Final Results

Informa Group PLC 18 February 2003 Informa Group plc Preliminary Results for year ended 31 December 2002 Financial and operating highlights • Turnover of £283 million (2001: £323 million) • Profit before tax* of £30.1 million unchanged compared to 2001 • Significant improvement in operating margin* to 13.1% (2001:11.8%) • Earnings per share growth* of 2% to 16.4p (2001:16.1p) • Net debt reduced by £23 million to £96 million (2001: £119 million) • Subscriptions resilient and now accounting for 35% of Group revenue • Dividend maintained at 7.6 pence per share *Before goodwill amortisation and exceptional items Peter Rigby, Chairman of Informa Group plc commented: "This was a strong performance achieved in difficult trading conditions. Management took action in the year to reduce costs and rationalise the product portfolio, leading to a significant improvement in our operating margin. In addition, we continued to focus on building our core subscription revenues which now account for 35 per cent of total turnover. "With economic pressures still acute, we believe it is unlikely that the trading environment will improve during 2003. However, while close cost control will remain our focus, we will continue to seek further opportunities to drive organic growth through new product development and to build further on the market leading positions we enjoy. We believe the business is well positioned to achieve significant profit and margin improvement when economic confidence returns. "We are pleased to be able to report that our biggest single event, the 3GSM World Congress which is held this week in Cannes, has achieved very encouraging results, with exhibition and sponsorship income up 11 per cent on 2002 and delegate numbers ahead of expectations." For further information Informa Group plc 020 7017 4302 Peter Rigby, Chairman David Gilbertson, Chief Executive Jim Wilkinson, Finance Director Bell Pottinger Financial 020 7861 3232 Catherine Lees/Zoe Sanders We are pleased to announce that Informa's profit before tax, goodwill amortisation and exceptional items in 2002 was £30.1 million, equalling the level we achieved in 2001. This was despite a fall in turnover of 12%, to £283 million which reflected the economic slowdown seen in a number of sectors, notably mobile telecommunication. This was an excellent result in what was a difficult year for most media companies and especially those providing business-to-business information. Our focus in these weaker trading conditions has been to manage our costs, cash and product profitability particularly closely. We successfully converted 125% of our 2002 operating profit* into cash compared with 108% in 2001. This has enabled us to pay down our debt at an accelerated rate. At the end of 2002, Informa's net debt was £96million, a reduction of £23 million in the year. Our operating profits* covered our interest payments 5.2 times in 2002, compared to 4.8 times in 2001. We also tailored our output of conferences and publications to the lower levels of demand now being experienced. A rationalisation of marginal and loss-making product enabled us to lower our headcount by 241 (9%) in the year at a cost of £2.5 million. These adjustments, which will reduce full-year payroll costs by £8 million follow manpower reductions of 13% in 2001. As staffing levels have been brought down we have managed to sublet some of our premises, but we have been left with some unoccupied buildings. We have taken an exceptional charge in 2002 of £4.2 million to provide for future excess property costs. Separately, the reduced level of activity has made it necessary to streamline our operating board resulting in £2.3 million of reorganisation costs which we have similarly treated as an exceptional charge in the 2002 accounts. The combined effect of these two charges will be to lower our operating costs in 2003 by some £2 million. Results Profits before tax (and before goodwill amortisation and exceptional items) in 2002 were £30.1 million (2001 £30.1million). Turnover at £283 million was 12% down on 2001 (£323 million). Despite this fall in turnover, close management of costs helped the operating margin improve to 13.1% from 11.8%. Adjusted earnings per share rose 2% to 16.4 pence (2001 16.1 pence). The Board recommends a final dividend of 4.94 pence payable on 28 May 2003 to shareholders whose names are on the register of members on 25 April 2003. When added to the interim dividend of 2.66 pence this gives a total dividend for the year of 7.6 pence, unchanged from 2001. The recommended dividend is covered two times by earnings excluding goodwill amortisation and will be fully funded by cash flow from operations. Overview As a whole, 2002 showed a substantial recovery from the very poor trading conditions seen in the second half of 2001, a period affected by the after-effects of September 11. However, overall activity did not recapture the levels hit in the first half of 2001 and in previous years. Our subscription revenue which now accounts for some 35% of total turnover, made a solid contribution with renewal rates continuing to average 80% across the portfolio, but our other revenue streams were affected by the economic downturn. Total delegate revenue from our conferences in 2002 was 18% below 2001, although average attendance at our non-telecoms conferences only fell 12%. Total advertising revenues in our publications were 13% lower. Sponsorship and exhibition income was 18% lower year on year with continuing strong marketing spend at our major events offset by a reduction in client spending at smaller conferences. We continue to review the performance and profitability of our full product portfolio on an ongoing basis. We ran 6% (181) fewer conferences in 2002 than in 2001, with the reductions falling mainly in the mobile telecommunications and financial areas and we also closed, merged or suspended some 20 publications. The Group retains the ability to lower its variable costs by adjusting the product offering without undermining the key market-leading positions enjoyed across our six core sectors. Our commitment to the portfolio approach of operating in several different marketplaces with a range of different media revenue streams remains unaltered. The growth of our subscription business is the bedrock of our strategy and the focal point both for ongoing organic development and future acquisitions when greater stability returns to our markets. We also remain fully committed to our advertising, sponsorship and delegate revenue streams which will provide significant upside in better times, with little additional cost. Divisional review of 2002 2002 2001 Revenue Profit Revenue Profit £'000 £'000 £'000 £'000 Finance and Insurance 79,442 12,135 82,621 10,347 Telecoms and Media 52,575 9,301 73,866 10,910 Law and Tax 45,097 4,737 54,328 5,283 Maritime, Trade and Transport 46,705 2,379 52,484 4,531 Life Sciences 27,492 5,308 26,515 3,846 Commodities and Energy 31,226 3,615 31,880 3,717 Other 905 (220) 1,159 (543) ------- ------- ------- ------- Total 283,442 37,255 322,853 38,091 ======= ======= ======= ======= The Finance and Insurance division became the group's largest business in 2002. Despite the contractions in the financial markets which affected advertising and delegate revenues, profits grew by 17%. This was mainly due to a particularly strong performance from our largely electronically delivered data-driven subscription services to the investment, insurance and capital markets, which account for the majority of the revenue in this division. This result, further underlined the importance of the "must have" information provided by this division. A better than expected first full year performance from MCM, the real time bond and foreign exchange information business that we acquired in the first quarter of 2001, was a major contributor to this division's results. Profit margins in MCM have increased from a pre acquisition 12% in 2000/1 to 22% in 2002. The Telecoms & Media business experienced a 29% fall in its revenues due to the continuing difficulties in the mobile telecommunications industry. The division responded by cutting the number of conferences produced from 350 in 2001 to 229 in 2002 and by concentrating on our industry leading events such as our GSM and Bluetooth series. We also lowered the cost base of the division by reducing staff numbers significantly (35% since June 2001). As a consequence we have improved the profit margin from 15% in 2001 to 18% in 2002. The division continued to develop new products such as the Bluetooth Developers Conference in San Jose in December which was very successful achieving revenues of £0.8 million. Life Sciences continued to perform well with a growth in profits of 38% due in part to a strong result from the BioTechniques publishing business which we acquired in March 2001. The division's flagship Drug Discovery Technologies event, which is held in Boston in August, delivered another record profit. Economic uncertainty in the United States modestly affected the Life Sciences events business, but the European events business did extremely well. The continuing focus on ensuring our products are market leading, resulted in some of the marginal conferences being amalgamated into existing events. Law and Tax profits declined by 10% with a good performance in our subscription publishing business being countered by a weaker result from our conference businesses. These were adversely affected by the economic conditions in Europe as a whole and by domestic elections in Holland and Germany. We closed our Dutch training business in the first half of 2002 which resulted in an exceptional charge of £525,000. Excluding the operating result from the comparatives shows that the underlying profits grew by 14% over 2001. The Commodities and Energy division achieved a satisfactory result by equalling its 2001 profit. Our traditional Agra Europe business of highly niche publications and conferences for the grain, coffee, sugar and dairy markets grew well. Although our commercial fishing industry publications faced difficult trading conditions due to reduced North Sea fishing quotas, we partly offset the decline through advances in our international publications and through developing products for the fish farming and seafood sectors. Our energy conference and consultancy businesses suffered as the Middle East situation continued to affect the oil markets and confidence generally. Maritime Trade and Transport profits declined 47% although the second half performance showed a strong recovery in profit compared to 2001. Almost 36% of this division's income came from advertising in 2001 and this revenue dropped 15% in 2002. The consequent impact on the division's publishing business was severe. During the year we reorganised the management of the division and these changes, coupled with the biennial appearance of our major Cruise + Ferry exhibition in London in May this year, leads us to expect a significant rebound in profitability from this division in 2003. New Products During 2002 we cemented an agreement in China with the Xinhua Financial Network to provide financial information to their Chinese news service and jointly arrange conferences for the Chinese market. With the Chinese economy enjoying good growth coupled with the stimulus of the W.T.O and the 2008 Olympics we believe this will be a good market for us in the medium term. Similarly towards the end of 2002 we signed a joint venture agreement with Expomedia Group to run conferences and exhibitions in Moscow. We have already identified opportunities in Oil and Gas, Seafood, Telecommunications, Coal and Transport and believe there are a number of further opportunities in the Russian market place. Today, we have further strengthened this relationship by agreeing to invest £2 million in new shares of Expomedia to help fund this expansion programme. Expomedia has considerable experience of the Russian and Eastern European markets and we believe this will prove to be an extremely worthwhile opportunity in a market which is growing rapidly. We have also agreed a joint venture to produce Mining related events with the McCloskey Group. Already events have been held in France and Australia and further events are planned for Russia, South East Asia and China. While our focus in 2003 remains on close cost monitoring we are developing a number of potentially important new products across the areas of our operation to drive organic growth. We will launch two new life sciences publications into the marketplace namely Preclinica and Bioprocess International at a cost of about £1.5million. At this stage they both look very promising. In a climate of increased business focus on issues of risk we are launching a new publication on corporate risk assessment and management called Executive Risk. Also, in the maritime sector, we have developed an electronic assessment tool which will allow ports and other maritime interests to assess the risks associated with ships using their facilities. Current trading Our biggest single event, the 3GSM World Congress, is held this week in Cannes and has achieved a very encouraging result with exhibition and sponsorship income up 11% on 2002. Fully paid delegate attendance at the associated conference at over 4,000 means that total revenue from the event will be around 95% of last year. Given the widespread cutbacks the mobile telecommunications industry has undergone in the last 12 months, this is a creditable result and slightly ahead of our expectations. Among our top events, our German Energy conference in January, run in conjunction with the Handelsblatt newspaper, had record delegate attendance and exhibition revenues. In the telecoms sector our Bluetooth Congress in June is looking strong with exhibition bookings ahead of last year's levels. Similarly, the Groups second largest event, the Drug Discovery Technology conference, held in August also has exhibition bookings ahead of 2002. With the prospect of war in the Middle East increasing, like many other companies we must anticipate some impact on our business with the most susceptible area being our events division. Although this accounted for 46% of total Group revenue in 2002, we believe that large parts of this activity are likely to be relatively unaffected by a localised conflict. Of our 3,000 conferences, around 900 are planned to occur in the second quarter, of which only around 16 are large international events. They accounted for just 2.5% of total Group revenue in 2002. We are ready to respond quickly and plan to move promptly to reschedule events that we deem likely to be severely impacted by any widespread unwillingness to travel. Outlook With geopolitical and economic pressures still acute we believe it is unlikely that trading conditions will improve during 2003. Our goal this year therefore will again be to manage our profitability, maximise cash flow, reduce debt levels and take advantage of opportunities to drive organic growth through new product development and building further on the market leading positions we enjoy. We believe this approach is the correct stance to position the business well for a strong rebound and sustained profit growth when markets do improve. Throughout this difficult year our staff have worked extremely hard to ensure our business has performed as well as possible. I would like to thank and congratulate them for their endeavours especially during such uncertain times. Consolidated profit and loss account For the year ended 31 December 2002 2002 2001 Before Exceptional unaudited (as restated - exceptional items Total note 4) items (note 3) notes £000 £000 £000 £000 ---------- ---------- ---------- ---------- Turnover 1 283,442 - 283,442 322,853 ---------- ---------- ---------- ---------- Operating profit before goodwill amortisation 1 37,255 (6,454) 30,801 38,091 Goodwill amortisation (10,992) - (10,992) (9,959) Goodwill impairment - - - (4,288) ---------- ---------- ---------- ---------- (10,992) - (10,992) (14,247) Operating profit 26,263 (6,454) 19,809 23,844 Loss on disposal of subsidiary undertaking 3 - (525) (525) (838) ---------- ---------- ---------- ---------- Profit on ordinary activities before interest 1 26,263 (6,979) 19,284 23,006 Net interest payable (7,200) - (7,200) (7,977) ---------- ---------- ---------- ---------- Profit on ordinary activities before tax 19,063 (6,979) 12,084 15,029 Tax on profit on ordinary activities 4 (9,167) 1,909 (7,258) (9,838) ---------- ---------- ---------- ---------- Profit on ordinary activities after tax 9,896 (5,070) 4,826 5,191 Minority interests - equity (59) (96) ---------- ---------- Profit for the year attributable to 4,767 5,095 shareholders Equity dividends paid and proposed (9,692) (10,184) ---------- ---------- Loss for the year (4,925) (5,089) ---------- ---------- Dividends per share 7.60p 7.60p ---------- ---------- Earnings per share Earnings per share (basic) 2 3.74p 4.07p Earnings per share (diluted) 2 3.74p 4.03p Adjusted basic earnings per share 2 16.36p 16.12p All results are derived from continuing operations. Consolidated statement of total recognised gains and losses For the year ended 31 December 2002 2002 2001 unaudited (As restated - note 4) £000 £000 Profit for the year 4,767 5,095 Currency translation differences on foreign currency net (3,809) 17 investments and borrowings ---------- ---------- Total gains and losses recognised in the year 958 5,112 Prior year adjustment (note 4) (353) - ---------- ---------- Total gains and losses recognised since last annual report 605 5,112 ---------- ---------- Consolidated cash flow statement For the year ended 31 December 2002 2002 2001 31 December 31 December unaudited notes £000 £000 Cash inflow from operating activities 5 46,510 41,076 Return on investments and servicing of finance (6,492) (6,581) Taxation (1,667) (11,145) Capital expenditure (2,123) (15,489) Acquisitions and disposals (4,576) (59,262) Equity dividends paid (9,674) (9,825) ---------- ---------- Cash inflow/(outflow) before financing 21,978 (61,226) Financing (19,027) 61,454 ---------- ---------- Increase in cash in the year 2,951 228 ---------- ---------- Reconciliation of net cash flow to movement in net debt For the year ended 31 December 2002 2002 2001 31 December 31 December unaudited notes £000 £000 Increase in cash in the year 2,951 228 Cash outflow/(inflow) from decrease/(increase) in debt 19,799 (8,393) financing ---------- ---------- Change in net debt resulting from cash flows 22,750 (8,165) Translation differences 553 714 ---------- ---------- Movement in net debt in the year 23,303 (7,451) Net debt at the start of the year 6 (118,832) (111,381) ---------- ---------- Net debt at the end of the year 6 (95,529) (118,832) ========== ========== Consolidated balance sheet At 31 December 2002 2002 2001 31 December 31 December unaudited (As restated - note 4) £000 £000 Fixed assets Intangible assets 159,639 174,396 Tangible assets 23,080 28,292 Investments 4,788 4,109 ---------- ---------- 187,507 206,797 Current assets Stocks and work in progress 6,212 6,558 Debtors 51,734 61,274 Cash at bank and in hand 5,195 4,102 ---------- ---------- 63,141 71,934 Creditors: amounts falling due within one year (117,876) (126,309) ---------- ---------- Net current liabilities (54,735) (54,375) ---------- ---------- Total assets less current liabilities 132,772 152,422 Creditors: amounts falling due after more than one year (99,143) (117,192) Provisions for liabilities and charges (7,028) (828) Minority interests (334) (206) ---------- ---------- Net assets 26,267 34,196 ========== ========== Capital and reserves Called up share capital 12,824 12,787 Share premium account 123,103 122,334 Special reserve 1 2 Other reserve 37,398 37,398 Profit and loss account (147,059) (138,325) ---------- ---------- Surplus on shareholders' funds - equity 26,267 34,196 ========== ========== Notes 1. Segmental analysis Underlying operating profit excludes amortisation of goodwill and exceptional items. Turnover Underlying operating Profit / (loss) profit before interest Analysis by market sector 2002 2001 2002 2001 2002 2001 unaudited unaudited unaudited £000 £000 £000 £000 £000 £000 Finance and Insurance 79,442 82,621 12,135 10,347 7,098 6,487 Telecoms and Media 52,575 73,866 9,301 10,910 5,968 7,458 Law and Tax 45,097 54,328 4,737 5,283 1,877 2,744 Maritime, Trade and Transport 46,705 52,484 2,379 4,531 (582) 2,079 Life Sciences 27,492 26,515 5,308 3,846 3,565 2,607 Commodities and Energy 31,226 31,880 3,615 3,717 1,636 2,227 Other 905 1,159 (220) (543) (278) (596) --------- ---------- ---------- --------- --------- --------- 283,442 322,853 37,255 38,091 19,284 23,006 ========= ========== ========== ========= ========= ========= 2. Earnings and adjusted earnings per share In order to show results from operating activities on a comparable basis, an adjusted earnings per share has been calculated which excludes amortisation of goodwill and exceptional items. 2002 2001 unaudited (As restated) £000 £000 4,767 5,095 Profit for the year Adjustments: Amortisation of goodwill 10,992 14,247 Exceptional item 5,070 838 -------- ------------ 20,829 20,180 Adjusted earnings ======== ============ Weighted average number of equity shares - for basic and adjusted earnings 127,294,855 125,174,819 Effect of dilutive share options 4,888 1,110,519 Weighted average number of equity shares - for diluted earnings 127,299,743 126,285,338 ========= ========= Earnings per equity share 3.74p 4.07p Diluted earnings per equity share 3.74p 4.03p Adjusted earnings per equity share 16.36p 16.12p ========= ========= 3. Exceptional item (1) Operating costs The £6,454,000 shown within operating costs is in respect of the following: (a) an estimate for future costs on properties not used by the group from 1 January 2003 onwards (£4,173,000). (b) redundancy costs relating to restructuring of the senior operating board (£2,281,000). (2) Loss on disposal of subsidiary undertaking The current year charge represents the expected net cost arising on the closure of a Dutch subsidiary. The loss on disposal of a subsidiary undertaking in 2001 represents the write off of amounts due from the purchaser of a subsidiary sold in 2000, which are unlikely to be received. 4. Taxation The underlying worldwide operating tax rate for the Group, after removing the effect of goodwill amortisation and exceptional items, is 31% (2001 restated: 33%). 2002 2001 unaudited (As restated) £000 £000 United Kingdom corporation tax 1,619 5,346 Overseas tax 5,046 4,139 ---------- ---------- Current tax 6,665 9,485 Deferred tax 2,502 353 --------- --------- 9,167 9,838 ===== ===== Adoption of FRS 19 has required a change in the method of accounting for deferred tax. Deferred tax is provided in full for timing differences, except as otherwise required by FRS 19. Deferred tax assets are only recognized to the extent that they are considered recoverable. Deferred tax balances are not discounted. As a result the comparative figure for tax on profit on ordinary activities has increased by £353,000 in the year to 31 December 2001. The impact of adopting FRS 19 on the results for the year is an increase in the tax charge of £2,502,000. 5. Reconciliation of operating profit to net cash inflow from operating profits 2002 2001 unaudited £000 £000 Operating profit 19,809 23,844 Depreciation charges 7,357 5,798 Amortisation of goodwill 10,992 14,247 (Profit)/ Loss on sale of tangible fixed assets (23) 17 Decrease in stocks 219 1,197 Decrease in debtors 10,393 16,336 Decrease in creditors (2,457) (20,279) Other operating items 220 (84) --------- --------- Net cash inflow from operating activities 46,510 41,076 ===== ===== 6. Analysis of changes in net debt At 1 January Cash flow Exchange At 31 unaudited movement December unaudited unaudited £000 £000 £000 £000 Cash at bank and in hand 4,102 1,174 (81) 5,195 Overdrafts (3,815) 1,777 (24) (2,062) ---------- ---------- ---------- ---------- 287 2,951 (105) 3,133 Bank loans due in less than one year (2,500) 2,126 - (374) Loan notes due in less than one year (438) 438 - - Bank loans due after one year (116,181) 17,235 658 (98,288) ---------- ---------- ---------- ---------- Total (118,832) 22,750 553 (95,529) ========== ========== ========== ========== 7. Basis of preparation and statutory information The financial information set out above does not constitute the Group's statutory accounts for the year ended 31 December 2002 or 2001. The financial information for 2002 is unaudited and the financial information for 2001 is derived from the audited statutory accounts for 2001. The auditors have reported on the 2001 financial statements, their report was unqualified and did not contain statements under 237(2) or (3) of the Companies Act 1985. The financial information has been prepared on a going concern basis under the historical cost convention and in accordance with all applicable current accounting standards. The financial information has been prepared on a consistent basis with the prior year, except for the impact of adopting 'FRS 19: Deferred Tax', as disclosed in note 4. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Informa (INF)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today