Interim Results
Huveaux PLC
26 July 2006
26 July 2006
HUVEAUX PLC
Interim Results for the six months ended 30 June 2006
and
acquisition of Political Wizard
Highlights
• Turnover up 122% to £20.1 million
• Pre-tax profit up 133% to £1.3 million
• EBITDA margin up from 7.8% to 8.9% at £1.8 million
• Normalised EPS doubled to 0.68 pence*
• Excellent performance from the JBB Sante and Epic acquisitions
• Key strategic steps delivered ahead of schedule
• Acquisition of Political Wizard, a leading online political monitoring
business, for £4.88 million in cash
• Outlook for continued strong progress in the second half of 2006
Summary of Results Six months to Six months to
30 June 2006 30 June 2005
£'000 Unaudited Unaudited
and Restated**
Turnover 20,075 9,046
Profit before tax 1,296 557
EBITDA*** 1,780 707
Normalised earnings per share (basic)* 0.68p. 0.34p.
Earnings per share (basic) 0.62p. 0.34p.
* Stated before amortisation of goodwill of £84,000 (2005 nil).
** Restated for change in accounting policy in accordance with the introduction
of FRS 20: 'Share-based Payment.' The charge for the six months to 30 June 2005
was £78,000.
*** EBITDA is calculated as operating profit before amortisation, depreciation
and exceptional items.
John van Kuffeler, Executive Chairman of Huveaux, commented:
'Strong growth in revenue and profits has been driven principally by the
acquisition of Epic and JBB Sante in 2005. Following their successful
integration, we have been able to deliver all our strategic steps for 2006 ahead
of schedule. The first half also reflects a solid performance in our other
businesses.
The acquisition of Political Wizard will further strengthen our position in the
strategically important area of online political monitoring, which is a growing
and lucrative market in both the UK and EU. This will provide an enhanced
platform from which we can continue to build a substantial business, as part of
our highly successful Political Division, both in the UK and internationally.
The outlook for Huveaux in the second half of 2006 remains positive and we are
well placed to deliver continued strong progress for the full year. The Board
expects the acquisition of Political Wizard to enhance Huveaux's earnings in the
first full financial year of ownership.'
For further information, please contact:
Huveaux
John van Kuffeler, Executive Chairman 020 7245 0270
Gerry Murray, Chief Executive Officer
Dan O'Brien, Group Finance Director
Finsbury
Katie Lang 020 7251 3801
Don Hunter
A presentation for analysts will be held at 9.30am today at the offices of
Dresdner Kleinwort, 30 Gresham Street, London EC2V 7PG. Coffee will be available
from 9.15am.
Note to Editors:
Huveaux was formed in 2001 with the objective of building a substantial,
high-quality publishing and media group. It is now twenty fold the size when it
first listed on AIM.
The Group consists of three Divisions each of which has strong brands and market
leading positions:
Political Division comprises Dod's Parliamentary Companion, The House Magazine,
Epolitix.com and numerous other magazine titles and revenue-generating websites.
It is the market leader in Political business-to-business publishing in the UK
and the EU.
Learning Division comprises Epic, the UK market leader in e-learning, The
Training Journal magazine and seminar business, Lonsdale Revision Guides for
schools and the highly acclaimed Westminster Explained conferences and seminars.
Healthcare Division, based in France, comprises Panorama du Medecin, a leading
weekly magazine for French doctors, Le Concours Medical and La Revue du
Praticien, both market leading Continuing Medical Education magazines, Egora.fr,
the leading medical information website, and a number of other magazines and a
medical conference business.
Huveaux has now completed ten successful acquisitions over the past four years
and employs more than 450 staff in London, Paris, Brussels and four UK regional
offices.
Further information about Huveaux can be found at www.huveauxplc.com
The name Huveaux is a trademark of Huveaux PLC. All other trademarks mentioned
herein are the property of Huveaux's respective subsidiary companies. All rights
reserved.
OPERATING AND FINANCIAL REVIEW
Group Performance
The first half of 2006 saw substantial growth in sales, profits and earnings per
share driven principally by contributions from Epic and JBB Sante which were
acquired in August and October 2005 respectively. The integration of these
companies is now complete and is helping to drive significant strategic progress
across the Group.
In March, we confirmed our strategic objectives and identified the areas of
further investment in each of our three Divisions. Excellent progress has been
made and many of the new launches planned for 2006 are now largely complete. In
many cases, these launches have combined Huveaux generated content with
Epic-generated digital delivery to further increase the Group's digital
footprint and revenues.
Sales increased to £20.1 million from £9.0 million in 2005 and EBITDA increased
from £0.7 million to £1.8 million. Normalised earnings per share doubled to 0.68
pence from 0.34 pence.
Operating Review
• Political Division
The Political Division maintained the significant performance improvement
achieved during the 2005 General Election period, with like-for-like revenue
unchanged at £4.1 million. The first half was also marked by a record number of
successful new launches including:
- Dod's Polling
A quarterly poll of MPs to enable organisations to gauge the perceptions and
opinions of parliamentarians on key issues
- EU Political Monitoring
A vital new service for organisations affected by the European Union providing
monitoring of all EU institutions on legislation and policy
- The Parliament Regional Review
Reflecting the work of the influential Committee of the Regions, this new
quarterly magazine provides an authoritative forum to examine the impact of EU
investment in the regions
- Vacher's Parliamentary Profiles
A new publication that provides an impartial, authoritative and detailed profile
on every Member of Parliament within the United Kingdom
- Dod's Westminster Contacts
A pocket book with over 1,500 contacts within Westminster providing essential
political contact information
- Who's Who in Public Affairs
The first single work of reference available for organisations profiling all key
people that work in the public affairs departments across the UK
These new products and the continued progress of our existing titles provide a
good foundation for revenue and profit growth across the Division in the second
half.
In addition, development work continues on our Civil Service portal due for
launch at the year-end.
• Learning Division
The Learning Division had an excellent first half performance with revenues
doubling to £7.8 million, driven principally by the contribution from Epic.
Epic enjoyed an encouraging flow of new business from both existing and new
customers. Its performance also included the following notable contract wins:
- the first £1.0 million plus new contract in Epic's history from a blue
chip financial services company;
- a Government department contract to project manage and deliver its
overall learning needs. This contract marks success in our targeted entry into
the higher value managed learning services arena;
- the establishment of Epic Professional, a new operating unit aimed at
providing a range of off-the-shelf e-learning products. Initially, these will
focus on the fast-moving and increasingly demanding compliance and regulatory
markets and build on Huveaux-owned intellectual property, skills and content.
Epic Professional has recently launched products in Absenteeism and Ageism as
well as a modular Leadership programme; and
- an e-learning contract from a French Healthcare Agency won following a
joint bid proposal from Huveaux France and Epic. This is the first major success
arising from the close working relationship which has been forged between these
two Group businesses in order to deliver bespoke e-learning healthcare products
and take advantage of opportunities in the broader local market of Continuing
Medical Education (CME).
These demonstrate our progress in expanding Epic's product and service offerings
beyond its original bespoke e-learning business model and into higher quality
earnings streams.
From September, the new National Science curriculum in schools will be
introduced in England, Wales and Northern Ireland. Consequently, Lonsdale had a
quiet first half successfully selling all its old curriculum products prior to
the launch of its 35 new titles across the summer. We expect the launch of these
new titles to drive significant growth in revenue and profits during the second
half. We have developed a prototype online testing system at Lonsdale using Epic
technology and expertise which is presently undergoing customer trials.
At Fenman, we have continued to maintain our profit levels and grow the Training
Journal and professional training events side of the business. This has been
achieved while reducing our reliance on the sale of videos and converting
content into an e-learning format.
• Healthcare Division
The Healthcare Division's sales amounted to £8.2 million, compared to £0.8
million in the first half of last year. This was driven by the acquisition of
JBB Sante which is now trading as Huveaux France as part the Healthcare
Division. Several strategic milestones have been achieved in the first half of
2006 that position the business well for the second half and beyond:
- Panorama du Medecin has been successfully relaunched and its market share
has increased from 14% to 16%;
- Le Concours Medical has been relaunched as a fortnightly magazine with a
new editorial proposition;
- details of CME legislation was published in June, requiring doctors and
other healthcare professionals to keep abreast of new developments by
subscribing to medical journals and undertaking regular training, were published
in June. All our magazines have been provisionally allocated CME points by the
French Ministry of Health. When confirmed, we will hold the highest annual
point-scoring portfolio of CME-accredited magazines in the French medical
publishing sector;
- we have designed a new bespoke CME product for the treatment of
alcoholism which is the first of its kind to be approved by the French Ministry
of Health; and
- the Healthcare Division and Epic have successfully negotiated an
e-learning project with the French National Institute of Cancer Research.
These achievements demonstrate that our strategic objectives have been delivered
well ahead of schedule and that we are in an exceptionally strong market
position.
We anticipate continued strong performance in the second half of 2006 with the
benefit of CME sales contributing to growth during 2007.
Financial Review
Net debt amounted to £9.3 million at 30 June 2006. During the first half, we
settled £0.9 million of restructuring costs relating to previous acquisitions
and paid £1.5 million in satisfaction of the 2005 final dividend. Proforma net
debt will now increase to £14.7 million following the financing of the Political
Wizard acquisition announced today. This still represents a modest level of
gearing, a proforma net debt to EBITDA of 2.5 times, and a strong position from
which to finance any future requirements.
In line with the introduction of FRS 20: 'Share-based Payment', the Company has
changed its accounting policy to recognise the cost of share option awards to
employees. The amount recognised in the profit and loss account for the first
half of 2006 is £117,000 (2005: £78,000).
The Company is currently undertaking an initial review of the impact of adopting
IFRS which it is required to adopt in line with all AIM-listed companies for the
financial year commencing 1 January 2007. A further update will be provided in
the Company's results for the year ended 31 December 2006.
Outlook
The second half of each financial year is an important period for the business
given the start of both the academic and parliamentary years in September and
October respectively. The coming second half will be particularly important due
to the 35 new titles being launched by Lonsdale in the summer to cover the
introduction of the new National Science curriculum in schools this September.
We have made excellent progress on our strategic and operational goals during
the first half leaving us well placed for strong progress in the second half of
2006.
The position of the Group will be further enhanced by the acquisition of
Political Wizard which was announced today. The Board expects this acquisition
to enhance Huveaux's earnings in the first full financial year of ownership.
Acquisitions remain an important part of Huveaux's growth strategy and we are
currently in negotiations for a further complementary acquisition.
HUVEAUX PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six For the six For the
months months year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
as restated* as restated*
Unaudited Unaudited Audited
Note £ 000s £ 000s £ 000s
Turnover 3 20,075 9,046 27,736
Cost of sales (12,443) (5,370) (15,646)
Gross profit 7,632 3,676 12,090
Administrative expenses (6,100) (3,123) (7,943)
Amortisation of goodwill (84) - (56)
Exceptional items - - (1,903)
Total operating expenses (6,184) (3,123) (9,902)
Total operating profit 3 1,448 553 2,188
Other interest receivable and similar income 46 27 111
Interest payable and similar charges (198) (23) (105)
Exceptional items - - (231)
Interest payable and similar charges (198) (23) (336)
Profit on ordinary activities before taxation 1,296 557 1,963
Tax on profit on ordinary activities 4 (434) (191) (427)
Profit for the financial period 862 366 1,536
*see notes 1 and 10
Earnings per share - basic 5 0.62 p 0.34 p 1.31 p
Earnings per share - diluted 5 0.61 p 0.34 p 1.30 p
Adjusted basic earnings per share before
exceptional items and goodwill amortisation 5 0.68 p 0.34 p 2.62 p
HUVEAUX PLC
CONSOLIDATED BALANCE SHEET
As at As at As at
30 June 30 June 31 December
2006 2005 2005
as restated* as restated*
Unaudited Unaudited Audited
Note £ 000s £ 000s £ 000s
Fixed assets
Intangible assets 6 50,999 38,046 51,083
Tangible assets 1,302 836 1,000
52,301 38,882 52,083
Current assets
Stocks 1,941 1,287 2,150
Debtors 12,025 6,317 12,672
Cash at bank and in hand 1,033 625 2,678
14,999 8,229 17,500
Creditors: Amounts falling due within one year (13,907) (7,565) (13,919)
Net current assets 1,092 664 3,581
Total assets less current liabilities 53,393 39,546 55,664
Creditors: Amounts falling due after more
than one year (9,328) - (10,065)
Provision for liabilities and charges (615) - (1,552)
Net assets 43,450 39,546 44,047
Capital and reserves
Called-up equity share capital issued 14,017 10,761 14,017
Share premium account 26,795 26,726 26,795
Merger reserve 409 409 409
Profit and loss account 1,883 1,516 2,597
Share-based payments reserve 346 134 229
Equity shareholders' funds 7 43,450 39,546 44,047
*see notes 1 and 10
HUVEAUX PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six For the six For the
months months year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
as restated* as restated*
Unaudited Unaudited Audited
Note £ 000s £ 000s £ 000s
Reconciliation of operating profit to net cash
flow from operating activities
Operating profit 1,448 553 2,188
Depreciation charges 248 154 400
Share-based payments charges 117 78 173
Amortisation charges 84 - 56
Cash flow relating to restructuring (937) - (1,349)
provisions
Decrease in stocks 209 25 409
Decrease/(increase) in debtors 647 (1,741) (2,977)
(Decrease)/increase in creditors (1,127) 1,284 2,273
Net cash inflow from operating activities 689 353 1,173
Cash flow statement
Cash flow from operating activities 689 353 1,173
Returns on investments and servicing of
finance 8 (152) 4 (225)
Taxation - - (385)
Capital expenditure and financial
investment 8 (623) (193) (359)
Acquisitions and disposals 8 - (1,571) (9,849)
Equity dividends paid (1,542) (1,076) (1,076)
Cash outflow before financing (1,628) (2,483) (10,721)
Financing 8 - (3) 10,389
Decrease in cash in the period 9 (1,628) (2,486) (332)
*see notes 1 and 10
HUVEAUX PLC
Notes to the Accounts
30 June 2006
1 These accounts comply with relevant accounting standards and have been
prepared on a consistent basis using the accounting policies set out in the
Annual Report 2005, as amended by the introduction of FRS 20 Share-based
Payment, the effect of which is set out in note 10.
2 The financial information included in this document does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. The accounts for the year ended 31 December 2005, which have been
filed with the Registrar of Companies, received an unqualified audit report
and did not contain a statement under section 237(2) or (3) of the Companies
Act 1985. The financial information contained herein in respect of the six
month periods to 30 June 2006 and to 30 June 2005 is unaudited.
3 Segmental information
The tables below set out information on each of the Group's industry segments
and geographic areas of operation.
Period ended Period ended Year ended
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Group turnover by geographical destination
Political
United Kingdom 3,412 3,269 8,214
Continental Europe and rest of the world 700 1,108 1,507
4,112 4,377 9,721
Learning
United Kingdom 7,608 3,791 10,880
Continental Europe and rest of the world 192 121 344
7,800 3,912 11,224
Healthcare
United Kingdom - - -
Continental Europe and rest of the world 8,163 757 6,791
8,163 757 6,791
20,075 9,046 27,736
3 Segmental information (continued)
Period ended Period ended Year ended
30 June 30 June 31 December
2006 2005 2005
*as restated *as restated
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Total operating profit/(loss)
Political
United Kingdom 233 381 1,190
Continental Europe and rest of the world 91 129 237
324 510 1,427
Learning
United Kingdom 1,207 758 2,109
Continental Europe and rest of the world 29 24 29
1,236 782 2,138
Healthcare
United Kingdom - - -
Continental Europe and rest of the world 1,024 (70) 277
1,024 (70) 277
Head Office
United Kingdom (1,136) (669) (1,654)
Continental Europe and rest of the world - - -
(1,136) (669) (1,654)
1,448 553 2,188
Head office costs include amortisation of goodwill totalling £84,000
(period ended 30 June 2005: £nil; year ended 31 December 2005: £56,000) and
charges for share-based payments totalling £117,000 (period ended 30 June
2005: £78,000; year ended 31 December 2005: £173,000).
3 Segmental information (continued)
As at As at As at
30 June 30 June 31 December
2006 2005 2005
*as restated *as restated
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Net assets/(liabilities)
Political
United Kingdom 23,474 23,890 23,337
Continental Europe and rest of the world - - -
23,474 23,890 23,337
Learning
United Kingdom 17,791 13,284 17,764
Continental Europe and rest of the world - - -
17,791 13,284 17,764
Healthcare
United Kingdom - - -
Continental Europe and rest of the world 1,739 2,636 1,945
1,739 2,636 1,945
Head Office
United Kingdom 446 (264) 1,001
Continental Europe and rest of the world - - -
446 (264) 1,001
43,450 39,546 44,047
*see notes 1 and 10
4 Taxation
The taxation charge for the six months ended 30 June 2006 is based on the
expected annual tax rate.
5 Earnings per Share
Period ended Period ended Year ended
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Profit attributable to shareholders 862 366 1,536
Add: exceptional items - - 2,134
Add: amortisation of goodwill 84 - 56
Less: tax in respect of exceptional - - (640)
items
Adjusted profit attributable to 946 366 3,086
shareholders
2006 2005 2005
Shares Shares Shares
Weighted average number of shares
In issue during the year - basic 140,170,496 107,108,770 117,677,253
Dilutive potential ordinary shares 513,854 21,761 421,610
Diluted 140,684,350 107,130,531 118,098,863
Earnings per share - basic (pence) 0.62 0.34 1.31
Earnings per share - diluted (pence) 0.61 0.34 1.30
Adjusted earnings per share before exceptional
items and amortisation of goodwill - 0.68 0.34 2.62
basic (pence)
6 Intangible fixed assets
Period Period Year
ended ended ended
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Cost & Net book value
Opening balance 51,083 38,046 38,046
Additions - - 29
Additions through acquisition - - 13,064
Amortisation charged in year (84) - (56)
Closing balance 50,999 38,046 51,083
7 Reconciliation of movements in equity shareholders' funds
Total equity
shareholders'
funds
Unaudited
£ 000s
Profit for the period 862
Payment of 2005 dividend (1,542)
Share-based payments charges 117
Currency translation differences on foreign currency net investments (34)
Net decrease in shareholders' funds (597)
Equity shareholders' funds at 31 December 2005 (as restated - see note 10) 44,047
Equity shareholders' funds at 30 June 2006 43,450
8 Analysis of cash flows
Period ended Period ended Year ended
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Returns on investment and servicing of finance
Interest and similar income received 46 27 111
Interest and similar expenses paid (198) (23) (336)
(152) 4 (225)
Capital expenditure and financial investment
Purchase of tangible fixed assets (623) (193) (358)
Purchase of intangible fixed assets - - (1)
(623) (193) (359)
Acquisitions and disposals
Purchase of subsidiary undertakings and assets - - (18,224)
Lonsdale deferred consideration paid - (1,100) (1,100)
PCL deferred consideration paid - (471) (471)
Cash acquired on acquisition of subsidiary - - 9,946
- (1,571) (9,849)
Financing
Debt due within one year:
Increase in short-term borrowing - - 9,016
Repayment of secured loan - - (8,500)
Debt due after more than one year:
New secured loan repayable from 2007 to 2012 - - 9,807
Expenses recouped in connection with share issue - (3) 66
- (3) 10,389
9 Analysis of net debt
Period ended Period ended Year ended
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
£ 000s £ 000s £ 000s
Cash at bank and in hand
Opening balance 2,678 3,120 3,120
Cash flow during the period (1,628) (2,486) (332)
Exchange movement (17) (9) (110)
Closing balance 1,033 625 2,678
Debt due within one year
Opening balance (516) - -
Cash flow during the period - - (516)
Exchange movement (2) - -
Reclassification of debt (518) - -
Closing balance (1,036) - (516)
Debt due after one year
Opening balance (9,807) - -
Cash flow during the period - - (9,807)
Exchange movement (39) - -
Reclassification of debt 518 - -
Closing balance (9,328) - (9,807)
Net (debt)/funds (9,331) 625 (7,645)
10 Adoption of FRS 20 Share-based Payment
FRS 20 Share-based Payment requires that the fair value of share awards
granted to employees is assessed at grant date and is charged to the profit
and loss account over the vesting period based on the expectation of the
number of shares which the Directors consider likely to vest, with a
corresponding increase in equity. The fair value of the options granted is
measured using an option pricing model, taking into account the terms and
conditions upon which the options were granted.
Deferred tax is recognised where it is likely that share relief will be
available on the difference between exercise price and market price at the
balance sheet date.
The amount recognised in profit before tax for the six month period ended
30 June 2006 is £117,000.
The effect of the adoption of FRS 20 on equity shareholders' funds and profit
after tax for the comparative periods is shown below.
Equity Equity
Shareholders' Shareholders'
funds funds
At 30 June At 31 December
2005 2005
£ 000s £ 000s
As previously stated 39,546 44,041
Deferred - 6
tax asset
As restated 39,546 44,047
Profit after Profit after
tax tax
Period ended Year ended
30 June 31 December
2005 2005
£ 000s £ 000s
As previously stated 445 1,703
Share-based payments charge (78) (173)
Movement on deferred tax asset (1) 6
As restated 366 1,536
11 Reconciliation between operating profit and non-statutory measure
The following tables reconcile operating profit as stated above to EBITDA, a
non-statutory measure which the Directors believe is the most appropriate
measure in assessing the performance of the Group.
EBITDA is defined by the Directors as being earnings before interest, tax,
depreciation, amortisation and exceptional items.
Period ended 30 June 2006
Political Learning Healthcare Head Office Total
£ 000s £ 000s £ 000s £ 000s £ 000s
Operating profit 324 1,236 1,024 (1,136) 1,448
Amortisation - - - 84 84
Depreciation 111 89 34 14 248
EBITDA 435 1,325 1,058 (1,038) 1,780
Included within Head Office costs are share-based payments charges of £117,000.
Year ended 31 December 2005
Political Learning Healthcare Head Office Total
£ 000s £ 000s £ 000s £ 000s £ 000s
Operating profit 1,427 2,138 277 (1,654) 2,188
Amortisation - - - 56 56
Depreciation 218 104 52 26 400
Exceptional items 155 373 1,152 223 1,903
EBITDA 1,800 2,615 1,481 (1,349) 4,547
Included within Head Office costs are share-based payments charges of £173,000.
Period ended 30 June 2005
Political Learning Healthcare Head Office Total
£ 000s £ 000s £ 000s £ 000s £ 000s
Operating profit 510 782 (70) (669) 553
Amortisation - - - - -
Depreciation 93 25 23 13 154
EBITDA 603 807 (47) (656) 707
Included within Head Office costs are share-based payments charges of £78,000.
This information is provided by RNS
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