Preliminary Results
Centaur Media PLC
29 September 2006
Centaur Media plc
Preliminary results for the year ended 30 June 2006
Centaur Media plc ("Centaur" or "the Company"), the specialist business
publishing and information group, announces results for the year ended 30 June
2006.
Centaur's premier brands include Marketing Week, Design Week, Creative Review,
Money Marketing, The Lawyer, The Engineer, New Media Age, Homebuilding &
Renovating and the online service Perfect Information.
HIGHLIGHTS
IFRS IFRS
Actual Actual
Year ended Year ended
30 June 30 June Year on year
2006 2005 movement
£m £m %
Revenue 82.3 72.2 14%
Adjusted EBITDA (a) 15.7 12.2 29%
Adjusted EBITDA (a) margin 19% 17%
Profit before tax 15.1 9.2 64%
Adjusted profit before tax (b) 13.2 9.7 36%
Basic EPS (pence) 7.6p 4.4p 73%
Adjusted basic EPS (pence) (c) 6.2p 4.7p 32%
Cash conversion rate (d) 89% 80%
Net cash 6.2 0.0
Full year dividend per share (pence) 3.0p 1.7p 76%
• Strong growth in revenues leads to record profits
• Adjusted EBITDA margin increases to 19%
• 15% growth in advertising revenues, led by strong online performance,
which grew by 20%
• 15% growth in events revenues, boosted by launch of 6 new events
• 4 new magazines and 5 new websites launched in the year
• 6 bolt-on acquisitions completed in the period
• PBT up 64% to £15.1m (2005 £9.2m) and adjusted PBT up 36% to £13.2m
(2005 £9.7m), ahead of expectations
• 76% increase in full year dividend
• Appointment of Geoff Wilmot as new Chief Executive Officer announced
Commenting on the preliminary results, Graham Sherren, Chairman and Chief
Executive Officer of Centaur said:
"I am pleased to announce that Centaur is reporting record profits in the 12
months to 30 June 2006, with adjusted PBT ahead of expectations up 36% to
£13.2m, and adjusted basic earnings per share 32% up at 6.2p (2005: 4.7p).
Revenues, which grew 14% in the year, benefited from strong growth in
advertising in most of our markets, particularly in online media, from continued
growth in our events business and from the results of new and recently launched
products. Revenue growth was underpinned by the bolt-on acquisitions we made
during the year, but underlying revenues excluding acquisitions still grew 9% in
the year.
The new financial year has started well and our growth prospects continue to be
supported by our pipeline of new and recently launched or acquired products.
Revenues in the first quarter are comfortably ahead of the same period last
year. The outlook is encouraging and we expect FY 2007 results to demonstrate
further good progress."
Notes
a. One of Centaur's key internal measures of profit is earnings before
interest, tax, depreciation and amortisation excluding exceptionals and
other material non-cash items (Adjusted EBITDA). In addition,
"underlying" results of continuing operations are presented to provide
a better indication of overall financial performance. The "underlying"
results exclude the impact of recent acquisitions or disposals and of
new launches into new communities, as well as that of amortisation of
acquired intangibles and of exceptional items and other material
non-recurring items..
b. Adjusted PBT is profit before tax, excluding the impact of amortisation
of acquired intangibles and of exceptional items.
c. Adjusted EPS is based on the basic EPS but after making adjustments for
amortisation on acquired intangibles and exceptional items as detailed
in note 3.
d. Cash conversion rate is free cash flow expressed as a percentage of
adjusted operating profit. Free cash flow is defined as cash generated
from operations less capital expenditure on property, plant and
equipment and software. Adjusted operating profit is operating profit
after making adjustments for amortisation on acquired intangibles and
exceptional items.
Enquiries:
Centaur Media plc Graham Sherren, CEO Tel: 020 7970 4000
Geoff Wilmot, CFO
Gavin Anderson & Company Richard Constant Tel: 020 7554 1400
Robert Speed
Janine Brewis
CHAIRMAN'S STATEMENT
Introduction
I am pleased to announce that Centaur is reporting record profits in the 12
months to 30 June 2006, with adjusted PBT ahead of expectations up 36% to
£13.2m, and adjusted basic earnings per share 32% up at 6.2p (2005: 4.7p).
Revenues, which grew 14% in the year, benefited from strong growth in
advertising in most of our served markets, particularly in online media,
continued growth in our events business and from the results of new and recently
launched products. Revenue growth was underpinned by the bolt-on acquisitions we
made during the year, but underlying revenues excluding acquisitions still grew
9% in the year.
Adjusted EBITDA increased by 29% to £15.7m, representing a further strong
improvement in margin to 19% from 17% in the previous year, despite another year
of significant further investment in the major new product, Finance Week.
Profit before tax amounted to £15.1m compared with £9.2m in the year ended 30
June 2005. The 2006 result is stated after an exceptional credit of £2.2m
relating principally to the release of a provision for deferred purchase
consideration in respect of Synergy Group and after charging, within
administrative expenses, £0.3m of amortisation of acquired brands and publishing
rights (2005 £0.0m). Finally, cash balances at 30 June 2006, net of loan note
creditors, stood at £6.2m (2005: £10.0m).
In light of this performance, the Board is recommending a final dividend of 2.4p
per share, giving a full year dividend of 3.0p, representing an increase of 76%
over prior year. The final dividend will be paid to shareholders on the register
as at 3 November 2006. It is proposed that the dividend will be paid on 1
December 2006. The Company will not be proposing any Scrip Dividends or Dividend
Reinvestment Plan Options.
These excellent results reflect the success of our strategy of seeking to build
market-leading positions across a number of vertical markets through continuous
customer-focussed innovation. The recovery in the advertising cycle that started
towards the end of 2003 has continued through the year to June 2006 in most of
our served markets, although the marketing and creative sectors experienced
well-publicised difficulties, reflecting weakness in the retail and consumer
goods sectors in particular.
Nevertheless, total advertising turnover during the year increased by 15% over
the equivalent prior year period. Acquisitions made during the year contributed
to this growth, but underlying advertising revenues also grew strongly, thanks
in particular to buoyant underlying trading conditions in the legal and
financial markets.
The fastest pace of revenue growth was derived from online products (up 20%) and
events (up 15%), reflecting the success of the principal focus of our strategy
in the past few years, which has been to extend our major print publishing
brands across multiple media. Centaur has developed most of its business
organically and in FY2006, 12% of revenues were generated by products launched
within the previous three years. We continued to maintain an active pace of new
product development during the year, with the launch of 4 new magazines, 5 new
websites and half a dozen new events.
In the past year we have also supplemented our growth through a number of small
bolt-on acquisitions. These were in line with our established acquisition
strategy, making selective purchases of businesses that fit with our overall
growth strategy, which is to expand existing market positions and to establish
market-leading positions in new markets. The key developments and initiatives in
the period are outlined in the Business Review.
The new financial year has started well and our growth prospects continue to be
supported by our pipeline of new and recently launched or acquired products.
Revenues in the first quarter are comfortably ahead of the same period last
year. The outlook is encouraging and we expect FY 2007 results to demonstrate
further good progress.
As previously reported, I am also pleased to confirm that Geoff Wilmot will
become Chief Executive Officer with effect from 1st November 2006. I am
confident that he and his team will continue to take Centaur from strength to
strength. Finally, my thanks to all my colleagues who as always have performed
with great energy and enthusiasm.
Business Review
Trading Review
Revenues grew 14% in the year to 30 June 2006, led by 15% growth in revenues
from both advertising and events. Advertising growth was particularly strong in
our online media, which grew total revenues by 20%. Overall productivity
improved, with total revenues per employee increasing 11% to £112k. This revenue
and productivity growth, combined with other initiatives, resulted in adjusted
EBITDA margins improving to 19% (2005:17%) and in adjusted basic earnings per
share rising by 32% to 6.2p.
Centaur's rapid growth in the year continued to be supported by its pipeline of
new and recently launched products and the record results were achieved despite
a continuing high level of investment in future growth. Overall, approximately
12% of revenues generated in the last financial year were from products or
events launched within the past three years. The bulk of the new product
launches have been in existing communities, enhancing and extending established
leading brands. Our major new product development, Finance Week, incurred
further significant operating losses during the year, which have decreased
significantly following its conversion to an online-only format in March 2006.
We also completed a number of small bolt-on acquisitions during the past year.
In addition to the acquisition of Logistics Manager part way through the
previous year, these acquisitions contributed 5% of revenues in FY2006 and an
adjusted EBITDA margin of 10%.
Legal & Financial
This was our most successful market segment in the year, reflecting the strength
of the underlying communities served. Revenue grew 18% year on year and we
increased the EBITDA margin to 29% (2005:26%).
This division's three leading titles, Money Marketing, Mortgage Strategy and The
Lawyer, each ended the year strongly. Money Marketing and its sister title, Fund
Strategy, both benefited from a surge in demand for retail investment products
in the second half, whilst Mortgage Strategy's consistent growth throughout the
year reflected the continuing high levels of activity in that sector. The
Lawyer, meanwhile, again recorded its best performance ever, benefiting in
particular from the impact of the healthy levels of underlying M&A activity on
the legal profession.
Events in this Division also recorded strong growth, led by the launch of two
new summit events during the year. The Mortgage Summit, launched in September
2005, was successfully repeated in June 2006. The Investment Summit, launched in
March 2006, was also a great success. The Lawyer's European Summit continued to
grow as did our major exhibitions in the financial sector, Money Marketing Live.
The fastest pace of growth in this Division was derived from online products.
Revenues and profits from the three major internet businesses, Money Marketing
Online (principally banner advertising), TheLawyer.com (recruitment and
directory advertising) and Headlinemoney (subscriptions income) each grew
strongly and each of these business units is now delivering above average EBITDA
margins.
Marketing, Creative & New Media
Revenues in what was previously our largest market segment declined 2% in the
year, and, despite tight cost control, adjusted EBITDA margins deteriorated to
14% (2005: 20%).
The advertising recovery in this sector has been severely affected by the
consumer and retail slowdown experienced in the last year and by the
well-publicised challenges faced by traditional media owners. As a result,
recruitment advertising in particular suffered and our leading magazines in this
sector, Marketing Week, Design Week and Creative Review, all recorded a decline
in overall revenues during the year. This was offset to an extent by continuing
recovery in revenues from New Media Age, our leading weekly magazine for the
interactive marketing community.
The direct marketing segment, for which we publish the weekly magazine Precision
Marketing (PM), also remained weak. In response to changing conditions in this
market, we decided to reduce PM's frequency to fortnightly, with effect from
July 2006. We are supplementing the magazine with a new stand-alone website,
launched in September 2006, and we are increasing the magazine's revenue
potential by expanding its circulation.
The Insight and InStore shows both delivered modest revenue and profits growth.
The DM Show, run in September 2005, did not improve its results year on year,
reflecting the weakness of the underlying sector of the market. The Total
Motivation Show also achieved only modest revenue growth in its second year. The
only event which recorded significant growth was The Online Marketing Show, also
in its second year.
Our internet portal, mad.co.uk, which serves the marketing, advertising and
design communities, delivered strong revenue growth, principally from
recruitment and banner advertising, but profits growth was held back by the
increased costs of its new technology platform, implemented during the year,
which we invested in to support future growth.
Construction & Engineering
Led by the acquisitions of Period Living and Pro-Talk, revenues in this division
grew 24% in the year and EBITDA margins improved 5 points to 21% having doubled
in the previous year to 16%.
The leading title in the engineering portfolio is The Engineer, which is
celebrating its 150th anniversary in 2006. We have been successfully
repositioning the title as the news magazine for technology and innovation,
published principally for those involved in the development of new applications
and transferable technology. As a result of this repositioning, the magazine
delivered its second successive year of double digit revenue growth. Our largest
magazine in the construction portfolio is the leading monthly self-build
publication Homebuilding & Renovating, which experienced a levelling out of
revenues, following several years of strong growth, reflecting some softness in
the housing market during the year.
We continued to experience challenging market conditions for our two major
engineering monthlies, Process Engineering and Metalworking Production. We have
reduced the frequency of both magazines to bi-monthly and enhanced their online
publication activity. The respective online services will deliver news and jobs,
leaving the magazines more capacity for in-depth analysis and case studies.
Despite the slowdown in the housing market each of the six established
Homebuilding exhibitions generated further strong growth in revenues, delivering
nearly 100,000 visitors in aggregate. In the engineering sector, Subcon, the
show for international buyers of sub-contracted manufacturing, delivered
significant revenue growth and a useful profit contribution.
Online revenues in this Division are driven principally by The Engineer Online
(mainly recruitment advertising), homebuilding.co.uk (mainly banner
advertising), plotfinder.co.uk (revenues from subscriptions) and the newly
acquired Pro-Talk (online response driven search-advertising model). In
aggregate, online products delivered strong revenue growth and satisfactory
improvement in margins.
Perfect Information
Perfect Information (PI) achieved record results in the year, with revenue
growth of 8% combined with cost savings leading to a £1m increase in EBITDA to
£1.4m, giving an improved adjusted EBITDA margin of 22%.
High levels of M&A activity led to improved trading conditions in PI's core
investment banking and legal markets. As a result, PI secured significant growth
in new subscriptions to its core Perfect Filings service. The year also saw good
progress on the development of PI's new equity research service, Perfect
Analysis (PA). PA Web, which delivers most of PA's powerful functionality within
a pure web environment, was launched in February 2006. A new Excel add-in
service, allowing users to exploit the full functionality of PA from within
their own desktop version of Excel, was substantially completed by the year-end
and was released to the market in the first quarter of the new financial year.
We secured a number of new subscribers to PA during the year under review and
net operating losses relating to this service were substantially reduced. PA is
expected to generate a net profit contribution in the current year.
Other
This division comprises products serving a number of distinct business
communities. These include HR (Employee Benefits), logistics (Logistics
Manager), the recruitment sector (The Recruiter), corporate accounting and
finance managers (Finance Week), business travel (Business Travel Shows),
carpets and textiles (Hali) and TV and film production (Televisual). In
aggregate, revenues grew 37%, with most of the growth arising in the newly
acquired sectors, logistics and recruitment. EBITDA grew £1.1m to £0.5m, despite
continuing losses on Finance Week amounting to £1.3m (2005: £1.4m).
Revenue and profits growth in this division were driven principally by Logistics
Manager and The Recruiter. In both cases, the underlying served markets are
enjoying buoyant trading conditions and our investment in redeveloping these
recently acquired titles is delivering promising results. In addition, the
Employee Benefits portfolio and the Business Travel shows also delivered growth
in revenues and profit contribution.
As previously reported, we converted Finance Week (FW) into an online-only
format in the third quarter of last year. This was done in order to enable us to
expand the readership base of the title so as to provide the market with a more
effective recruitment medium. It also enabled us to make a substantial reduction
in FW's operating costs. FW's online circulation has been building steadily over
the past few months and revenue growth is on target.
Since the year-end we have sold Televisual (TV) to its former publisher. TV is a
strong brand that enjoys an exceptional position in its market. However, the
market it serves has been in decline for a number of years, as a result of
technology innovations, TV has recently begun to incur losses and we do not
believe that it offers the potential to justify Centaur's continued investment.
New Business Development Initiatives
During the year we continued to focus on new product development opportunities
and we became more proactive in searching for suitable bolt-on acquisitions. The
key development initiatives in the period are outlined below.
New Magazines
In the first half we launched two new magazines within existing product
portfolios. The monthly magazine Move or Improve is an extension of the
market-leading publication, Homebuilding and Renovating, which will in
particular enable us to address the metropolitan market more successfully. It
published 6 issues during the year and delivered a small profit contribution
before overheads. Modern Carpets & Textiles is a quarterly magazine published by
the Hali team for the major buyers of these products in this growing
international market. We published 3 issues in the year and traded at a small
loss.
In January 2006, in response to recent regulatory and technology changes in the
UK lending industry, we launched the monthly magazine Lending Strategy,
published alongside its successful sister publication, Mortgage Strategy. We
published 5 issues in the year which generated a small loss.
In May 2006 we launched Corporate Adviser, a monthly publication targeted at
financial intermediaries selling pensions and employee benefits products into
the corporate market. The magazine bridges the gap between Employee Benefits and
Money Marketing and builds on our extensive knowledge of these two sectors. We
published two issues in the year and generated a small loss.
Each of these new products is expected to make a profit contribution in the new
financial year.
New Online Products
The Internet is becoming established as an increasingly important advertising
and information medium, which offers significant business opportunities to
Centaur. We have continued to invest steadily in enhancing the performance,
functionality and reach of our established internet operations and as reported
above they are now delivering high rates of revenue growth and increasingly
attractive profit margins. Our success in this area was reflected in the
TheLawyer.com's great achievement in winning the Association of Online
Publishers' award of Business Website of the Year in autumn 2005.
Apart from the ongoing development of financeweek.co.uk and Perfect Analysis, as
reported above, most of our new online product activity during the year was
linked to our bolt-on acquisitions, which are addressed below.
New Events
We organised three new trade exhibitions during the year. Two of these were
regional logistics shows acquired with Logistics Manager magazine. The third
show was a new launch of a third regional logistics show combined with a section
for materials handling suppliers. These shows all made a useful profit
contribution and served to enhance our strengthening position in this important
new market. In June 2006 we also announced a major repositioning of the Smart
Homes show in conjunction with Future Publishing's market-leading consumer title
T3. The first of the new-look shows will be run alongside the National
Homebuilding show at the NEC in March 2007.
In FY2006, Centaur established a new extension to its events business with the
formation of Centaur Summits. Summits typically comprise meetings/workshop-based
events, bringing together relatively small numbers of senior decision-makers
within particular vertical markets. We give these events a strong independent
"editorial" base, but revenues are normally derived from sponsorship.
As noted above, we organised three new summits during the year, two Mortgage
Summits and one Investment Summit, which made an important profit contribution
in their first year and have resulted in increased levels of bookings for repeat
events in FY2007. We also announced the launch of the first Employee Benefits
summit which ran successfully in July 2006.
The Conferences division, most of whose events have traditionally been in the
marketing sector, suffered from the underlying weakness of that market. This was
offset to a certain extent by the launch of a number of new conferences in other
Centaur communities, notably, legal, financial and engineering and we will seek
to consolidate our position as a conference producer in these markets in the
future.
Acquisitions
Our acquisition strategy is typically to identify targets that meet the
following criteria:
a. The business is operating in a market with high growth potential and
high value.
b. There is an identifiable high value information need on which to base a
range of products
c. The business is a market-leader in its respective sector or capable of
achieving market leadership quickly
d. Its key people fit comfortably into Centaur's culture
In the past year we have completed six bolt-on acquisitions which we believe
meet these criteria. In October 2005 we strengthened our position in the
increasingly important logistics market with the acquisition of two small
magazines and an established awards event from UKTP for £0.3m.
In December 2005 we acquired the fortnightly magazine The Recruiter for £4m. We
are pleased with the progress we have made in investing in the quality of the
magazine, which has performed ahead of our expectations at the time of purchase.
In the second half we organised a successful awards event for the community and
relaunched The Recruiter's website.
In January 2006, we acquired the monthly magazine Period Living for £1.5m. We
have made improvements to the editorial and visual quality of this strong brand,
which is fitting in well with our growing portfolio of special interest consumer
brands, focussed currently on the property sector.
In March 2006 we announced the acquisition, for a maximum of £1.2m, of the
remaining 50% of the website Headlinemoney (HM), the highly successful
information service for financial journalists. Total ownership of this business
will enable us more readily to apply the Headlinemoney model in other markets.
Since acquisition, we have successfully integrated HM's operations within
Centaur and we expect to launch the first new extension of this business in the
next few months.
In May 2006 we announced the purchase of the online sales lead service Pro-Talk
for an initial consideration of £4m. We believe that this acquisition will
provide us with a model which can be applied across a number of vertical markets
to take advantage of the ongoing significant growth in search engine marketing
expenditure. Since acquisition, we have identified and launched three new sites
within Pro-Talk and invested further in sales resources to drive future growth.
We have also recently announced the acquisition for £0.1m of Air and Business
Travel News (ABTN), an online publication for the business travel community
which complements our successful trade shows serving this community. ABTN
currently comprises a website and an online newsletter reaching 23,000 readers.
We intend to develop ABTN to unlock its true commercial potential and to enhance
our position in this market.
Overall, our recently acquired companies have contributed revenues in FY2006 of
£3.9m on which they earned an EBITDA margin of 10%.
Current Development Activity
Innovation is central to Centaur's culture and is an almost constant activity
across the whole portfolio. In the new financial year, we are continuing to
develop new products at a steady pace. Our current development effort is
focussed on extending our established brands into new areas and enhancing our
recent acquisitions.
In addition to the ongoing development of initiatives mentioned above, we have
recently launched a new specialist consumer exhibition, The Good Parent Show and
three new summits in the financial and legal sectors. We have also launched two
new stand-alone marketing websites, marketingweek.co.uk and
precisionmarketing.co.uk, to complement our leading magazines in this sector and
will shortly launch a dedicated website to complement Design Week. We have also
recently launched eCR, a digital version of Creative Review, with which we plan
to extend the title's circulation and which is allowing us to offer advertisers
improved marketing solutions.
Editors' Notes
a. One of Centaur's key measures of profit is earnings before interest,
tax, depreciation and amortisation and excluding exceptionals and other
material non-cash items (EBITDA). In addition, we report adjusted PBT
which is profit before tax excluding the impact of amortisation of
acquired intangibles and of exceptional items.
b. Centaur's product portfolio currently comprises 7 weekly magazines, 3
fortnightly magazines, 14 monthly magazines, 7 magazines of a quarterly
or bi-monthly frequency, 33 online products or services, 30 awards or
other sponsored events, 26 exhibitions and approximately 90 conferences.
c. Centaur reports its results within 5 distinct divisions, namely Legal
and Financial, Marketing and Creative, Engineering and Construction,
Perfect Information and Other. The first 3 segments comprise principally
the following vertical business communities in which Centaur publishes
market-leading magazine titles: Marketing Services, Creative Services,
New Media, Retail Financial Products, Legal Services, Engineering and
Special Interest Residential Property.
d. Centaur also enjoys strong positions in a number of other specialist
communities, namely HR, Recruitment, Logistics, Business travel,
Construction, Carpets and Textiles and Public/Private Finance.
Business Review (continued)
Analysis of results
2006 2006 2005 2005
-------------------------------------------------
£m £m £m £m
By Division Revenue EBITDA Revenue EBITDA
Legal and Financial 24.5 7.1 20.7 5.4
Marketing, Creative and New Media 23.5 3.3 24.0 4.9
Construction and Engineering 16.5 3.4 13.3 2.1
Perfect Information 6.4 1.4 5.9 0.4
Other 11.4 0.5 8.3 (0.6)
-----------------------------------------------------------------------------------------
Total 82.3 15.7 72.2 12.2
------------------------------------------------------------------------------------------
By Source
Recruitment advertising 12.9 - 11.6 -
Other advertising 31.0 - 26.7 -
Circulation revenue 5.8 - 5.6 -
Online subscriptions 7.6 - 6.9 -
Events 23.9 - 20.8 -
Other 1.1 - 0.6 -
-----------------------------------------------------------------------------------------
Total 82.3 - 72.2 -
------------------------------------------------------------------------------------------
By Product type
Magazines 43.8 7.6 39.3 7.1
Events 23.9 5.1 20.8 3.8
Online products 12.8 2.1 10.7 0.9
Other 1.8 0.9 1.4 0.4
-----------------------------------------------------------------------------------------
Total 82.3 15.7 72.2 12.2
-----------------------------------------------------------------------------------------
Underlying
Underlying 78.4 15.3 72.1 12.3
Acquisitions (1) 3.9 0.4 0.1 (0.1)
-----------------------------------------------------------------------------------------
Total 82.3 15.7 72.2 12.2
-----------------------------------------------------------------------------------------
By Maturity
New (2) 9.6 (0.3) 10.6 (0.3)
Existing and acquired 72.7 16.0 61.6 12.5
-----------------------------------------------------------------------------------------
Total 82.3 15.7 72.2 12.2
-----------------------------------------------------------------------------------------
Notes
1. Acquisitions are reported by reference to the two years preceding each
reporting date
2. New products are defined as any product launched in the last three years
and are reported by reference to the three years preceding each
reporting date.
Consolidated Income Statement for the year ended 30 June 2006
2006 2005
Note £m £m
Revenue 1 82.3 72.2
Cost of sales (42.8) (39.2)
-----------------------------------------------------------------------------------------
Gross profit 39.5 33.0
Distribution costs (4.5) (4.2)
Administrative expenses (20.3) (19.9)
Adjusted EBITDA 1 15.7 12.2
Depreciation of property, plant and equipment (0.7) (0.6)
Amortisation of software (1.8) (1.8)
Amortisation of acquired intangibles (0.3) -
Share based payments (0.4) (0.4)
Exceptional administrative credit / (costs) 2.2 (0.5)
Operating profit 14.7 8.9
Interest receivable 0.3 0.3
Share of post-tax profit from associate 0.1 -
-----------------------------------------------------------------------------------------
Profit before taxation 15.1 9.2
Taxation 2 (3.7) (2.8)
-----------------------------------------------------------------------------------------
Profit for the year attributable to equity shareholders 11.4 6.4
-----------------------------------------------------------------------------------------
Earnings per share 3
Basic 7.6p 4.4p
Fully diluted 7.6p 4.3p
-----------------------------------------------------------------------------------------
All operations in the current and prior year relate to continuing activities
The accompanying accounting policies and notes form an integral part of these
financial statements.
Consolidated Balance Sheet at 30 June 2006
2006 2005
--------------------
£m £m
Non-current assets
Goodwill 142.0 138.4
Other intangible assets 13.1 4.1
Property, plant and equipment 2.5 2.1
Investments accounted for using the equity method 0.3 0.2
Deferred tax assets 1.6 1.2
-----------------------------------------------------------------------------------------
159.5 146.0
-----------------------------------------------------------------------------------------
Current assets
Inventories 1.5 1.3
Trade and other receivables 18.7 15.7
Cash and cash equivalents 7.8 12.5
-----------------------------------------------------------------------------------------
28.0 29.5
-----------------------------------------------------------------------------------------
Current liabilities
Financial liabilities - borrowings 1.6 2.5
Trade and other payables 11.3 10.4
Deferred income 10.5 9.9
Current tax liabilities 2.6 0.5
Provisions 0.6 -
-----------------------------------------------------------------------------------------
26.6 23.3
-----------------------------------------------------------------------------------------
Net current assets 1.4 6.2
-----------------------------------------------------------------------------------------
Non - current liabilities
Provisions 1.9 2.5
Deferred tax liabilities 1.1 1.1
3.0 3.6
-----------------------------------------------------------------------------------------
Net assets 157.9 148.6
-----------------------------------------------------------------------------------------
Capital and reserves
Share capital 14.9 14.9
Share premium 0.3 0.3
Other reserves 2.4 2.0
Retained earnings 140.3 131.4
-----------------------------------------------------------------------------------------
Total shareholders' equity 157.9 148.6
-----------------------------------------------------------------------------------------
The financial statements were approved by the Board of Directors on 28 September
2006 and were signed on its behalf by:
GTD Wilmot
Director
Consolidated Cash Flow Statement for the year ended 30 June 2006
2006 2005
-----------------------
£m £m
Cash flows from operating activities
Cash generated from operations 14.4 9.6
Tax paid (1.8) (1.1)
-----------------------------------------------------------------------------------------
Cash flows from operating activities 12.6 8.5
-----------------------------------------------------------------------------------------
Cash flows from investing activities
Interest received 0.3 0.3
Acquisition of subsidiaries (net of cash acquired) (4.8) -
Proceeds from the disposal of subsidiaries 0.4 0.4
Purchase of property, plant and equipment (1.0) (0.7)
Purchase of intangible assets (8.6) (2.4)
-----------------------------------------------------------------------------------------
Cash flows from investing activities (13.7) (2.4)
-----------------------------------------------------------------------------------------
Cash flows from financing activities
Net proceeds from issue of ordinary share capital - 0.4
Repayment of loan notes (0.9) (0.9)
Dividends paid (2.7) (2.2)
-----------------------------------------------------------------------------------------
Cash flows from financing activities (3.6) (2.7)
-----------------------------------------------------------------------------------------
Net (decrease) / increase in cash and cash equivalents (4.7) 3.4
-----------------------------------------------------------------------------------------
Cash and cash equivalents at 1 July 12.5 9.1
-----------------------------------------------------------------------------------------
Cash and cash equivalents 30 June 7.8 12.5
-----------------------------------------------------------------------------------------
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) applicable at 30 June 2006 and with those parts of the
Companies Act, 1985 applicable to companies reporting under IFRS. The financial
statements have been prepared on the historical cost basis.
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.
Alternative presentation within the consolidated income statement
The Group has presented separately on the face of the consolidated income
statement an alternative profit measure of adjusted EBITDA. Adjusted EBITDA is
earnings before interest, tax, depreciation, amortisation and excluding
exceptionals and other material non-cash items. This presentation has been
provided as the Directors believe that this measure reflects more clearly the
ongoing operations of the Group.
First time adoption of IFRS
On first time adoption of IFRS, Centaur followed the guidelines outlined in IFRS
1, First Time Adoption of International Financial Reporting Standards, in which
a number of optional exemptions to the general principle of full retrospective
application are permitted. Centaur has adopted the following approach in respect
of the following key exemptions:
• Business combinations: Centaur has not reclassified business
combinations prior to the transition date.
• Share based payment: Centaur has adopted the exemption from full
retrospective application of all share based payment awards and in
accordance with the guidance in IFRS 2, Share-based payments has only
applied the standard to equity instruments that were granted after 7
November 2002, and which had not vested before 1 July 2005.
• Financial instruments: Centaur has taken the exemption not to restate
comparatives for IAS 32 Financial Instruments: Disclosure and
Presentation and IAS 39 Financial Instruments: Recognition and
Measurement for the year ended 30 June 2005.
Reconciliations to assist in understanding the nature and value of the
differences between UK GAAP and IFRS are given in note 4.
Notes to the financial statements
1 Segmental reporting
Primary reporting format - business segments
The group is currently organised into five main business segments:
Year ended Legal and Marketing, Construction Perfect Other Unallocated Eliminations Group
30 June 2006 Financial Creative and information
and New engineering
-------------------------------------------------------------------------------------------------------------------
£m £m £m £m £m £m £m £m
Sales to external cutomers 24.5 23.5 16.5 6.4 11.4 - - 82.3
Sales to other segments 0.3 0.8 0.2 - 0.3 - (1.6) -
-------------------------------------------------------------------------------------------------------------------
Revenue 24.8 24.3 16.7 6.4 11.7 - (1.6) 82.3
-------------------------------------------------------------------------------------------------------------------
Adjusted EBITDA 7.1 3.3 3.4 1.4 0.5 - - 15.7
Depreciation of
property, plant and
equipment (0.1) (0.2) (0.2) (0.1) (0.1) - - (0.7)
Amortisation of intangibles (0.4) (0.3) (0.3) (0.8) (0.3) - - (2.1)
Share based payments - - - - - (0.4) - (0.4)
Exceptional administrative
credit - - - 2.2 - - - 2.2
-------------------------------------------------------------------------------------------------------------------
Segment result 6.6 2.8 2.9 2.7 0.1 (0.4) - 14.7
-------------------------------------------------------------------------------------------------------------------
Interest receivable - - - - - 0.3 - 0.3
Share of post tax profit
of associates 0.1 - - - - - - 0.1
-------------------------------------------------------------------------------------------------------------------
Profit before tax 6.7 2.8 2.9 2.7 0.1 (0.1) - 15.1
Taxation - - - - - (3.7) - (3.7)
-------------------------------------------------------------------------------------------------------------------
Profit for the year
attributable to equity
shareholders 6.7 2.8 2.9 2.7 0.1 (3.8) - 11.4
-------------------------------------------------------------------------------------------------------------------
Segment assets 68.6 51.9 40.7 15.1 11.2 - - 187.5
-------------------------------------------------------------------------------------------------------------------
Consolidated total assets 68.6 51.9 40.7 15.1 11.2 - - 187.5
--------------------------------------------------------------------------------------------------------------------
Segment liabilities 4.7 5.5 6.9 2.8 3.7 - - 23.6
Corporate liabilities - - - - - 6.0 - 6.0
-------------------------------------------------------------------------------------------------------------------
Consolidated total liabilities 4.7 5.5 6.9 2.8 3.7 6.0 - 29.6
-------------------------------------------------------------------------------------------------------------------
Other items:
Capital expenditure 1.6 0.5 7.9 1.2 4.9 - - 16.1
Impairment of trade
receivables 0.2 0.2 0.1 - 0.1 - - 0.6
-------------------------------------------------------------------------------------------------------------------
Corporate costs are allocated to business segments on an appropriate basis
depending on the nature of the cost. Inter-segment pricing is determined on an
arm's length basis. 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, intangible
assets and goodwill and includes additions resulting from acquisitions through
business combinations.
Notes to the financial statements (continued)
1 Segmental reporting (continued)
Year ended Legal and Marketing, Construction Perfect Other Unallocated Eliminations Group
30 June 2005 Financial Creative and information
and New engineering
Media
£m £m £m £m £m £m £m £m
Sales to external customers 20.7 24.0 13.3 5.9 8.3 - - 72.2
Sales to other segments 0.2 0.8 0.2 0.1 0.2 - (1.5) -
-------------------------------------------------------------------------------------------------------------------
Revenue 20.9 24.8 13.5 6.0 8.5 - (1.5) 72.2
-------------------------------------------------------------------------------------------------------------------
Adjusted EBITDA 5.4 4.9 2.1 0.4 (0.6) - - 12.2
Depreciation of
property, plant and
equipment (0.1) (0.1) (0.1) (0.2) (0.1) - - (0.6)
Amortisation of intangibles (0.5) (0.3) (0.2) (0.6) (0.2) - - (1.8)
Share based payments - - - - - (0.4) - (0.4)
Exceptional administrative
costs - - - - - (0.5) - (0.5)
-------------------------------------------------------------------------------------------------------------------
Segment result 4.8 4.5 1.8 (0.4) (0.9) (0.9) - 8.9
-------------------------------------------------------------------------------------------------------------------
Interest receivable - - - - - 0.3 - 0.3
-------------------------------------------------------------------------------------------------------------------
Profit before tax 4.8 4.5 1.8 (0.4) (0.9) (0.6) - 9.2
Taxation - - - - - (2.8) - (2.8)
-------------------------------------------------------------------------------------------------------------------
Profit for the year
attributable to equity
shareholders 4.8 4.5 1.8 (0.4) (0.9) (3.4) - 6.4
-------------------------------------------------------------------------------------------------------------------
Segment assets 60.9 49.2 35.3 15.1 10.8 - - 171.3
Corporate assets - - - - - 4.2 - 4.2
-------------------------------------------------------------------------------------------------------------------
Consolidated total assets 60.9 49.2 35.3 15.1 10.8 4.2 - 175.5
-------------------------------------------------------------------------------------------------------------------
Segment liabilities 3.6 5.6 4.4 5.5 3.2 - - 22.3
Corporate liabilities - - - - - 4.6 - 4.6
-------------------------------------------------------------------------------------------------------------------
Consolidated total
liabilities 3.6 5.6 4.4 5.5 3.2 4.6 - 26.9
-------------------------------------------------------------------------------------------------------------------
Other items:
Capital expenditure 0.6 0.4 0.2 1.2 0.7 - - 3.1
Impairment of trade
receivables - - - 0.1 - - - 0.1
-------------------------------------------------------------------------------------------------------------------
Secondary reporting format - geographical segments
Substantially all of Centaur's net assets are located and all revenue and profit
are generated in the United Kingdom. The Directors consider that the group
operates in a single geographical segment, being the United Kingdom, and
therefore secondary format segmental reporting is not required.
Notes to the financial statements (continued)
2 Taxation
(a) Analysis of charge in period
2006 2005
--------------------
£m £m
Current tax
- Current period 3.3 1.7
- Adjustment in respect of prior period 0.6 0.2
----------------------------------------------------------------------------------------
3.9 1.9
----------------------------------------------------------------------------------------
Deferred tax
- Current period 0.5 1.1
- Adjustment in respect of prior period (0.7) (0.2)
----------------------------------------------------------------------------------------
(0.2) 0.9
----------------------------------------------------------------------------------------
Taxation 3.7 2.8
----------------------------------------------------------------------------------------
(b) Tax on items charged to equity
----------------------------------------------------------------------------------------
Deferred tax (credit) on share based payments (0.2) (0.1)
----------------------------------------------------------------------------------------
(c) Factors affecting tax charge for the period
The tax assessed for the period is lower (2005: lower) than the standard rate of
corporation tax in the UK (30%). The differences are explained below:
2006 2005
£m £m
Profit on ordinary activities before tax 15.1 9.2
Profit on ordinary activities multiplied by standard rate of corporation 4.5 2.8
tax in the UK of 30% (2005: 30%)
Effects of:
Non taxable release of deferred consideration provision (0.8) -
Expenses not deductible for tax purposes 0.2 0.2
Statutory deduction in respect of non-capital research and development - (0.2)
expenditure
Deferred tax credit on share based payments taken to income statement (0.1) -
Adjustments to tax charge in respect of previous periods (0.1) -
-----------------------------------------------------------------------------------------
Total taxation 3.7 2.8
-----------------------------------------------------------------------------------------
Notes to the financial statements (continued)
3 Earnings per share
The calculation of the basic earnings per share (EPS) is calculated by dividing
the earnings attributed to ordinary shareholders by the weighted average number
of shares in issue during the year, 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. The Company has two classes of dilutive
potential ordinary shares: share options 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; and the contingently issuable shares under the
Company's long term incentive plan to the extent that the conditions are met at
the period end.
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.
2006 2005
Earnings Weighted Per share Earnings Weighted Per share
average amount average amount
number of number of
shares shares
----------------------------------------------------------------------
£m millions Pence £m millions Pence
----------------------------------------------------------------------------------------------------
Basic EPS 11.4 149.3 7.6 6.4 148.3 4.4
----------------------------------------------------------------------------------------------------
Effect of dilutive securities
Options 0.7 1.2
Contingently issuable shares 0.1 -
----------------------------------------------------------------------------------------------------
Diluted basic EPS 11.4 150.1 7.6 6.4 149.5 4.3
----------------------------------------------------------------------------------------------------
Adjusted EPS
Earnings attributable to
ordinary shareholders 11.4 149.3 7.6 6.4 148.3 4.4
Amortisation of acquired
intangibles 0.3 - 0.2 - - -
Exceptional administrative
(credit) / costs (2.2) - (1.5) 0.5 - 0.3
Tax effect of above
adjustments (0.2) - (0.1) - - -
----------------------------------------------------------------------------------------------------
Adjusted EPS 9.3 149.3 6.2 6.9 148.3 4.7
----------------------------------------------------------------------------------------------------
Effect of dilutive securities
Options 0.7 1.2
Contingently issuable shares 0.1 -
----------------------------------------------------------------------------------------------------
Diluted adjusted EPS 9.3 150.1 6.2 6.9 149.5 4.6
----------------------------------------------------------------------------------------------------
Notes to the financial statements (continued)
4 Explanation of transition to IFRS
Centaur Media plc reported under UK GAAP in its previously published financial
statements for the year ended 30 June 2005. The analysis below shows a
reconciliation of net assets and profit as reported under UK GAAP as at 30 June
2005 to the revised net assets and profit under IFRS as reported in these
financial statements. In addition there is a reconciliation of net assets under
UK GAAP to IFRS at the transition date for this group, being 1 July 2004.
Reconciliation of profit for the year ended 30 June 2005
Group Company
UK GAAP Effect of IFRS UK GAAP Effect of IFRS
transition transition
to IFRS to IFRS
Note
£m £m £m £m £m £m
Revenue 72.2 - 72.2 - - -
Cost of sales (39.2) - (39.2) - - -
-------------------------------------------------------------- -------------------------------
Gross Profit 33.0 - 33.0 - - -
Distribution costs (4.2) - (4.2) - - -
Administrative expenses b, c (26.5) 6.6 (19.9) (2.2) (0.1) (2.3)
Adjusted EBITDA 12.2 - 12.2 (2.2) - (2.2)
Depreciation of property,
plant and equipment a (i) (2.4) 1.8 (0.6) - - -
Amortisation of
intangibles a (i),c (7.0) 5.2 (1.8) - - -
Share based payments b - (0.4) (0.4) - (0.1) (0.1)
Exceptional
administrative costs (0.5) - (0.5) - - -
Operating profit / (loss) 2.3 6.6 8.9 (2.2) (0.1) (2.3)
Interest payable and
similar charges - - - (0.3) - (0.3)
Interest receivable 0.3 - 0.3 0.1 - 0.1
Dividends received from
subsidiaries - - - 5.0 (3.0) 2.0
--------------------------------------------------------------- -------------------------------
Profit / (loss) before tax 2.6 6.6 9.2 2.6 (3.1) (0.5)
Taxation b (2.8) - (2.8) - - -
-------------------------------------------------------------- -------------------------------
Profit / (loss) for the
year attributable to
equity shareholders (0.2) 6.6 6.4 2.6 (3.1) (0.5)
-------------------------------------------------------------- -------------------------------
Notes to the financial statements (continued)
4 Explanation of transition to IFRS (continued)
Reconciliation of equity at 30 June 2004 (date of transition to IFRS)
Group Company
Note UK GAAP Effect of IFRS UK GAAP Effect of IFRS
transition transition
to IFRS to IFRS
Assets £m £m £m £m £m £m
Non-current assets
Goodwill a (ii) - 138.5 138.5 - - -
Other intangible assets a (i),a 138.7 (135.1) 3.6 - - -
(ii)
Property, plant and equipment a (i) 5.3 (3.4) 1.9 - - -
Investments in subsidiaries - - - 147.8 - 147.8
Investments accounted for using
the equity method 0.2 - 0.2 - - -
Deferred tax assets a (viii) - 2.1 2.1 - - -
-----------------------------------------------------------------------------------------------------------
144.2 2.1 146.3 147.8 - 147.8
-----------------------------------------------------------------------------------------------------------
Current assets
Inventories 1.2 - 1.2 - - -
Trade and other receivables a (viii) 14.8 (1.0) 13.8 0.2 - 0.2
Cash and cash equivalents 9.1 - 9.1 5.6 - 5.6
-----------------------------------------------------------------------------------------------------------
25.1 (1.0) 24.1 5.8 - 5.8
-----------------------------------------------------------------------------------------------------------
Liabilities
Current liabilities
Financial liabilities -
borrowings a (vi) - (3.4) (3.4) - (3.4) (3.4)
Trade and other payables a (vi),d,e (23.4) 4.5 (18.9) (6.8) (0.1) (6.9)
Current tax liabilities - - - - - -
Provisions a (iii) - (0.9) (0.9) - - -
-----------------------------------------------------------------------------------------------------------
(23.4) 0.2 (23.2) (6.7) (3.5) (10.2)
------------------------------------------------------------------------------------------------------------
Net current assets /(liabilities) 1.7 (0.8) 0.9 (1.0) (3.5) (4.5)
Non- current liabilities
Provisions a (iii) (3.4) 0.9 (2.5) - - -
Deferred tax liabilities a (viii) - (1.1) (1.1) - - -
-----------------------------------------------------------------------------------------------------------
(3.4) (0.2) (3.6) - - -
-----------------------------------------------------------------------------------------------------------
Net assets 142.5 1.1 143.6 146.8 (3.5) 143.3
-----------------------------------------------------------------------------------------------------------
Capital and reserves
Share capital a (vii) 14.9 (0.1) 14.8 14.9 (0.1) 14.8
Share premium account 127.0 - 127.0 127.0 - 127.0
Other reserves a (vii) 1.5 0.1 1.6 1.5 0.1 1.6
Retained earnings (0.9) 1.1 0.2 3.4 (3.5) (0.1)
------------------------------------------------------------------------------------------------------------
Total shareholders' equity 142.5 1.1 143.6 146.8 (3.5) 143.3
-----------------------------------------------------------------------------------------------------------
Notes to the financial statements (continued)
4 Explanation of transition to IFRS (continued)
Reconciliation of equity at 30 June 2005
Group Company
Note UK GAAP Effect of IFRS UK GAAP Effect of IFRS
transition transition
to IFRS to IFRS
Assets £m £m £m £m £m £m
Non-current assets
Goodwill a (ii),c - 138.4 138.4 - - -
Other intangible assets a (i),a (ii) 132.1 (128.0) 4.1 - - -
Property, plant and equipment a (i) 5.5 (3.4) 2.1 - - -
Investments in subsidiaries b, f - - - 147.7 (2.7) 145.0
Investments accounted for using
the equity method 0.2 - 0.2 - - -
Deferred tax assets a (viii) - 1.2 1.2 - - -
-----------------------------------------------------------------------------------------------------------
137.8 8.2 146.0 147.7 (2.7) 145.0
-----------------------------------------------------------------------------------------------------------
Current assets
Inventories 1.3 - 1.3 - - -
Trade and other receivables a (viii) 15.8 (0.1) 15.7 4.7 (4.7) -
Cash and cash equivalents 12.5 - 12.5 4.7 - 4.7
-----------------------------------------------------------------------------------------------------------
29.6 (0.1) 29.5 9.4 (4.7) 4.7
-----------------------------------------------------------------------------------------------------------
Liabilities
Current liabilities
Financial liabilities -
borrowings a (vi) - (2.5) (2.5) - - -
Trade and other payables a (vi),d,e (24.7) 4.4 (20.3) (9.8) 1.5 (8.3)
Current tax liabilities a (v) - (0.5) (0.5) - - -
Provisions a (iii) - - - - - -
-----------------------------------------------------------------------------------------------------------
(24.7) 1.4 (23.3) (9.8) 1.5 (8.3)
-----------------------------------------------------------------------------------------------------------
Net current assets /(liabilities) 4.9 1.3 6.2 (0.4) (3.2) (3.6)
Non- current liabilities
Provisions a (iii) (2.5) - (2.5) - - -
Deferred tax liabilities a (viii) - (1.1) (1.1) - - -
-----------------------------------------------------------------------------------------------------------
(2.5) (1.1) (3.6) - - -
-----------------------------------------------------------------------------------------------------------
Net assets 140.2 8.4 148.6 147.3 (5.9) 141.4
-----------------------------------------------------------------------------------------------------------
Capital and reserves
Share capital a (vii) 15.0 (0.1) 14.9 15.0 (0.1) 14.9
Share premium account 0.3 - 0.3 0.3 - 0.3
Other reserves a (vii),b 1.5 0.5 2.0 1.5 0.5 2.0
Retained earnings 123.4 8.0 131.4 130.5 (6.3) 124.2
-----------------------------------------------------------------------------------------------------------
Total shareholders' equity 140.2 8.4 148.6 147.3 (5.9) 141.4
-----------------------------------------------------------------------------------------------------------
Notes to the financial statements (continued)
4 Explanation of transition to IFRS (continued)
Explanation of reconciling items between UK GAAP and IFRS
(a) The financial information is in IFRS format and reflects a number of
differences in presentation between UK GAAP and IFRS as follows;
i) The classification of software that is not an integral part of operating
hardware, including website development costs, as an intangible asset
separate from property plant and equipment on the balance sheet and the
classification of the related depreciation as amortisation.
ii) The disclosure of goodwill as separate from intangible assets on the
balance sheet.
iii) The reclassification of provisions as current or non current
liabilities.
iv) The classification of dividends as a movement in equity.
v) The disclosure of current tax liabilities as separate from creditors
falling due within one year.
vi) The disclosure of loan notes as separate from creditors falling due
within one year.
vii) The disclosure of deferred shares as other reserves.
viii) The separate disclosure of deferred tax assets and liabilities.
b) Share-based payments
IFRS 2 requires a charge to be made to the income statement for the cost of
providing share options to employees. The expense is calculated as the fair
value of the award on the date of the grant, and is recognised over the vesting
period of the scheme. A stochastic model has been used to calculate the fair
value of options on their grant date. Centaur has applied IFRS 2 to share
options that were granted after 7 November 2002 that were unvested at 1 January
2005 in accordance with the transitional provisions of IFRS2. There was no net
impact on the balance sheet at 1 July 2004 as a result of adopting IFRS 2. In
the year to 30 June 2005, the application of IFRS 2 results in pre tax charges
to the income statement of £0.4m.
In the financial statements of the Company, the application of IFRS 2 results in
pre tax charges to the income statement of £0.1m and an increase in investments
in subsidiaries of £0.3m representing the expense in relation to share options
granted to employees of subsidiary companies.
c) Business combinations
Under UK GAAP, goodwill arising on business combinations is amortised over a
period not exceeding 20 years. Under IFRS 3, regular amortisation of goodwill is
prohibited. Instead, an annual impairment test is required to support the
carrying value of goodwill. This test was carried out at 30 June 2004 and 30
June 2005. No impairment of goodwill was noted at either of these dates.
Amortisation of goodwill arising on the acquisition of the Centaur
Communications Group in March 2004 ceased on 1 July 2004, resulting in an
increase of pre tax profits of £7.0m for the year to 30 June 2005.
d) Employee benefits
Under UK GAAP, no provision was made for annual leave accrued. Under IAS 19, the
expected cost of compensated short term absences should be recognised at the
time the related service is provided. As a result, on transition, a provision of
£0.4m has been recognised.
Notes to the financial statements (continued)
4 Explanation of transition to IFRS (continued)
e) Dividends
Interim dividends declared are not considered a liability under IFRS until they
are paid. Final dividends declared are recognised as a liability under IFRS in
the period in which they are approved by the shareholders in general meeting.
Centaur has restated its liabilities in respect of dividend payments on
transition and in the year to 30 June 2005.
The Company has also restated its liabilities in respect of dividends receivable
from subsidiaries which were previously recorded as a reduction in amounts due
from subsidiaries.
f) Dividends from pre-acquisition profits
Dividends received from subsidiary undertakings that are paid from
pre-acquisition profits are treated as a reduction in the cost of investment
under IFRS. The cost of investment in subsidiaries has been reduced by £3.0m in
the year ending 30 June 2005 in the financial statements of the Company.
Explanation of material adjustments to the Cash Flow Statement for 2005
Income taxes of £1.1m paid in the year ended 30 June 2005 are classified as part
of operating cash flows under IFRS, but were included in a separate category of
tax cash flows under UK GAAP.
Net interest income of £0.3m (Company: £0.1m) received in the year ended 30 June
2005 is classified as part of investing cash flows under IFRS, but were included
in a separate category of returns on investment and servicing of finance cash
flows under UK GAAP.
Proceeds from the disposal of subsidiaries of £0.4m received in the year ended
30 June 2005 are classified as part of investing cash flows under IFRS, but were
included in separate category of acquisitions and disposals cash flows under UK
GAAP.
Purchases of computer software of £1.8m paid in the year ended 30 June 2005 are
classified as purchases of intangible assets under IFRS, but were included in
amounts paid for purchases of tangible assets under UK GAAP.
Equity dividends of £2.2m paid in the year ended 30 June 2005 are classified as
part of financing cash flows under IFRS, but were included in separate category
of equity dividends cash flows under UK GAAP.
There are no other material differences between the cash flow statement
presented under IFRS and the cash flow statement presented under UK GAAP.
5. Nature of the financial information
The foregoing financial information does not amount to full accounts within the
meaning of Section 240 of Companies Act 1985. The financial information has been
extracted from the Group's Annual Report and Accounts for the year ended 30 June
2006 on which the auditors have not yet expressed an opinion, but for which an
unqualified report is expected. Copies of the Annual Report and Accounts will be
posted to shareholders shortly and will be available from the Company's
registered office at 50 Poland Street, London, W1F 7AX
This information is provided by RNS
The company news service from the London Stock Exchange