per year.


Cash flow

Cash generated from operations in the year was £52.9 million (2007: £41.5 million). The principal applications of cash were £15.9 million on purchasing shares on the open market for the Employees Share Option Trust ('ESOT') and treasury shares that were cancelled in the year (2007: £17.5 million)£0.8 million applied to venue loans and advances (2007: £0.9 million); £7.million was paid in tax; (2007: £10.3 million); £13.5 million was applied to acquisitions in the year (2007: £1.4 million) and £12.1 million was distributed as dividends (2007: £9.6 million). The net increase in cash balances at 30 September 2008 was £2.5 million.


Net cash at 30 September 2008 was £29.1 million (2007: £26.7 million).


Acquisitions & disposals

On 29 February 2008 ITE acquired a Security and fire protection event, Sfitex, from Omega for consideration of Roubles 30 million (approximately $1.15 million). The event is held in October each year.


On 29 April 2008, ITE acquired 100% of Siberian Fairs LLC, from Mr Yakushin, for consideration of $12 million. The company organises over 30 exhibitions in NovosibirskRussia, held throughout the year.


On 15 June 2008, ITE acquired 75% of Primexpo NW LLC from Mr Trofimov for consideration of €12 million. The company organises Interstroyexpo, a construction event in St Petersburg. There are matching 'put' and 'call' options over the remaining 25%.


On 23 September 2008, ITE acquired a Childrenswear event, Bubble, from Kidding LLC for consideration of £0.3 million. The event is held in January and July each year in London.



Balance Sheet

The Group's consolidated balance sheet at 30 September 2008 is summarised in the table below:



Assets

Liabilities

Net assets


£m

£m

£m





Goodwill and intangibles

57.1

-

57.1

Property, plant and equipment

1.7

-

1.7

Associates

1.4

-

1.4

Venue advances

2.4

-

2.4

Cash

35.7

(6.6)

29.1

Deferred income

-

(64.1)

(64.1)

Current assets and liabilities excluding cash and venue advances

41.7

(17.3)

24.4

Deferred consideration

Provisions

-

-

(5.0)

(0.9)

(5.0)

(0.9)

Deferred tax

1.6

(3.6)

(2.0)






Total as at 30 September 2008

141.6

(97.5)

44.1





Total as at 30 September 2007

122.1

(76.7)

45.4


Net assets decreased by £1.3 million to £44.1 million. The main changes are in goodwill and intangibles (an increase of £18.4 million) and net cash (increase of £2.5 million), offset by decrease in venue advances (£1.2 million), an increase in deferred tax (£2.0 million) and an increase in deferred income (£18.0 million). 


Investment and capital expenditure

The Group's capital expenditure on plant and equipment for the year was £1.1 million (2007: £0.8 million) and included exhibition equipment, computer equipment and associated software. 


Venue arrangements

The Group's capital expenditure on plant and equipment for the year was £1.1 million (2007: £0.8 million) and included exhibition equipment, computer equipment and associated software. 


Venue arrangements

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


Expocentr is ITE's principal venue in Moscow and hosts some of its largest exhibitions including MosBuild, Moscow International Oil & Gas exhibition, Moscow International Travel & Tourism, World Food Moscow, TransRussia and Moscow International Protection & Security exhibition. ITE has an agreement with Expocentr which secures the Group's rights to conduct its exhibitions until 2010.


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


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


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


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



At 30 September 2008, the Group's Sterling value of the outstanding balances of advance payments and venue loans was £2.4 million (2007: £3.6 million) as follows:


 
30-Sep-07
New
Repayments
30-Sep-08
 
£m
£m
£m
£m
 
 
 
 
 
Kyiv
1.3
-
(0.4)
0.9
Almaty
1.0
1.1
(1.7)
0.4
St Petersburg
0.7
-
(0.2)
0.5
Uzbekistan
0.4
0.3
(0.2)
0.5
Bulgaria
0.2
-
(0.1)
0.1
 
 
 
 
 
Total
3.6
1.4
(2.6)
2.4


Capital

During the year, the Company has purchased 5,445,585 shares which were held in Treasury and then cancelledThe Company has also issued 3,039,493 ordinary shares of 1p in the year. Of the total new issues, 3,029,146 were pursuant to the exercise of options and yielded aggregate consideration of £1.8 million. The remaining shares were issued as part of Directors' remuneration.


The ESOT held 6,967,783 (2.8%) of the Company's issued share capital at the year-end (2007: 1,854,875; 0.7%).


Post balance sheet events

There have been no significant post balance sheet events. 


Treasury

During the year, the Group experienced net foreign exchange losses of £3.1 million (2007: £12,000 loss). The exchange rate for the Euro at 30 September 2008 was €1.26:£1 (30 September 2007: €1.43:£1); the exchange rate for the US Dollar at 30 September 2008 was $1.82:£1 (30 September 2007: $2.02:£1).

 

During the year, 71% of the Group's sales were priced in Euros and 11% in US Dollars, the balance being in local currency. Overall 51% of the Group's cash receipts for the period were collected in 'hard' currency (Sterling, Dollars or Euros) and 49% was collected in various local currencies.


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


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

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


At 30 September 2008, the Group had options to sell €11.0 million spread over the six months to 31 March 2009, against which it held a mark to market provision of £1.0 million


Since the year end the Group has entered into forward contracts to sell Euros for Sterling between April 2009 and September 2009. The value of the contract is €26.8 million at an average rate of €1.274:£1. These instruments are designated as hedging instruments.


Over the year, the Group has entered into currency borrowing arrangements to minimise its exposure to foreign exchange risk on trade receivables. At 30 September 2008 the Group had borrowings of €5.9 million, and US$3.3 million. The cash balance of £29.1 million at 30 September 2008 is net of these borrowings.


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


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


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



Liquidity risk

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


Recent events in the world financial markets have highlighted the risks associated with holding deposits in foreign domiciled banks. The territories in which ITE operates do not all have internationally recognised banks and the Group has relationships with a number of domestic banks. The Group seeks to use the territory's leading bank and to minimise the level of cash held in such banks.


Going concern

After considering the current financial projections for the Group, the Directors have a reasonable expectation that the Company has adequate resources to continue its operations for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the accounts.



Consolidated income statement

For the year ended 30 September 2008




2008

2007



Restated*


£000

£000

Continuing operations



Revenue

110,063

99,134

Cost of sales

(55,173)

(49,397)


__________

__________

Gross profit

54,890

49,737

Other operating income

292

253

  Administrative expenses before amortisation

(16,222)

(15,599)

  Amortisation of acquired intangibles

(2,596)

(1,603)

Total administrative expenses

(18,818)

(17,202)

Share of results of associate

173

266


__________

__________

Operating profit

36,537

33,054

Finance income

1,907

1,778

Finance costs

(3,917)

(1,096)


__________

__________

Profit on ordinary activities before taxation

34,527

33,736

Tax on profit on ordinary activities

(11,071)

(10,777)


__________

__________

Profit for the period

23,456

22,959


__________

__________

Attributable to:



  Equity holders of the parent

23,479

22,978

  Minority interests

(23)

(19)


__________

__________


23,456

22,959


__________

__________




Earnings per share (p)



Basic

9.4

9.1

Diluted

9.3

9.0


__________

__________



* Restated for the presentation of financial instruments. See note 2 for details.


Consolidated statement of recognised income and expense

For the year ended 30 September 2008



2008

2007


£000

£000




Currency translation difference on net investment in subsidiary undertakings

2,921

(62)

(Decrease)/increase in fair value on cash flow hedge

(51)

331

Tax on items taken directly to equity

(246)

1,921


__________

__________

Net income recognised directly in equity

2,624

2,190




Transferred to profit or loss on cash flow hedges

-

(614)

Put option at fair value

(3,269)

-

Profit for the period attributable to the shareholders

23,456

22,959


__________

__________

Total recognised income and expense for the period

22,811

24,535


__________

__________




Attributable to:



  Equity holders of the parent

22,834

24,554

  Minority interests

(23)

(19)


__________

__________


22,811

24,535


__________

__________





Consolidated balance sheet

30 September 2008




2008

2007



Restated

Non-current assets

£000

£000

Goodwill

40,982

34,424

Other intangible assets

16,115

4,295

Property, plant and equipment

1,727

1,412

Investments in associates

1,381

1,358

Venue advances and other loans

1,001

1,583

Deferred tax asset

1,594

1,690


___________

___________


62,800

44,762

Current assets



Trade and other receivables

42,712

33,603

Tax prepayment

389

3,721

Cash and cash equivalents

35,709

39,963

Derivative financial instruments

-

48


___________

___________


78,810

77,335




Total assets

141,610

122,097




Current liabilities



Bank overdraft

(6,568)

(13,306)

Trade and other payables

(18,044)

(13,326)

Deferred income

(64,131)

(46,157)

Derivative financial instruments

(4,257)

(610)

Provisions

(264)

(824)


___________

___________


(93,264)

(74,223)

Non-current liabilities



Provisions 

(653)

(754)

Deferred tax liabilities

(3,617)

(1,671)

Derivative financial instruments

-

(49)


___________

___________


(4,270)

(2,474)




Total liabilities

(97,534)

(76,697)


___________

___________

Net assets

44,076

45,400


___________

___________

Equity



Share capital

2,479

2,503

Share premium account

2,669

871

Merger reserve

2,746

2,746

Capital redemption reserve

457

403

ESOT reserve

(8,390)

(597)

Retained earnings 

42,776

38,930

Translation reserve

3,414

493

Hedge reserve

-

51

Put option reserve

(3,269)

-


___________

___________

Equity attributable to equity holders of the parent

42,882

45,400




Minority interests

1,194

-


___________

___________

Total equity

44,076

45,400


___________

___________



Consolidated cash flow statement

For the year ended 30 September 2008




2008

2007

Cash flows from operating activities

£000

£000

Operating profit from continuing operations

36,537

33,054

Adjustments for:



Depreciation and amortisation

3,314

2,159

Share-based payments

931

1,550

Other non-cash expenses

(654)

47

Loss/(profit) on sale of fixed asset

1

(39)

Share of associate profit

(173)

(266)

Increase/(decrease) in provisions

1,147

(1,505)


__________

__________

Operating cash flows before movements in working capital

41,103

35,000

Increase in receivables

(10,005)

(1,230)

Increase in deferred income

17,974

6,449

Increase in payables

3,785

1,299


__________

__________

Cash generated from operations

52,857

41,518

Tax paid

(7,043)

(10,324)

Venue advances and loans

(830)

(929)


__________

__________

Net cash from operating activities

44,984

30,265




Investing activities



Interest received

1,902

1,752

Loss on derivative financial instruments

(2,990)

-

Dividends received from associates

198

444

Acquisition of businesses

(13,508)

  (359)

Exercise of Moda Put Option

-

(1,030)

Purchase of property, plant and equipment and computer software

(1,075)

(783)

Disposal of property, plant and equipment

-

142


__________

__________

Net cash (utilised)/generated from investing activities

(15,473)

166




Financing activities



Dividends paid

(12,050)

(9,634)

Interest paid

(598)

(663)

Net cash flow in relation to ESOT shares

(7,793)

2,623

Purchase of own shares

(8,078)

(17,506)

Proceeds from issue of share capital

1,810

144


__________

__________

Net cash flows from financing activities

(26,709)

(25,036)




Net increase in cash and cash equivalents

2,802

5,395





Net cash and cash equivalents at beginning of period net of overdrafts


26,657


21,166

Effect of foreign exchange rate changes

(318)

96


__________

__________

Net cash and cash equivalents at end of period net of overdrafts

29,141

26,657



__________

__________



2008

2007


£000

£000

Comprising:



Cash and cash equivalents

35,709

39,963

Bank overdrafts

(6,568)

(13,306)


__________

__________


29,141

26,657


__________

__________


Cash generated from the business:



Cash generated from operations

52,857

41,518

Interest received

1,902

1,752

Interest paid

(598)

(663)

Dividends earned from associates

198

444


__________

__________


54,359

43,051


__________

__________


Free cash flow from the business:



Cash generated from the business

54,359

43,051

Tax paid

(7,043)

(10,324)

Receipts from disposal of property, plant and equipment

-

142


__________

__________


47,316

32,869


__________

__________



Notes


1    Basis of preparation

ITE Group plc has prepared its audited annual accounts in accordance with International Financial Reporting Standards (IFRS).


The financial information set out in the preliminary announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985, but is derived from those accounts. While the financial information in this preliminary announcement has been prepared in accordance with International Financial Reporting (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The IFRS accounting policies applied in respect of the current and prior years have previously been disclosed. Statutory accounts for the year ended 30 September 2007 have been delivered to the Registrar of Companies and those for the year ended 30 September 2008 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts - their reports were unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985.

 

2    Change in accounting policies
Gains and losses on derivatives not in designated and effective hedging relationships

During the 2007/2008 financial year, ITE Group plc has changed its accounting policy in relation to the income statement disclosure of fair value gains and losses on derivatives not in designated and effective hedging relationships. Previously, ITE Group plc reported these fair value gains and losses in 'Administrative expenses' in the income statement. As a result of the change in policy, these fair value gains and losses are now disclosed as part of 'Finance income/costs'. Management judges that this policy provides a fairer presentation of administrative expenses and a clearer presentation of derivatives in the financial statements. The comparative financial statements for 2007 have been restated. The effects of these changes on the comparative figures are increase in 'Finance costs' of £0.4 million and a resulting decrease in 'Administrative expenses'.


Presentation of derivative financial instruments in the balance sheet

In light of the change of accounting policy above and the movement in the value of derivative instruments in the period, the Group has also amended the balance sheet presentation of derivative financial instruments. Previously, the fair value of derivatives was shown in 'Other debtors/other creditors', but is now presented as a separate balance sheet caption on the face of the balance sheet. Management believes that this presentation provides a clearer picture of the derivative instruments used by the Group. This presentational change has resulted in a restatement of the comparative prior year end financial statements for 2007. The effects of these changes on the comparative figures are decrease in 'Other creditors' of £0.7 million and a resulting increase in 'Derivative finance instruments'.



Impact of new accounting standards

In the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures which is effective for annual periods beginning on or after 1 January 2007, and the related amendments to IAS 1 Presentation of Financial Statements. The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided in these financial statements regarding the Group's financial instruments. 


In addition the following new standards, amendments to standards and interpretations are mandatory for the year ending 30 September 2008, and these have been adopted but have had no impact on the 2008 Group financial statements:


  • IFRIC 10 Interim Financial Reporting and Impairment

  • IFRIC 11 IFRS 2 Group and Treasury Share Transactions 



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


 


2008 

£000

2007 

£000

Profit on ordinary activities before taxation

34,527

33,736

Amortisation of acquired intangibles

2,596

1,603


__________

__________

Headline pre-tax profit

37,123

35,339


__________

__________


4    Segmental analysis

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


 

Year ended 30 September 2008

UK & Western Europe

Central Asia & Caucasus

 

 

Russia

Eastern & Southern Europe

Rest of World

Total Group


£000

£000

£000

£000

£000

£000

By geographical location of events/activities 







Revenue

12,280

21,973

65,956

9,252

602

110,063








Result

(7,480)

8,893

33,817

2,183

(1,049)

36,364


________

________

________

________

________

_______

By origin of sale







Revenue

55,813

11,096

37,056

5,971

128

110,063








Result

18,667

2,107

15,134

485

(30)

36,364


_______

________

________

_______

________


Share of results of associates






173

Profit on disposal of group undertakings






-







_______

Operating profit






36,537

Finance income






1,907

Finance costs






(3,917)







_______

Profit before tax






34,527

Tax






(11,071)







_______

Profit after tax






23,456







________

Capital expenditure

535

75

444

22

-

1,076

Depreciation and amortisation

2,430

115

752

17

-

3,314








Balance Sheet







Assets*

83,771

7,852

44,802

1,819

2

138,246


________

________

________

________

________

_______

Interest in associates






1,381

Consolidated total assets






139,627







________

Liabilities*

49,579

5,967

33,604

1,703

42

90,895


________

________

________

________

________

_______


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


The revenue in the year of £110.1 million includes £0.2 million (2007: £0.2 million) of barter sales.


Year ended 30 September 2007

UK & Western Europe

Central Asia & Caucasus

 

 

Russia

Eastern & Southern Europe

Rest of World

Total Group
Restated


£000

£000

£000

£000

£000

£000

By geographical location of events/activities 







Revenue  

10,624

18,082

61,706

7,069

1,653

99,134








Result

(6,672)

6,060

31,003

2,445

(48)

32,788


________

________

________

________

________

_______

By origin of sale







Revenue 

51,290

8,928

34,492

3,972

452

99,134








Result

18,788

2,191

12,037

(304)

76

32,788


_______

________

________

_______

________


Share of results of associates






266

Profit on disposal of group undertakings






-







_______

Operating profit






33,054

Finance income






1,778

Finance costs






(1,096)







_______

Profit before tax






33,736

Tax






(10,777)







_______

Profit after tax






22,959







________

Capital expenditure

255

154

361

13

-

783

Depreciation and amortisation

1,839

68

212

40

-

2,159








Balance Sheet







Assets*

92,537

6,137

15,297

1,389

(32)

115,328


________

________

________

________

________

_______

Interest in associates






1,358

Consolidated total assets






116,686







________

Liabilities*

51,628

4,798

14,206

1,333

87

72,052


________

________

________

________

________

_______


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


The revenue in the year of £99.1 million includes £0.2 million (2006: £0.2 million) of barter sales.


5    Finance income



2008

2007


£000

£000




Interest receivable from bank deposits

1,874

1,720

Interest receivable from Inland Revenue repayments

15

28

Interest receivable on advances to venues

13

4

Unwind of fair value discount on venue advances

5

26


__________

__________


1,907

1,778


__________

__________

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


6    Finance costs

 


2008

2007
Restated


£000

£000




Interest on overdrafts

360

453

Bank charges

238

210

Loss on derivative financial instruments

3,319

433


__________

__________


3,917

1,096


__________

__________


7    Tax on profit on ordinary activities


Analysis of tax charge for the year:

2008

    2007


    £000

    £000

Group taxation on current year profit



UK corporation tax on profit for the year

5,158

5,093

Adjustment to UK tax in respect of previous years

51

(196)


__________

__________


5,209

4,897




Overseas taxation - current year

5,489

5,915

Overseas taxation - previous years

419

111


__________

__________


5,908

6,026




Current tax

11,117

10,923


__________

__________

Deferred tax



Origination and reversal of timing differences

(46)

(146)


__________

__________


11,071

10,777


__________

__________


The tax charge for the year can be reconciled to the profit per the income statement as follows:



2008


2007


£000

£000

Profit on ordinary activities before tax

34,527

33,736


__________

__________

Profit on ordinary activities multiplied by standard rate of corporation tax

in the UK of 29% (2007: 30%)

10,013

10,121




Effects of:



Expenses not deductible for tax purposes

470

279

Deferred tax assets not recognised 

62

172

Withholding tax and other irrecoverable taxes

400

1,111

Adjustments to tax charge in respect of previous years

393

(85)

Deferred tax provision in respect of proposed dividends from overseas subsidiaries

801

-

Effect of different tax rates of subsidiaries operating in other jurisdictions

(1,018)

(768)

Associate tax

(50)

(53)


__________

__________


11,071

10,777


__________

__________

 

8  Dividends


    2008

    2007


    £000

    £000

Amounts recognised as distributions to equity holders in the year:






Final dividend for the year ended 30 September 2007 of 3.2p (2006 - 2.5p) per ordinary share

8,045

6,331

Interim dividend for the year ended 30 September 2008 of 1.6p (2007 -1.3p) per ordinary share

4,005

3,303


__________

__________


12,050

9,634


__________

__________

Proposed final dividend for the year ended 30 September 2008 of 3.7p (2007 - 3.2p) per ordinary share

8,915

7,983


__________

__________

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

Under the terms of the trust deed dated 20 October 1998, the ITE Group Employees Share Trust, which holds 6,967,783 (2007: 1,854,875) ordinary shares representing 3% of the Company's called-up ordinary share capital, has agreed to waive all dividends due to it.


9    Earnings per share

 

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

Number of shares

2008

2007


Number of shares ('000)

Number of shares ('000)

Weighted average number of shares:



For basic earnings per share

249,647

251,276

Effect of dilutive potential ordinary shares

2,493

4,454


___________

___________

For diluted and headline diluted earnings per share

252,140

255,730


___________

___________


Basic and diluted earnings per share
The calculations of basic and diluted earnings per share are based on the profit for the financial year attributable to equity holders of the parent of £23.5 million (2007: £23.0 million). Basic and diluted earnings per share were 9.4p and 9.3p respectively (2007: 9.1p and 9.0p respectively).

Headline diluted earnings per share
Headline diluted earnings per share is intended to provide a consistent measure of Group earnings on a year-on-year basis and is 10.1p per share (2007: 9.4p).  Headline basic earnings per share is 10.2p per share (2007: 9.6p).


2008 

£000

2007 

£000

Profit for the financial year attributable to equity holders of the parent

23,479

22,978

Amortisation of acquired intangible assets

2,596

1,603

Tax effect of amortisation of acquired intangible assets

(713)

(419)


________

________

Headline earnings for the financial year

25,362

24,162


________

________


Financial calendar


Final dividend 2008




Ex date

11 February 2009



Record date

13 February 2009



Annual General Meeting

27 February 2009



Payment date

13 March 2009



Interim dividend 2009




Record date

May 2009



Payment date

June 2009



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