Final Results

RNS Number : 1677M

Centaur Media PLC

13 September 2012

 



13 September 2012

Centaur Media plc

EBITDA up 18% as Group benefits from acquisitions, restructuring and digital focus

Centaur Media plc (LSE: CAU), the business information, events and marketing services group, has published its full year results for the year to 30 June 2012.

Highlights

Financial

§ Adjusted EBITDA up 18% to £11.7m (2011: £9.9m)

o  Adjusted EBITDA margins increased to 18% (2011: 14%)

§ Adjusted profit before tax up 23% to £8.0m (2011: £6.5m)

§ Adjusted basic EPS up 24% to 4.2p (2011: 3.4p)

§ Proposed full year dividend up 12.5% to 2.25p (2011: 2.0p)

§ Cash conversion remains strong at 120% (2011: 125%)

Operational

§ Significant progress achieved and building strong momentum towards medium term financial targets, despite challenging economic environment

§ Five acquisitions completed since 1 July 2011, including Econsultancy in July 2012

§ All three divisions benefiting from new operating structure

§ Pro-forma⁴ revenues increased by 25%, with digital revenues increased to 35% and print revenues reduced to 31% of total pro-forma⁴ revenues

		Year to 30		Year to 30		Reported		Underlying		Pro-forma
		June 2012		June 2011		Growth		Growth 3		Growth 4
						%		%		%
Revenue (£m)		65.6		68.3		-4%		2%		25%
Adjusted EBITDA (£m) 1		11.7		9.9		18%		18%
Adjusted EBITDA margin		18%		14%
Adjusted profit before tax (£m) 1		8.0		6.5		23%
Profit / (loss) before tax (£m)		2.7		(30.3)
Basic EPS / (LPS) (pence)		0.9		(21.2)
Adjusted basic EPS (pence) 1		4.2		3.4		24%
Dividend per share (pence)		2.25		2.0		12.5%
Operating cash flow		10.3		8.4		23%
Cash conversion 2		120%		125%

1.      Adjusted results exclude adjusting items as detailed in the Basis of Preparation section of the Statement of Accounting Policies.

2.      Cash conversion rate is operating cash flow expressed as a percentage of adjusted operating profit.  Adjusted operating profit is as calculated in the Basis of Preparation section of the Statement of Accounting Policies and operating cash flow is as calculated in the Financial Review.

3.      Underlying growth rates adjust for the impact of acquisitions, disposals and discontinued activities by excluding them from both the reported 2012 and 2011 results.

4.      Pro-forma metrics are based on reported results, adjusted in 2011 and 2012 to exclude the impact of disposals and discontinued activities, and in 2012 to reflect a full year contribution from acquisitions completed since 1 July 2011. Further detail is included in the Financial Review.

Geoff Wilmot, Chief Executive of Centaur, said:

"This has been a transformational year. Following last summer's major restructuring, the principal focus of the management team has been to continue to re-engineer the business, and to execute a series of targeted acquisitions designed to accelerate delivery of our strategic objectives.

"We have made excellent progress towards the achievement of our three-year targets and have also reported a strong set of results, delivered in difficult economic circumstances.   We are seeing good momentum as we head into the new financial year."

Enquiries

Centaur Media plc	[phone]
Geoff Wilmot, Chief Executive
Mark Kerswell, Finance Director
College Hill	[phone]
Adrian Duffield / Kay Larsen

Overview

Centaur is a leading provider of business information and marketing solutions to high value professional and commercial markets. The Group delivers its services through market-leading brands operating across three principal media formats:  digital, events and print.

The Group's strategic objectives are:

·      To deliver rapid growth by taking full advantage of the many opportunities to expand and to build market- leading positions in high growth markets.

·      To improve the quality of its revenues by increasing the proportion of revenues generated from digital media, high value subscriptions and events.

·      To leverage scale to deliver sustainable growth in adjusted EBITDA margins and cash flow.

Centaur aims to achieve these objectives through a combination of strong organic growth, new product development and selected acquisitions. 

In October 2011, the Group announced ambitious headline target measures for the three financial years to 30 June 2014.  These are to double underlying revenues, double the digital share of those revenues to at least 50% and double adjusted EBITDA margins to at least 25%.

The year to 30 June 2012 was the first year of the three-year plan and Centaur has already made excellent progress towards these targets. On a pro-forma basis, revenues have increased 25% with pro-forma adjusted EBITDA margins at 18%, the percentage of pro-forma digital revenues increased from 30% to 35% and the percentage of pro-forma print revenues reduced from 40% to 31%. These metrics demonstrate the strong momentum that the Group has heading into the 2013 financial year in growing revenues, re-balancing its revenue profile and growing margins.

Highlights since 1 July 2011 include:

·      The Group has acquired five businesses. The largest and most significant, Econsultancy, the digital marketing and information business, was completed just after the year-end in July 2012.  All of the acquired businesses are being progressively integrated within Centaur and are benefiting from significant synergies with the Group.  In aggregate, they have already effected a transformation of the scale and balance of the Group, as reflected in the pro-forma numbers referred to above.

·      The Group has continued the restructuring process of its Business Publishing division to position it as a digital first operation, operating from an efficient and scalable common systems platform and audience database.

·      The Group has begun to build a strong pipeline of new products within the new divisional structure, which further reinforces its focus on digital solutions and events.    

Adjusted EBITDA increased by 18% to £11.7m (2011: £9.9m), with adjusted EBITDA margins increasing from 14% to 18%. Adjusted profit before tax increased by 23%.

In the context of what have remained challenging economic conditions, these are another set of strong results, which reflect the wide-ranging restructuring initiatives implemented over the last year, continued focus on costs and cash flow and a disciplined approach to portfolio management.

These results also continue to demonstrate the Group's ability to convert adjusted operating profits into cash flow, with operating cash flow increasing by 23% to £10.3m (2011: £8.4m), and a cash conversion rate of 120% (2011: 125%).

The strength of the Group's free cash flow is also encouraging, with free cash flow, adjusted for the cash impact of exceptional items, of £9.1m (2011: £6.9m).

The Group has worked hard to deliver improved visibility around cost structures and to take advantage of opportunities to leverage its scale to deliver a more efficient and flexible cost base. The Group has also focused on the underlying profitability of each product across the portfolio, with marginal products discontinued. This financial discipline has contributed to the strong underlying results across the Group, with EBITDA margins improved and revenues per employee increased by 11%.

Current trading and outlook

The Group ends the year with a higher quality revenue and earnings profile, with a more scalable and flexible cost base, with a strong balance sheet, with the capacity to fund further growth, and with more opportunity to drive scale benefits and margin improvement.

The Group has experienced continued growth in its operations in the new financial year, although July and August are traditionally a quieter period across all three divisions and the economic backdrop remains uncertain. Centaur continues to see the benefits of the restructuring flowing through, particularly in the Business Publishing division. The Group's most recent acquisition, Econsultancy, is trading in line with expectations and provides transformational potential across the Group as a whole.

Centaur's business is now more focused, higher margin, better balanced and more commercially resilient. With an experienced and ambitious management team now firmly in place, the Board is confident that the Group is well positioned to build on its momentum in revenue and margin growth.

The Board's primary focus is on leveraging Centaur's brands and organisation to accelerate organic and new product growth, while continuing to look for appropriate acquisition opportunities.

Financial Review

Adjusted, statutory and pro-forma results

Throughout this financial review, the Group refers to both adjusted and statutory results. Adjusted results are presented to provide a more comparable view on the Group's performance. A summary of adjusting items is presented on the Statement of Comprehensive Income and further detail on each adjusting item together with a reconciliation to adjusted EBITDA, is included in the Basis of Preparation section of the Statement of Accounting Policies.

References to pro-forma results are based on reported results, adjusted in 2011 and 2012 to exclude the impact of disposals and discontinued activities, and in 2012 to reflect a full year contribution from acquisitions completed since 1 July 2011.  The pro-forma contribution from acquisitions includes VBR (acquired in December 2011), Profile (acquired in February 2012) and Econsultancy (acquired in July 2012).  Pro-forma results are unaudited but are included as they demonstrate the progress made in growing revenues, re-balancing the Group's revenue profile and in growing margins, which would otherwise only become fully apparent in the Group's reported 2013 results.

Segmental reporting

Revenue and adjusted EBITDA by division are set out below, together with the respective reported and underlying growth rates.

						Reported	Underlying
			2012	2011		Growth	Growth
			£m	£m		%	%
Business Publishing
Revenue			41.8	46.8		-11%	-1%
Adjusted EBITDA			6.5	5.4		20%	27%
Adjusted EBITDA margin			16%	12%
Business Information
Revenue			7.6	5.8		31%	6%
Adjusted EBITDA			2.6	2.2		18%	14%
Adjusted EBITDA margin			34%	38%
Exhibitions
Revenue			16.2	15.7		3%	10%
Adjusted EBITDA			2.6	2.3		13%	5%
Adjusted EBITDA margin			16%	15%
Total
Revenue			65.6	68.3		-4%	2%
Adjusted EBITDA			11.7	9.9		18%	18%
Adjusted EBITDA margin			18%	14%

Revenue

Total Group revenues were £65.6m (2011: £68.3m), which reflects the impact of discontinued activities and the closure of lower margin events activities, offset by the impact of acquisitions.

Underlying revenue growth was 2%, with print revenues declining by 5%, digital revenues up 7% and events revenues up 6%. The balance of reported revenues has improved significantly throughout the year with digital revenues increasing to 30% of total revenues (2011: 26%) and print falling to 38% (2011: 43%). Events revenues increased to 31% of total revenues (2011: 30%) and other revenues remained flat at 1% of total revenues. By source, advertising revenues accounted for 43% of total revenues (2011: 49%) and paid for content 24% (2011: 20%).

Business Publishing revenues were £41.8m, 11% lower than the £46.8m reported in 2011. This reflects the impact of the sale of the Logistics and Supply Chain portfolio, the Recruiter and the manufacturing and B2B construction assets, the closure of the print editions of NMA and Design Week and, throughout 2012, the closure of the Conference division across the Marketing and Creative communities. Underlying revenues declined by 1%, with weaker print revenues across Marketing Week and Money Marketing being offset by good growth in digital revenues across all products. Underlying events revenues across the Business Publishing division declined by 8% as marginal individual product across the portfolio was discontinued. The key awards events across this division have all performed well.

The Business Information division, which includes PI, VBR and Profile, reported revenues of £7.6m, 31% ahead of reported 2011 revenues of £5.8m. On an underlying basis, excluding the impact of the two acquisitions within this division, revenues grew by 6%. Revenues across this division are predominantly digital paid-for content. Econsultancy will also be reported within this division in 2013.

The Exhibitions division reported revenues of £16.2m, 3% ahead of the reported 2011 revenues of £15.7m. On an underlying basis, adjusting for the impact of the sale of the Logistics exhibitions portfolio and the discontinued Business Travel events in Dusseldorf and Dubai, revenues across this division grew by 10%. Within the division, the core exhibitions portfolio grew underlying revenues by 16%, and the smaller specialist construction publishing portfolio, which represents approximately one third of the division's revenues, saw underlying revenues decline by 2%.

Adjusted EBITDA and adjusted profit before tax

Adjusted EBITDA of £11.7m was 18% up on the £9.9m reported in 2011. Adjusted EBITDA margins improved by four percentage points from 14% to 18%. Adjusted profit before tax of £8.0m was 23% up on the £6.5m reported in 2011.

Net adjusted operating expenses were reduced from £61.6m to £57.0m reflecting the various restructuring initiatives initiated in 2011 and 2012 to reduce costs, and a reduction in average headcount from 622 to 536. Total employment related costs, excluding redundancy costs, were reduced by £3.1m to £25.2m. Revenues per employee have increased from £110,000 to £122,000. Adjusted for the impact of acquisitions completed in 2012, average headcount across the Group has been reduced by 19% to 507.

The increase in adjusted profit before tax is reported after an increase in finance costs of £0.4m. This reflects the new debt facilities put in place in 2012 and the acquisition activity throughout the year, further detail on which is included throughout this review.

Reported profit before tax, which takes into account the amortisation of acquired intangibles and exceptional items, was £2.7m. This compares to the loss before tax reported in 2011 of £30.3m, which included the amortisation of acquired intangibles, exceptional items and an impairment charge of £32.2m.

Restructuring activities

Throughout 2012, further restructuring activities have been completed, principally across the Business Publishing division. Further detail on these initiatives is included in the Operational Review section. Total restructuring costs were £2.3m (2011: £3.4m), which includes redundancy costs of £1.9m (2011: £3.0m), the accelerated amortisation of software costs of £0.1m (2011 £0.1m) and product closure costs of £0.3m (2011: £0.3m). The product closure costs relate to the Business Travel Dusseldorf event.  Restructuring costs are included within exceptional items.

Assets that have been either sold or closed contributed £7.0m and £0.5m to 2011 and 2012 revenues respectively, and £0.6m and £(0.1)m to 2011 and 2012 adjusted EBITDA respectively.

Exceptional items

The Group has reported exceptional items of £4.5m (2011: £3.4m). In addition to the restructuring costs referred to above, exceptional items have been incurred related to acquisitions. Acquisition related costs include legal and professional fees and stamp duty. Provisions for any deferred contingent consideration, where this is also contingent on the future employment of the vendors, are also reported as exceptional items.

Further information on exceptional items is presented in note 3 to the financial statements.

Net finance costs

Net finance costs were £0.6m (2011: £0.2m). The increase in net finance costs reflects the acquisition activity throughout the year and the resultant increase in net debt. Net finance costs also include the commitment fees in respect of undrawn amounts under the new bank facility and the amortisation of the arrangement fee. Further details on the new banking facilities are set out in this review.

Taxation

A tax charge of £1.4m has been recognised. The adjusted tax charge was £2.2m, giving an adjusted effective tax rate (compared to adjusted profit before tax) of 27.5% (2011: 27.7%).

Earnings per share

The Group's adjusted EPS increased by 24% to 4.2p (2011: 3.4p).

Basic earnings per share was 0.9p (2011: Loss per share of 21.2p). Full details of the EPS calculations are presented in note 6.

Dividends

A final dividend of 1.5p per share is proposed, giving a total for the year of 2.25p (2011: 2.0p) up 12.5%. The final dividend is subject to shareholder approval at the annual general meeting and will be paid on 7 December 2012 to all ordinary shareholders on the register at close of business on 9 November 2012.  Dividend cover, on an adjusted basis, has increased from 1.7 times in 2011 to 1.9 times and the Group expects this to continue to increase towards its target dividend cover of 2-3 times across the economic cycle.

Acquisitions and disposals

The Group completed the acquisitions of IPL, VBR, the Excite show and Profile in 2012. Further detail on each of these acquisitions is included in the Operational Review and in note 11. Subsequent to the year end, the Group completed the acquisition of Econsultancy, further detail on which is included in note 13.

The Group also completed the disposal, in 2012, of the Logistics and Supply Chain portfolio, the Recruiter and the manufacturing and B2B construction assets.

The acquisitions of FEM in 2011 and IPL and VBR in 2012 each involve earn-out payments which are contingent on the future performance of the acquired businesses and the continued employment of the vendors. Under the provisions of IFRS 3 (revised), a provision for such contingent consideration is recognised over the life of the earn-out period, on a straight line basis, in the Consolidated Statement of Comprehensive Income.

Financing and bank covenants

During the year, the Group refinanced its existing £8m revolving credit facility with a new £40m revolving credit facility, provided by RBS and Barclays. This is a four-year facility that amortises by £2.5m per annum. The principal financial covenants under the facility are maximum net debt to EBITDA of 2.5 times progressively dropping to 2.0 times in the final year of the facility, minimum interest cover of 5 times and minimum cash flow to debt service of 1.1 times. All these covenants are tested on a quarterly basis.

While the maximum net debt to EBITDA covenant is 2.5 times, the Group has set out a target leverage ratio of below 2 times. At 30 June 2012, all tests were comfortably passed, with net debt to EBITDA of 0.6 times.  For full details of all covenant tests as at 30 June 2012, see note 12.

Cash flow

Cash flow has been strong throughout the year and a summary of operating cash flow and free cash flow is set out below. Operating cash flow of £10.3m was generated from adjusted operating profits of £8.6m, a cash conversion ratio of 120% (2011: 125%).

						2012	2011
						£m	£m
Adjusted operating profit						8.6	6.7
Depreciation and software amortisation						2.8	3.0
Share based payments						0.3	0.2
Adjusted EBITDA						11.7	9.9
Movement in working capital						0.8	0.4
Capital expenditure						(2.2)	(1.9)
Operating cash flow						10.3	8.4
Cash impact of exceptional items						(4.2)	(0.9)
Taxation						-	(1.2)
Interest and finance leases						(0.6)	(0.3)
Financing arrangement fees						(0.6)	-
Free cash flow						4.9	6.0
Acquisitions						(11.5)	(2.1)
Disposals						0.5	-
Dividends						(2.9)	(2.5)
Share purchases						(0.2)	(0.5)
Net cash flow						(9.2)	0.9
Opening cash						2.0	1.1
Closing net (debt)/cash						(7.2)	2.0

The decrease in working capital in 2012 of £0.8m (2011 £0.4m) excludes the impact of exceptional cost accruals and the effect of acquisitions and disposals, and reflects the continued focus on working capital management across the Group.

Free cash flow of £4.9m (2011: £6m) is reported after exceptional related cash flows of £4.2m (2011: £0.9m). The cash impact of exceptional items principally includes payments related to redundancy costs incurred in 2011 and 2012, and the cash impact of acquisition related expenses in 2012. No tax was paid in 2012 (2011: £1.2m) as taxable profits in 2012 were offset by the taxable losses incurred in 2011 as a result of the various restructuring activities. The Group spent £11.5m on acquisitions in 2012 and further analysis on these investments is included in notes 10 and 11.

Net debt at 30 June 2012 was £7.2m (2011: net cash of £2.0m).

Capital expenditure

Capital expenditure on software and property, plant and equipment amounted to £2.2m (2011: £1.9m) reflecting continued development across digital platforms, principally within the Business Information and Business Publishing divisions.

Balance sheet

Net assets at 30 June 2012 were £122.6m (2011: £124.1m).

Deferred income at 30 June 2012 was £11.3m, a 20% increase on the £9.4m reported at 30 June 2011.

Key performance indicators (KPIs)

The Board uses a range of performance indicators to monitor progress against these objectives and manage the business. The indicators which the Board considers to be important are as set out below:

						2012	2011
Underlying revenue growth / (decline) by revenue type 3
Print						-5%	7%
Digital						7%	12%
Events						6%	15%
Other						0%	0%
Total						2%	11%
Digital revenues as a percentage of total revenues						30%	26%
Adjusted EBITDA margin 1						18%	14%
Revenue per employee (£'000s)						122	110
Adjusted PBT (£m) 1						8.0	6.5
Adjusted EPS (pence) 1						4.2	3.4
Cash conversion rate 2						120%	125%

1. Adjusted results exclude adjusting items as detailed in the Basis of Preparation section of the Statement of Accounting Policies.

2. Cash conversion rate is operating cash flow expressed as a percentage of adjusted operating profit.  Adjusted operating profit is as calculated in the Basis of Preparation section of the Statement of Accounting Policies and operating cash flow is as calculated in the Financial Review.

3. Underlying growth rates adjust for the impact of acquisitions, disposals and discontinued activities by excluding them from both the reported 2011 and 2012 results.

Post balance sheet events

On 11 July 2012, the Group completed the acquisition of Econsultancy.com Limited for an initial consideration of £12m and further performance related consideration of up to £38m, based on EBITDA performance in the year ending 31 December 2015 and payable in 2016. Econsultancy will be reported within the Business Information division.

Operational review

Trading conditions in Centaur's markets were broadly positive in the seasonally weakest first quarter of the financial year.  Thereafter, conditions rapidly deteriorated, as uncertainty in the Eurozone escalated.  Against this difficult backdrop, the Group demonstrated its growing resilience with a strong performance across all three divisions. 

Operating divisions    

Centaur operates through three operating divisions, Business Publishing, Business Information and Exhibitions, each supported by a central shared services infrastructure.  Each division operates with its own distinct commercial and operational focus, but also benefits significantly through collaboration with the other divisions.

Business Publishing

This division comprises the digital, print and related events activities for the portfolio of leading B2B publications in the Marketing, Creative, Legal, Financial, HR and Engineering communities. Leading brands include Marketing Week, Creative Review, The Lawyer, Money Marketing, Employee Benefits, The Engineer, FEM and The Platforum.

On an underlying basis, adjusting for the impact of acquisitions, disposals and discontinued activities, Business Publishing revenues declined by 1%. Reported revenues were down 11%, largely due to the impact of closures and disposals implemented as part of the restructuring of this division in Q1 2012.  

The impact of rigorous management focus and further restructuring was evident in Business Publishing adjusted EBITDA margins, which increased to 16% (2011: 12%), resulting in a 20% increase in divisional adjusted EBITDA to £6.5m.

Following the reorganisation of the Group in Q1 2012, the key focus in Business Publishing has been to position this division as a digital first operation, operating from an efficient and scalable common systems platform and audience database.  This has led to the establishment of a new publishing services operations team serving all the Business Publishing operations.  This team has been formed from a merger of Centaur's formerly distributed and discrete resources engaged in web operations, database management, marketing, magazine fulfilment, event management and editorial production.  This new structure has been accompanied by a re-engineering of editorial processes within the publishing groups to ensure that all parts of the business are making full use of the Groups' scalable digital platform.   

Across the Marketing and Creative communities, underlying revenues fell by 6% with the leading publication brand Marketing Week impacted by the economic environment, although digital publishing revenues continued to grow.  The decline in Marketing Week print revenues was partly offset by good performances from the Creative Review portfolio, reflecting the benefits of its closer integration with Marketing Week and from a resilient performance from sponsored events, including the Marketing Week Engage Awards.

Across the Legal and Financial communities, underlying revenues fell by 2% with the leading brands Money Marketing and Fund Strategy affected by a dramatic slowdown in retail investment funds flow, commencing in October 2011.  The legal market served by The Lawyer was less affected by the economic slowdown and this division also saw a strong contribution from its information-based businesses, Taxbriefs and The Platforum. 

Across the HR and Engineering communities, underlying revenues grew by 11%, benefiting from further growth from both the Employee Benefits and The Engineer portfolios. Reported revenues were supplemented by a first full year's contribution from FEM, the events business serving the global HR mobility community.

Business Information

This division comprises Perfect Information ("PI"), a digital information and workflow business serving the global corporate advisory sector, and three of the Group's recent acquisitions - VBR, Profile and Econsultancy.

Business Information reported a 31% increase in revenues, thanks to a partial contribution from VBR and Profile. The results for the year to 30 June 2012 do not include any contribution from Econsultancy. Underlying revenues were 6% ahead of the prior year.  This was a strong performance in what was a difficult year for PI's core banking client sector in particular, with renewal rates especially resilient at over 100% by value. 

Adjusted EBITDA margins fell as expected to 34% (2011: 38%) as a result of contributions from the lower margin business Profile and VBR. VBR, as anticipated, is currently operating at close to break-even.  Underlying margins in PI were slightly improved.

The two Business Information acquisitions completed in 2012 performed in line with expectations.  VBR, with its two key services, Clean Energy Pipeline and Global Security Pipeline, generated a small loss in 2012, following increased investment in content and sales and marketing resource since the acquisition.  The business is generating good growth in revenues and is expected to move into profit in 2013.  Profile Group has been fully integrated into Centaur in the past few months, resulting in some cost savings and increased revenue growth momentum.  The Group is implementing new revenue opportunities identified during due diligence and expects to see positive impact from these initiatives in 2013.

The most recent acquisition, Econsultancy is a leading digital information business serving the fast growing international digital marketing and e-commerce sector. It is highly complementary with Centaur's Marketing Week, the UK's market-leading publishing and events portfolio serving the marketing sector. Econsultancy revenues, 20% of which are generated outside of the UK, grew by 50% per annum compound in the two years to 31 December 2011, its last reported year-end. Econsultancy is a leading global expert on digital marketing and is expected to make a significant contribution towards the transformation of Centaur's digital operations.

Exhibitions

This division comprises a portfolio of specialist exhibitions covering a number of sectors, and certain publishing assets linked to the specialist construction show portfolio.  Leading brands include Marketing Week Live, Employee Benefits Live, SubCon, The Business Travel Show and the Homebuilding and Renovating portfolio.

The Exhibitions division reported 3% growth in revenues and an increase in adjusted EBITDA margin to 16% (2011: 15%).  On an underlying basis, revenues increased by 10%. While this division's results include a small contribution from the Excite show, acquired in December 2012, it has delivered the strongest organic growth performance of the three divisions, driven by new product activity and an excellent performance from its core show brands.  This is reflected in forward bookings for 2013 exhibitions that were 16% ahead of prior year at 30 June 2012. The publishing assets within this division delivered a resilient performance in difficult market conditions, with underlying revenues down 2%.

In September 2011, Employee Benefits Live delivered a 21% increase in revenues and sold out its venue capacity, so we have moved it to Olympia for the 2012 show.  In October 2011, the Group launched Aidex in Brussels, a new show for the international humanitarian relief sector, which was well received.  The show generated a small loss in its first outing, but is on track to deliver good growth and a profitable result in October 2012.  The Group also invested in a hosted buyer programme for the Business Travel Show in London in February, which underpinned a successful show, resulting in a doubling of the rebook rate at the show. 

A key focus of the Exhibitions division is on maintaining a strong pipeline of new launch activity.  The Group launched two new co-located shows alongside Marketing Week Live, which contributed to 23% growth in revenues for this event.  In February 2012 the Group also launched The Meetings show, which will run for the first time in July 2013.  This is a major new event for this important industry of destinations, venues, hotels and associated service providers and is the first UK show to offer a fully hosted buyer programme to the market.

Acquisitions

The Group has completed five acquisitions since 1 July 2011, each in line with its investment strategy to focus on digital marketing, information and events businesses operating within one or more of the Group's target markets.  The highlights of these transactions are as follows:

·      IPL, acquired in August 2011, provides research data, analysis and advice on retail financial distribution and fund platforms through its The Platforum brand.  It has been successfully integrated within the Legal & Financial publishing group within Business Publishing.

·      VBR, acquired in December 2011, provides transaction-related news and data to the investment communities operating within the global renewable energy and security markets.  It now forms an important part of the Business Information division.

·      The Excite show, acquired in December 2011, is a small show for marketers and show organisers that has been rebranded the Live Marketing show and successfully integrated within the Group's flagship event for marketers, Marketing Week Live.

·      Profile, acquired in February 2012, is a digital information business, which provides forward planning and contact information to over 3,000 subscribers in the marketing, media and PR communities.  It has already been successfully integrated within the Business Information division.

·      Econsultancy, announced in June 2012 and completed in July 2012, is a digital information and events business which occupies a leading position in the fast-growing global market for digital marketing and e-commerce.  It will form an integral part of the Business Information division and is expected to accelerate the transformation of Centaur into a digital information and events business.  Econsultancy will work in close collaboration with Centaur's leading publication brand, Marketing Week, where there is an opportunity for significant cross-selling and marketing synergies.  The business is also well positioned to deliver substantial revenues from paid content solutions in this fast growing international market.

Consolidated Statement of Comprehensive Income for the year ended 30 June 2012

		Adjusted	Adjusting	Statutory	Adjusted	Adjusting	Statutory
		Results	Items	Results	Results	Items	Results
		2012	2012	2012	2011	2011	2011
	Notes	£m	£m	£m	£m	£m	£m
Revenue	1	65.6	-	65.6	68.3	-	68.3
Net operating expenses	2	(57.0)	(5.3)	(62.3)	(61.6)	(36.8)	(98.4)
Operating profit/(loss)		8.6	(5.3)	3.3	6.7	(36.8)	(30.1)
Finance costs	4	(0.6)	-	(0.6)	(0.2)	-	(0.2)
Profit/(loss) before tax		8.0	(5.3)	2.7	6.5	(36.8)	(30.3)
Taxation (expense)/credit	5	(2.2)	0.8	(1.4)	(1.7)	2.4	0.7
Profit/(loss) for the year attributable to owners of the parent		5.8	(4.5)	1.3	4.8	(34.4)	(29.6)
Total comprehensive income/(loss) attributable to owners of the parent		5.8	(4.5)	1.3	4.8	(34.4)	(29.6)
Earnings/(loss) per share attributable to owners of the parent	6
Basic		4.2p		0.9p	3.4p		(21.2)p
Fully diluted		4.1p		0.9p	3.4p		(21.2)p

Consolidated Balance Sheet as at 30 June 2012

		2012	2011
	Note	£m	£m
Non-current assets
Goodwill	7	121.3	116.1
Other intangible assets	8	15.4	9.8
Property, plant and equipment		2.3	2.5
Deferred income tax assets		0.8	0.6
		139.8	129.0
Current assets
Inventories		1.1	1.3
Current income tax asset		-	1.1
Trade and other receivables		13.5	14.7
Cash and cash equivalents		5.3	2.0
		19.9	19.1
Assets of disposal group classified as held-for-sale		-	0.6
Total Assets		159.7	148.7
Current liabilities
Financial liabilities	9	-	(0.2)
Trade and other payables		(10.0)	(12.2)
Deferred income		(11.3)	(9.4)
Current income tax liabilities		(0.8)	-
Provisions	10	(0.3)	(0.3)
		(22.4)	(22.1)
Net current liabilities		(2.5)	(2.4)
Non-current liabilities
Financial liabilities	9	(12.5)	(0.5)
Provisions	10	(1.2)	(0.9)
Deferred income tax liabilities		(1.0)	(1.1)
		(14.7)	(2.5)
Net assets		122.6	124.1
Capital and reserves attributable to owners of the parent
Share capital		15.0	15.0
Treasury and employee benefit trust shares		(10.5)	(10.3)
Share premium		0.7	0.7
Other reserves		3.7	3.4
Retained earnings		113.7	115.3
Total equity		122.6	124.1

The financial statements were approved by the Board of Directors on 12 September 2012 and were signed on its behalf by:

M H Kerswell

Group Finance Director

Consolidated Cash Flow Statement for the year ended 30 June 2012

		2012	2011
	Note	£m	£m
Cash flows from operating activities
Cash generated from operations		8.3	9.4
Tax paid		-	(1.2)
Net cash generated from operating activities		8.3	8.2
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)		(11.3)	(2.1)
Other acquisitions	7	(0.2)	-
Purchase of property, plant and equipment		(0.3)	(0.1)
Purchase of software	8	(1.9)	(1.8)
Disposals		0.5	-
Net cash flows used in investing activities		(13.2)	(4.0)
Cash flows from financing activities
Employee benefit trust shares purchased		(0.2)	(0.5)
Interest paid		(0.4)	(0.1)
Finance arrangement fees paid		(0.6)	-
Finance lease repayments		(0.2)	(0.2)
Dividends paid		(2.9)	(2.5)
Draw downs on credit facility	9	12.5	-
Net cash flows generated from/(used in) financing activities		8.2	(3.3)
Net increase in cash and cash equivalents		3.3	0.9
Cash and cash equivalents at 1 July		2.0	1.1
Cash and cash equivalents at 30 June		5.3	2.0
Reconciliation of net debt
		2012	2011
		£m	£m
Cash and cash equivalents		5.3	2.0
Financial liabilities	9	(12.5)	-
Net (debt)/cash		(7.2)	2.0

Statement of Accounting Policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The consolidated and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and International Financial Reporting Interpretations Committee (IFRIC) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared on the historical cost basis.  The consolidated financial statements have been prepared on a going concern basis.  These financial statements are presented in pounds sterling (GBP) as that is the currency of the primary economic environment in which the Group operates.

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, events or actions, the actual results may ultimately differ from those estimates.

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements.

(a) New and amended standards adopted by the group:

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2011:

·    Annual improvements to IFRSs applicable for annual periods beginning after 1 January 2011 (EU-endorsed 18 February 2011).

·    'IAS 24, 'Related party disclosures' (revised 2009). Amends the definition of a related party and modifies certain related-party disclosure requirements for government-related entities. Effective date 1 January 2011, EU-endorsed 19 July 2010.

(b) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 July 2011 but not currently relevant to the group:

·    Amendments to IFRS 7, 'Financial instruments: disclosures on transfers of assets' (effective 1 July 2011).

·    Amendments to IFRIC 14, 'Prepayments of a minimum funding requirement' (effective 1 January 2011).

(c) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 July 2011 and not early adopted:

·    IAS 1, 'Financial statement presentation - regarding other comprehensive income' (effective 1 July 2012).

·    IAS 12, 'Income taxes - on deferred tax' (effective 1 January 2012).

·    IFRS 9, 'Financial instruments', (effective 1 January 2013).

·    IFRS 10, ' Consolidated financial statements' (effective 1 January 2013).

·    IFRS 12, 'Disclosures of interests in other entities (effective 1 January 2013).

·    IFRS 13, 'Fair value measurement' (effective 1 January 2013).

·    IAS 27 (Revised), 'Separate financial statements' (effective 1 January 2013).

The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Group.

Additional presentation of non-statutory measures

The Directors believe that adjusted results and adjusted earnings per share provide additional useful information on the ongoing operations of the Group to shareholders.  The term 'adjusted' is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies.  It is not intended to be a substitute for, or superior to, IFRS measurements of profit.

The following charges were presented as adjusting items:

		2012	2011
	Notes	£m	£m
Exceptional items	3	4.5	3.4
Amortisation of acquired intangibles	8	0.8	1.2
Impairment of goodwill and intangibles	7	-	32.2
		5.3	36.8
Tax relating to adjusting items		(0.8)	(2.4)
		4.5	34.4

The principal adjustments are made in respect of:

·      Exceptional items - the Group considers items of income and expenses as exceptional items and excludes them from the adjusted results where the nature of the item, or its size, is likely to be material so as to assist the user of the financial statements to better understand the results of the operations of the Group.  Details of exceptional items are shown in note 3.

·      Amortisation of acquired intangibles - the Group amortises all intangible assets.  The amortisation charge for those intangible assets recognised on the acquisition of a subsidiary are excluded from the adjusted results of the Group so as to assist the user of the financial statements to better understand the results of the operations of the Group. The amortisation of intangible software assets acquired other than through the acquisition of a subsidiary is included in the adjusted results. Details of amortisation of intangibles are shown in note 8.

·      Impairment of goodwill and intangibles - the Group tests all goodwill and intangible assets for impairment on an annual basis or more frequently when an indicator exists. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the asset's fair value less cost to sell and its value in use.  Any impairment loss recognised is excluded from the adjusted results of the Group so as to assist the user of the financial statements to better understand the results of the operations of the Group.

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes, calculated using the standard rate of corporation tax.

Reconciliation from Operating profit/(loss) to Adjusted EBITDA:

		2012	2011
	Notes	£m	£m
Operating profit/(loss)		3.3	(30.1)
Adjusting items		5.3	36.8
Adjusted operating profit		8.6	6.7
Depreciation of property, plant and equipment		0.7	0.9
Amortisation of software	8	2.1	2.1
Share based payments		0.3	0.2
Adjusted EBITDA		11.7	9.9

1 SEGMENTAL REPORTING

The Board of Directors has been identified as the chief operating decision-maker.  The Board reviews the Group's internal monthly reporting in order to assess performance and allocate resources.  Management has determined the operating segments based on these reports.

The Board considers the business from a divisional perspective.  The basis of measurement used for allocating overheads is the headcount for each division.  Corporate costs are allocated to business segments on an appropriate basis depending on the nature of the cost.  Costs that cannot be allocated to a business segment are shown as "unallocated". 

Segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, inventories, trade receivables and cash and cash equivalents.  Segment liabilities comprise trade payables, accruals and deferred income.  Corporate assets and liabilities comprise current and deferred tax balances, cash and cash equivalents and borrowings.

Capital expenditure comprises additions to property, plant and equipment, and software.

There are no major customers that provide revenue of over 10% of a reportable segment and all revenue is derived from external customers.

Geographical segments

Substantially all of the Group's net assets are located and substantially all revenue and profit are generated in the United Kingdom.  Furthermore substantially all of the Group's customers are located in the United Kingdom.  The Directors therefore consider that the Group currently operates in a single geographical segment, being the United Kingdom.

	Business	Business
	Publishing	Information	Exhibitions	Unallocated	Group
	£m	£m	£m	£m	£m
Year ended 30 June 2012
Continuing operations
Revenue	41.8	7.6	16.2	-	65.6
Adjusted EBITDA	6.5	2.6	2.6	-	11.7
Depreciation of property, plant and equipment	(0.5)	(0.1)	(0.1)	-	(0.7)
Amortisation of software	(1.0)	(0.9)	(0.2)	-	(2.1)
Amortisation of acquired intangibles	(0.4)	(0.2)	(0.2)	-	(0.8)
Share based payments	-	-	-	(0.3)	(0.3)
Exceptional items	(2.5)	(1.7)	(0.3)	-	(4.5)
Operating profit/(loss)	2.1	(0.3)	1.8	(0.3)	3.3
Finance costs	-	-	-	(0.6)	(0.6)
Profit/(loss) before tax	2.1	(0.3)	1.8	(0.9)	2.7
Taxation	-	-	-	(1.4)	(1.4)
Profit/(loss) for the year from continuing operations	2.1	(0.3)	1.8	(2.3)	1.3
Profit/(loss) for the year attributable to owners of the parent	2.1	(0.3)	1.8	(2.3)	1.3
Segment assets	99.9	23.0	30.7	-	153.6
Corporate assets	-	-	-	6.1	6.1
Consolidated total assets	99.9	23.0	30.7	6.1	159.7
Segment liabilities	(10.8)	(5.6)	(6.1)	-	(22.5)
Corporate liabilities	-	-	-	(14.6)	(14.6)
Consolidated total liabilities	(10.8)	(5.6)	(6.1)	(14.6)	(37.1)
Other items
Capital expenditure	1.0	1.1	0.2	-	2.3
Impairment of trade receivables	-	-	0.1	-	0.1

	Business	Business
	Publishing	Information	Exhibitions	Unallocated	Group
	£m	£m	£m	£m	£m
Year ended 30 June 2011
Continuing operations
Revenue	46.8	5.8	15.7	-	68.3
Adjusted EBITDA	5.4	2.2	2.3	-	9.9
Depreciation of property, plant and equipment	(0.7)	(0.1)	(0.1)	-	(0.9)
Amortisation of software	(1.1)	(0.9)	(0.1)	-	(2.1)
Amortisation of acquired intangibles	(0.7)	-	(0.5)	-	(1.2)
Share based payments	-	-	-	(0.2)	(0.2)
Impairment charge	(24.7)	-	(7.5)	-	(32.2)
Exceptional items	(2.6)	(0.2)	(0.5)	(0.1)	(3.4)
Operating profit/(loss)	(24.4)	1.0	(6.4)	(0.3)	(30.1)
Finance costs	-	-	-	(0.2)	(0.2)
(Loss)/profit before tax	(24.4)	1.0	(6.4)	(0.5)	(30.3)
Taxation	-	-	-	0.7	0.7
(Loss)/profit for the year from continuing operations	(24.4)	1.0	(6.4)	0.2	(29.6)
(Loss)/profit for the year attributable to owners of the parent	(24.4)	1.0	(6.4)	0.2	(29.6)
Segment assets	100.6	12.2	32.2	-	145.0
Corporate assets	-	-	-	3.7	3.7
Consolidated total assets	100.6	12.2	32.2	3.7	148.7
Segment liabilities	(13.5)	(3.6)	(6.4)	-	(23.5)
Corporate liabilities	-	-	-	(1.1)	(1.1)
Consolidated total liabilities	(13.5)	(3.6)	(6.4)	(1.1)	(24.6)
Other items
Capital expenditure	1.0	0.8	0.1	-	1.9
Impairment of trade receivables	0.2	-	0.2	-	0.4

2 NET OPERATING EXPENSES

Operating profit is stated after charging/(crediting):

			Adjusted	Adjusting	Statutory	Adjusted	Adjusting	Statutory
			Results	Items	Results	Results	Items	Results
			2012	2012	2012	2011	2011	2011
		Notes	£m	£m	£m	£m	£m	£m
Employee benefit expense			25.2	-	25.2	28.3	-	28.3
Depreciation of owned property, plant
	and equipment		0.7	-	0.7	0.9	-	0.9
Amortisation of intangibles		8	2.1	0.8	2.9	2.1	1.2	3.3
Impairment of goodwill and intangibles		7, 8	-	-	-	-	32.2	32.2
Exceptional items		3	-	4.5	4.5	-	3.4	3.4
Operating lease rentals
	Minimum lease payments		2.4	-	2.4	2.7	-	2.7
	Subleases		(0.5)	-	(0.5)	(0.5)	-	(0.5)
Repairs and maintenance expenditure
	on property, plant and equipment		-	-	-	0.1	-	0.1
Trade receivables impairment			0.1	-	0.1	0.4	-	0.4
Other operating expenses			27.0	-	27.0	27.6	-	27.6
			57.0	5.3	62.3	61.6	36.8	98.4
Cost of Sales			35.0	-	35.0	37.0	-	37.0
Distribution costs			2.5	-	2.5	3.0	-	3.0
Administrative expenses			19.5	5.3	24.8	21.6	36.8	58.4
			57.0	5.3	62.3	61.6	36.8	98.4
Services provided by the Group's auditor
							2012	2011
							£'000	£'000
Audit fees:
Fees payable to Company's auditor for the audit of parent company
and consolidated financial statements							30	30
Fees payable to the Company's auditor and its associates for other services:
	The audit of the Company's subsidiaries pursuant to legislation						117	75
	Other services pursuant to legislation						25	21
	Services relating to remuneration						-	40
	All other services						219	6
							391	172

Included within other services are fees of £200,000 in respect of financial and tax due diligence advice on the acquisition of Econsultancy.com Limited.

3 EXCEPTIONAL ITEMS

				2012	2011
				£'000	£'000
Restructuring costs
	Redundancies			1.9	3.0
	Accelerated amortisation of software			0.1	0.1
	Product closure costs			0.3	0.3
				2.3	3.4
Acquisition related costs				1.1	0.3
Deferred contingent consideration				1.1	-
Onerous lease provision				0.3	(0.1)
Poland Street lease
	Compensation receivable			-	(1.5)
	Move related costs			-	0.8
	Accelerated depreciation on leasehold improvements			-	0.5
				-	(0.2)
Profit on disposal				(0.3)	-
Total				4.5	3.4

Restructuring costs in 2012 comprise redundancy costs of £1.9m, the accelerated amortisation of software of £0.1m and product closure costs on discontinued/disposed products of £0.3m, all resulting from the continuing restructuring of the Group commenced in 2011.

Acquisition related costs in 2012 comprise the legal and professional fees and stamp duty associated with the acquisition of Investment Platforms Limited ("IPL") in August 2011 (£0.1m), Venture Business Research Limited ("VBR") in December 2011 (£0.2m) and The Profile Group (UK) Limited ("Profile") in February 2012 (£0.2m), plus non-contingent legal and professional fees incurred during the year associated with the acquisition of Econsultancy.com Limited in July 2012 (£0.5m) and legal and professional fees associated with the refinancing of the Group's banking facilities in February 2012 (£0.1m).

The deferred contingent consideration charge relates to the acquisitions of The Forum for Expatriate Management Limited (in 2011), IPL and VBR.  Earn-out payments for each of these acquisitions are contingent on the future profitability of each of the acquired businesses (refer to note 11). As the payments are also contingent on the continued employment of the vendors, IFRS3(R) requires that such arrangements are recognised in the Consolidated Statement of Comprehensive Income, based on the Directors' best estimate of the earn-out amount, on a straight line basis over the life of the earn-out. The charge recorded in 2012 represents the proportionate amount of the expected earn-out payments, plus an adjustment to earlier periods where the latest information available indicates that the consideration ultimately payable will differ from that which was initially expected.

Following the acquisition of Profile, the business was relocated to Centaur's offices, resulting in an onerous lease provision of £0.3m being made for the remaining cost of their existing lease (note 10).

During the year, the Group disposed of the Logistics and Supply Chain portfolio, the Recruiter and the manufacturing and B2B construction assets.  The gain of £0.3m recognised in relation to these disposals represents the net present value of the consideration receivable from the sales (£1.1m), less the net book value of intangible assets disposed (£0.6m - disclosed as held for sale in 2011) and legal, professional and other costs of disposal (£0.2m).

Reorganisation costs in 2011 comprise redundancy costs of £3m, the impairment of software of £0.1m and product closure costs on discontinued products of £0.3m.

Acquisition related costs in 2011 comprise the legal fees and stamp duty associated with the acquisition of The Forum for Expatriate Management Limited in April 2011 and the final adjustment to the deferred consideration for Taxbriefs Holdings Limited which was acquired in 2010.

Following the acquisition of Taxbriefs in 2010, a decision was made to relocate the business to Centaur's offices, resulting in a provision being made for the remaining costs of their existing lease.  The £0.1m credit shown in 2011 arose from an adjustment to the onerous lease provision following the sub-letting of the premises.

Poland Street lease related items in 2011 arose from the Group's vacation of one of its central London offices.  Statutory compensation of £1.5m received (in 2012) upon expiry of the lease was offset by the write-off of £0.5m of leasehold improvements specific to those premises and £0.8m of unavoidable costs incurred in relation to the move.

4 FINANCE COSTS

				2012	2011
				£m	£m
Interest payable on revolving credit facility				(0.3)	(0.1)
Commitment fees and amortisation of arrangement fee in respect of revolving credit facility				(0.2)	-
Finance lease interest				(0.1)	(0.1)
				(0.6)	(0.2)

5 TAXATION

				2012	2011
				£m	£m
(a) Analysis of charge in year
Current tax
	Current year			1.3	(0.5)
	Adjustment in respect of prior year			0.4	(0.1)
				1.7	(0.6)
Deferred tax
	Origination and reversal of temporary differences			0.1	(0.2)
	Adjustment in respect of prior year			(0.4)	0.1
				(0.3)	(0.1)
Taxation				1.4	(0.7)

(b) Factors affecting the tax charge for the year

The tax charge/(credit) for the year is higher (2011: lower) than the standard rate of corporation tax in the UK (25.5% - 2011: 27.75%).  The differences are explained below:

				2012	2011
				£m	£m
Profit/(loss) before tax				2.7	(30.3)
Profit/(loss) before tax multiplied by standard rate of corporation tax in the UK of 25.5% (2011: 27.75%)				0.7	(8.4)
Effects of:
Expenses not deductible for tax purposes				1.0	0.2
Effects of changes in tax rate on deferred tax balances				(0.3)	-
Utilisation of tax losses brought forward				(0.1)	-
Non-taxable lease compensation				-	(0.4)
Goodwill and intangibles impairment not deductible				-	7.8
Deferred tax charge/(credit) on share based payments taken to the statement of comprehensive income				0.1	0.1
				1.4	(0.7)

The Finance Act 2011 included legislation to reduce the main rate of corporation tax from 26% to 24% from 1 April 2012.  In addition, legislation to reduce the main rate of corporation tax from 24% to 23% from 1 April 2013 is expected to be included in the Finance Act 2012.  These further changes have not been substantively enacted at the balance sheet date and, therefore are not included in these financial statements.

There will be no material effect on the deferred tax liability or the tax charge/(credit) resulting from the changes to be enacted in the Finance Act 2012.

6 EARNINGS PER SHARE

Basic earnings/(loss) per share (EPS/(LPS)) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the year.  1,813,762 (2011: 1,476,500) shares held in the employee benefit trust and 8,964,507 (2011: 9,309,102) shares held in treasury have been excluded in arriving at the weighted average number of shares.

For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  This comprises share options (including those granted under the Sharesave plan) granted to Directors and employees where the exercise price is less than the average market price of the Company's ordinary shares during the year.

An alternative measure of adjusted earnings per share has been provided as the Directors believe that this measure is more reflective of the ongoing trading of the Group.

		2012	2012	2012	2011	2011	2011
		Earnings	Weighted		Earnings	Weighted
		attributable	average		attributable	average
		to owners	number	Amount	to owners	number	Amount
		of the parent	of shares	per share	of the parent	of shares	per share
		£m	millions	Pence	£m	millions	Pence
Basic EPS/(LPS)		1.3	139.3	0.9	(29.6)	139.9	(21.2)
Effect of dilutive securities
Options		-	2.2	-	-	-	-
Diluted basic EPS/(LPS)		1.3	141.5	0.9	(29.6)	139.9	(21.2)
Adjusted EPS
Earnings/(loss) attributable to owners of the parent		1.3	139.3	0.9	(29.6)	139.9	(21.2)
Amortisation of acquired intangibles (excluding software) (note 8)		0.8		0.6	1.2		0.9
Impairment of goodwill and intangibles assets (note 7)		-		-	32.2		23.0
Exceptional items (note 3)		4.5		3.2	3.4		2.4
Tax effect of above adjustments		(0.8)		(0.5)	(2.4)		(1.7)
Adjusted EPS		5.8	139.3	4.2	4.8	139.9	3.4
Effect of dilutive securities
Options		-	2.2	-	-	2.5	-
Diluted adjusted EPS		5.8	141.5	4.1	4.8	142.4	3.4

7 GOODWILL

					Total
					£m
Cost
At 1 July 2011					142.0
Additions - acquisition of subsidiaries					5.8
Additions - other acquisitions					0.2
FEM adjustment					(0.8)
At 30 June 2012					147.2
Impairment
At 1 July 2011					25.9
Charge for the year					-
At 30 June 2012					25.9
Net book amount
At 30 June 2012					121.3
At 30 June 2011					116.1
2011
Cost
At 1 July 2010					140.7
Additions					1.3
At 30 June 2011					142.0
Impairment
At 1 July 2010					-
Charge for the year					25.9
At 30 June 2011					25.9
Net book amount
At 30 June 2011					116.1
At 30 June 2010					140.7

The majority of the Group's goodwill arose on the acquisition of the Centaur Communications Group in 2004.

The fair values of the acquired assets and liabilities of The Forum for Expatriate Management Limited ("FEM"), acquired in April 2011, were disclosed as provisional in 2011, and were finalised in 2012. The provisional 2011 goodwill calculation included a provision for £1.1m of deferred contingent consideration, of which £0.3m was paid in July 2011. The remaining £0.8m is contingent on the continuing employment of the vendors, and IFRS3(R) requires that such arrangements are recognised in the Consolidated Statement of Comprehensive Income over the life of the earn-out rather than being treated as a cost of investment (refer to note 10). Goodwill has therefore been adjusted by £0.8m.

Goodwill acquired as part of business combinations of £5.8m has been recognised in the year (note 11).

Additions from other acquisitions arose from the purchase of an additional 0.71% of the share capital of Perfect Information Limited ("PI") for £0.2m in January 2012.  The entire value of this purchase has been added to goodwill as no non-controlling interest has been recognised with respect to PI as the company had net liabilities as at 30 June 2011.

Goodwill by segment

Each brand, comprising individual magazines, digital titles and events, is deemed to be a Cash Generating Unit (CGU), being the lowest level for which cash flows are separately identifiable.  Goodwill is attributed to individual CGUs but is reviewed at the segment level for the purposes of the annual impairment review as this is the level that management monitor goodwill.

The following table shows the allocation of goodwill to segments at 30 June 2012:

		Business		Business
		Publishing	Exhibitions	Information	Total
		£m	£m	£m	£m
Goodwill
At 30 June 2011		82.2	25.3	8.6	116.1
Additions (note 11)		0.8	-	5.2	6.0
FEM adjustment		(0.8)	-	-	(0.8)
At 30 June 2012		82.2	25.3	13.8	121.3

Impairment testing of goodwill and acquired intangible assets

During the year goodwill and acquired intangible assets were tested for impairment in accordance with IAS 36.  In assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with its recoverable amount, being the higher of value in use and fair value less costs to sell.

Fair value is calculated based on expected proceeds.  For all other assets the recoverable amount is measured based on value-in-use.

The Group estimates the value-in-use of its CGUs using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and discounts these using a pre-tax rate of 11.9% (2011: 12.7%).  The discount rate used is consistent with the Group's weighted average cost of capital and is used across all segments.

The key assumptions used in calculating value-in-use are revenue growth, adjusted EBITDA margin, discount rate and the terminal growth rate.  The Group has used formally approved forecasts for the first five years of the value-in-use calculation, and applied a terminal growth rate of 2.25% (2011: 2.25%).  This timescale and the terminal growth rate are both considered appropriate given the cyclical nature of the Group's revenues.

No impairment was noted as a result of the impairment review (2011: £32.2m).  The 2011 impairment charge related to CGUs that were closed or disposed of as well as those CGUs where the carrying value exceeded the value-in-use.

The forecasts used in value-in-use calculations are sensitive to changes in the forecast growth rates and the discount factor applied.  However, forecast revenue would need to reduce by 3% per annum for the next 5 years or the discount factor would have to increase by 2 percentage points in order to trigger an impairment in any segment.

8 OTHER INTANGIBLE ASSETS

			Brands &
		Computer	publishing	Customer	Websites	Non-compete
		software	rights	relationships	& content	arrangements	Total
		£m	£m	£m	£m	£m	£m
At 1 July 2010
Cost		11.2	10.1	4.1	0.4	0.5	26.3
Accumulated amortisation and impairment		(5.9)	(2.0)	(1.5)	(0.4)	(0.3)	(10.1)
Net book amount		5.3	8.1	2.6	-	0.2	16.2
Year ended 30 June 2011
Opening net book amount		5.3	8.1	2.6	-	0.2	16.2
Additions - business combinations		-	1.6	0.5	-	-	2.1
Additions - separately acquired		1.1	-	-	-	-	1.1
Additions - internally generated		0.7	-	-	-	-	0.7
Amortisation charge for the year		(2.1)	(0.5)	(0.6)	-	(0.1)	(3.3)
Accelerated amortisation (note 3)		(0.1)	-	-	-	-	(0.1)
Impairment charge (note 7)		-	(4.7)	(1.5)	-	(0.1)	(6.3)
Transfer to disposal group		-	(0.6)	-	-	-	(0.6)
Closing net book amount		4.9	3.9	1.0	-	-	9.8
At 30 June 2011
Cost		13.0	9.9	4.2	0.4	0.5	28.0
Accumulated amortisation and impairment		(8.1)	(6.0)	(3.2)	(0.4)	(0.5)	(18.2)
Net book amount		4.9	3.9	1.0	-	-	9.8
Year ended 30 June 2012
Opening net book amount		4.9	3.9	1.0	-	-	9.8
Additions - business combinations		-	1.0	4.4	1.1	-	6.5
Additions - separately acquired		1.7	0.1	-	-	-	1.8
Additions - internally generated		0.3	-	-	-	-	0.3
Accelerated amortisation (note 3)		(0.1)	-	-	-	-	(0.1)
Amortisation charge for the year		(2.1)	(0.2)	(0.5)	(0.1)	-	(2.9)
Closing net book amount		4.7	4.8	4.9	1.0	-	15.4
At 30 June 2012
Cost		14.8	5.6	6.0	1.5	0.5	28.4
Accumulated amortisation and impairment		(10.1)	(0.8)	(1.1)	(0.5)	(0.5)	(13.0)
Net book amount		4.7	4.8	4.9	1.0	-	15.4

Computer software capitalised in 2012 and 2011 principally relates to the development of software used in websites and digital products, and also to the development of new products in the Business Information segment.

The additions to brands and publishing rights, customer relationships and websites and content through business combinations in 2012 relate to the acquisition of Investment Platforms Limited, purchased in August 2011, Venture Business Research Limited, purchased in December 2011, and The Profile Group (UK) Limited, purchased in February 2012 (note 11).  The addition to brands and publishing rights and customer relationships through business combinations in 2011 relates to The Forum for Expatriate Management Limited, purchased in April 2011 (note 11). 

The separately acquired addition to brands and publishing rights in 2012 relates to the purchase of the Excite show in December 2012.

9 FINANCIAL LIABILITIES

				2012	2011
				Group	Group
	Note			£m	£m
Current liabilities
Finance lease payables				0.2	0.2
Arrangement fee in respect of revolving credit facility				(0.2)	-
				-	0.2
Non-current liabilities
Finance lease payables				0.3	0.5
Arrangement fee in respect of revolving credit facility				(0.3)	-
Revolving credit facility	12			12.5	-
				12.5	0.5

Finance lease payables

Lease payables are effectively secured as the rights to the leased assets revert to the lessor in the event of default.

				2012	2011
				£m	£m
Gross finance lease liabilities - minimum lease payments
No later than 1 year				0.3	0.3
Later than 1 year and no later than 5 years				0.3	0.5
				0.6	0.8
Future finance charges on finance leases				(0.1)	(0.1)
Present value of finance lease liabilities				0.5	0.7

The present value of finance lease liabilities is as follows:

				2012	2011
				£m	£m
No later than 1 year				0.2	0.2
Later than 1 year and no later than 5 years				0.3	0.5
Future finance charges on finance leases				0.5	0.7

10 PROVISIONS

			Deferred	Onerous
			consideration	lease	Total
			£m	£m	£m
Group
At 1 July 2011			1.2	-	1.2
Paid during the year			(0.3)	-	(0.3)
FEM adjustment			(0.8)	-	(0.8)
Charged to statement of comprehensive income during the year			-	0.3	0.3
Utilised during the year			-	-	-
Arising on acquisitions (note 11)			1.1	-	1.1
At 30 June 2012			1.2	0.3	1.5
Current			-	0.3	0.3
Non-current			1.2	-	1.2
At 30 June 2012			1.2	0.3	1.5

The £0.3m of deferred consideration paid during the year relates to the acquisition of The Forum for Expatriate Management Limited ("FEM") in 2011.  A further £0.8m of deferred consideration that was provided for in 2011 in respect of FEM is contingent on the continued employment of the vendors. IFRS3(R) requires that such arrangements are recognised in the Consolidated Statement of Comprehensive Income over the life of the earn-out rather than being treated as a cost of investment. The provision at 1 July 2011 has therefore been adjusted by £0.8m (refer to note 7).

The deferred contingent consideration provision of £1.1m arising in the year relates to the acquisitions of Investment Platforms Limited, Venture Business Research Limited and FEM. Earn-out payments for each of these acquisitions are contingent on the future profitability of the acquired businesses, and further detail on the contingent payments is included in note 11. As the payments are also contingent on the continued employment of the vendors, IFRS3(R) requires that such arrangements are recognised in the Consolidated Statement of Comprehensive Income, based on the Directors' best estimate of the earn-out amount, on a straight line basis over the life of the earn-out. The provision arising in the year represents the amount of the expected earn-out payments due as at 30 June 2012.

The onerous lease provision relates to premises acquired with The Profile Group (UK) Limited, whose staff transferred to existing Group premises.

11 BUSINESS COMBINATIONS

Subsidiaries acquired
					Proportion of
			Date of		voting equity
			acquisition		interest acquired
Investment Platforms Limited (IPL)			19.08.2011		100%
Venture Business Research Limited (VBR)			08.12.2011		100%
The Profile Group (UK) Limited (Profile)			20.02.2012		100%

On 19 August 2011, the Group acquired the entire issued share capital of IPL, a specialist information business in the retail financial services sector.  Initial cash consideration of £2m was paid on completion of the acquisition, including a working capital adjustment of £0.2m.  Further contingent consideration, up to a maximum of £4.2m, may be payable in 2015 dependent on the performance of IPL in the year ended 30 June 2014.

On 8 December 2011, the Group acquired the entire issued share capital of VBR, a specialist digital information, data and analytics business in the clean energy and global security sectors. Initial cash consideration of £2.4m was paid on completion of the acquisition, net of a working capital adjustment of £0.1m.  Further contingent consideration, up to a maximum of £5m, may be payable in 2016, dependent on the performance of VBR in the year ended 30 June 2015.

The deferred consideration payments in respect of both IPL and VBR are also contingent on the continued employment of the vendors of each business, and in such circumstances IFRS3(R) requires the estimated final payment to be charged to the Consolidated Statement of Comprehensive Income over the term of the earn-out rather than being treated as a cost of investment.  As a result, the value of the contingent consideration has been excluded from the calculation of goodwill shown below.  See note 3 for details of the amounts charged to the Statement of Comprehensive Income during 2012 and note 10 for details of the deferred consideration provision as at 30 June 2012

On 20 February 2012, the Group acquired the entire issued share capital of Profile, a specialist digital information business, for a net cash consideration of £7.5m, representing initial cash consideration of £8.0m offset by a £0.5m working capital adjustment. Profile provides forward planning and contact information to media, PR and marketing professionals.

Consideration transferred
			IPL	VBR	Profile
			£m	£m	£m
Cash			2.0	2.4	7.5

Acquisition-related costs amounting to £0.5m have been excluded from the consideration and recognised as an expense in the current year as an exceptional item within the net operating expenses line item on the consolidated statement of comprehensive income.

Assets acquired and liabilities assumed at the acquisition date

The following tables set out, at the respective dates of acquisition, the carrying value and provisional fair value of the assets and liabilities acquired.  All intangible assets were recognised at their respective fair values.

				Carrying values
				pre-acquisition	Fair value
				£m	£m
IPL
Intangible assets (excluding goodwill)				-	1.0
Trade and other receivables				0.1	0.1
Trade and other payables				(0.3)	(0.3)
Cash and cash equivalents				0.4	0.4
Net assets acquired				0.2	1.2
VBR
Intangible assets (excluding goodwill)				0.4	0.6
Trade and other receivables				0.3	0.3
Trade and other payables				(0.4)	(0.4)
Net assets acquired				0.3	0.5
Profile
Intangible assets (excluding goodwill)				0.3	4.9
Property, plant and equipment				0.1	0.1
Trade and other receivables				1.0	1.0
Trade and other payables				(0.7)	(0.7)
Deferred income				(1.4)	(1.4)
Cash and cash equivalents				0.5	0.5
Net assets acquired				(0.2)	4.4

Goodwill arising
		IPL	VBR	Profile	Total
		£m	£m	£m	£m
Consideration transferred		2.0	2.4	7.5	11.9
Less: fair value of net assets acquired		(1.2)	(0.5)	(4.4)	(6.1)
Provisional goodwill		0.8	1.9	3.1	5.8

The goodwill arising on the acquisition of IPL has been allocated to Business Publishing and the goodwill arising on the acquisition of VBR and Profile to Business Information, as those segments are expected to benefit from the synergies of the respective business combinations.   Goodwill is principally attributable to the workforce and anticipated operating synergies.

Impact on the results of the Group

From their respective dates of acquisition, the acquisitions contributed the following to the results of the Group.

			IPL	VBR	Profile
			£m	£m	£m
Revenue			0.9	0.3	1.1
Profit before tax			0.4	-	0.1

If the business combinations had been effected from 1 July 2011, the revenue of the Group would have been £67.8m and the profit for the year of the Group before tax would have been £3.1m.  The directors consider these numbers to represent an approximate measure of the performance of the combined Group on an annualised basis - this information is not necessarily indicative of the results of operations that would have occurred had the purchase been made at the beginning of the year or the future results of combined operations.

Prior year acquisitions

On 6 April 2011, the Group acquired the entire share capital of The Forum for Expatriate Management Limited (FEM), an expatriate information and events business.  FEM's revenues are generated principally through events and subscriptions.  The table below sets out the carrying value and fair value of the assets and liabilities acquired, disclosed provisionally in 2011 and now confirmed as follows:

				Carrying values
				pre-acquisition	Fair value
				£m	£m
Intangible assets (excluding goodwill)				-	2.1
Inventories				0.1	0.1
Trade and other receivables				0.4	0.4
Trade and other payables				(0.1)	(0.1)
Deferred income				(0.8)	(0.8)
Cash and cash equivalents				0.6	0.6
Net assets acquired				0.2	2.3
Goodwill arising
Consideration transferred					2.8
Less: fair value of net assets acquired					(2.3)
Final goodwill					0.5

The provisional goodwill calculation of £1.3m in 2011 has been adjusted by £0.8m (refer to Note 7). The amount of contingent consideration payable with respect to the acquisition of FEM is dependent on the profits generated by FEM in year to 30 June 2013, subject to a maximum payment of £4m.

12 FINANCIAL INSTRUMENTS

The Group's activities expose it to a variety of financial risks: currency risk, interest rate risk, credit risk, liquidity risk and capital risk.  The following note describes the role that financial instruments have had during the year ended 30 June 2012 in the management of the Group's financial risks.

Currency risk

Substantially all the Group's net assets are located and substantially all revenue and adjusted EBITDA is generated in the United Kingdom and consequently foreign exchange risk is limited.  The results of the Group are not currently sensitive to movements in currency rates.

Interest rate risk

The Group has no significant interest-bearing assets and is exposed to interest rate risk as it borrows funds at floating interest rates.  This risk may be managed by the use of interest rate swap contracts as cash flow hedges.  Hedging activities are evaluated regularly to align interest rate views and risk appetite with the hedging requirements of the Group's revolving credit facility. 

The Group did not enter into any hedging transactions during the year and, as at 30 June 2012, the only floating rate to which the Group is exposed was LIBOR.

The Group's exposure to interest rates on financial assets and financial liabilities is detailed in the liquidity risk section of this note.

Credit risk

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, and credit exposures to customers including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. For customers, the Group's risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.  The carrying amount of the Group's trade receivables, net of any provision for impairment, and other receivables best represents the Group's maximum exposure to credit risk.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Throughout most of 2012, and for the foreseeable future, the Group is expected to be in a net borrowings position.  The Group manages liquidity risk by maintaining adequate reserves and working capital credit facilities, and by continuously monitoring forecast and actual cash flows.  A summary of the undrawn facilities the Group has at its disposal to further reduce liquidity risk is shown below:

					2012	2011
					£m	£m
Expiring later than one year and less than 5 years
	Working capital facility				9.0	5.0
	Acquisition facility				18.5	-
					27.5	5.0

The following tables detail the Group's remaining financial maturity for its financial liabilities

					Less than
			Book value	Fair value	1 year	2-5 years
			£m	£m	£m	£m
At 30 June 2012
Non-derivative financial liabilities
	Variable interest rate instruments		12.5	12.5	-	12.5
	Fixed interest rate instruments		0.5	0.5	0.2	0.3
	Non-interest bearing instruments		(0.5)	(0.5)	(0.2)	(0.3)
			12.5	12.5	-	12.5
At 30 June 2011
Non-derivative financial liabilities
	Fixed interest rate instruments		0.7	0.7	0.2	0.5
			0.7	0.7	0.2	0.5

The book value of primary financial instruments approximates to fair value where the instrument is on a short maturity or where they bear interest at rates approximate to the market.

All trade and other payables are due in one year or less, or on demand.  The maturity of other non-current liabilities is given in note 10.

Capital risk 

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising return to stakeholders as well as sustaining the future development of the business. 

The capital structure of the Group consists of net debt, which includes financial liabilities (note 9) and cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings.

During the year the Group refinanced its banking facilities, establishing a new revolving credit facility featuring both a working capital facility, to assist in managing the Group's liquidity risk, and an acquisition facility, to support the Group's acquisition strategy.  The facility, available for a period of 4 years, allows for a maximum drawdown of £40m, £30m of which can be utilised for funding acquisition activity and £10m of which can be utilised for working capital purposes.  The facility amortises at £2.5m per year through the term of the facility.  Interest is calculated on LIBOR plus a margin dependent on the ratio of net debt to EBITDA.

The principal financial covenant ratios under this facility are a maximum net debt to EBITDA ratio of 2.5 times, a minimum EBITDA interest cover of 5 times, and a minimum cash flow to debt servicing ratio of 1.1 times, tested quarterly.  At 30 June 2012 all of these covenants were comfortably achieved, with a net debt (including a provision for deferred consideration) to EBITDA ratio of 0.8 times, an EBITDA interest cover of 19.7 times and cash flow to debt servicing ratio of 10.3 times.  Excluding the provision for deferred consideration, net debt to EBITDA was 0.6 times.

There have been no breaches of covenant throughout 2012. The bank borrowings are guaranteed by material subsidiaries of the Group. The Group does not have any of its property or equipment and other intangible assets pledged as security over this facility.

13 POST BALANCE SHEET EVENTS

On 11 July 2012, Centaur Communications Limited (a subsidiary of Centaur Media plc) acquired the entire share capital of E-consultancy.com Limited (Econsultancy), a leading digital and events-led information provider to the global digital marketing and e-commerce community.  Econsultancy will be integrated within the Business Information division.

The initial consideration was £12m and the total maximum consideration payable is £50m.  The final consideration is dependent on the results of Econsultancy in the 12 months ending 31 December 2015 and will be payable in the 2016 calendar year.  Payment of the initial consideration was funded from an additional drawdown on the Group's existing revolving credit facility.

The fair value of contingent consideration, fair value of net assets acquired, goodwill value and the amount of acquisition related costs have not been finalised as at the date of signing these accounts, and will be finalised during 2013.

Non-contingent legal and professional fees incurred during the year associated with the acquisition of Econsultancy of £0.5m have been recorded in 2012.

 

14 NATURE OF THE FINANCIAL INFORMATION

The foregoing financial information does not amount to full accounts within the meaning of Section 434 of Companies Act 2006. The financial information has been extracted from the Group's Annual Report and Accounts for the year ended 30 June 2012 on which the auditors have expressed an unqualified opinion.

Copies of the Annual Report and Accounts will be posted to shareholders shortly and will be available from the Company's registered office at Wells Point, 79 Wells Street, London, W1T 3QN.

 

END

 

 

FR LJMATMBIBMIT