Final Results
Wilmington Group Plc
16 September 2004
For Immediate Release Thursday 16th September 2004
WILMINGTON GROUP PLC
Preliminary Results
For the year ended 30th June 2004
Wilmington Group plc, the business information and training group, today
announces its preliminary results for the year to 30th June 2004.
Preliminary results highlights:
• Turnover of £82.7m (2003: £78.4m), an increase of 5%
• Adjusted profit* increased by 12% to £10.2m (2003: £9.1m)
• Profit before tax increased by 23% to £5.4m (2003: £4.4m)
• Adjusted earnings per share increased by 16% to 7.73p (2003: 6.65p)
• Cash flow of £12.0 million generated from operating activities
• Final dividend of 2.0p per share creating total dividend of 3.0p
an increase of 20% (2003: 2.5p)
* Adjusted profit is profit before tax, amortisation of goodwill and intangible
assets and exceptional items
Commenting on the interim results, Charles Brady, Chief Executive of Wilmington,
said:
'I am pleased to report that Wilmington Group plc has delivered an excellent
performance during the 12 months ended 30 June 2004.
'The decisive action taken by Wilmington's management team to streamline and
focus the business has successfully delivered profit growth, as well as creating
the capacity to deliver improved results during the current year and beyond.'
For further information, please call:
Charles Brady On the day: 020 7466 5000
Chief Executive, Wilmington Thereafter: 0121 355 0900
Suzanne Brocks Tel: 020 7466 5000
Buchanan Communications
Chairman's Statement
Results
I am pleased to announce the results for Wilmington Group plc for the year to
30th June 2004.
Turnover in the year to 30th June 2004 was £82.7m (2003: £78.4m), an increase of
5%. Profit before tax, amortisation of goodwill and intangible assets and
exceptional items increased by 12% to £10.2m (2003: £9.1m). Adjusted earnings
per share increased by 16% to 7.73p (2003: 6.65p). Cash flow of £12.0m was
generated from operating activities.
The Board is proposing a final dividend of 2.0p per share payable on 5th
November 2004 to shareholders on the register on 8th October 2004. Taken
together with the interim dividend of 1.0p per share, this will make a total
dividend for the year of 3.0p per share, an increase of 20% over the 2.5p paid
last year.
Market Focus
Wilmington remains committed to generating sustainable and growing profits from
servicing the information and training requirements of professional business
communities. Our strategy is to develop stronger positions in key market
sectors by focusing investment, both acquisitive and organic, on those market
sectors and to expand revenue streams by adding new products and delivery
channels. In order to accelerate growth, the management of the Group's
businesses has been restructured and is now organised by market sector. The
principal sectors are: Legal and Regulatory; Healthcare; Media and
Entertainment; Design and Construction; and Drinks and Catering. The results of
the Group's businesses are now being reported by market sector which will
provide a clearer view of their performance.
Overview of Results
The results for the year reflect the significant progress made in developing the
Group through improvements in the performance of existing businesses and by
acquisitions. They have been influenced by a number of trends in the
information marketplace. We have experienced increasing demand for information
delivered electronically. The growing demand for mandatory training has had a
positive impact on our courses and conferences and we have seen a number of
opportunities to expand our capability internationally which has been reflected
in a 12% increase in overseas sales. In contrast we have not experienced
significant improvement in magazine advertising revenues.
An analysis of the Group's performance by market sector is set out in the Chief
Executive's Operational Review from which the significance and continuing growth
of our Legal and Regulatory business is evident. Legal and Regulatory
contributed £39.1m to Group turnover (2003: £34.9m) and £9.6m to operating
profit before amortisation and allocation of central overheads (2003: £8.5m).
We have continued to create new revenue streams through organic initiatives.
These include the development of anti-money laundering and compliance training
programmes recently launched in collaboration with the British Bankers
Association and the development of an accreditation scheme for immigration
lawyers.
We have made a number of targeted acquisitions to improve our presence in key
markets, principally the acquisition of Agence de Presse Medicale ('APM') from
Reuters in December 2003. APM is based in Paris and provides on-line
information on the French healthcare industry. The performance of APM and other
acquisitions was strong and has exceeded expectations at the time of purchase.
In addition to restructuring the management of the Group along market sectors,
we continue to take action to improve efficiency and focus our activities. We
undertook a further rationalisation of our magazine portfolio through the
disposal of the Group's UK industrial magazines, giving rise to an exceptional
profit of £251,000. We also incurred exceptional costs of £250,000 in the year
which related to two transactions aborted at the due diligence stage.
Summary
As a result of the positive action taken over the last two years, we have
created a strong platform for future growth and are better placed to take
advantage of new opportunities in our key markets. The Group operates in a
number of established, high value sectors which provide both stability and
growth opportunities. The Group's businesses generate strong cash flows and we
have a robust balance sheet together with an experienced management team
committed to the profitable development of the Group.
We believe that the current marketplace offers us some exciting possibilities
and we remain confident that the Group will continue to move forward.
Finally, I would like to thank my fellow directors, senior managers and all of
the Group's employees for their hard work and commitment.
Bernard Jolles
Chairman
Chief Executive's Operational Review
Results
After my first year as Chief Executive, I reported my confidence in Wilmington's
ability to deliver annual profit growth. Therefore I am now pleased to report
that the Group has performed excellently during the year ended 30th June 2004.
Operating profit before exceptional items, interest, tax and amortisation rose
by 13.3% to £10.6 million (2003: £9.4 million). Adjusted earnings per share grew
by 16.2% from 6.65p to 7.73p in 2004.
The decisive action taken by Wilmington's management team to streamline and
focus the business has successfully delivered profit growth, as well as creating
the capacity to deliver improved results during the current year and beyond.
Strategy
Wilmington's strategy is to provide information and training to selected
professional business markets. In these markets our clients operate in an
intensely competitive environment with increasing levels of regulatory pressure.
Wilmington provides researched and accurate information in a variety of
formats to service their needs. This varies from professional magazines
providing news and updates to comprehensive databases provided either
electronically or in hard copy format. Wilmington also provides comprehensive
training and conference programmes and a range of educational and accreditation
schemes.
By understanding and working directly with our client base Wilmington is able to
provide essential support and information which frequently requires regular
updating, thereby resulting in long-term and continuing revenue sources.
Wilmington's strategy is to focus on those key market sectors where it has
critical mass and where there is a demonstrable need for information and
training. In many cases there are mandatory professional or regulatory
requirements for clients to use products of the type provided by Wilmington.
Review of Operations
Our strategy results from a major review of Wilmington's portfolio of businesses
initiated two years ago. The review clearly identified that certain Wilmington
businesses operated in major markets with good growth potential. They were
robust businesses, delivering outstanding profit margins, with the potential for
organic and acquisitive growth. In these markets Wilmington generally had a
range of complementary activities in a variety of formats including: magazines;
directories; information databases; exhibitions; training conferences and
seminars. Our intention is to focus on key markets where we have, or can
develop, businesses with these characteristics.
Existing market sectors which fulfill these objectives are as follows:
• Legal and Regulatory;
• Healthcare;
• Media and Entertainment;
• Design and Construction;
• Drinks and Catering
In previous years Wilmington was organised by delivery channel into three
divisions - Business Information; Media; and Professional Training. From this
year we will report and manage our business by the markets identified above. We
believe this will provide a better understanding of how we manage and perceive
the Group and create a better base for expansion.
The review also highlighted that parts of Wilmington's portfolio were in markets
the Group no longer intended to pursue, or did not have the profit and growth
characteristics that the Group sought. We have therefore disposed of, or
closed, a number of non-core activities. The most recent was the disposal of a
portfolio of seven magazines serving the UK industrial and manufacturing sector
in June 2004. This continues the process whereby in recent years Wilmington has
effectively managed a number of non-core activities with a view to exiting at an
appropriate time.
A second result of the review was to streamline Wilmington's management to
increase efficiency and to create a team capable of growth through organic
development combined with strategic bolt on acquisitions. This process is
continuing in the year ending 30 June 2005. The directors are determined to
take the action necessary to improve the quality of the business whilst
delivering consistent profit growth. We are succeeding in this objective.
During the year ended 30th June 2004 Wilmington completed a number of
acquisitions. The main acquisition was the purchase of Agence de Presse
Medicale ('APM') from Reuters in December 2003. APM is based in Paris and
provides on-line information on the French healthcare industry. Earlier, in
August 2003 the Group entered into arrangements whereby its Retail Entertainment
Data business merged with its principal competitor, Muze UK, to form a new
subsidiary, New Entertainment Data.
Wilmington has continued to seek other acquisitions which complement its
strategic goals and which provide the opportunity to increase shareholder value.
As part of this process exceptional costs of £250,000 were incurred in the
year relating to two transactions which were aborted at the due diligence stage.
This has been compensated for by the exceptional profits on the sale of our
industrial magazines.
To ensure progressive long-term profit growth Wilmington has looked to develop
additional revenues from its core businesses including the development of an
extensive range of electronic and Internet applications for our principal
markets. The result has been the creation of new and sustainable profit streams.
It is anticipated that e-revenues will continue to grow within the Group and in
some cases our businesses are largely based on e-delivery and the Internet. In
all of our businesses electronic delivery is an important part of product
development and margin improvement.
The period under review has also seen growth in our overseas revenues as we
expand our existing capability outside the UK in key markets. In particular
revenues have been enhanced by our acquisition of APM and the expansion of our
overseas education programmes on trust management, compliance and anti money
laundering.
I would now like to provide a more detailed overview of our businesses, each of
which is managed by an experienced team with a proven track record. Further
information about all our products and services is contained on our web site at
www.wilmington.co.uk.
Legal and Regulatory
Twelve months to Twelve months to
30th June 2004 30th June 2003
£'000 £'000
Turnover 39,087 34,940
Trading Profit* 9,622 8,537
Margin 24.6% 24.4%
*Trading profit is before unallocated central overheads, amortisation, interest,
exceptional items and tax
This is our largest sector accounting for 47% of Group turnover and contributing
81% of Group trading profit. Legal and Regulatory had a good year: turnover has
grown by 11.9% and trading profit increased by 12.7% during the year. The
combination of high quality 'must have' information together with a range of
focused, market leading products and events has produced a resilient, growing
business with good profit margins which have been increased to 24.6% in the year
ended 30th June 2004 (2003 24.4%)
Waterlow provides information in hard copy and electronic format for the Legal,
Accountancy, Surveying, Pensions, Finance and Charity markets. Many of its
products are market leading and are based on high-quality, proprietary
information. Waterlow has shown growth in sales and profits over a number of
years, most of which has been organic.
The business has a number of established subsidiary brands including Pendragon
which provides online information on the UK pensions industry, ICP which
provides financial analysis and information on overseas companies and Charity
Choice/Caritas which provide financial analysis and information on charities.
Waterlow has growing e-revenues much of which are based on annually renewable
contracts. Pendragon and ICP deliver all their information electronically.
Waterlow has also developed a number of key strategic partnerships with
professional institutions including the Law Society, CBI, Institute of Chartered
Accountants in England and Wales and The Royal Institution of Chartered
Surveyors. These long-term relationships, combined with Waterlow's proprietary
information and expertise in data management, have formed the basis of its
sustained revenue and long-term profits.
In November 2002 Waterlow acquired the Solicitors Journal, a weekly subscription
based magazine for the legal profession. In its first full year subscriptions
have increased and advertising revenue has doubled. In addition this publication
is a valuable marketing and cross selling resource for our training activities
and other Group products.
Our education and training activities reported good turnover and profit growth,
Central Law Training ('CLT') serves the legal and financial markets, being the
market leader in the provision of mandatory post qualification courses for UK
lawyers. It delivers more than 3,000 courses per year.
Our legal training business is founded on a strong subscription membership
scheme and excellent marketing capability. Furthermore CLT has developed strong
business partnerships with local Law Societies and professional associations.
CLT has grown strongly in Scotland producing record profits in the year under
review and has recently launched a new post-qualification training programme in
Ireland. In the period the Group was accredited by The Commission for Legal
Services and The Law Society as the sole provider of a mandatory accreditation
scheme for immigration and asylum advisers. From April 2005 all immigration and
asylum advisers wishing to receive legal aid must be accredited.
On an international basis we operate in 20 centres around the world and have
become the leading trainers in trust management, compliance and anti-money
laundering. These include an MBA in Wealth Management provided in conjunction
with Manchester Business School.
Bond Solon, the witness training company has had an excellent year with profits
up 66%. Since its acquisition in 2001 turnover has increased by 225% and profit
by 300%. This is a tribute to the management team at Bond Solon which has
accurately identified the need for proper preparation for witnesses giving
evidence to a court or tribunal. This growth is likely to continue as Bond
Solon has secured long-term contracts with major employers such as HM Customs &
Excise, Northern Ireland Fire Brigade and many NHS trusts.
Healthcare
Twelve months to Twelve months to
30th June 2004 30th June 2003
£'000 £'000
Turnover 8,833 6,730
Trading Profit* 1,246 886
Margin 14.1% 13.2%
*Trading profit is before unallocated central overheads, amortisation, interest,
exceptional items and tax
Healthcare accounts for 11% of Group turnover and 11% of Group trading profit.
This sector had a good year: turnover increased by 31% and trading profits by
41%. Healthcare is an area in which we will concentrate on expanding our
presence as it is a high value market where a combination of accelerating use of
technology and rapid changes in information requirements are creating many
opportunities.
Binleys was acquired in 2001 and has maintained revenue growth of 25% per annum.
Its foundation is contact data of individuals across the UK healthcare industry.
It has a high spending primary client base including the NHS and all the major
pharmaceutical companies. It is expecting to continue its expansion and is being
supported by investment at all levels, including capital expenditure of over
£2.5m on new premises to support its growth.
The division also includes Agence de Presse Medicale ('APM') which was acquired
from Reuters in December 2003. APM is based in Paris and provides on-line
information on the French healthcare industry. APM delivered an initial
contribution which exceeds original expectations. Profits from this sector are
expected to grow as a result of a full year's contribution from APM.
The Group also publishes a number of specialist magazines in this area and is
developing a seminar training programme with the Institute of Health Management.
There is close collaboration between the Group's healthcare and legal training
businesses, partly as a result of which Bond Solon currently acts for
approximately 150 NHS trusts.
Media and Entertainment
Twelve months to Twelve months to
30th June 2004 30th June 2003
£'000 £'000
Turnover 8,453 7,508
Trading Profit* 958 850
Margin 11.3% 11.3%
*Trading profit is before unallocated central overheads, amortisation, interest,
exceptional items and tax
Media and Entertainment, which accounts for 10% of Group turnover and 8% of
Group trading profit, had a good year in which turnover and trading profits
increased by 13%. The media industry is another fast changing, evolving market
where a combination of technological developments and high quality data create
new opportunities for Wilmington.
Media and Entertainment services the requirements of the media and entertainment
sector including TV, music, publishing and PR. It is the leading provider in the
UK of information on recorded music and video. It operates through a number of
leading brands including Hollis, Muze, Retail Entertainment Data, PCR, Abacus
and TMSS.
In August 2003 the Group entered into arrangements whereby its Retail
Entertainment Data business merged with its principal competitor, Muze UK, to
form a new subsidiary, New Entertainment Data. The costs of integration were
largely absorbed in the first half year and the anticipated level of
profitability was achieved in the second half. Profits from this business are
expected to grow as a result of a full year's contribution from New
Entertainment Data.
Design and Construction
Twelve months to Twelve months to
30th June 2004 30th June 2003
£'000 £'000
Turnover 11,282 12,742
Trading Profit/ (loss)* (165) 609
Margin -1.5% 4.8%
*Trading profit is before unallocated central overheads, ammortisaton, interest,
exceptional items and tax
Design and Construction accounted for 14% of Group turnover. This sector has
had a disappointing year: turnover declined by 11% and a trading profit of
£609,000 in 2003 became a loss of £165,000 in the year ended 30th June 2004.
Whilst we have a number of strong products, principally Modern Power Systems;
Timber Trade Journal; Tunnels and Tunnelling; FX and Blueprint, its dependence
on display advertising has resulted in a poor performance. This is partly due
to the overall economy but also to severe competitive pressures.
Design and Construction remains an important market place and therefore a major
restructuring is underway which includes further rationalisation of the property
and cost base together with the development of alternative revenue streams from
information sales and events. As a result we have budgeted for a number of
one-off costs associated with this in the year to 30th June 2005.
Drinks and Catering
Twelve months to Twelve months to
30th June 2004 30th June 2003
£'000 £'000
Turnover 9,035 8,756
Trading Profit* 303 458
Margin 3.4% 5.2%
*Trading profit is before unallocated central overheads, amortisation, interest,
exceptional items and tax
Drinks and Catering accounted for 11% of Group turnover and 3% of Group trading
profit. Results from this business have been severely impacted by the downturn
in magazine advertising. A sustained recovery in these revenues will clearly
have a significant impact on this business. Notwithstanding this, some of this
decline has been compensated by growth in event and information service revenue.
The successful development of event revenues includes the International Wine
Challenge, the world's largest blind wine tasting event, as well as leading
catering events serving the armed forces, prisons and cost sector catering
markets. We have also developed additional revenues from major research
contracts with leading food service providers and the development of
associations and affinity groups.
Other and Discontinued
The remainder of our turnover falls into a number of miscellaneous markets or
are revenues from discontinued businesses including the disposal of our
portfolio of industrial titles.
Summary
As a result of positive action undertaken by the management team Wilmington has
developed a number of resilient profitable businesses with a solid record of
performance. The majority of these businesses are cash generative with good
profit margins and substantial repeat revenues. Wilmington's strategy is to
build multi media businesses, with diverse revenue streams, in core markets.
This diversity creates a robust business model and allows a greater
understanding and insight into the dynamics of the markets we serve. Wilmington
has continually invested in technology, the costs of which are written off as
incurred, to extend its product range and profitability.
Wilmington's management has created an environment which encourages organic
growth, whilst at the same time targeting focused bolt on acquisitions which
complement our core activities. We have a robust business with a strong balance
sheet which will enable us to continue to grow a coherent and profitable
business.
In spite of demanding trading conditions, Wilmington has been successful in
identifying new opportunities. Advances in our information and training profits
have more than compensated for weakness in magazine advertising, which now
accounts for 23% of Group sales as compared to 35% three years ago.
Outlook
We are set to make further progress this financial year as a result of the
growing requirement for high quality information and training amongst the
professional business communities we serve. The current year has started in
line with our expectations and, as in the previous year, we expect that the
Group's performance will be weighted to the second half of the year.
The success of Wilmington has been founded on the entrepreneurial talents of
hard working people. Our strategy remains the continuation of a structure in
which managers are given an environment to grow their operations while being
highly motivated to succeed. I should like to thank our Chairman, my fellow
directors, our business managers and our many employees for all their
enthusiasm, hard work and support. Our people remain our greatest assets and
their efforts are appreciated.
The Directors' intention is to continue creating an exciting and focused
business of which shareholders and employees will be proud.
Charles J Brady
Chief Executive
Consolidated Profit and Loss Account
For the year ended 30th June 2004
Twelve Twelve
months months
Amortisation ended ended
Existing Discontinued Sub and 30th June 30th June
Operations Acquisitions Operations -Total Exceptionals 2004 2003
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
- continuing 78,487 1,555 - 80,042 - 80,042 74,210
operations
- discontinued - - 2,616 2,616 - 2,616 4,209
operations
1 and 2 78,487 1,555 2,616 82,658 - 82,658 78,419
Cost of Sales (26,525) (73) (875) (27,473) - (27,473) (26,348)
Gross profit 51,962 1,482 1,741 55,185 - 55,185 52,071
Operating expenses 3 (41,680) (980) (1,912) (44,572) (5,044) (49,616) (47,135)
Operating profit
- continuing 10,282 502 - 10,784 (5,044) 5,740 4,908
operations
- discontinued - - (171) (171) - (171) 28
operations
10,282 502 (171) 10,613 (5,044) 5,569 4,936
Non-operating 4 - - - - 251 251 (239)
exceptionals
Profit before interest 10,282 502 (171) 10,613 (4,793) 5,820 4,697
and taxation
Interest receivable and similar income 15 78
Interest payable and similar charges (423) (364)
Profit on ordinary activities before taxation 5,412 4,411
Taxation (2,695) (2,600)
Profit on ordinary activities after taxation 2,717 1,811
Minority interests (658) (715)
Profit for the financial period and attributable to shareholders 2,059 1,096
Dividend paid or proposed (2,501) (2,078)
Retained loss for the period (442) (982)
Earnings per ordinary share 6 2.47p 1.32p
Diluted earnings per ordinary share 6 2.46p 1.32p
Adjusted earnings per ordinary share 6 7.73p 6.65p
There are no recognised gains and losses for the year other than those shown in
the consolidated profit and loss account.
Balance Sheets
As at 30th June 2004
Group Company
30th June 30th June 30th June 30th June
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Fixed assets
Goodwill and intangible assets 64,453 62,444 - -
Tangible assets 11,665 9,749 1,883 2,008
Investments - - 48,552 48,052
76,118 72,193 50,435 50,060
Current assets
Stock and work in progress 1,874 2,053 - -
Debtors 17,802 16,320 30,460 25,461
Cash at bank and in hand 2,954 5,787 2,000 4,576
22,630 24,160 32,460 30,037
Creditors: Amounts falling due within one year (31,832) (31,964) (11,392) (17,874)
Net current (liabilities)/assets (9,202) (7,804) 21,068 12,163
Total assets less current liabilities 66,916 64,389 71,503 62,223
Creditors: Amounts falling due after
more than one year (7,000) (4,900) (7,000) -
Provision for liabilities and charges (604) (678) (51) (82)
Net assets 59,312 58,811 64,452 62,141
Capital and reserves
Called-up share capital 4,167 4,156 4,167 4,156
Share premium account 42,363 42,149 42,363 42,149
Other reserves 949 949 - -
Profit and loss account 9,743 10,185 17,922 15,836
Equity Shareholders' funds 57,222 57,439 64,452 62,141
Minority interests 2,090 1,372 - -
59,312 58,811 64,452 62,141
Consolidated Cash Flow Statement
For the year ended 30th June 2004
Twelve Twelve
months months
ended ended
30th June 30th June
2004 2003
Notes £'000 £'000
Net cash inflow from operating activities 7(a) 11,969 12,936
Returns on investments and servicing of finance
Interest received 15 78
Interest and similar charges paid (545) (364)
Dividends paid to minority shareholders in subsidiary undertakings (256) (157)
Net cash outflow (786) (443)
Taxation
Corporation tax paid (2,970) (2,719)
Capital expenditure and financial investment
Purchase of goodwill and intangible fixed assets (309) (1,075)
Purchase of tangible fixed assets (3,854) (1,375)
Sale of tangible fixed assets 223 272
Net cash outflow (3,940) (2,178)
Acquisitions and disposals
Purchase of subsidiary undertakings and minority interests (12,954) -
Purchase of businesses (493) (1,529)
Sale of businesses 44 663
Net cash outflow (13,403) (866)
Equity dividends paid (2,247) (1,055)
Cash (outflow)/inflow before financing (11,377) 5,675
Financing
Issue of shares 225 65
New borrowings 7,000 -
Repayment of loan notes - (295)
Net cash inflow/(outflow) 7,225 (230)
(Decrease)/increase in net (debt)/cash in the year 7(b) (4,152) 5,445
Reconciliation of net cash flow to movement in net (debt)/cash 7(b)
(Decrease)/increase in net (debt)/cash in the year (4,152) 5,445
Cash arising on acquisitions and disposals 1,024 -
New borrowings (7,000) -
Net cash brought forward 5,590 145
Net (debt)/cash carried forward (4,538) 5,590
Notes to the Accounts
1. Segmental information
In order to better reflect the focus of the business on delivery of business
information to a defined number of professional markets, it has now been decided
to represent and manage the business by market sector rather than by the three
divisions it formerly comprised. Set out below is the segmental information
relating to the business by market sector. Comparative figures have been
prepared on the same basis for the twelve months to 30th June 2003.
Twelve months Twelve months
to 30th June to 30th June
2004 2003
£'000 £'000
Turnover:
Legal and Regulatory 39,087 34,940
Healthcare 8,833 6,730
Media and Entertainment 8,453 7,508
Design and Construction 11,282 12,742
Drinks and Catering 9,035 8,756
Other 3,352 3,534
Discontinued 2,616 4,209
82,658 78,419
Profit before taxation:
£'000 £'000
Legal and Regulatory 9,622 8,537
Healthcare 1,246 886
Media and Entertainment 958 850
Design and Construction (165) 609
Drinks and Catering 303 458
Other 53 (76)
Discontinued (171) 28
Trading profit 11,846 11,292
Less: unallocated central overheads (1,233) (1,921)
Operating profit before interest, exceptional items and amortisation 10,613 9,371
Less: interest (408) (286)
Profit before taxation, amortisation and exceptional items 10,205 9,085
('adjusted profit')
Exceptional items - operating (250) -
- non-operating 251 (239)
Profit before amortisation and taxation 10,206 8,846
Less: amortisation (4,794) (4,435)
Profit before taxation 5,412 4,411
The amortisation charge is split between Legal and Regulatory - £3,124,000
(2003: £2,747,000), Healthcare - £364,000 (2003: £199,000), Media and
Entertainment - £617,000 (2003: £385,000), Design and Construction - £444,000
(2003: £429,000), Drinks and Catering - £129,000 (2003: £133,000), Other -
£116,000 (2003: £168,000) and Discontinued - £Nil (2003: £374,000). £123,000 of
the Healthcare amortisation charge relates to an acquisition made during the
twelve months to 30th June 2004.
30th June 30th June
2004 2003
£'000 £'000
Net assets:
Legal and Regulatory 39,148 40,217
Healthcare 8,437 3,239
Media and Entertainment 7,698 6,053
Design and Construction 5,882 7,028
Drinks and Catering 5,017 4,924
Other 1,830 1,873
68,012 63,334
Unallocated central net liabilities (8,700) (4,523)
59,312 58,811
2. Turnover
Twelve months Twelve months
to 30th June to 30th June
2004 2003
£'000 £'000
The geographical analysis of turnover is as follows:
United Kingdom 68,743 66,037
Overseas 13,915 12,382
82,658 78,419
3. Operating expenses
Twelve months Twelve months
to 30th June to 30th June
2004 2003
£'000 £'000
Distribution and selling costs 23,183 23,084
Administrative expenses 21,389 19,616
Exceptional item - abortive transaction costs 250 -
44,822 42,700
Amortisation of goodwill and intangible assets 4,794 4,435
Total operating expenses 49,616 47,135
4. Exceptional items
Twelve months Twelve months
to 30th June to 30th June
2004 2003
£'000 £'000
Operating exceptional item - abortive transaction costs (250) -
Non-operating exceptional items comprise
Profit on sale of businesses 251 553
Restructuring costs - (792)
251 (239)
Tax credit on exceptional items 279 164
5. Acquisitions
Subsidiaries acquired
During the year a wholly owned subsidiary of the company acquired 100 per cent.
of the share capital of Agence de Presse Medicale International SAS ('APM') and
a 75 per cent. owned subsidiary of the Company acquired 100 per cent. of the
share capital of Corporate Event Publishing Limited.
Assets and liabilities of subsidiary undertakings acquired:
Fair value
Book value adjustments Fair value
£'000 £'000 £'000
Tangible fixed assets 47 - 47
Debtors 998 - 998
Cash 1,024 - 1,024
Creditors due within one year (1,350) - (1,350)
Goodwill and intangible assets - - -
719 - 719
Less: minority interests (68)
651
Goodwill arising on consolidation 5,472
Consideration 6,123
Satisfied by cash 6,123
No adjustments were necessary to the book values of the net assets acquired to
reflect their fair values and the application of Group accounting policies.
Other acquisitions
During the year the Company indirectly acquired an additional title Cosmetics
and Toiletries Manufacture Worldwide Directory for a total cash consideration of
£493,000.
In August 2003 the Group entered into arrangements whereby its Retail
Entertainment Database Publishing business merged with its principal competitor
Muze UK to form a new subsidiary New Entertainment Data Limited which is 50.001
per cent owned by the Group. The Group retains day to day management control of
the business.
During the year the Group entered into an agreement whereby its office equipment
magazine business acquired Channel Info, one of its main competitors, in
exchange for a 25 per cent. interest in the combined business, Office Solutions
Media Limited.
Minority interests acquired
During the year the Company indirectly acquired the remaining 25 per cent. of
CaritasData Limited for a total cash consideration of £817,000 giving rise to an
increase in goodwill and intangible assets of £714,000. During the year the
Company also indirectly acquired a further 7.55 per cent. of Pendragon
Professional Information Limited for a total cash consideration of £293,000
giving rise to an increase in goodwill and intangible assets of £227,000.
6. Earnings per ordinary share
Twelve Twelve
months months
ended ended
30th June 30th June
2004 2003
The calculation of earnings per ordinary share is based on
profit after taxation and minority interests of £2,059,000 £1,096,000
and on the average number of ordinary shares in issue
during the period of 83,292,467 83,103,203
and, after adjusting for 274,502 outstanding share options (2003:
55,159), on the diluted average number of ordinary shares during the
period of 83,566,969 83,158,362
Earnings per ordinary share 2.47p 1.32p
Diluted earnings per ordinary share 2.46p 1.32p
Adjusted earnings per ordinary share 7.73p 6.65p
An adjusted earnings per ordinary share has been calculated using an adjusted
profit after taxation and minority interests but before amortisation of goodwill
and intangible assets and post taxation exceptional items of £6,439,000 (2003:
£5,528,000).
7. Notes to the consolidated cash flow statement
(a) Reconciliation of operating profit to net cash inflow from operating
activities:
Twelve months Twelve months
ended ended
30th June 30th June
2004 2003
£'000 £'000
Operating profit 5,569 4,936
Depreciation of tangible fixed assets 1,766 1,949
Amortisation of goodwill and intangible fixed assets 4,794 4,435
Profit on sale of tangible fixed assets (4) (55)
Restructuring costs - (792)
Decrease in stock and work in progress 136 176
Decrease/(increase) in debtors 372 (344)
(Increase)/decrease in creditors (664) 2,631
Net cash inflow from operating activities 11,969 12,936
(b) Analysis of movement in net cash/(debt)
At Arising on At
1st July acquisitions 30th June
2003 Cash flow and disposals 2004
£'000 £'000 £'000 £'000
Cash at bank and in hand 5,787 (3,857) 1,024 2,954
Bank overdraft (197) (295) - (492)
5,590 (4,152) 1,024 2,462
Bank loan - (7,000) - (7,000)
5,590 (11,152) 1,024 (4,538)
8. Nature of the financial information
The foregoing financial information does not amount to full accounts within the
meaning of Section 240 of Companies Act 1985. The financial information has
been extracted from the Group's Annual Report and Accounts for the year ended
30th June 2004 on which the auditors have given an unqualified report.
Copies of the Annual Report and Accounts will be posted to shareholders shortly
and will be available from the Company's registered office at Paulton House, 8
Shepherdess Walk, London, N1 7LB.
This information is provided by RNS
The company news service from the London Stock Exchange
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