Annual Financial Report

RNS Number : 6891J

Centaur Media PLC

03 April 2018

 

Centaur Media plc

Incorporated in England and Wales

Registration number: 04948078

LEI: 2138005WK87G7DQRQI62

ISIN: GB0034291418

Centaur Media Plc

(the "Company")

ANNUAL REPORT 2017 AND ASSOCIATED DOCUMENTS

London, UK - 3 APRIL 2018 - Centaur Media plc (the "Company") (LSE: CAU), the business to business information, insight and events group, announces that its Annual General Meeting will be held on Thursday 3 May 2018 at 12.30pm at Wells Point, 79 Wells Street, London, W1T 3QN.

In compliance with Listing Rule 9.6.1R, the following documents have today been submitted to the National Storage Mechanism and will shortly be available at www.morningstar.co.uk/uk/NSM 

Annual Report 2017

Notice of 2018 Annual General Meeting

Form of Proxy for 2018 Annual General Meeting

The Annual Report 2017 and Notice of 2018 Annual General Meeting are also available in the Investors section of the Centaur Media plc website at http://www.centaurmedia.com

The information set out in the appendices to this announcement, which is extracted from the Annual Report 2017, constitutes the material required by Disclosure & Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  This announcement is not a substitute for reading the Annual Report and Accounts for the period ended 31 December 2017.

Enquiries:

Helen Silver

Company Secretary

020 7970 4000

Note to editors

Centaur Media is an award-winning UK-based multi-platform content group that inspires and enables people to excel at what they do, raising the standard for market insight, interaction and impact.

Leading brands include: Econsultancy, Marketing Week, Festival of Marketing, Creative Review, Celebrity Intelligence, Fashion & Beauty Monitor, Oystercatchers, MarketMakers, Money Marketing, Platforum, The Lawyer, Employee Benefits, The Engineer, Subcon, The Business Travel Show and The Meetings Show.

Appendices

Appendix A: Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ('IFRSs) as adopted by the European Union and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.  Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and Company for that period.  In preparing these financial statements, the Directors are required to:

·      Select suitable accounting policies and then apply them consistently;

·      State whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and IFRSs as adopted by the European Union have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

·      Make judgements and accounting estimates that are reasonable and prudent; and

·      Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. 

The Directors are also responsible for safeguarding the assets of the Group and the hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website.  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Board of Directors summary on pages 28 and 29, confirms that, to the best of their knowledge:

·      The Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the Company;

·      The Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

The Directors' Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.  In the case of each director in office at the date the Directors' Report is approved:

·      So far as the Director is aware, there is no relevant audit information which the Group and Company's auditors are unaware; and

·      They have taken all steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Group and Company's auditors are aware of that information.

By order of the Board

Helen Silver

Company Secretary

20 March 2018

Appendix B: Principal Risks

Risk management approach

The Board has overall responsibility for the effectiveness of the Group's system of risk management and internal controls and these are regularly monitored by the Audit Committee.

Details of the activities of the Audit Committee in this financial year can be found in the Audit Committee Report on pages 37 to 40.

The Executive Committee is responsible for identifying, managing and monitoring material risks in each area of the business and for regularly reviewing and updating the risk register, as well as reporting to the Audit Committee in relation to risks, mitigations and controls.  As the Group operates principally from one office and with relatively short management reporting lines, members of the Executive Committee are closely involved in day-to-day matters and able to identify areas of increasing risk quickly and respond accordingly.  The responsibility for each risk identified is assigned to a member of the Executive Committee.  The Audit Committee considers risk management and controls regularly and the Board formally considers risks to the Group's strategy and plans as well as the risk management process as part of its strategic review.

The risk register is the core element of the Group's risk management process.  The register is maintained by the Company Secretary with input from the Executive Committee.  The Executive Committee initially identifies the material risks facing the Group and then collectively assesses the severity of each risk (by ranking both the likelihood of occurrence of the risk and its potential impact on the business) and the related mitigating controls.

As part of its risk management processes, the Board considers both strategic and operational risks, as well as its risk appetite in terms of the tolerance level it is willing to accept in relation to each principal risk, which is recorded in the Company's risk register.  This approach recognises that risk cannot always be eliminated at an acceptable cost and that there are some risks which the Board will, after due and careful consideration, choose to accept.  The Group's risk register, its method of preparation and the operation of the key controls in the Group's system of internal control are regularly reviewed and overseen by the Audit Committee with reference to the Group's strategic aims and its operating environment.  The register is also reviewed and considered by the Board.

As part of the ongoing enhancement of the Group's risk monitoring activities, we reviewed and updated the procedures by which we evaluate principal risks and uncertainties during the year.

Principal risks

The Group's risk register currently includes operational and strategic risks.  The principal risks faced by the Group in 2017, taken from the register, together with the potential effects and mitigating factors, are set out below. The Directors confirm that they have undertaken a robust assessment of the principal risks facing the Group.  Financial Risks are shown in note 29 to the Financial Statements.

Risk		Description of risk and impact	Risk mitigation / control procedure	Movement in risk
Fraudulent or accidental breach of our security, or ineffective operation of IT and data management systems leads to loss, theft or misuse of personal data or confidential information or other breach of data protection requirements.		-A serious occurrence of a loss, theft or misuse of personal data or sensitive or confidential information could result in reputational damage, a breach of data protection requirements or direct financial impact. See  The General Data Protection Regulation ('GDPR') below.  -Centaur collects and processes personal data and confidential information from some of its customers, users and other third parties. Centaur is at risk from a serious occurrence of a loss, theft or misuse of personal data or confidential information on our software/hardware due to the actions of a Centaur employee, partner or third party. See also GDPR below	- Appropriate IT security is undertaken for all key processes to keep the IT environment safe. -Websites are hosted by specialist third-party providers who provide warranties relating to security standards. -All of our websites have been migrated onto a new and more secure platform which is cloud hosted and databases have been cleansed and upgraded during 2015, 2016 and ongoing in 2017. - External access to data is protected and staff are instructed to password protect or encrypt where appropriate. -The Director of Data and Analytics ensures that rigorous controls are in place to ensure that warehouse data can only be downloaded by the data team. Integration of the warehouse with current databases and data captured and stored elsewhere is ongoing. -Centaur has a business continuity plan which includes its IT systems and there is daily, overnight back-up of data, stored off-site. -Please see below for specifics relating to GDPR compliance / Data	→ The Board considers this risk to be broadly the same as the prior year
Regulatory;  GDPR. Stricter requirements regarding how Centaur handles personal data, including that of customers and the risk of a fine from the ICO, third party claims (e.g. from customers) as well as reputational damage if we do not comply.		The General Data Protection Regulation ('GDPR'), which is the new data protection law coming into force in May 2018, involves much stricter requirements for Centaur regarding its handling of personal data. This includes: -customers having greater rights on how we use their data -Centaur having to provide specific information to our customers on how we use their data -new rules around how we obtain customer's consent to being contacted - personal data being kept more securely; time and access - new contracts being put in place between us and suppliers that handle our data -new rules about notifying the ICO in the event of a breach of GDPR - a shorter time period for responding to "subject access requests" from  customers - a requirement to demonstrate HOW we comply with GDPR, which means we need to improve our internal record-keeping, etc. In the event of a serious breach of the GDPR, Centaur could be subject to a significant fine from the regulator (the ICO) and claims from third parties including customers as well as reputational damage. The new maximum fine for breach of GDPR is much higher than the current maximum fine applicable under current UK data protection legislation.	Centaur has engaged Wiggin LLP to provide legal advice on what changes we are required to make in order to comply with GDPR. The measures we are taking include: -Updating the 'consent' wording on our websites and event registration pages to ensure language is specific/ unambiguous -updating our unsubscribe process -improving our data complaints procedures - improving our procedures for removing individuals from databases where details are inaccurate/ not needed -updating our standard terms and conditions across all products -updating our privacy and cookies policy and website terms and conditions - amending our contract with suppliers who provide us with personal data (ie lists) or who handle data on our behalf.	New Risk
Serious systems failure (affecting core systems and multiple products or functions) or breach of IT network security (as a result of a deliberate cyber-attack or unintentional event)		-Centaur relies on its IT network to conduct its operations. The IT network is at risk of a serious systems failure or breach of its security controls. This could result from deliberate cyber-attacks or unintentional events and may include third parties gaining unauthorised access to Centaur's IT network and systems resulting in misappropriation of its financial assets, proprietary or sensitive information, corruption of data, or operational disruption,  such as unavailability of our websites and our digital products to users or unavailability of support platforms. -If Centaur suffers further serious cyber-attacks, whether by a third party or insider, any operational disruption may directly affect our revenues or collection activities. - Centaur may incur significant costs and suffer other negative consequences, such as remediation costs (including liability for stolen assets or information, and repair of any damage caused to Centaur's IT network infrastructure and systems). Centaur may also suffer reputational damage and loss of investor confidence resulting from any operational disruption.	Centaur has invested significantly in its IT systems and several key IT system upgrades have taken place during 2017; -  the ongoing development of  CRM (PCI compliance )  and finance systems introduced in 2015. - IT system improvements in 2017 and ongoing into 2018, following completion of an external audit of the security of our main IT infrastructure  carried out by a specialist third party provider i.e. Microsoft security against Ransomware attacks - where services are outsourced to suppliers, contingency planning is carried out to mitigate risk of supplier failure.           Lockton's  is advising us in relation to any additional cover that is appropriate to insure against a serious failure of IT network security controls. -Migration of Econ to our secure platform Wordpress in 2018 is underway - we are upgrading our policies in Q1 2018 to further ensure our staff are clear and accountable for their IT compliance.	→ The Board considers this risk to be broadly the same as for the prior year
Trends in advertising and direct sales of our print products result in declining revenues from these sources		Print advertising revenues and direct sales of our print products continued to decline more steeply during the latter part of 2016 as direct revenue from print products dipped more sharply than expected at the start of the year, and are not being replaced like-for-like with online or digital products. The non-print media sector has high levels of competition from a wider group and low barriers to entry. This leads to different pressures on audience and customer retention as well as pricing. This risk has increased since the 2015 reporting period due to volatility in advertising spend across our markets in the weeks leading up to and following the UK's EU referendum. The uncertainty following the EU referendum result in specific markets including financial services continued throughout 2016 and in the first half of 2017 and is expected, at the very least, until firm plans for the UK's exit from the EU are established by the UK government.	Our Business Plans take into account the market shrinkage and where appropriate print products are being replaced.  Our strategy includes identifying the type of content our audiences want and how they want to consume the content, meaning that we are not simply putting print products online to try to replace diminishing print revenues for traditional brands. Centaur has been rapidly reducing the company's exposure to print advertising and has significantly increased revenues from digital paid-for content. In 2017 we reduced print volumes by over 60% across the financial, legal, marketing and HR portfolios. This involved changes in frequency (weekly to monthly) and for some brands moving to digital-only formats supported by profitable events and awards. We continue to monitor the decline in our print products while at the same time investing in developing our digital capability and ability to scale cross-media marketing solutions. In addition to a new, flexible web platform we are developing new revenues streams from products, such as the Marketing Week Mini MBA, which are exclusively digital and derive no revenue from print. We support our product innovation, by hiring people with experiences and skills in new areas of the market where appropriate. The role of our Executive Committee includes anticipating future changes in the market and ensuring that our business reacts or accelerates our plans accordingly However spend cannot be assumed to flow directly to replacement products and therefore volatility on advertising in our core sectors remain a risk factor.	↓ The Board considers that our exposure to this risk has decreased since the prior year due to the specific actions we have taken to reduce our dependency on print advertising.
Key to movement in risk from last year (after taking into account mitigating controls) ↑Increase in risk → Risk unchanged ↓Decrease in risk

Viability statement

In accordance with provision C.2.2 of the UK Corporate Governance Code April 2016, the Directors have assessed the viability of the Group over a three-year period to December 2020, taking account of the Group's current position, the Group's strategy, the Board's risk appetite and, as documented above, the principal risks facing the Group and how these are managed.  Based on the results of this analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to December 2020.

The Board has determined that the three-year period to December 2020 is an appropriate period over which to provide its viability statement because the Board's financial planning horizon covers a three-year period.  In making their assessment, the Directors have taken account of the Group's existing financing arrangements to 2019 (and assumed that financing will be available to replace the current facility on similar terms), cash flows, dividend cover and other key financial ratios over the period.  These metrics are subject to stress testing which involves sensitising a number of the main assumptions underlying the forecasts both individually and in unison.  The assumptions sensitised include forecasted EBITDA, cash conversion4 and capital expenditure.  Where appropriate, this analysis is carried out to evaluate the potential impact of the Group's principal risks actually occurring, such as print and advertising revenues continuing to shrink, staff attrition, UK economic conditions and replication of products by competitors.  Sensitising the model for changes in the assumptions and risks affirmed that the Group would remain viable over the three year period to 2020. 

Going concern basis of accounting

In accordance with provision C.1.3 of the UK Corporate Governance Code April 2016, the Directors' statement as to whether they consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements and their identification of any material uncertainties to the Group's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements and for the foreseeable future can be found on page 32.

Appendix C: Related Party Transactions

Group

Key management compensation is disclosed in note 5. There were no other material related party transactions for the Group in the current or prior year.

Company

During the year, interest was recharged from subsidiary companies as follows:

	2017 £m	2016 £m
Interest payable	1.0	0.4

Borrowings of £17.5m were repaid (2016: £3.5m) by subsidiaries on behalf of the Company.

The balances outstanding with subsidiary companies are disclosed in notes 18 and 20.

There were no other material related party transactions for the Company in the current or prior year.

Audit Exemption

For the year ended 31 December 2017 the Company has provided a guarantee pursuant to sections 479A-C of the Companies Act 2006 over the liabilities of the following subsidiaries and as such they are exempt from the requirements of the Act relating to the audit of individual financial statements, or preparation of individual financial statements, as appropriate, for this financial year.

Name	Company number	Outstanding liabilities (£m)
Centaur Communications Limited	01595235	10.6
Chiron Communications Limited	01081808	56.3
The Forum for Expatriate Management Limited	06776955	0.2
Pro-Talk Ltd	03939119	0.2
Taxbriefs Holdings Limited	03572069	-
Taxbriefs Limited	01247331	0.4
Investment Platforms Limited	06439194	0.1
Venture Business Research Limited	05663936	1.4
The Profile Group (UK) Limited	05243851	0.7
Econsultancy.com Limited	04047149	0.8
Mayfield Publishing Ltd	02034820	-
Your Business Magazine Limited	01707331	0.3
MarketMakers Incorporated Limited	05063707	-

The newly acquired business MarketMakers Incorporated Limited will have its statutory audit for the year ended 31 December 2017 performed by RSM UK.

 

END

 

 

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