Final Results

Huveaux PLC 08 March 2004 HUVEAUX PLC Preliminary announcement of the final results for the year ended 31 December 2003 HIGHLIGHTS 8 March 2004 Huveaux PLC is a specialised publishing and media business with strong margins and cash flow. Key points for 2003 • Turnover up 334% to £4.6 million • Pre-tax profits up 227% to £1.2 million • Dividend up 17% to 0.88 pence per share • Three acquisitions completed in 2003 • Further acquisition announced today • Significant growth anticipated in 2004 • Further substantial acquisitions being explored John van Kuffeler, Chairman, said today: 'I am extremely pleased with what we have achieved in 2003. Our objective continues to be to build a substantial publishing and media group over the next 10-15 years. This year we have made great strides by delivering a pre-tax profit of £1.2 million up 227%, and acquiring 3 further new businesses. A further acquisition is announced today making a total of five acquisitions since flotation two years ago. 'We are well placed to take advantage of a growing market and see 2004 as a year of significant opportunity for our existing businesses and future acquisitions.' Enquiries John van Kuffeler 020 7245 0270 Chairman, Huveaux PLC Charlotte Lambkin 020 7861 3232 Bell Pottinger Financial CHAIRMAN'S STATEMENT The year 2003 was one of major achievement for Huveaux. We made three acquisitions and consequently sales grew from £1.1 million to £4.6 million (£3.1 million from acquisitions), pre-tax profits rose from £0.4 million to £1.2 million (£0.9 million from acquisitions) and earnings per share (EPS) marked time at 2.0 pence. Reflecting such major strides in the Company's development, your directors are recommending a dividend of 0.88 pence (2002 - 0.75 pence), an increase of 17 per cent. At the year end we had a strong balance sheet with no borrowings and £3.7 million in cash. I am also pleased to announce today the acquisition of the Public Affairs Newsletter for £750,000. This will strengthen further our position in the political publishing market and it is anticipated that this acquisition will enhance Huveaux's EPS in the current year. Review of Operations As at 31 December 2003 Huveaux's operations comprised four operating units. The sales and profits of each were as follows for the year 2003: Sales Pre-tax Profits £000s £000s -------- --------- Lonsdale 1,906 790 Fenman 680 184 Vacher Dod 1,474 228 Le Trombinoscope 515 293 -------- --------- 4,575 1,495 Head office costs, net of interest income - (290) -------- --------- 4,575 1,205 ======== ========= Each of these is now described in turn. • Lonsdale Lonsdale is a specialist publisher of revision guides and workbooks for schools in England and Wales. It specialises in Key Stages 2, 3 and 4, including GCSE (for pupils between the ages of 7 and 16) and has 63 current titles. Sales are made directly to the schools and are priced at between £1 and £4. The guides are designed to assist teachers to ensure that their pupils receive the exact material on which they will be assessed. Lonsdale is based in Holmfirth, Yorkshire and Kirby Lonsdale, Lancashire and has 16 employees. The acquisition of Lonsdale was completed on 31 March 2003 and therefore nine months of Lonsdale's results have been included in Huveaux's 2003 results. The sales for the nine months were £1,906,000 and the pre-tax profits were £790,000 which is a pre-tax profit margin of 41 per cent. The cash flow generated (before tax) was £680,000. In the nine months in our ownership, Lonsdale generated an annualised 20 per cent pre-tax return on the consideration paid to date (15 per cent on the total consideration payable). During this time we have expanded the editorial staff from 4 to 6 and substantially increased the capacity of the warehouse in Penrith, Cumbria, while succeeding in reducing annual print costs by £100,000. Consequently we have been able to expand the range of titles and grow sales, which augurs well for the future. • Fenman Fenman is a specialist publisher of material for training managers in both the public and private sectors, including larger companies, government departments, local authorities, the armed forces and large accounting firms. Its flagship product is a monthly publication, The Training Journal, which has some 5,000 annual subscribers. Fenman also makes and sells a wide range of training videos and publishes 108 different training manuals. In addition, it operates a subscription website with over 2,000 subscribers and runs seminars and courses for training managers at locations throughout the UK. Fenman is based in Ely, Cambridgeshire and has 16 employees. The acquisition of Fenman was completed in October, 2003 and therefore three months of Fenman's results are included in Huveaux's 2003 figures. Fenman's sales during this short period were £680,000 and the pre-tax profits were £184,000, a pre-tax profit margin of 27 per cent. Cash generated amounted to just £15,000 as the company invested £85,000 in the filming of new video titles. In the three months under our ownership, Fenman generated an annualised 12 per cent pre-tax return on the cost of the acquisition. During this time, we have approved plans to launch 3 new video titles and to expand the programme of courses and seminars. We have also started a programme of key account management. Brand management and pricing are the subject of future plans. • Vacher Dod Publishing Vacher Dod Publishing is the leading UK provider of political biographical information in both printed and electronic format. The principal publications in book format are: Dod's Parliamentary Companion; Dod's European Companion; Dod's Civil Service Companion; Dod's Constituency Guide and Dod's Scotland, Wales and Northern Ireland Companion. These are supplemented by a quarterly update, Vacher's Parliamentary Companion. In addition, the information is provided on CD, called Dod on Disc and most importantly, by means of an online subscription website, Dod-on-Line, which provides immediate access to a constantly changing database and therefore provides real time information to its subscribers. The company maintains a regular client base of over 8,000 customers many of whom buy from across the product range. The customers comprise large companies, the UK parliament and government, other public institutions, universities and academic institutions, the lobbying industry and the media. Vacher Dod is based in Westminster and has 23 employees. Vacher Dod was acquired by Huveaux in 2002 and therefore its results are included for the whole of 2003. Sales for the year were £1,474,000 and pre-tax profits were £228,000. The comparative pre-tax profit figure was £185,000 in 2002 (unaudited and adjusted for changes in accounting policy) and £109,000 in 2001. There have therefore been two successive years of good profit growth. Nevertheless, the cash flow was £67,000 and pre-tax return on investment was 5 per cent in 2003. These are too low and plans are in place to raise the cash flow and return substantially in 2004. In 2003, we replaced the Managing Director and Head of Sales and invested in new IT systems to support both the publications and the successful subscription website Dod-on-Line. We have substantial plans to expand into other EU countries in 2004. • Le Trombinoscope Le Trombinoscope is the leading provider of political biographical information in France and publishes three annual political directories; one for central government; one for local government; and one for EU government, plus a monthly newsletter and a subscription website. Le Trombinoscope is based in Paris and has 10 employees. The acquisition of Le Trombinoscope was completed in September, 2003 and four months of its sales and profits are therefore included in our 2003 results. During the period of our ownership, Le Trombinoscope had sales of £515,000 and pre-tax profits of £293,000, a pre-tax profit margin of 57 per cent. This included the highest sales period of the year. Cash flow generated amounted to £241,000. The annualised pre-tax return on our investment during this short period was 56 per cent. Upon acquisition, we appointed a new Managing Director, and have subsequently appointed a new Head of Sales and a Head for our EU project. This, combined with a re-launch of the newsletter and website give considerable scope for future growth. • Head Office The business units are supported by a small Head Office whose total costs in 2003 including directors' salaries amounted to just £290,000 net of interest income. • Earnings per Share Whereas EPS remained at 2.0 pence in 2003, I should point out, that if we had made no acquisitions in 2003 our sole source of profit would have been Vacher Dod Publishing, which in 2002 we only owned in the highly profitable second half of the year, so did not have to account for its losses in the first half. The profits in 2003 from Vacher Dod Publishing would only have produced EPS of 0.8 pence per share. The three acquisitions have therefore more than doubled EPS in 2003 and added significantly to shareholder value. • Acquisition of Public Affairs Newsletter I am also pleased to announce today that we have completed the acquisition of the Public Affairs Newsletter for a consideration of £750,000 cash on completion. The Public Affairs Newsletter was founded in 1993 and is the leading international monthly business magazine in the public affairs and lobbying sector. It is a subscription-only publication with additional revenue from advertising. Its customers include public affairs consultancies and public affairs professionals within corporate and public sector organizations in the UK, EU and worldwide. The Public Affairs Newsletter's turnover and profits for its last two financial years (unaudited) have been as follows: Year Ended Turnover Pre-tax Profit 31 January £000s £000s 2003 182 110 2004 199 119 The net assets of the Public Affairs Newsletter are not material. It is anticipated that the acquisition of the Public Affairs Newsletter will enhance Huveaux's EPS in the current year. The acquisition of the Public Affairs Newsletter is a further step in Huveaux becoming a leading provider of political data in the UK and the EU. This is particularly important as the demand for our information is anticipated to grow dramatically with the accession of 10 new countries to the EU on 1 May 2004 and the European Parliamentary Elections in June of this year, followed by a General Election in the UK which is currently anticipated to be in 2005. • Board and Management Having started just over two years ago with myself as the only (unpaid) employee, we have now taken substantial steps to build a credible management team. At Head Office, I am pleased to welcome David Horne who started work for Huveaux on a contract basis in April, 2003 and was appointed full time Finance Director and Company Secretary on 1 January 2004. He is a Chartered Accountant who moved from Canada after qualifying there with Price Waterhouse, and subsequently worked with AT&T and the BBC before being appointed European Finance Director of BSMG Worldwide. I would like to thank John Clarke for his important contribution as part time Finance Director and Company Secretary and I am delighted he is able to remain a non-executive director of the company. I am also pleased to welcome Pam Anson as Corporate Development Manager. Pam started her career at Grindlays Bank and went on to become an assistant director at Hill Samuel, London and division director at Macquarie Bank, Australia. She has also run her own business assisting small and medium sized businesses in Australia with financial management, corporate development and creation and implementation of financial systems and controls. Maria Farmery joined the Group as the new Managing Director of Vacher Dod in June 2003. Maria is an expert in reference book publishing and database management. Her background includes roles with CMP Business Information Systems, as Managing Director of the directories' division of William Reed Publishing and as Publishing Manager with Incisive Media. The Managing Director of Lonsdale is Paul Wharton, who is one of the founders of the business. He is a former teacher who has been actively involved in writing, editorial and commissioning areas of the business since inception. Both he and another former partner, Hefin Rees, have been retained on a contract employment basis since our acquisition of Lonsdale and are both actively involved in running the business. At the time of the acquisition of Le Trombinoscope, we recruited Jean-Marie Simon as its new Managing Director, and he started in October 2003. Jean-Marie has substantial management, publishing and finance experience in France and Europe. He was formerly Deputy General Manager of EMAP France, having been with the EMAP group since 1995 initially as Finance Director, France. Earlier career positions were with The Walt Disney Company, GD Searle & Co, and Arthur Andersen. Sarah Perito is the Managing Director of Fenman, having joined in April 2002. Previous career positions have included BBC York, Wyvern Publishing and Reed Elsevier, as well as extensive overseas experience. She was recently nominated for the Cambridge area Business Woman of the Year. Our ability to attract and retain good quality management, which can support and enhance our activities and businesses is critical to our continued growth and profitability. These appointments demonstrate substantial progress in developing our management team. • Corporate Philosophy Huveaux has the objective of building a substantial publishing and media group over the next 10 to 15 years. After two years of significant achievement, our objective remains unchanged and is being implemented as follows: • Making acquisitions of businesses which are profitable or will enhance the profits of our existing businesses; • Growing these businesses organically as well as by acquisition; • All our businesses must be cash generating and in growing markets; • Our businesses sell important information primarily direct to end users, thus ensuring we receive the full sales proceeds; and • During the early years, Huveaux does not intend to take on significant borrowings until it has reached a more mature stage. Our group provides a wide range of 'must have' information which is provided direct, comprising print publishing, electronic publishing, internet subscription, magazines, newsletters, video production, courses and seminars. • Outlook I am looking forward to a year of further significant growth in 2004, which will see the first full year of contribution for 3 of our 4 businesses, and I am confident that all these are well positioned to achieve their objectives. We have a strong balance sheet with no borrowings and £3.7 million in cash at the year end. Education and training continues to be a high government priority and our businesses are well positioned to take advantage of future growth opportunities. The demand for information in our political businesses is likely to be particularly strong in 2004 with the accession of 10 new countries to the EU on 1 May 2004 followed by the European Parliamentary Elections in June. Furthermore, the next General Election in the UK is drawing closer and is currently anticipated to be in 2005. All these factors are likely to boost significant growth in demand for political information. We will also continue with our program of acquisitions. Since the year end, we have acquired the Public Affairs Newsletter and are currently actively negotiating a further substantial acquisition. John P de Blocq van Kuffeler Chairman 5 March 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2003 Note 2003 2002 £ 000s £ 000s Turnover Continuing operations 2 1,474 1,055 Acquisitions 2 3,101 - -------- --------- 4,575 1,055 Cost of sales (1,497) (495) -------- --------- Gross profit 3,078 560 Administrative expenses (1,969) (275) -------- --------- Operating profit Continuing operations 2 167 285 Acquisitions 2 942 - -------- --------- 1,109 285 Other interest receivable 99 83 Other interest payable (3) - -------- --------- Profit on ordinary activities before 1,205 368 taxation Tax on profit on ordinary activities 3 (250) (67) -------- --------- Profit for the financial year 955 301 Dividends on equity shares (629) (155) -------- --------- Retained profit for the year transferred to 326 146 reserves ======== ========= Earnings per share - basic and diluted 4 2.01 p 2.05 p The accompanying notes are an integral part of this consolidated profit and loss account. CONSOLIDATED BALANCE SHEET As at 31 December 2003 Note 2003 2002 £ 000s £ 000s Fixed assets Intangible assets 19,451 4,950 Tangible assets 515 68 -------- --------- 19,966 5,018 -------- --------- Current assets Stocks 841 89 Debtors 1,153 439 Cash at bank and in hand 3,710 1,361 -------- --------- 5,704 1,889 Creditors: Amounts falling due within one year (2,901) (812) -------- --------- Net current assets 2,803 1,077 -------- --------- Total assets less current liabilities 22,769 6,095 Creditors: Amounts falling due after more than (1,162) - one year Provision for liabilities and charges (22) - -------- --------- Net assets 21,585 6,095 ======== ========= Capital and reserves Called-up equity share capital issued 6 7,146 2,066 Called-up equity share capital not issued 6 400 - Share premium account 13,157 3,883 Merger reserve 409 - Profit and loss account 473 146 -------- --------- Equity shareholders' funds 21,585 6,095 ======== ========= The accompanying notes are an integral part of this consolidated balance sheet. These financial statements were approved by the board of directors and signed on its behalf by: John P de Blocq van Kuffeler David B Horne Chairman Finance Director 5 March 2004 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2003 Note 2003 2002 £ 000s £ 000s Cash inflow/(outflow) from operating 7 158 (180) activities Returns on investments and servicing of finance Interest received 99 83 Interest paid (3) - -------- -------- Net cash inflow from returns on investment and 96 83 servicing of finance Taxation - (27) Capital expenditure Purchase of tangible fixed assets (231) (47) Purchase of intangible fixed assets (9) - -------- -------- Net cash outflow from capital expenditure (240) (47) Acquisitions Purchase of subsidiary undertakings 5 (12,866) (4,021) Cash acquired on acquisition of subsidiaries 5 352 95 -------- -------- Net cash outflow from acquisitions (12,514) (3,926) Equity dividends paid (155) - -------- -------- Cash outflow before financing (12,655) (4,097) -------- -------- Financing Short-term bank funding received 1,380 - Short-term bank funding paid (1,380) - Issue of ordinary share capital 15,573 3,000 Expenses paid in connection with share issue (809) (354) -------- -------- Cash inflow from financing 14,764 2,646 -------- -------- Increase/(decrease) in cash for the year 8 2,109 (1,451) ======== ======== Notes to the preliminary announcement 31 December 2003 Note 1. Accounting policies The financial statements have been prepared on the basis of the accounting policies set out on pages 14 and 15 of the Huveaux PLC Annual Report for 2002, which have been consistently applied, except that the Group now capitalises internal editorial and production costs to stocks and work in progress, defers marketing expenditure that is directly attributable to deferred revenue, and discounts the reversals of timing differences for calculating deferred tax. The impact of these changes for the year ended 31 December 2002 and net assets at that date is not material. 2. Segmental information All amounts shown relate to one business segment, that of publishing. Continuing Operations Acquisitions Total 2003 2003 2003 2002 £ 000s £ 000s £ 000s £ 000s Group turnover by geographical area United Kingdom 1,474 2,586 4,060 1,055 Continental Europe - 515 515 - --------- ---------- -------- -------- 1,474 3,101 4,575 1,055 ========= ========== ======== ======== Operating profit by geographical area United Kingdom 167 722 889 285 Continental Europe - 220 220 - --------- ---------- -------- -------- 167 942 1,109 285 ========= ========== ======== ======== Net assets by geographical area United Kingdom 20,706 753 21,459 6,095 Continental Europe - 126 126 - --------- ---------- -------- -------- 20,706 879 21,585 6,095 ========= ========== ======== ======== Turnover by geographic destination is not materially different from turnover by geographic origin. Head office operating costs of £378,000 have been allocated to operating profits above, pro rata to operating profit before allocation. 3. Taxation 2003 2002 £ 000s £ 000s UK corporation tax Current tax on income for the period 46 7 Foreign tax Current tax on income for the period - - --------- --------- Total current tax 46 7 Deferred tax Origination and reversal of timing differences 275 60 Impact of discounting (71) - --------- --------- Total deferred tax 204 60 --------- --------- Tax on profit on ordinary activities 250 67 ========= ========= 4. Earnings per Share 2003 2002 £ 000s £ 000s Profit attributable to shareholders 955 301 ========= ========= 2003 2002 Shares Shares Weighted average number of shares In issue during the year - used in basic and 47,473,307 14,704,126 diluted earnings per share ========= ========= Earnings per share - basic and diluted (pence) 2.01 2.05 The impact of shares not yet issued in conjunction with the Lonsdale acquisition as explained under note 5 has been excluded because no shares would be issuable if the end of the reporting period was the end of the contingency period. 5. Acquisitions Each of the following acquisitions has been accounted for by the acquisition method. An analysis of the provisional book value and fair value of the net assets acquired on each is set out below. Publishing rights have, for each acquisition, been valued to reflect their estimated fair values, and each publication can be separately identified and valued. a) Lonsdale SRG On 31 March 2003 the group acquired the assets and trade of Lonsdale SRG, a partnership, excluding the cash, trade debtors and creditors of the business. The following table sets out the provisional book values of the identifiable assets and liabilities acquired and their provisional fair value to the group: Fair value Book value adjustment Fair value £ 000s £ 000s £ 000s Publishing rights - 6,415 6,415 Tangible fixed assets 208 - 208 Stock 293 - 293 --------- --------- --------- Net assets acquired 501 6,415 6,916 ========= ========= Goodwill - --------- Total consideration 6,916 ========= Satisfied by: Cash paid 4,896 Contingent consideration - payable in cash 1,400 Contingent consideration - payable in shares 400 Acquisition costs 220 --------- 6,916 ========= The Lonsdale SRG acquisition involves an arrangement whereby the consideration payable includes a deferred element that is contingent on the total turnover of, and the number of profitable new titles launched by Lonsdale SRG in the two-year period from 1 January 2003 to 31 December 2004. The provision for contingent consideration for Lonsdale SRG represents the expected future consideration payable. The contingent consideration is payable in cash of £1.4 million and the allotment of shares of £0.4 million, which is included within shares to be issued (note 6). The conditions to be satisfied are: 1. £1 million if the number of profitable future titles launched by 31 December 2004 is 10 or more, reducing by £100,000 per title to the extent the number of profitable future titles is less than 10. 2. £800,000 payable half in cash and half by way of the issue of the deferred consideration shares credited as fully paid up at 35 pence per share, reducing pound for pound to the extent that the aggregate audited turnover for the years ended 31 December 2003 and 2004 is less than £5 million, but so that no such additional amount will be payable if the aggregate audited turnover for the period is less than £4,400,000. Deferred consideration of £300,000 has been recorded under other creditors and has been paid subsequent to the balance sheet date. The balance of deferred cash consideration is shown under creditors payable after more than one year. The summarised profit and loss account for Lonsdale SRG for the year ended 31 July 2002 is given below. No results are given for the period from 1 August 2002 to 31 March 2003, as Lonsdale SRG was a partnership and therefore under no obligation to disclose its results publicly. The results for the year ended 31 July 2002 are publicly available, as they were disclosed in the acquisition and listing documents. (unaudited) Year ended 31 July 2002 £ 000s Turnover 2,223 ----------- Operating profit 838 ----------- Profit before taxation 839 Taxation (222) ----------- Profit for the year 617 =========== b) Publications Professionnelles Parlementaires SAS ('PPP') On 15 September 2003 the group acquired the entire share capital of PPP, publishers of Le Trombinoscope. The transaction was denominated in Euros and has been converted to Sterling at the rate on the date of acquisition. The following table sets out the provisional book values of the identifiable assets and liabilities acquired and their provisional fair value to the group: Fair value Book value Adjustments Fair value £ 000s £ 000s £ 000s Publishing rights 290 1,507 1,797 Tangible fixed assets 13 - 13 Stock 11 - 11 Debtors 271 - 271 Deferred tax - 100 100 Cash at bank and in hand 71 - 71 Creditors (688) - (688) ----------- ---------- --------- Net assets acquired (32) 1,607 1,575 =========== ========== Goodwill - --------- Total consideration 1,575 ========= Satisfied by: Cash paid 1,380 Acquisition costs 195 --------- 1,575 ========= The summarised profit and loss account for PPP for the year ended 31 December 2002 and the period from 1 January to 31 August 2003 is given below. (unaudited) (unaudited) Period ended Year ended 31 August 31 December 2003 2002 £ 000s £ 000s Turnover 262 1,113 ---------- ----------- Operating (loss)/profit (300) 206 ---------- ----------- (Loss)/profit before taxation (343) 153 Taxation 123 (55) ---------- ----------- (Loss)/profit after tax (220) 98 ========== =========== As part of the transaction to acquire PPP, the company provided an unconditional guarantee amounting to £210,000 to the vendor in respect of amounts payable by PPP to the vendor. The guarantee lapsed on 31 January 2004, without claim. c) Fenman Limited and Covelstone Publishing Limited On 1 October 2003 the group took effective control of Fenman Limited and Covelstone Publishing Limited. The following table sets out the provisional book values of the identifiable assets and liabilities acquired and their provisional fair value to the group: Fair value Book value Adjustments Fair value £ 000s £ 000s £ 000s Publishing rights - 6,280 6,280 Tangible fixed assets 69 (26) 43 Stock 386 (44) 342 Debtors 311 (26) 285 Deferred tax - 4 4 Cash at bank and in hand 281 - 281 Creditors (1,116) 56 (1,060) ----------- ----------- ---------- Net assets acquired (69) 6,244 6,175 =========== =========== Goodwill - ---------- Total consideration 6,175 ========== Satisfied by: Cash paid 6,000 Acquisition costs 175 ---------- 6,175 ========== The summarised consolidated profit and loss account for the Fenman group of companies for the year ended 31 July 2003 and the period from 1 August to 30 September 2003 is given below. (unaudited) Period ended Year ended 30 September 2003 31 July 2003 £ 000s £ 000s Turnover 342 3,045 ------------- ----------- Operating (loss)/profit (188) 820 ------------- ----------- (Loss)/profit before taxation (188) 857 Taxation 56 (258) ------------- ----------- (Loss)/profit after tax (132) 599 ============= =========== d) Vacher Dod Publishing Limited An additional £9,000 of sundry costs has been attributed to the 2002 acquisition of Vacher Dod Publishing Limited. 6. Called-up share capital Company 2003 2002 £ 000s £ 000s Authorised: Equity : 120,000,000 (2002: 30,000,000) ordinary 12,000 3,000 shares of 10p each ======== ======== Allotted, called-up and fully paid: Equity: 71,464,730 (2002: 20,661,909) ordinary shares 7,146 2,066 of 10p each ======== ======== Equity shares to be issued Equity: 1,142,857 (2002: nil) ordinary shares of 10p 400 - each, to be issued at 35p ======== ======== During the year the company issued 50,802,821 ordinary shares of 10p each for consideration of £5,080,000 and share premium of £9,683,000 net of expenses. Shares to be issued of £400,000 relates to the settlement of contingent consideration in relation to the acquisition of Lonsdale SRG as explained under note 5. 7. Reconciliation of operating profit to cash inflow/(outflow) from operating activities 2003 2002 £ 000s £ 000s Operating profit 1,109 285 Depreciation and amortisation 45 10 Increase in stocks (106) (75) Increase in debtors (258) (132) Decrease in creditors (632) (268) --------- --------- Net cash inflow/(outflow) from operating activities 158 (180) ========= ========= 8. Analysis and reconciliation of net funds Cash at bank Short-term and in hand Loan Total net funds £ 000s £ 000s £ 000s As at 1 January 2003 1,361 - 1,361 Cash flow during the year 2,349 (240) 2,109 --------- ---------- ----------- As at 31 December 2003 3,710 (240) 3,470 ========= ========== =========== The cash flow and ending balance of cash includes amounts in respect of restricted cash of £1,000,000, which is held to guarantee deferred consideration guarantees in respect of the Lonsdale SRG acquisition. 9. Post balance sheet events On 5 March 2004 the company announced the acquisition of Public Affairs Newsletter for £750,000 cash, payable upon completion. 10. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2003 or 2002 but is derived from those accounts. Statutory accounts for 2002 have been delivered to the registrar of companies, and those for 2003 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. This information is provided by RNS The company news service from the London Stock Exchange

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