Final Results

RNS Number : 3345J

ITE Group PLC

02 December 2008

 



2 December 2008

For Immediate Release        

ITE GROUP PLC

PRELIMINARY RESULTS ANNOUNCEMENT

Strong events portfolio and balance sheet support future growth 

Highlights

	Year ended 30 September 2008	Year ended 30 September 2007	Change
Revenue	£110.1m	£99.1m	11%
Profit before tax	£34.5m	£33.7m	2%
Headline pre-tax profit*	£37.1m	£35.3m	5%
Diluted earnings per share	9.3p	9.0p	3%
Headline diluted earnings per share**	10.1p	9.4p	7%
Dividend per share	5.3p	4.5p	18%

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

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

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

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

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

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

Russell Taylor, CEO of ITE Group, commented:

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

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

Notes:

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

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

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

    9 for details.

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

Enquiries:

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

ITE Group plc

Preliminary statement for the year ended 30 September 2008

Chairman's statement

Group Performance

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

Strategic Progress

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

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

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

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

Board and Management

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

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

Dividend

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

Outlook

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

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

Iain Paterson
Chairman
1 December 2008

Chief Executive's statement

Results for 2008 financial year

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

Headline pre-tax profit of £37.1 million was an absolute improvement on last year's result of £35.3 million, and was underpinned by a 16% improvement in like-for-like figures. This result was achieved after making a £3.3 million charge against derivative currency hedges which offset much of the beneficial effect of exchange rate movement on the Group's reported revenues for the year. The like-for-like increase in headline profits of circa £5.0 million was largely driven by growth in higher margin products.  

The business activity has again provided strong cash flow in the year. Headline profit before tax of £37.1 million has translated to an operational cash flow figure of £52.9 million. The Group applied £13.5 million of cash to the acquisition of businesses and £15.9 million to share buy backs (including ESOT purchases) over the course of the year. Net cash balances of £26.7 million at the beginning of the year rose to £29.1 million at the 30 September 2008.

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

Trading and operating performance in 2008

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

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

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

		Sq metres sold 000's	Revenue £m	Gross profit £m	Average Yield per m2
2007	All events	455	97	49
	Non annual	(23)	(6)	(4)
2007	Annually recurring	432	91	45	£210
	Acquisitions	19	2	1
	Growth	(2)	12	8
2008	Annually recurring	449	105	54	£234
	Non annual	51	3	1
2008	All events	500	108	55

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

Russia

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

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

Central Asia & Caucasus

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

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

Eastern and Southern Europe

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

UK and Western Europe

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

Strategy

ITE's primary business objectives remain:

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

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

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

The business strengths which ITE aims to build upon are:

International sales network

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

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

Market leading events

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

Local presence

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

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

Venue relationships

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

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

Russell Taylor
Chief Executive Officer
1 December 2008

Business review - Divisional review 2008 

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

	2008 £m	2007 £m	Actual  change	Like-for-like growth
Russia	66.0	61.7	7%	12%
Central Asia & Caucasus	22.0	18.1	22%	22%
Eastern & Southern Europe	9.3	7.1	31%	12%
UK & Western Europe	12.3	10.6	16%	16%
Rest of World	0.6	1.7	(64%)	(64%)
	----------	-----------	------------	-----------
Total	110.1	99.1	11%	13%

Russia

Offices: Moscow, St Petersburg, Novosibirsk

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

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

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

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

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

Central Asia & Caucasus

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

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

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

Kazakhstan

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

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

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

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

Uzbekistan

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

Eastern and Southern Europe

Offices:     Ukraine (Kyiv), Turkey (Istanbul)

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

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

Ukraine

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

Turkey

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

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

UK & Western Europe

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

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

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

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

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

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

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

Rest of the World 

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

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

Business review - Finance

Revenue and gross profit 

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

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

Administrative expenses across the Group increased to £18.8 million, up from £17.2 million in the previous year. Administrative expenses include an amortisation charge of £2.6 million (2007: £1.6 million) reflecting the acquisitions made in the year and a charge for share-based payments of £0.9 million (2007: £1.6 million). Overall, Group administrative expense represented 17% of revenue (2007: 17%), resulting in net operating margins of 33% (2007: 33%) for the year.  

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

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

Other operating income

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

Finance income 

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

Finance costs

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

Tax charge

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

Earnings per share

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

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

Dividends

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

Return to shareholders

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

Cash flow

Cash generated from operations in the year was £52.9 million (2007: £41.5 million). The principal applications of cash were £15.9 million on purchasing shares on the open market for the Employees Share Option Trust ('ESOT') and treasury shares that were cancelled in the year (2007: £17.5 million), £0.8 million applied to venue loans and advances (2007: £0.9 million); £7.0 million was paid in tax; (2007: £10.3 million); £13.5 million was applied to acquisitions in the year (2007: £1.4 million) and £12.1 million was distributed as dividends (2007: £9.6 million). The net increase in cash balances at 30 September 2008 was £2.5 million.

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

Acquisitions & disposals

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

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

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

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

Balance Sheet

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

	Assets	Liabilities	Net assets
	£m	£m	£m
Goodwill and intangibles	57.1	-	57.1
Property, plant and equipment	1.7	-	1.7
Associates	1.4	-	1.4
Venue advances	2.4	-	2.4
Cash	35.7	(6.6)	29.1
Deferred income	-	(64.1)	(64.1)
Current assets and liabilities excluding cash and venue advances	41.7	(17.3)	24.4
Deferred consideration Provisions	- -	(5.0) (0.9)	(5.0) (0.9)
Deferred tax	1.6	(3.6)	(2.0)
Total as at 30 September 2008	141.6	(97.5)	44.1
Total as at 30 September 2007	122.1	(76.7)	45.4

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

Investment and capital expenditure

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

Venue arrangements

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

Venue arrangements

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

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

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

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

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

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

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

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

Capital

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

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

Post balance sheet events

There have been no significant post balance sheet events. 

Treasury

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

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

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

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

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

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

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

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

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

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

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

Liquidity risk

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

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

Going concern

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

Consolidated income statement For the year ended 30 September 2008
	2008	2007
		Restated*
	£000	£000
Continuing operations
Revenue	110,063	99,134
Cost of sales	(55,173)	(49,397)
	__________	__________
Gross profit	54,890	49,737
Other operating income	292	253
Administrative expenses before amortisation	(16,222)	(15,599)
Amortisation of acquired intangibles	(2,596)	(1,603)
Total administrative expenses	(18,818)	(17,202)
Share of results of associate	173	266
	__________	__________
Operating profit	36,537	33,054
Finance income	1,907	1,778
Finance costs	(3,917)	(1,096)
	__________	__________
Profit on ordinary activities before taxation	34,527	33,736
Tax on profit on ordinary activities	(11,071)	(10,777)
	__________	__________
Profit for the period	23,456	22,959
	__________	__________
Attributable to:
Equity holders of the parent	23,479	22,978
Minority interests	(23)	(19)
	__________	__________
	23,456	22,959
	__________	__________
Earnings per share (p)
Basic	9.4	9.1
Diluted	9.3	9.0
	__________	__________

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

Consolidated statement of recognised income and expense

For the year ended 30 September 2008

	2008	2007
	£000	£000
Currency translation difference on net investment in subsidiary undertakings	2,921	(62)
(Decrease)/increase in fair value on cash flow hedge	(51)	331
Tax on items taken directly to equity	(246)	1,921
	__________	__________
Net income recognised directly in equity	2,624	2,190
Transferred to profit or loss on cash flow hedges	-	(614)
Put option at fair value	(3,269)	-
Profit for the period attributable to the shareholders	23,456	22,959
	__________	__________
Total recognised income and expense for the period	22,811	24,535
	__________	__________
Attributable to:
Equity holders of the parent	22,834	24,554
Minority interests	(23)	(19)
	__________	__________
	22,811	24,535
	__________	__________

Consolidated balance sheet 30 September 2008
	2008	2007
		Restated
Non-current assets	£000	£000
Goodwill	40,982	34,424
Other intangible assets	16,115	4,295
Property, plant and equipment	1,727	1,412
Investments in associates	1,381	1,358
Venue advances and other loans	1,001	1,583
Deferred tax asset	1,594	1,690
	___________	___________
	62,800	44,762
Current assets
Trade and other receivables	42,712	33,603
Tax prepayment	389	3,721
Cash and cash equivalents	35,709	39,963
Derivative financial instruments	-	48
	___________	___________
	78,810	77,335
Total assets	141,610	122,097
Current liabilities
Bank overdraft	(6,568)	(13,306)
Trade and other payables	(18,044)	(13,326)
Deferred income	(64,131)	(46,157)
Derivative financial instruments	(4,257)	(610)
Provisions	(264)	(824)
	___________	___________
	(93,264)	(74,223)
Non-current liabilities
Provisions	(653)	(754)
Deferred tax liabilities	(3,617)	(1,671)
Derivative financial instruments	-	(49)
	___________	___________
	(4,270)	(2,474)
Total liabilities	(97,534)	(76,697)
	___________	___________
Net assets	44,076	45,400
	___________	___________
Equity
Share capital	2,479	2,503
Share premium account	2,669	871
Merger reserve	2,746	2,746
Capital redemption reserve	457	403
ESOT reserve	(8,390)	(597)
Retained earnings	42,776	38,930
Translation reserve	3,414	493
Hedge reserve	-	51
Put option reserve	(3,269)	-
	___________	___________
Equity attributable to equity holders of the parent	42,882	45,400
Minority interests	1,194	-
	___________	___________
Total equity	44,076	45,400
	___________	___________

Consolidated cash flow statement For the year ended 30 September 2008
	2008	2007
Cash flows from operating activities	£000	£000
Operating profit from continuing operations	36,537	33,054
Adjustments for:
Depreciation and amortisation	3,314	2,159
Share-based payments	931	1,550
Other non-cash expenses	(654)	47
Loss/(profit) on sale of fixed asset	1	(39)
Share of associate profit	(173)	(266)
Increase/(decrease) in provisions	1,147	(1,505)
	__________	__________
Operating cash flows before movements in working capital	41,103	35,000
Increase in receivables	(10,005)	(1,230)
Increase in deferred income	17,974	6,449
Increase in payables	3,785	1,299
	__________	__________
Cash generated from operations	52,857	41,518
Tax paid	(7,043)	(10,324)
Venue advances and loans	(830)	(929)
	__________	__________
Net cash from operating activities	44,984	30,265
Investing activities
Interest received	1,902	1,752
Loss on derivative financial instruments	(2,990)	-
Dividends received from associates	198	444
Acquisition of businesses	(13,508)	(359)
Exercise of Moda Put Option	-	(1,030)
Purchase of property, plant and equipment and computer software	(1,075)	(783)
Disposal of property, plant and equipment	-	142
	__________	__________
Net cash (utilised)/generated from investing activities	(15,473)	166
Financing activities
Dividends paid	(12,050)	(9,634)
Interest paid	(598)	(663)
Net cash flow in relation to ESOT shares	(7,793)	2,623
Purchase of own shares	(8,078)	(17,506)
Proceeds from issue of share capital	1,810	144
	__________	__________
Net cash flows from financing activities	(26,709)	(25,036)
Net increase in cash and cash equivalents	2,802	5,395

Net cash and cash equivalents at beginning of period net of overdrafts	26,657	21,166
Effect of foreign exchange rate changes	(318)	96
	__________	__________
Net cash and cash equivalents at end of period net of overdrafts	29,141	26,657
	__________	__________

	2008	2007
	£000	£000
Comprising:
Cash and cash equivalents	35,709	39,963
Bank overdrafts	(6,568)	(13,306)
	__________	__________
	29,141	26,657
	__________	__________

Cash generated from the business:
Cash generated from operations	52,857	41,518
Interest received	1,902	1,752
Interest paid	(598)	(663)
Dividends earned from associates	198	444
	__________	__________
	54,359	43,051
	__________	__________
Free cash flow from the business:
Cash generated from the business	54,359	43,051
Tax paid	(7,043)	(10,324)
Receipts from disposal of property, plant and equipment	-	142
	__________	__________
	47,316	32,869
	__________	__________

Notes

1    Basis of preparation

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

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

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

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

Presentation of derivative financial instruments in the balance sheet

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

Impact of new accounting standards

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

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

• IFRIC 10 Interim Financial Reporting and Impairment

• IFRIC 11 IFRS 2 Group and Treasury Share Transactions 

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

	2008  £000	2007  £000
Profit on ordinary activities before taxation	34,527	33,736
Amortisation of acquired intangibles	2,596	1,603
	__________	__________
Headline pre-tax profit	37,123	35,339
	__________	__________

4    Segmental analysis

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

Year ended 30 September 2008	UK & Western Europe	Central Asia & Caucasus	Russia	Eastern & Southern Europe	Rest of World	Total Group
	£000	£000	£000	£000	£000	£000
By geographical location of events/activities
Revenue	12,280	21,973	65,956	9,252	602	110,063
Result	(7,480)	8,893	33,817	2,183	(1,049)	36,364
	________	________	________	________	________	_______
By origin of sale
Revenue	55,813	11,096	37,056	5,971	128	110,063
Result	18,667	2,107	15,134	485	(30)	36,364
	_______	________	________	_______	________
Share of results of associates						173
Profit on disposal of group undertakings						-
						_______
Operating profit						36,537
Finance income						1,907
Finance costs						(3,917)
						_______
Profit before tax						34,527
Tax						(11,071)
						_______
Profit after tax						23,456
						________
Capital expenditure	535	75	444	22	-	1,076
Depreciation and amortisation	2,430	115	752	17	-	3,314
Balance Sheet
Assets*	83,771	7,852	44,802	1,819	2	138,246
	________	________	________	________	________	_______
Interest in associates						1,381
Consolidated total assets						139,627
						________
Liabilities*	49,579	5,967	33,604	1,703	42	90,895
	________	________	________	________	________	_______

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

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

Year ended 30 September 2007	UK & Western Europe	Central Asia & Caucasus	Russia	Eastern & Southern Europe	Rest of World	Total Group Restated
	£000	£000	£000	£000	£000	£000
By geographical location of events/activities
Revenue	10,624	18,082	61,706	7,069	1,653	99,134
Result	(6,672)	6,060	31,003	2,445	(48)	32,788
	________	________	________	________	________	_______
By origin of sale
Revenue	51,290	8,928	34,492	3,972	452	99,134
Result	18,788	2,191	12,037	(304)	76	32,788
	_______	________	________	_______	________
Share of results of associates						266
Profit on disposal of group undertakings						-
						_______
Operating profit						33,054
Finance income						1,778
Finance costs						(1,096)
						_______
Profit before tax						33,736
Tax						(10,777)
						_______
Profit after tax						22,959
						________
Capital expenditure	255	154	361	13	-	783
Depreciation and amortisation	1,839	68	212	40	-	2,159
Balance Sheet
Assets*	92,537	6,137	15,297	1,389	(32)	115,328
	________	________	________	________	________	_______
Interest in associates						1,358
Consolidated total assets						116,686
						________
Liabilities*	51,628	4,798	14,206	1,333	87	72,052
	________	________	________	________	________	_______

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

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

5    Finance income

	2008	2007
	£000	£000
Interest receivable from bank deposits	1,874	1,720
Interest receivable from Inland Revenue repayments	15	28
Interest receivable on advances to venues	13	4
Unwind of fair value discount on venue advances	5	26
	__________	__________
	1,907	1,778
	__________	__________

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

6    Finance costs

	2008	2007 Restated
	£000	£000
Interest on overdrafts	360	453
Bank charges	238	210
Loss on derivative financial instruments	3,319	433
	__________	__________
	3,917	1,096
	__________	__________

7    Tax on profit on ordinary activities

Analysis of tax charge for the year:	2008	2007
	£000	£000
Group taxation on current year profit
UK corporation tax on profit for the year	5,158	5,093
Adjustment to UK tax in respect of previous years	51	(196)
	__________	__________
	5,209	4,897
Overseas taxation - current year	5,489	5,915
Overseas taxation - previous years	419	111
	__________	__________
	5,908	6,026
Current tax	11,117	10,923
	__________	__________
Deferred tax
Origination and reversal of timing differences	(46)	(146)
	__________	__________
	11,071	10,777
	__________	__________

The tax charge for the year can be reconciled to the profit per the income statement as follows:	2008	2007
	£000	£000
Profit on ordinary activities before tax	34,527	33,736
	__________	__________
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 29% (2007: 30%)	10,013	10,121
Effects of:
Expenses not deductible for tax purposes	470	279
Deferred tax assets not recognised	62	172
Withholding tax and other irrecoverable taxes	400	1,111
Adjustments to tax charge in respect of previous years	393	(85)
Deferred tax provision in respect of proposed dividends from overseas subsidiaries	801	-
Effect of different tax rates of subsidiaries operating in other jurisdictions	(1,018)	(768)
Associate tax	(50)	(53)
	__________	__________
	11,071	10,777
	__________	__________

8  Dividends

	2008	2007
	£000	£000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 30 September 2007 of 3.2p (2006 - 2.5p) per ordinary share	8,045	6,331
Interim dividend for the year ended 30 September 2008 of 1.6p (2007 -1.3p) per ordinary share	4,005	3,303
	__________	__________
	12,050	9,634
	__________	__________
Proposed final dividend for the year ended 30 September 2008 of 3.7p (2007 - 3.2p) per ordinary share	8,915	7,983
	__________	__________

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

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

9    Earnings per share

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

Number of shares	2008	2007
	Number of shares ('000)	Number of shares ('000)
Weighted average number of shares:
For basic earnings per share	249,647	251,276
Effect of dilutive potential ordinary shares	2,493	4,454
	___________	___________
For diluted and headline diluted earnings per share	252,140	255,730
	___________	___________

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

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

	2008  £000	2007  £000
Profit for the financial year attributable to equity holders of the parent	23,479	22,978
Amortisation of acquired intangible assets	2,596	1,603
Tax effect of amortisation of acquired intangible assets	(713)	(419)
	________	________
Headline earnings for the financial year	25,362	24,162
	________	________

Financial calendar

Final dividend 2008
Ex date	11 February 2009
Record date	13 February 2009
Annual General Meeting	27 February 2009
Payment date	13 March 2009
Interim dividend 2009
Record date	May 2009
Payment date	June 2009

 

END

 

 

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