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  Print      Mail a friend       Annual reports

Tuesday 07 December, 2004


Final Results

07 December 2004

                                 ITE GROUP PLC


7 December 2004

ITE Group plc, the leading exhibition organiser in emerging markets, is pleased
to announce its preliminary results for the year ended 30 September 2004.

Key points:

- Record results
- Profit before tax of £15.7 million (2003: £12.3 million), up 28%
- Headline pre-tax profit* of £18.1 million (2003: £15.5 million), up 17%
- Dividend per share of 2.2p (2003: 1.6p), up 38%
- Net cash of £33.5 million (2003: £22.1 million), up 52%
- Diluted earnings per share of 3.8p (2003: 3.0p), up 27%
- Headline diluted earnings per share of 4.7p (2003: 4.2p), up 12%
- Strong growth in core markets, with 'like for like' increase of 11% in sales
- 30 new launches in the year

Commenting on the results, Iain Paterson, Chairman, said:

'I am very pleased to report record full-year results for ITE Group plc. These
reflect an excellent performance in all of our key markets with Headline profit
before tax up 17% to £18.1 million. These results are even more pleasing as in
this year of our biennial cycle two of our largest shows do not take place. The
Group's balance sheet remains strong with net cash of £33.5 million.

'The markets in which the Group operates are enjoying rapid growth and our
strong market position, particularly in Russia and the CIS, positions us well
for future growth. During the year we made a number of strategic acquisitions to
complement our core businesses and we continue to extend and strengthen
relationships with key venues. We believe that the Group is well placed to
continue the strong performance next year and I am pleased to announce a
substantial increase in the dividend from 1.6p per share to 2.2p per share to
bring it in line with the Company's new platform of profitability.'

* Headline pre-tax profit is defined as profit before tax, amortisation and
impairment of goodwill (including associates) and profits or losses arising on
disposal of group undertakings - see the Profit and Loss Account for details


Ian Tomkins             ITE Group plc               020 7596 5000
Bridget Fury            Merlin                      020 7653 6620

ITE Group plc

Preliminary statement for the year ended 30 September 2004

Chairman's Statement

Group Performance
I am pleased to be announcing record results for ITE Group plc. These results
reflect the underlying strength of the business and an excellent performance in
all of our key markets. This was achieved despite the impact on the results of
ITE's biennial cycle. Turnover and Headline profit before tax for 2004 were
£60.8 million (2003: £58.9 million) and £18.1 million (2003: £15.5 million)
respectively. Headline diluted earnings per share grew by 12% to 4.7p per share
and diluted earnings per share improved to 3.8p per share (2003: 3.0p per
share). Profit before tax of £15.7 million is a 28% improvement on last year's
Profit before tax of £12.3 million. The Group has a strong balance sheet and
finished the year with net assets of £44.4 million (2003: £38.6 million) and a
net cash balance of £33.5 million (2003: £22.1 million).

Strategic Progress
In addition to our strong core business performance we have made a number of
strategic and complementary acquisitions. Most recently in October 2004 we
acquired Caspian Events Limited which owns the Caspian Oil and Gas exhibition
taking place every year in Azerbaijan. In May we acquired two exhibitions in the
Ukraine which have helped to build our presence in this growing market. In June
we completed the acquisition of RAS Publishing Group which owns the publishing
titles complementary to MODA, our UK Fashion brand. These acquisitions all
reflect our strategy of building the business through acquisitions in regions or
sectors where we already have relevant knowledge and experience.

We have made more progress in disposing of businesses where there is little
scope for management to achieve reasonable returns or improve performance.
Further to the disposal of our Czech associate interest in November 2003, we
sold our 50% shareholding in ACG our Egyptian associate company in May this
year. In October 2004 we disposed of X-RM Limited, a small UK based software

We have made further progress in extending and strengthening our key
relationships with the venues that host our exhibitions business. ITE has been
instrumental in supporting the construction projects for new facilities in
Almaty (Kazakhstan), Kyiv (Ukraine) and St Petersburg (Russia). The expansion in
international quality exhibition facilities will provide more space for our
exhibition organising business to continue its growth.

Board and Management
There have been no changes to the main Board since we last reported to you.
Michael Hartley who joined the Board in October 2003 was appointed Chairman of
the Remuneration Committee in February of this year. The Board has made some
changes to bring its structure and practices more closely into line with the
requirements of the New Combined Code. In particular Marco Sodi and Christopher
Russell, the two appointees of Veronis Suhler Stevenson have now agreed to stand
for re-election in accordance with normal practice.

The stability of the Board has assisted the Group in developing its management
team and I am encouraged at the level of talent that is apparent throughout our
local offices. I should like, on behalf of the Board, to reflect our
appreciation for all the efforts of our staff that have helped to make 2004 such
a rewarding year.

Over the last 2 years the organisation and cost base of the Group has been
restructured. As the benefits of this are now reflected in this year's financial
performance, the Board has re-evaluated the Company's dividend policy and has
decided to re-base the dividend by recommending a final dividend of 1.65p per
share. The total dividend for the year of 2.2p per share represents a 38%
increase over last year's dividend of 1.6p per share. The Group intends to
increase future dividends to reflect underlying financial performance.

The regions in which the Group operates are experiencing strong growth and the
venue space which facilitates expansion of our business is increasing in our
significant markets. We believe that ITE is well positioned to take advantage of
the anticipated expansion in the exhibition business in developing and emerging
markets. With our strong and established positions we remain confident that we
can build on the good financial performance of this year.

Iain Paterson
7 December 2004

Chief Executive's Review

Financial performance
Turnover for the year was £60.8 million (2003; £58.9 million) and Operating
profits were £13.8 million (2003: £11.7 million). The increase in Turnover and
Operating Profits of 3% and 17% respectively has been earned in the weaker year
of our biennial cycle. On a like for like basis (i.e. after adjustment for the
effect of our biennial cycle) revenues for 2004 increased by 11% and Operating
profit by 49% relative to the 2003 performance.

Sales of exhibition metres for the year were 276,000 (2003: 292,000) at an
average Sterling yield of £220 per m2 (2003: £202 per m2). Overall our Sterling
yields have increased in Moscow where contracts are priced in Euros although
there has been some deterioration in other regions where contracts have been
priced in US dollars. Yields have also improved as a result of better pricing
and discount controls throughout the Group.

Operating profit of £13.8 million for 2004 is an improvement of £2.1 million
over last year's comparable figure of £11.7 million. The change consists of a
£0.5 million improvement in Gross profit and a £1.6 million reduction in
Operating expenses. The improved Gross profit figure has been derived from
higher sales made at a consistent 45% gross margin. Operating expenses of £13.4
million (2003: £15.1 million) reflect the benefits of a lower cost base
following last year's re-structuring exercise and a net reduction in non
recurring items of £0.8 million. Net operating expenses before amortisation of
goodwill were £10.9 million (2003 £12.7 million) and now reflect a revised
ongoing cost base for the Group at its current level of operation. Foreign
exchange losses of £0.4 million (2003 losses of £0.4 million) are included in
Net operating expenses.

Our associated company contribution relates solely to our 50% owned business,
ITF in Istanbul, Turkey. Revenues and volume sales were both 15% lower than in
2003 on account of calendar changes for two significant events - which were
re-scheduled into 2005. Despite this the Group's share of ITF's Operating
profits contributed £0.5 million.

Trading highlights
In 2004 ITE organised 141 events in 15 countries (2003: 114 events in 16
countries). We launched 30 new events over the course of the year across a range
of industries concentrating on our core markets of Kazakhstan, Ukraine and
Moscow. The top ten events ordered by contribution to gross profit in 2004 and
their change in size over 2003 are set out below:

Rank   Event                           Location        2004      2003 
                                                    m2 sold   m2 sold  Growth
                                                   --------- --------- ------
   1   Mosbuild                        Moscow        35,700    34,600   3%
   2   Moscow International Travel &   Moscow        16,700    17,500   *
       Tourism (MITT)
   3   World Food Moscow               Moscow        20,000    17,500   14%
   4   Moscow International Motor Show Moscow        16,600    22,800   *
       / Autosalon
   5   MODA UK (bi-annual)             U.K.          21,000    19,000   11%
   6   Kazakhstan International Oil &  Kazakhstan     6,200     5,600   11%
       Gas (inc. conference)
   7   Windows & Doors                 Moscow         8,900     8,600   3%
   8   Baltic Building Week            St Petersburg  9,900     9,000   10%
   9   Moscow International Sports &   Moscow         9,900     7,500   32%
       Boat Show**
  10   Ingredients Russia              Moscow         4,700     4,500   4%

* 2003 Events not directly comparable
** Now split into two separate events

Like for like growth in space sales of our top ten annual events was 7%. This
reflects the constraint of venue space with respect to our major events,
Mosbuild, Windows and Doors and Moscow International Travel and Tourism.
World Food Moscow and the Moscow Boat Show procured additional space to
facilitate strong performances.

In Moscow volume growth was lower but tighter pricing and the Euro denomination
of its sales supported an improved average Sterling yield. Volume growth was
stronger in Central Asia but yields suffered from being priced in US dollars.
New launches contributed 12,000m2 in volume sales, revenues of £2.4 million and
gross profits of £0.5 million.

Profits earned from Oil and Gas and the Motor sectors events are proportionately
smaller, as is normal in the weaker year of our biennial cycle when we do not
hold the Oil and Gas event in Moscow and the Moscow International Motor Show
(MIMS) runs in place of Autosalon event. The strength of Construction Events
throughout Russia and CIS is apparent, as are the improved profits from the
travel sector driven by the events in Moscow and Ukraine.

Review of Operations

Despite lower overall volumes sold (see below) revenues were supported by better
yields and gross profits earned in Russia rose by 3%.

In 2004 the biennial Moscow International Oil & Gas was not scheduled, and the
smaller version of the two Motor events, MIMS took place instead of Autosalon.
This biennial effect accounted for a 17,000m2 reduction in volume sales. In
response to a change in the international calendar of events it has been decided
Autosalon will now be scheduled in 'even years' commencing in 2006, with MIMS
alternating in the 'odd years'.

A notable success in Moscow this year was the decision to split the Sports and
Boats show into two separate events which enabled the Boat show to expand by
35%. We have undertaken infrastructure works with the venue to further enhance
this event. World Food Moscow benefited both from additional space being made
available and an improvement in yield, to increase its revenues by 28%. The
Moscow office launched 6 new events into new market niches for technology and

A significant influence on the performance of a number of our major exhibitions
is the availability of quality exhibition space. This year has heralded the
opening of a new 30,000m2 gross facility, Crocus, in Moscow. Our Mosbuild
construction event is scheduled to expand into this facility in 2005 allowing
new space for potential growth. We note that Crocus has also started
construction of Phase 2 which will increase its overall space available by a
further 60,000m2 gross which will facilitate further anticipated growth of our
leading event.

The St Petersburg office has seen strong growth in volume sales and gross
margins of approximately 20% on a like for like basis. Two new launches were
successful in addition to 10% growth in size of the office's largest and most
profitable event, Baltic Building Week. ITE has advanced a further loan of $2.1
million to the venue owners, Lenexpo, to part finance a construction project on
their exhibition grounds. The loan will be recouped by offsetting future venue
charges otherwise payable.

Central Asia
ITE's offices in these regions achieved dynamic growth with 15 new events -
adding 5,100 metres of sales - in addition to the strong performance from
existing events. A new office has been established in Tbilisi, Georgia. New
events have also been launched in Kyrgystan and Tajikistan.

In total the Central Asia & Caucasus region now accounts for 15% of the Group's
Revenues and 13% of Gross profits. The most significant contributions were in
the Oil and Gas and the Construction sectors. The Central Asian offices
currently run 7 construction exhibitions in Almaty, Astana, Atyrau, Baku,
Tashkent, Tbilisi and Bishkek and together they increased their sales by over
40% from circa 10,000m2 to over 14,000m2. Kazakhstan International Oil and Gas
Exhibition and its Conference (KIOGE) improved its profits by 16% over last year
- largely on the basis of an increase in the size of the exhibition facilitated
by the newly constructed pavilion at Almaty, funded by ITE. As reported at the
interim stage ITE has made an additional loan of $1.2 million to support the
construction of improved facilities at the Almaty exhibition venue.

The acquisition of the Caspian Oil and Gas Exhibition and Conference in October
2004 complements our portfolio of Oil and Gas events throughout the CIS. This
annual event, held in Baku, is one of the pre-eminent Oil and Gas events in the
region and the integration into our local office infrastructure and the ITE
international sales network has been initiated.

Eastern & Southern Europe
The Kyiv office in Ukraine completed a successful year increasing its total
volume of sales by 50% to 20,000 metres. This was achieved through 5 new
launches and strong growth in its 3 core events - Food, Construction and Travel
where collectively volume sales and profitability increased by 40%. This office
will benefit in the next financial year from the acquisition earlier in the year
of two high quality exhibitions serving the Medical and Telecoms sectors. These
acquisitions were successfully integrated into our Kyiv office and were held in
October 2004. Both events showed growth on the previous shows prior to ITE
ownership. During the year ITE made an additional loan of $2 million to the IEC
venue in Kyiv where construction of an additional pavilion is well under way and
due for opening by the middle of next year. ITE holds all its events in the IEC
venue where ITE was a participant in the funding of the initial development.

In Turkey our wholly owned subsidiary (EUF) had a mixed year. The 26,000m2
biennial Ankomak event (construction plant and machinery) was not scheduled to
take place and consequently reduced the overall activity level of the office.
Optik, an acquisition in 2003 made a successful debut in March 2004.

Associate Company - ITF

ITF our 50% owned associate business in Istanbul organised 12 events (2003: 16
Events). Significantly the Auto and Otomotiv events were not scheduled in 2004.
The next editions of these events have more recently been successfully held in
November 2004. Despite this the business managed to produce consistent profits
in 2004 albeit from a smaller sales base. We maintain tempered optimism with
respect to the economic conditions in Turkey, however the task to improve the
profitability of the business in Istanbul remains a challenge given the very low
yields and strong influence of trade associations on major events.

Western Europe and UK
In June this year ITE acquired the associated publishing titles of Womenswear
Buyer and Menswear Buyer which support our MODA UK exhibition. These trade
magazines provide advertising and marketing services to the same exhibitors at
MODA UK and are read by the same buyers who attend the exhibitions. This
acquisition enables us to offer a more complete range of marketing services to
our customers. The additional publishing staff share the same offices as our
exhibition team and are combining their activities and databases. The Spring and
Autumn MODA UK exhibitions performed well - but as anticipated last year the
events have plateaued in terms of their growth. MODA is currently reviewing
plans to expand the business with new sector and market development.

ITE has international sales offices based in London and Hamburg. The primary
role of these sales offices is to facilitate the sale of international
exhibitors into the Group's portfolio of exhibitions.

Rest of World
The Group established an office in Johannesburg in the year initially to service
the World Petroleum Congress event to take place in September 2005. In addition
ITE has initiated the launch of an exhibition and conference business in various
other parts of Africa - including Libya. ITE continues to work with UNCTAD to
prospect new opportunities in Africa and in 2005 will launch a new event in

I am pleased that ITE has concluded the year in a very strong operational and
financial position. There is a clear route to growth in each of our core
markets. Favourable economic conditions in our core markets, allied to an
expansion in venue facilities in Moscow, Ukraine, Kazakhstan and Turkey
contribute to a healthy prognosis for our exhibition business.

The financial results for 2004 depict a genuinely strong trading result. In
addition to organic revenue growth of 11% and 30 new launches, strong gross
margins and the benefits of a lower cost base have raised the net Operating
margin before charges for goodwill amortisation to a new level of 27% from last
year's comparative 24%.

ITE has focussed on the strategy of building on the strengths of our key assets
in our core markets where we have competitive advantages and local
infrastructure. We have sought to supplement our organic growth plans with
selective acquisitions principally in markets and sectors where we have in-depth
knowledge. We will continue to prospect suitable opportunities on a prudent and
opportunistic basis.

In the forthcoming year, ITE will manage the 18th World Petroleum Congress in
addition to organising our
biennial Moscow International Oil and Gas Exhibition and Congress. When coupled
with our strongly performing core operations the prospects for 2005 are indeed
bright. As of 3 December 2004 ITE had achieved advance sales of £42 million in
respect of the next financial year (11% ahead of last year on a like for like
basis). I continue to be confident and enthused about the prospects ahead for
our business.

Ian Tomkins
Chief Executive
7 December 2004

Group Financial review

Earnings per share
The diluted earnings per share increased to 3.8p from 3.0p in the prior year.
The Group achieved Headline diluted earnings per share of 4.7p per share
compared with 4.2p for the year to 30 September 2003. Headline diluted earnings
per share is based upon profit before amortisation and impairment of goodwill,
(including associates) and profits or losses on disposal of group undertakings.

Acquisitions & disposals
ITE has made a number of strategic acquisitions over the last twelve months. In
May of this year ITE completed the acquisition of two Ukrainian exhibitions for
consideration of $2.8 million in cash. In June of this year ITE's 90% owned
subsidiary, ITE Moda UK Limited, acquired 100% of the RAS Publishing Group for a
net cash consideration of £2.0 million. Shortly after the year end, on 6 October
2004 ITE acquired 100% of the share capital of Caspian Events Limited for £2.2
million in cash.

As reported last year ITE disposed of its 50% interest in its Czech associate
Incheba Praha and also its related 50% investment in the Slovakian exhibition,
Coneco in November 2003. The overall loss on this transaction of £0.8 million
was provided for in the 2003 accounts. There remain two loan repayments due from
Incheba Praha of CZK 35 million (£0.7 million) each due in December 2004 and
December 2005. In May 2004 ITE disposed of its 50% interest in its Egyptian
associate, ACG to its fellow owners for $0.9 million. The sales proceeds are
accounted for when they are received and the outstanding amount due under the
purchase and sale agreement and not yet received is $0.3 million.

Post Balance Sheet Event
On 22 October 2004 ITE sold its 100% shareholding in X-RM Limited to its
Managing Director, Jonathan Block for £1. Jonathan Block was the original vendor
of this business to ITE in 2000. Having reviewed the business of X-RM Limited
carefully ITE saw no synergy or positive prospects for this loss making
business. There was a loss on disposal of £0.1 million in respect of unamortized

Tax charge
The tax charge of £5.0 million represents 27% of Headline pre-tax profits. The
Group anticipates that for the next 2-3 years the tax rate will remain below the
UK Corporation tax rate of 30% due to losses available in certain parts of the
Group and the lower tax rate experienced in some of our major overseas markets.

The Company has issued 3,821,369 ordinary shares of 1p in the year. This
represented 1.4% of the issued share capital at 1 October 2003. Of these
3,754,417 were pursuant to the exercise of options and yielded aggregate
consideration of £1.0million. The remaining shares were issued as part of
Directors' remuneration.

The Employees Share Option Trust ('ESOT') held 10,427,000 (3.6%) of the
Companies issued share capital at the year end (2003: 9,857,000; 3.5%). The ESOT
has acquired further shares in the market over the course of the year.

Cash Flow
Net cash at 30 September 2004 was £33.5 million (2002: £22.1 million). The cash
inflow from operating activities was £21.8 million (2003: £16.9 million). The
net cash outflow of £1.3 million on acquisitions and disposals comprises
outflows of £3.3 million on acquisitions and £0.2 million on deferred
consideration and an inflow of £2.2 million from the disposals of Incheba Praha
and ACG in the year

A further £3.4 million was applied in taxation payments and £4.5 million was
paid to shareholders as dividends.

Net interest earned in the year was £1.1 million (2003: £0.7 million). The Group
held average cash balances of £27.4 million through the year (2003: £19.7
million). At 30 September 2004 £17.0 million sterling was held on term deposits
of between 3 and 12 months.

Investment and capital expenditure
The Group's capital expenditure on plant and equipment for the year of £0.7
million (2003: £0.5 million) included exhibition equipment, computer equipment
and associated software.

The Group funds the development of venues and facilities where improved
facilities will enhance the prospects and profitability of our organising
business. The funding can take the form of a prepayment of future venue fees, or
a loan which can be repaid by cash or by offset against future venue fees (both
referred to as 'venue loans'). Generally the funding brings rights over future
venue use and advantageous pricing arrangements. Venue loans are included under
debtors in the balance sheet and are treated as financial investments in the
Cash Flow Statement.

At 30 September 2004 the Group's Sterling value of the outstanding balances was
£4.6 million (2002: £3.3 million) advanced against venue construction projects
as follows:

                  30 September Repayments New Loans 30 September
                  2003                              2004
                  £m           £m         £m        £m

Kyiv              0.8         (0.3)       1.1       1.6
Almaty            0.7         (0.5)       0.6       0.8
St. Petersburg    1.6         (0.8)       1.2       2.0
Bulgarreklama     0.2           -          -        0.2
                  ----        -----       ----      ----
                  3.3         (1.6)       2.9       4.6

These balances will be recovered from future venue use within three years except
in Bulgaria and St. Petersburg. In St. Petersburg part of the loan repayments
relate to future events taking place between 2007 and 2011. ITE is not presently
active in Bulgaria and the loan will be repaid by instalments.

Financial risk
The main risk facing the Group is foreign currency risk. The Board has reviewed
and agreed policies to manage financial risk as follows:

Foreign Currency risk
The Group is exposed to movements in foreign exchange rates against Sterling for
both trading transactions and for the translation of net assets and the profits
and loss accounts of overseas operations. The principal exposure is to the Euro
and Dollar exchange rates which form the basis of pricing for our international
customers. During the year the Group experienced net foreign exchange losses of
£0.4 million (2003: £0.4 million). The exchange rate for the Euro moved from
€1.44: £1 at the beginning of the year to €1.46, though it traded around €1.5:
£1 for a large part of the year; the exchange rate for the US dollar started the
year at $1.68: £1, and finished the year $1.8: £1 again having traded at weaker
levels in mid-year.

The bulk of the Group's business is in emerging markets and to minimise the
currency risk, the Group invoices predominantly in Euros and US dollars. In 2004
62% of the Group's sales were based on Euros and 28% on $US. The Group has a
large proportion of its revenues and costs denominated in non-Sterling
currencies. Sterling costs exceed Sterling revenue due to the level of UK based
costs - in particular London sales and head office costs. In 2004 the weighted
average exchange rate against Sterling used for converting $US sales was $1.69
and Euro sales was €1.44.

The Group uses derivative instruments and currency borrowings to protect itself
against the effect of currency fluctuations on its balance sheet. The Group's
policy on derivative instruments is that:
- it will only hedge up to 80% of the value of anticipated cash flows and;
- it will not enter into derivative transactions more than 18 months ahead.

Over the course of the year the Group has entered into currency borrowings to
minimise the exposure to foreign exchange risk. The currency borrowings can be
offset against the matching sterling deposits. The net cash balances of £33.5
million at 30 September 2004 are shown in the balance sheet.

Interest rate risk
The Group finances its operations through cash holdings and debt facilities. 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 exposure to interest rate

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

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. Should debt
financing be required, the term of the facility would be matched to funding

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
continue to adopt the going concern basis in preparing the accounts.

Russell Taylor
Finance Director

7 December 2004

Consolidated Profit and Loss Account
For the year ended 30 September 2004

                                                         2004             2003
                                                         £000             £000

Turnover                                               60,750           58,934
Cost of sales                                         (33,542)         (32,213)
                                                     __________       __________
Gross profit                                           27,208           26,721
                                                       --------         --------
Net operating expenses before goodwill amortisation   (10,883)         (12,720)
Goodwill amortisation                                  (2,528)          (2,331)
                                                       --------         --------

Total net operating expenses                          (13,411)         (15,051)
                                                     __________       __________
Operating profit                                       13,797           11,670
                                                       --------         --------
Share of associates' operating profit before              676              836
goodwill amortisation            
Goodwill amortisation                                    (221)            (132)
                                                       --------         --------

Share of associates' operating profit                     455              704
Profit/(provision or loss) on disposal of                 323             (779)
group undertakings                                   __________       __________
Profit on ordinary activities before interest          14,575           11,595
Interest receivable                                     1,148              760
Interest payable and similar charges                      (16)             (68)
                                                     __________       __________
Profit on ordinary activities before taxation          15,707           12,287
Tax on profit on ordinary activities                   (4,955)          (4,030)
                                                     __________       __________
Profit on ordinary activities after taxation           10,752            8,257
Minority interests                                        (31)               6
                                                     __________       __________
Profit for the financial year                           10,721           8,263
Dividends paid and proposed                            (5,984)          (4,359)
                                                     __________       __________
Retained profit for the year                            4,737            3,904
                                                   ============     ============
Earnings per share
Basic                                                    3.9p             3.1p
Diluted                                                  3.8p             3.0p
Headline diluted                                         4.7p             4.2p
                                                   ============     ============

Consolidated Balance Sheet 
30 September 2004
                                                         2004             2003
                                                      (As restated - see Note 1)
                                                         £000             £000
Fixed assets
Goodwill                                               29,348           30,016
Tangible assets                                         1,862            1,920
Associates                                              1,377            1,057
Other investments                                          74               78
                                                  ___________      ___________
                                                       32,661           33,071
Current assets
Debtors due within one year                            23,426           19,557
Debtors due after one year                              4,060            3,914
Cash at bank and in hand                               33,546           22,104
                                                  ___________      ___________
                                                       61,032           45,575

Creditors: amounts falling due within one year        (47,773)         (39,035)
                                                  ___________      ___________
Net current assets                                     13,259            6,540
                                                  ___________      ___________
Total assets less current liabilities                  45,920           39,611
Provisions for liabilities and charges                 (1,498)            (984)
                                                  ___________      ___________
Net assets                                             44,422           38,627
                                                 =============    =============

Capital and reserves
Called up share capital                                 2,852            2,813
Share premium account                                  29,036           27,996
Merger reserve                                          2,746            2,746
Option reserve                                             23              132
ESOT reserve                                           (2,792)          (2,334)
Profit and loss account                                12,329            7,277
                                                  ___________      ___________
Equity shareholders' funds                             44,194           38,630
                                                  ___________      ___________
Minority interests                                        228               (3)
                                                  ___________      ___________
Total capital employed                                 44,422           38,627
                                                 =============    =============

Consolidated Cash Flow Statement
For the year ended 30 September 2004
                                                           2004           2003
                                                           £000           £000

Net cash inflow from operating activities                21,754         16,890
Dividends received from associates                          172              -
Returns on investments and servicing of finance           1,132            692
Taxation                                                 (3,363)        (3,677)
Capital expenditure and financial investment             (2,858)        (2,306)
Acquisitions and disposals                               (1,345)        (3,595)
Equity dividends paid                                    (4,545)        (4,026)
                                                     __________     __________

Cash inflow before management of liquid resources        10,947          3,978
and financing        
Management of liquid resources                          (19,336)        (5,164)
Financing                                                   495            433
                                                     __________     __________
Decrease in cash in the year                             (7,894)          (753)
                                                    ============   ============

Consolidated Statement of Total Recognised Gains and Losses
For the year ended 30 September 2004
                                                           2004           2003
                                                           £000           £000

Profit for the financial year
Group                                                     10,534         7,762
Associates                                                  187            501
                                                      ___________    ___________
                                                          10,721         8,263
Gain/(loss) on foreign currency translation                   96           (46)
Adjustment to option reserve for lapsed options                -            42
                                                      ___________    ___________
Total recognised gains and losses relating                10,817         8,259
to the year 
                                                    =============  =============


1 Basis of preparation

This Preliminary Announcement is for the year ended 30 September 2004 and was
approved by the Board on 6 December 2004.

The financial information set out herein does not constitute the Company's
statutory accounts for the years ended 30 September 2004 or 2003, but is derived
from those accounts. Statutory accounts for 2003 have been delivered to the
Registrar of Companies and those for 2004 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 s237(2) or
(3) Companies Act 1985.

The results for the year ended 30 September 2003 have been restated to reflect
the adoption of UITF 38 'Accounting for ESOP trusts' which resulted in the
investment in company shares held by the ESOT being reclassified from Other
investments to ESOT Reserve.

The accounts have been prepared on the historical cost basis and do not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985.

2 Net operating expenses

Net operating expenses includes total administrative expenses of £13.7 million
(2003: £15.3 million) and rental income of £303,000 (2003: £287,000).

In the prior year, administrative expenses included £0.4 million of redundancy
costs and, in connection with the Group's activities in the Czech Republic and
Slovakia, £0.8 million of operating charges and £0.6 million of goodwill

3 Earnings per share

The calculations of earnings per share are based on the following results and
numbers of shares.
                                        Headline diluted      Basic and diluted
                                         2004       2003        2004       2003
                                         £000       £000        £000       £000

Profit for the financial year           10,721      8,263     10,721      8,263
Amortisation of goodwill (including      2,749      2,463          -          -
(Profit)/loss on disposal of group        (323)       779          -          -
undertakings                           ________   ________   ________   ________
                                        13,147     11,505     10,721      8,263
                                     ========== ========== ========== ==========

                                                 2004                      2003
                               Number of shares ('000)   Number of shares ('000)
Weighted average number of shares:
For basic earnings per share                  274,435                   270,527
Exercise of share options                       7,203                     3,643
                                           ___________               ___________
For diluted earnings per share                281,638                   274,170
                                         =============             =============

Headline diluted earnings per share is intended to provide a consistent measure
of group earnings on a year on year basis.

Headline diluted earnings per share is calculated using profit for the financial
year before amortisation of goodwill and profits or losses arising on disposal
of group undertakings.

4 Reserves

                     Share    Merger    Option      ESOT    Profit and    Total
                   premium   reserve   reserve   reserve  loss account     
                      £000      £000      £000      £000          £000    £000

1 October 2003      27,996     2,746       132         -         7,277   38,151
(as previously reported)                  
Restatement              -         -         -    (2,334)            -   (2,334)  
for UITF 38               
1 October 2003      27,996     2,746       132    (2,334)        7,277   35,817
(as restated)       
Exercise of options  1,005         -      (109)       30          -         926
Retained profit          -         -         -         -         4,737    4,737
for the year                          
Gain on foreign          -         -         -         -            96       96 
currency translation                    
Gain on exercise of      -         -         -         -            20       20
Options issued in        -         -         -         -           199      199
the year at a discount to
market value                   
Shares issued for       35         -         -         -             -       35
Purchase of shares       -         -         -      (488)            -     (488)                    
                  _________ _________  ________  _________     ________ ________
30 September 2004   29,036     2,746        23     2,792)       12,329   41,342
                =========== ========== ========= ========== =========== ========

5 Cash flow notes

Reconciliation of operating profit to operating cash flows

                                                            2004          2003
                                                            £000          £000

Operating profit                                          13,797        11,670
Depreciation charges                                         471           454
Amortisation                                               2,528         2,331
Loss on sale or write down of fixed assets                   103           267
(Increase)/decrease in debtors                            (2,638)        1,217
Increase in creditors                                      6,546           649
Increase in provisions                                       947           302
                                                       __________    __________
Net cash inflow from operating activities                 21,754        16,890
                                                      ============ ============

Analysis of net funds

                              30 September                        30 September
                                      2003        Cash flow               2004
                                      £000             £000               £000

Cash at bank and in hand            16,940           (7,894)             9,046
                                __________       __________         __________
Net funds                           16,940           (7,894)             9,046

Cash held on deposit                 5,164           19,336             24,500
                                __________       __________         __________
Cash shown on balance sheet         22,104           11,442             33,546
                               ============     ============       ============

Reconciliation of net cash flow to movement in net funds

                                                       2004               2003
                                                       £000               £000

Decrease in cash in the year                         (7,894)              (753)
                                                   __________         __________
Movement in net funds in year                        (7,894)              (753)

Net funds at 1 October                               16,940             17,693
                                                   __________         __________
Net funds at 30 September                             9,046             16,940
                                                 ============       ============

6 Post balance sheet events

On 22 October 2004 the Group sold 100% of the shares in X-RM Limited to Jonathan
Block, a director of X-RM Limited, for £1. The Profit and Loss account for the
year ended 30 September 2004 includes a provision against the value of goodwill
in X-RM Limited of £142,000 within profit/(provision or loss) on disposal of
group undertakings and an accrual for redundancy and restructuring costs of X-RM
Limited of £100,000 within administrative expenses.

On 5 October 2004 the Group acquired 100% of the shares in Caspian Events
Limited for £2.2 million.

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