Final Results
Centaur Media PLC
21 September 2007
21 September 2007
Centaur Media plc
Preliminary results for the year ended 30 June 2007
Centaur Media plc ("Centaur" or "the Company"), the specialist business
publishing and information group, announces results for the year ended 30 June
2007.
Centaur's premier brands include Marketing Week, Design Week, Creative Review,
Money Marketing, The Lawyer, The Engineer, New Media Age, Homebuilding &
Renovating, Business Travel and the online service Perfect Information.
Highlights
•Revenue up 12% to £90.3m (4 year CAGR 11%)
•Adjusted EBITDA(1) margin up 2 percentage points to 22%
•Adjusted PBT(2) up 28% to £16.9m (unadjusted PBT £16.9m)
•Adjusted basic EPS(3) up 32% to 8.2p (unadjusted basic EPS 8.2p)
•Cash conversion(4) of 94%
•Net cash of £9m (FY2006 £6.2m)
•Dividend up 17% at 3.5p
Commenting on the preliminary results, Graham Sherren, Chairman of Centaur said:
"I am pleased to announce that Centaur is again reporting record profits up 28%
to £16.9million (FY2006: £13.2million) ahead of market forecasts. We have seen
strong growth in advertising in most of our markets, particularly in online
media, continued growth in our events business and from the results of new and
recently launched products. Revenue growth of 12% was supplemented by bolt-on
acquisitions with underlying organic revenue growth of 8% in the year.
"The new financial year has started well. Revenues in our Legal and Financial
segment are trading ahead of last year despite the impact of recent market
volatility. Total group revenues in the first quarter are anticipated to be
ahead of the same period last year. The outlook is positive and we expect FY2008
results to demonstrate further good progress.Given this, we are now proposing to
implement an on-market share buy-back programme within our existing authority of
up to 10% of the Company's share capital."
Notes:
1. One of Centaur's key measures of profit, which is used to measure the
relative performance of divisional units of the Group, is earnings before
interest, tax, depreciation and amortisation, excluding exceptional items and
other significant non-cash items including share based payments (Adjusted
EBITDA), as detailed in the business review.
2. Adjusted PBT is profit before tax, excluding the impact of amortisation
of acquired intangibles and of exceptional items and excluding the profit on
disposal of associated undertakings, as detailed in the business review.
3. Adjusted EPS is based on the basic EPS but after making adjustments for
amortisation on acquired intangibles and exceptional items and excluding the
profit on disposal of associated undertakings, as detailed in note 3 to the
financial statements.
4. Cash conversion rate is free cash flow expressed as a percentage of
adjusted operating profit. Free cash flow is defined as cash generated from
operations, less capital expenditure on property, plant and equipment and
software. Adjusted operating profit is operating profit after making adjustments
for amortisation on acquired intangibles and exceptional items, as detailed in
the business review.
5. All comparatives have been restated to exclude discontinued operations
Enquiries:
Centaur Media plc Geoff Wilmot, CEO Tel: 020 7970 4000
Mike Lally, GFD
Gavin Anderson & Company Robert Speed Tel: 020 7554 1400
Charlotte Stone
Centaur Media plc
Chairman's Statement
I am pleased to announce that Centaur is again reporting record profits in the
12 months to 30 June 2007, with adjusted PBT ahead of consensus market
expectations, up 28% to £16.9million (FY2006: £13.2million), and adjusted basic
earnings per share 32% up at 8.2p (FY2006: 6.2p). Revenues, which grew 12% in
the year, benefited from strong growth in advertising in most of our markets,
particularly in online media, continued growth in our events business and from
the results of new and recently launched products. Revenue growth was
supplemented by the bolt-on acquisitions in FY2007 and the previous year, with
underlying revenues excluding acquisitions growing 8% in the year.
Adjusted EBITDA increased by 25% to £19.7million (FY2006: £15.7million),
delivering a further strong improvement in margin to 22% from 20% in the
previous year representing further good progress towards our target margin of
25%.
In light of this performance, the Board is recommending a final dividend of 2.5p
per share, giving a full year dividend of 3.5p, representing an increase of 17%
over the prior year. The final dividend will be paid to shareholders on the
register as at 9 November 2007. It is proposed that the dividend will be paid on
7 December 2007.
These excellent results reflect the success of our strategy of building
market-leading positions across a number of vertical markets through a blend of
complementary media - print, online and events. The recovery in the advertising
cycle that started towards the end of 2003 has continued through the year to
June 2007 in most of our served markets. The marketing and creative sectors have
continued to experience well-publicised difficulties, reflecting challenges in
the media, retail and consumer goods sectors in particular, although we saw
evidence of some improvement in this sector in the second half of the year.
Against a backdrop of generally favourable market conditions, total advertising
turnover during the year increased by 16% over the prior year. Acquisitions made
during the year contributed to this growth, but underlying advertising revenues
also grew strongly, thanks in particular to buoyant trading conditions in the
legal and financial markets.
The fastest pace of revenue growth was derived from online products, which grew
by 23% over the prior year. This reflects the success of our principal strategy
in the past few years, which has been to extend our major print publishing
brands across multiple media, but with a particular focus on online
opportunities. Online now accounts for 17% of total revenues against 16% in
FY2006. Centaur has developed most of its business organically and in FY2007,
12% of revenues were generated by products launched within the previous three
years (FY2006: 12%). We continued to maintain a steady pace of new product
development during the year, with the launch of two new magazines, five new
websites and eleven new events.
In the past year we have also completed two small bolt-on acquisitions and two
joint initiatives. These were in line with our established acquisition strategy,
which is to make selective investments in businesses that enable Centaur to
expand existing market positions and to establish market-leading positions in
new markets. The key developments and initiatives in the year are outlined in
the Business Review.
The new financial year has started well. Our growth prospects continue to be
supported by our pipeline of new and recently launched or acquired products.
Revenues in our Legal and Financial segment are trading ahead of last year
despite the impact of recent market volatility. Total group revenues in the
first quarter are anticipated to be ahead of the same period last year. The
outlook is positive and we expect FY2008 results to demonstrate further good
progress. Given this, we are now proposing to implement an on-market share
buy-back programme within our existing authority of up to 10% of the Company's
share capital.
Centaur is above all an entrepreneurial Company. It depends for its success on
the talent, commitment, energy and creativity of its staff, who have performed
magnificently once again. My thanks and appreciation goes to all of them.
Centaur Media plc
Business Review
Analysis of results
Restated Restated
2007 2007 2006(1) 2006(1)
£m £m £m £m
By Segment Revenue Adjusted Revenue Adjusted
EBITDA EBITDA
Legal and Financial 30.3 9.0 24.5 7.1
Marketing and Creative 23.6 3.6 23.5 3.3
Construction and Engineering 19.4 4.1 16.5 3.4
Perfect Information 6.0 1.5 6.4 1.4
General Business Services 11.0 1.5 9.6 0.5
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Total 90.3 19.7 80.5 15.7
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By Source
Recruitment advertising 15.0 - 12.8 -
Other advertising 34.3 - 29.8 -
Circulation revenue 6.3 - 5.4 -
Online subscriptions 7.3 - 7.6 -
Events 25.9 - 23.8 -
Other 1.5 - 1.1 -
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Total 90.3 - 80.5 -
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By Client Type
Audiences 20.5 - 18.8 -
Marketers 69.8 - 61.7 -
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Total 90.3 - 80.5 -
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By Product type
Magazines 47.7 10.9 42.1 7.6
Events 25.9 5.9 23.8 5.1
Online products 15.8 2.9 12.8 2.1
Other 0.9 - 1.8 0.9
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Total 90.3 19.7 80.5 15.7
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Underlying
Underlying 82.5 18.1 76.6 15.3
Acquisitions(2) 7.8 1.6 3.9 0.4
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Total 90.3 19.7 80.5 15.7
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By Maturity
New (3) 10.9 (0.3) 9.4 (0.3)
Existing and acquired 79.4 20.0 71.1 16.0
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Total 90.3 19.7 80.5 15.7
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Notes
1.2006 comparatives have been restated to reflect activities
discontinued during 2007
2.Acquisitions are defined as those made within the current or
preceding financial year
3.New products are defined as any product launched in the current
or two preceding financial years
Strategic Overview
During the year we undertook a strategic review of the business, and as a result
we have identified the following key strategic objectives:
- To achieve critical mass in high value growth markets
Our primary focus is on expanding our presence in existing high value markets in
which we can see opportunities for significant growth. We do not wish to enter
markets unless we can realistically expect to achieve market leadership and a
minimum profit contribution of £1 million within 3 years. During the past year,
we have sold or discontinued three publications serving discrete specialist
communities which did not match these criteria.
- To deliver double digit growth in revenues across the cycle
12% growth in revenues in the year to June 2007 equates to a 11% compound annual
growth in revenues since 2003.
- To balance portfolio revenues across print, online and events
Print remains the dominant medium in Centaur's portfolio, representing 53% of
revenues in FY2007, but online revenues grew by 23% in the past year and
represent 17% of group revenues in FY2007 (FY2006: 16%).
- To expand audience share of revenues
Advertising revenues grew strongly in the year, up 16%. Nevertheless, revenues
from audiences retained their 23% share of total revenues. Initiatives such as
the recent joint venture with YouGov are expected to help increase the
proportion of revenues derived from our audiences in the future.
- To increase adjusted EBITDA margins to 25%
Adjusted EBITDA margins increased to 22% in the year (FY2006: 20%), representing
good progress towards our target.
Trading Review
Revenues grew 12% in the year to 30 June 2007, led by 16% growth in revenues
from advertising. Advertising growth was particularly strong in our online
media, which grew total revenues by 23%. Overall productivity also improved,
with total revenues per employee increasing 7% to £121k. This revenue and
productivity growth, combined with other initiatives, resulted in adjusted
EBITDA margins improving to 22% (FY2006: 20%) and in adjusted basic earnings per
share rising by 32% to 8.2p (FY2006: 6.2p).
Centaur's rapid growth in the year continued to be supported by its pipeline of
new and recently launched products and record results were achieved despite
continuing investment in future growth. Overall, approximately 12% of revenues
generated in the last financial year were from products or events launched
within the past three years. The bulk of the new product launches have been in
existing communities, enhancing and extending established leading brands.
We also completed two small bolt-on acquisitions during the past year and two
joint initiatives. In total, the acquisitions made during the year and during
the course of FY2006 contributed 9% of revenues in FY2007 and an adjusted EBITDA
margin of 21%.
Legal & Financial
This was our most successful market segment in the year, reflecting the strength
of the underlying communities served. Revenue grew 24% year on year, driven in
large part by investment in new products, in particular summits. Adjusted EBITDA
margins improved slightly to 30% (FY2006: 29%).
The three leading titles, Money Marketing, Mortgage Strategy and The Lawyer,
each ended the year well. Money Marketing and its sister title, Fund Strategy,
both benefited from strong demand for retail investment products in the second
half, whilst Mortgage Strategy's consistent growth throughout the year reflected
the high levels of activity in that sector. In addition, two new monthly
magazines were launched during the year, Mortgage Distributor in January 2007
and Loan Distributor in June 2007. Both publications made a small profit
contribution in their first year. The Lawyer, meanwhile, delivered further
growth in revenues and profits, despite stronger comparatives, continuing to
benefit in particular from the impact of the record levels of underlying M&A
activity on the legal profession.
The fastest pace of growth was derived from events, led by the launch of four
new Summit events during the year. These included the Mortgage Packager Summit
(launched alongside the new monthly Mortgage Distributor) and Secured Lending
Summit (launched alongside Loan Distributor). Margins on financial events were
restrained by the costs of establishing a new infrastructure for financial
Summits, but are expected to improve in the coming year. The Lawyer launched a
new awards event in January 2007, The Lawyer HR Awards, which was well received
and made a positive contribution.
Online revenues in this segment also recorded strong growth in revenues and
profits from the three major internet businesses, Money Marketing Online
(principally banner advertising), TheLawyer.com (recruitment and directory
advertising) and Headlinemoney (subscriptions income) each grew strongly and
these business units are now delivering attractive profit margins.
Marketing & Creative
Overall revenues in this market segment returned to growth in the year as a
whole, after a 4% decline in the first half year, reflecting improved conditions
in the underlying advertising market from early 2007. The overall results have
been held back by ongoing weakness in traditional marketing activities, such as
above the line media and direct marketing, offset by strong growth in other
areas, notably online marketing. The weakest sector was the direct marketing
portfolio (Precision Marketing and the DM Show) where revenues fell 15% or £0.3
million in the year. This was offset by growth in online marketing activity,
represented principally by New Media Age, the Online Marketing Show and the
Interactive Marketing Summit, where revenues grew by more than 20%. Overall
growth in this segment was led by online recruitment revenues in our newly
launched magazine websites, MarketingWeek.co.uk and DesignWeek.co.uk, which made
a small positive profit contribution before central overheads in their first
year of operation. With revenue growth for the year as a whole at 0.4%, adjusted
EBITDA recorded only a modest increase with margins improving slightly to 15%
(FY2006: 14%).
Since launch less than 12 months ago, MarketingWeek.co.uk and DesignWeek.co.uk
have established themselves rapidly as sources of news and jobs in their
respective markets and each is already independently generating traffic levels
similar to those achieved by mad.co.uk. Both sites are making a positive profit
contribution and are expected to generate strong growth in revenues in the
future.
Events in this segment experienced a decline in revenues. The DM Show (direct
marketing) and the Total Motivation Show (incentives) which ran in the first
half of the financial year, both underperformed significantly in weak market
conditions and have been discontinued. However this was partly offset by good
results from the Insight Show (market research), the Online Marketing Show and
the newly launched Interactive Marketing Summit, each occupying strong positions
in growing sectors of the market.
Construction & Engineering
Led by the full year impact of prior year acquisitions of Period Living and
Pro-Talk and of the recently launched magazine Move or Improve, revenues in this
segment grew 18% in the year. Margins for these new, maturing products, which
represent a significant portion of total segment revenues, are still below
average and as a result adjusted EBITDA margins remained essentially level at
21% overall.
Following two years of double digit revenue growth, The Engineer magazine
delivered further modest revenue growth, complementing more dramatic increases
online, with revenues of theengineer.co.uk rising by over 60% on prior year.
This was offset by a decline in revenues from the monthly magazine,
MetalworkingProduction, due largely to the non-occurrence of a biennial trade
exhibition which ran in the previous financial year. Our largest magazine in the
construction portfolio is the leading monthly self-build publication
Homebuilding & Renovating, which experienced a return to modest growth, after
flat revenues in the previous year, reflecting renewed buoyancy in the housing
market during the period.
The strength of the self-build market was also reflected in double digit growth
in revenues from the associated Homebuilding exhibitions, which benefited from a
successful launch of a new regional show in Newbury in June 2007.
Online revenues in this segment are driven principally by The Engineer Online
(mainly recruitment advertising), homebuilding.co.uk (mainly banner
advertising), plotfinder.co.uk (revenues from subscriptions) and the recently
acquired Pro-Talk (online response driven search-advertising model). In
aggregate, online products delivered strong revenue growth and satisfactory
improvement in profits.
Perfect Information
PI increased adjusted EBITDA to £1.5 million (FY2006: £1.4 million), despite a
decline in revenues to £6.0 million (FY2006: £6.4 million) resulting in an
improved adjusted EBITDA margin of 25% (FY2006: 22%).
During the year, PI completed the development of its analytical and charting
tool, PA with the release of the PA Excel add-in in February 2007. This has been
well received by prospective clients, but aggressive pricing by established
competitors has resulted in minimal levels of new business for PA in the past
year. PI is now directing its development and sales focus to its core filings
business, where growth opportunities are more attractive. In particular, we are
looking to integrate the analytical functionality of PA with its extensive
filings database to allow original source documents to be more easily and
effectively incorporated into client workflow.
The decline in PI revenues during the year was due principally to a continuing
loss of non-core revenues from clients acquired at the time of the acquisition
of the Synergy Software Group, including revenues from products no longer
supported by PI, notably a private investor analytical tool. Underlying revenues
from filings were approximately level with prior year, following a period of
weaker than expected renewals in early 2007, but the refocused sales effort has
led to an improved performance in the last quarter of the year and the annual
value of filings subscriptions contracts at June 2007 was 2% higher than 12
months previously.
PI has more than offset the decline in PA revenues in the past year with cost
reductions, leading to the significant improvement in margin.
General Business Services
This segment comprises products serving a number of distinct business
communities. These include human resources (HR), the recruitment sector, supply
chain and logistics, and business travel.
In aggregate, revenues grew 15%, with most of the growth arising in the recently
acquired sectors, logistics and recruitment. Adjusted EBITDA grew £1.0 million
to £1.5 million, resulting in margins of 14% (FY2006: 5%)
Revenue and profits growth in this segment were driven by the logistics and
recruitment portfolios. In both cases, the underlying served markets are
enjoying buoyant trading conditions and our investment in redeveloping these
recently acquired products is delivering promising results. The Recruiter also
benefited from a full year's results. Revenues in the Employee Benefits
portfolio were adversely affected by loss of advertising resulting from the
removal, in the 2006 Finance Act, of the tax benefit, the Home Computing
Initiative, but growth was resumed in the final quarter of FY2007. The Business
Travel shows portfolio (excluding the regional show discontinued in October
2005) also delivered growth in revenues and profit contribution.
Discontinued Operations
As previously reported, we sold Televisual in August 2006. In July 2007, we also
sold the Hali portfolio to its publisher. Hali is a strong brand that enjoys an
exceptional position in the market for antique carpets and textiles. However,
the market it serves is small and we do not believe that it offers the potential
to justify Centaur's continued investment. Neither of these portfolios made a
positive contribution to Centaur profits in their last year of ownership.
New Business Development Initiatives
During the year we continued to focus on new product development opportunities
and to search for suitable acquisitions. The key development initiatives in the
period are outlined below.
New Magazines
In January we launched Mortgage Distributor, a monthly magazine covering the
changing nature of how mortgages are sold, with a particular focus on mortgage
packagers, the intermediary distributors serving this market. In June 2007, we
launched the monthly magazine Loan Distributor, which caters for the providers
of secured loans and the advisers who recommend them. These magazines were born
out of the success of Mortgage Strategy and our strength in that market was
confirmed by the fact that both titles generated a positive profit contribution
from launch.
New Online Products
The Internet is now firmly established as an essential advertising and
information medium, which continues to offer significant business opportunities
to Centaur. We have invested steadily in enhancing the performance,
functionality and reach of our established internet operations and many of them
are now delivering high rates of revenue growth and profitability. Total online
revenues grew 23% on prior year (despite the decline in PI revenues) and
adjusted EBITDA margins increased to 18% against 16% in FY2006.
Apart from the launch of vertical websites to complement Marketing Week and
Design Week, as reported above, our most significant new online product activity
during the year was linked to an extension of the successful news alerting
service for personal finance journalists, Headline Money (HM). We acquired our
joint venture partner's 50% share of HM in FY2006, with a view to launching the
model into new verticals. In FY2007 we have launched Headline Property (a
service for residential property journalists) and Headline Auto (for motoring
correspondents). Both sites are becoming firmly established as authoritative and
comprehensive sources of news stories for journalists in each sector and we
expect revenues to build steadily in the coming year, with both sites expected
to break even by the end of FY2008.
This year also saw two new online initiatives that we believe will deliver an
important contribution in the future. Firstly, three Centaur websites have
commenced web TV services, providing news analysis and the ability to showcase
new products. Secondly, we have launched our first vertical search engine -
madsearch - to service the marketing and creative sector. Revenues from these
initiatives are still immaterial, but we believe they offer significant
potential for future growth.
Perfect Information (PI) remains our largest single online business. As noted
above, we are now directing the development focus of PI towards its core filings
product suite. Our principal focus is on the following: to establish a new
enterprise solution tailored to specific categories of end user needs; to expand
our existing EDGAR search service to establish it as the leading US filings
product to complement our market-leading non-US service; to provide
workflow-related search products linking financial information directly with
source documents. Each of these projects is underway and we expect them to be
launched to market during the course of FY2008.
New Events
We organised one new exhibition, two new awards events, seven new sponsored
Summits and a number of training courses during the year. The new exhibition was
a regional Homebuilding Show, which ran successfully in Newbury in June 2007 and
generated a useful profit contribution. The Homebuilding & Renovating portfolio
now comprises seven exhibitions attracting in excess of 100,000 visitors per
annum.
Centaur launched its Summit business in FY2006, with the organisation of three
new events in that year. Summits typically comprise meetings/workshop-based
events, bringing together relatively small numbers of senior decision-makers
within particular vertical markets. We give these events a strong independent
"editorial" base, but revenues are normally derived from sponsorship.
In FY2007, we created a further seven Summit events, four of which were in the
financial services sector, one in recruitment, one in HR and one in marketing.
Each of these was profitable and well received by delegates and sponsors,
providing a good base for future growth. Two of these events were launched in
conjunction with new magazines - the Mortgage Packager Summit in January 2007 at
the same time as the first issue of Mortgage Distributor and the Secured Lending
Summit, alongside Loan Distributor in June 2007.
In January 2007, we launched The Lawyer HR Awards, the first event to recognise
the key role of HR specialists in the recruitment and retention of staff in law
firms. The event was a great success, helping to reinforce our relationship with
these key decision-makers and we expect it to deliver significant growth in
FY2008. In June 2007, we launched the inaugural Shopfitting & Display Awards in
association with Centaur's monthly magazine InStore.
Training is a natural extension of the services we offer to our various market
communities and in the past year we have commenced in a small way to develop a
series of training programmes, initially covering interactive marketing skills,
using the New Media Age brand. These have been well received and we aim to
expand on this initiative in the financial year ahead.
Finally, we have continued to rebalance the focus of the Conferences division,
reducing its traditional, relative exposure to the marketing sector, by
launching more events in other Centaur verticals such as legal and engineering.
In doing so, the division delivered 7% revenue growth and a dramatic improvement
in adjusted EBITDA margins.
Acquisitions and Joint Ventures
Our acquisition strategy is typically to identify targets that meet the
following criteria:
a. The business is operating in a market with high growth potential and high
value;
b. There is an identifiable high information need on which to base a range of
products;
c. The business is a market-leader in its respective sector or capable of
achieving market leadership quickly; and
d. Its key people fit comfortably into Centaur's culture.
Having identified suitable targets, we seek to apply the following financial
criteria in assessing valuations:
e. It should be earnings enhancing and deliver a minimum 10% post-tax ROI in its
first full year of Centaur ownership; and
f. It should deliver a minimum post-tax IRR of 5 percentage points above
Centaur's weighted average cost of capital (currently 10%).
In the past year we have completed two bolt-on acquisitions which we believe
meet these criteria. In March 2007 we strengthened our position in the logistics
market with the acquisition of The Awareness Group (AG). AG's principal product
is the Extended Supply Chain, a two day thought leadership event launched in
2003 for senior supply chain and logistics specialists from across Europe. The
business is highly complementary with Centaur's market-leading publishing
presence in this sector and we believe it will form a good platform for the
launch of additional events.
In May 2007 we acquired from Reed Elsevier plc the Creative Handbook, a
long-established and respected annual directory for the creative services
community. The Handbook fits ideally with our Creative Review and Design Week
titles and associated websites and its acquisition will serve to reinforce our
position in this sector.
During the year, we also entered into two important joint arrangements. In
February 2007, we launched a 50:50 joint venture with the leading online
research business, YouGov plc. The joint venture company, YouGovCentaur Ltd
(YGC), has been established in order to build specialist online research panels
within our major vertical markets and use them to create valuable and unique
content for our publications and customised and syndicated research products for
our markets. We have recruited two senior, experienced staff to work full-time
on this initiative, coordinating and leveraging the extensive resources of
YouGov and Centaur respectively to deliver new products. The first new products
are expected to be launched in the autumn of 2007.
Also in February 2007, we announced a joint initiative with Dnata World of
Events, a part of the Emirates Group and a leading event organiser based in
Dubai, the fastest growing business hub in the Middle East. The first project is
to organise the Business Travel Show Dubai, which is scheduled to take place in
October 2007 and is on schedule to deliver a small profit contribution in its
first year. Following that, it is planned to identify other event opportunities
for this market.
Overall, our new and recently acquired businesses have contributed revenues in
FY2007 of £7.8 million (FY2006: £3.9 million) on which they earned an adjusted
EBITDA margin of 21% (FY2006: 10%).
Current Development Activity
Innovation is central to Centaur's culture and is an almost constant activity
across the whole portfolio. In the new financial year, we are continuing to
develop new products at a steady pace. Our current development effort is
focussed on extending our established brands into new media and enhancing our
recent acquisitions.
In addition to the ongoing development and maturing of initiatives mentioned
above, we are currently in the process of developing a number of new projects
across the business. These include several new events, further development of
YGC research-based projects, expansion of our web TV and vertical search
activities, expansion of established websites to provide improved functionality
and productivity and the further development of training programmes for our core
communities.
Notes
1. One of Centaur's key measures of profit is earnings before interest, tax,
depreciation and amortisation, excluding exceptional items and other significant
non-cash items including share based payments (adjusted EBITDA). In addition, we
report adjusted PBT (PBTA) which is profit before tax excluding the impact of
amortisation of acquired intangibles and of exceptional items, and excluding of
the profit on disposal of associated undertakings.
2. Centaur's product portfolio currently comprises 7 weekly magazines, 3
fortnightly magazines, 14 monthly magazines, 7 magazines of a quarterly or
bi-monthly frequency, 33 online products or services, 30 awards or other
sponsored events, 26 exhibitions and approximately 90 conferences.
3. Centaur reports its results within 5 distinct segments, namely Legal and
Financial, Marketing and Creative, Engineering and Construction, Perfect
Information and General Business Services. The first 3 segments comprise
principally the following vertical business communities in which Centaur
publishes market-leading magazine titles: Marketing Services, Creative Services,
New Media, Retail Financial Products, Legal Services, Engineering and Special
Interest Residential Property. Centaur also enjoys strong positions in a number
of other specialist communities, namely HR, Recruitment, Logistics, Business
travel, Construction and Public/Private Finance.
The different measures of profit described above are summarised in the following
tables:
Continuing operations 2007 2006
£m £m
Revenue 90.3 80.5
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Adjusted EBITDA 19.7 15.7
Depreciation of property, plant and equipment (0.8) (0.7)
Amortisation of software (1.9) (1.8)
Share based payments (0.4) (0.4)
Interest receivable 0.2 0.3
Share of post-tax profit from associate 0.1 0.1
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Adjusted PBT 16.9 13.2
Amortisation of acquired intangibles (0.7) (0.3)
Exceptional administrative credit - 2.2
Profit on sale of associate 0.7 -
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Profit before taxation 16.9 15.1
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Operating profit from continuing operations 15.9 14.7
Amortisation of acquired intangibles 0.7 0.3
Exceptional (credit)/ costs - (2.2)
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Adjusted operating profit 16.6 12.8
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Centaur Media plc
Consolidated Income Statement for the year ended 30 June 2007
Restated
2007 2006
Note £m £m
Continuing operations
Revenue 1 90.3 80.5
Cost of sales (45.7) (41.5)
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Gross profit 44.6 39.0
Distribution costs (4.6) (4.4)
Administrative expenses (24.1) (19.9)
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Adjusted EBITDA 1 19.7 15.7
Depreciation of property, plant and equipment (0.8) (0.7)
Amortisation of software (1.9) (1.8)
Amortisation of acquired intangibles (0.7) (0.3)
Share based payments (0.4) (0.4)
Exceptional administrative credit - 2.2
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Operating profit from continuing operations 15.9 14.7
Interest receivable 0.2 0.3
Share of post-tax profit from associate 0.1 0.1
Profit on sale of associate 0.7 -
-------------------------------------------------------------------------------
Profit from continuing operations before taxation 16.9 15.1
Taxation 2 (4.6) (3.7)
-------------------------------------------------------------------------------
Profit for the year from continuing operations 12.3 11.4
Discontinued operations
Profit for the year from discontinued operations - -
-------------------------------------------------------------------------------
Profit for the year attributable to equity shareholders 12.3 11.4
-------------------------------------------------------------------------------
Earnings per share 3
Basic 8.2p 7.6p
Fully diluted 8.1p 7.6p
Earnings per share from continuing operations
Basic 8.2p 7.6p
Fully diluted 8.1p 7.6p
The accompanying accounting policies and notes form an integral part of these
financial statements.
Centaur Media plc
Consolidated Balance Sheet at 30 June 2007
2007 2006
Note £m £m
Non-current assets
Goodwill 140.1 142.0
Other intangible assets 16.5 13.1
Property, plant and equipment 2.1 2.5
Investments accounted for using the equity
method - 0.3
Deferred tax assets 1.5 1.6
-------------------------------------------------------------------------------
160.2 159.5
-------------------------------------------------------------------------------
Current assets
Inventories 1.1 1.5
Trade and other receivables 18.4 18.7
Cash and cash equivalents 10.1 7.8
-------------------------------------------------------------------------------
29.6 28.0
-------------------------------------------------------------------------------
Assets held in disposal group for sale 0.4 -
Current liabilities
Financial liabilities - borrowings 1.1 1.6
Trade and other payables 11.4 11.3
Deferred income 9.6 10.5
Current tax liabilities 2.3 2.6
Provisions - 0.6
-------------------------------------------------------------------------------
24.4 26.6
-------------------------------------------------------------------------------
Liabilities held in disposal group for sale 0.2 -
-------------------------------------------------------------------------------
Net current assets 5.4 1.4
-------------------------------------------------------------------------------
Non-current liabilities
Provisions - 1.9
Deferred tax liabilities 1.1 1.1
-------------------------------------------------------------------------------
1.1 3.0
-------------------------------------------------------------------------------
Net assets 164.5 157.9
-------------------------------------------------------------------------------
Capital and reserves
Share capital 15.0 14.9
Treasury shares (1.0) -
Share premium 0.3 0.3
Other reserves 2.8 2.4
Retained earnings 147.4 140.3
-------------------------------------------------------------------------------
Total shareholders' equity 164.5 157.9
-------------------------------------------------------------------------------
The financial statements were approved by the Board of Directors on 20 September
2007 and were signed on its behalf by:
MJ Lally
Director
Centaur Media plc
Consolidated Cash Flow Statement for the year ended 30 June 2007
2007 2006
Note £m £m
Cash flows from operating activities
Cash generated from operations 18.2 14.4
Tax paid (4.9) (1.8)
-------------------------------------------------------------------------------
Cash flows from operating activities 13.3 12.6
-------------------------------------------------------------------------------
Cash flows from investing activities
Interest received 0.2 0.3
Acquisition of subsidiaries (net of cash 0.1 (4.8)
acquired)
Proceeds from the disposal of businesses 0.8 0.4
Purchase of property, plant and equipment (0.5) (1.0)
Purchase of software (2.1) (2.0)
Purchase of other intangible assets (3.0) (6.6)
-------------------------------------------------------------------------------
Cash flows from investing activities (4.5) (13.7)
-------------------------------------------------------------------------------
Cash flows from financing activities
Net proceeds from issue of ordinary share 0.1 -
capital
Treasury shares purchased (1.0) -
Repayment of loan notes (0.5) (0.9)
Dividends paid (5.1) (2.7)
-------------------------------------------------------------------------------
Cash flows from financing activities (6.5) (3.6)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net increase / (decrease) in cash and cash
equivalents 2.3 (4.7)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash and cash equivalents at 1 July 7.8 12.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash and cash equivalents 30 June 10.1 7.8
-------------------------------------------------------------------------------
Centaur Media plc
Statement of accounting policies
The principal accounting policies adopted in the preparation of these financial
statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
Basis of preparation
The consolidated and Company financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted by
the European Union and International Financial Reporting Interpretations
Committee (IFRIC) applicable at 30 June 2007 and with those parts of the
Companies Act, 1985 applicable to companies reporting under IFRS. The financial
statements have been prepared on the historical cost basis.
The Company has taken advantage of the exemption available under section 230 of
the Companies Act 1985 and has not presented its own income statement in these
financial statements.
At the date of authorisation of these financial statements, the following
standards and interpretations which have not been applied in these financial
statements were in issue but have not yet come into effect:
IFRS 7 Financial Instruments: Disclosures and the related amendment to IAS 1 on
capital disclosures
IFRS 8 Operating segments
Revised IAS 23 Borrowing costs
IFRIC 10 Interims and impairment
IFRIC 11 IFRS 2 - Group and treasury share transactions
IFRIC 13 Customer loyalty programmes relating to IAS 18, Revenue
The Directors anticipate that the adoption of these standards and
interpretations in future periods will have no material impact on the financial
statements of the Group.
The following new standards and interpretations which were in issue but have not
yet come into effect are not considered to be relevant to Centaur's activities:
Revised guidance on implementing IFRS 4, 'Insurance contracts'
Amendment to IAS 21 Net investment in a foreign operation
IFRIC 12 Service concession arrangements
IFRIC 14, IAS 19 The limit on a defined benefit asset, minimum funding
requirements and their interaction
These financial statements are presented in pounds sterling (GBP) as that is the
currency of the primary economic environment in which the group operates.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of the amount, events or actions, the actual results may ultimately
differ from those estimates.
Additional presentation within the consolidated income statement
The Group has presented separately on the face of the consolidated income
statement an additional profit measure of adjusted EBITDA. Adjusted EBITDA is
earnings before interest, tax, depreciation, amortisation and excluding
exceptional and other significant non-cash items. This presentation has been
provided as the Directors believe that this measure reflects more clearly the
ongoing operations of the Group. In 2007 and 2006, share based payment costs
have been treated as a significant non-cash item.
Centaur Media plc
Notes to the financial statements
1 Segmental reporting
Primary reporting format - business segments
The group is currently organised into five main business segments. Corporate
costs are allocated to business segments on an appropriate basis depending on
the nature of the cost. Inter-segment pricing is determined on an arm's length
basis. Segment assets consist primarily of property, plant and equipment,
intangible assets including goodwill, inventories, trade receivables and cash
and cash equivalents. Segment liabilities comprise trade payables, accruals and
deferred income. Corporate assets and liabilities comprise current and deferred
tax balances, cash and cash equivalents and borrowings. Capital expenditure
comprises additions to property, plant and equipment, intangible assets and
goodwill and includes additions resulting from acquisitions through business
combinations.
Secondary reporting format - geographical segments
Substantially all of Centaur's net assets are located and all revenue and profit
are generated in the United Kingdom. The Directors consider that the group
operates in a single geographical segment, being the United Kingdom, and
therefore secondary format segmental reporting is not required.
Year ended Legal and Marketing Construction Perfect General Unallocated Group
30 June 2007 Financial and Creative and Information Business
Engineering Services
-------------------------------------------------------------------------------------------------------------
£m £m £m £m £m £m £m
Continuing
operations
Revenue 30.3 23.6 19.4 6.0 11.0 - 90.3
Adjusted EBITDA 9.0 3.6 4.1 1.5 1.5 - 19.7
Depreciation of
property, plant
and equipment (0.2) (0.2) (0.1) (0.1) (0.2) - (0.8)
Amortisation of
software (0.3) (0.3) (0.2) (1.0) (0.1) - (1.9)
Amortisation of
acquired intangibles (0.1) - (0.4) - (0.2) - (0.7)
Share based
payments - - - - - (0.4) (0.4)
Exceptional
administrative
credit - - - - - - -
-------------------------------------------------------------------------------------------------------------
Segment result 8.4 3.1 3.4 0.4 1.0 (0.4) 15.9
-------------------------------------------------------------------------------------------------------------
Interest
receivable - - - - - 0.2 0.2
Share of post tax
profit of
associates 0.1 - - - - - 0.1
Profit on sale of
associate 0.7 - - - - - 0.7
-------------------------------------------------------------------------------------------------------------
Profit before tax 9.2 3.1 3.4 0.4 1.0 (0.2) 16.9
Taxation - - - - - (4.6) (4.6)
-------------------------------------------------------------------------------------------------------------
Profit for the
year from
continuing operations 9.2 3.1 3.4 0.4 1.0 (4.8) 12.3
-------------------------------------------------------------------------------------------------------------
Discontinued
operations
-------------------------------------------------------------------------------------------------------------
Revenue - - - - 1.1 - 1.1
Segment result - - - - (0.1) - (0.1)
Profit on disposal
of operation - - - - 0.1 - 0.1
-------------------------------------------------------------------------------------------------------------
Profit for the
year from
discontinued operations - - - - - - -
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Profit for the
year attributable
to equity
shareholders 9.2 3.1 3.4 0.4 1.0 (4.8) 12.3
-------------------------------------------------------------------------------------------------------------
Segment assets 60.4 47.4 39.7 12.0 18.7 - 178.2
Corporate assets - - - - - 12.0 12.0
-------------------------------------------------------------------------------------------------------------
Consolidated total
assets 60.4 47.4 39.7 12.0 18.7 12.0 190.2
-------------------------------------------------------------------------------------------------------------
Segment
liabilities 4.2 5.3 5.5 2.9 2.5 - 20.4
Corporate
liabilities - - - - - 5.3 5.3
-------------------------------------------------------------------------------------------------------------
Consolidated total
liabilities 4.2 5.3 5.5 2.9 2.5 5.3 25.7
-------------------------------------------------------------------------------------------------------------
Other items:
Capital expenditure 0.3 1.0 0.2 1.0 4.7 - 7.2
Impairment of
trade receivables 0.1 0.2 0.2 (0.1) 0.2 - 0.6
1 Segmental reporting (continued)
Year ended Legal and Marketing Construction Perfect General Unallocated Group
30 June 2006 Financial and Creative and Information Business
Engineering Services
-------------------------------------------------------------------------------------------------------------
£m £m £m £m £m £m £m
Continuing
operations
Revenue 24.5 23.5 16.5 6.4 9.6 - 80.5
Adjusted EBITDA 7.1 3.3 3.4 1.4 0.5 - 15.7
Depreciation of
property, plant
and equipment (0.1) (0.2) (0.2) (0.1) (0.1) - (0.7)
Amortisation of
software (0.4) (0.3) (0.2) (0.8) (0.1) (1.8)
Amortisation of
acquired
intangibles - - (0.1) - (0.2) - (0.3)
Share based
payments - - - - (0.4) (0.4)
Exceptional
administrative
credit - - - 2.2 - - 2.2
--------------------------------------------------------------------------------------------------------------
Segment result 6.6 2.8 2.9 2.7 0.1 (0.4) 14.7
--------------------------------------------------------------------------------------------------------------
Interest
receivable - - - - - 0.3 0.3
Share of post tax
profit of
associates 0.1 - - - - - 0.1
-------------------------------------------------------------------------------------------------------------
Profit before tax 6.7 2.8 2.9 2.7 0.1 (0.1) 15.1
Taxation - - - - - (3.7) (3.7)
-------------------------------------------------------------------------------------------------------------
Profit for the
year from
continuing
operations 6.7 2.8 2.9 2.7 0.1 (3.8) 11.4
--------------------------------------------------------------------------------------------------------------
Discontinued
operations
-------------------------------------------------------------------------------------------------------------
Revenue - - - - 1.8 - 1.8
Segment result - - - - - - -
Profit on disposal
of operation - - - - - - -
--------------------------------------------------------------------------------------------------------------
Profit for the
year from
discontinued
operations - - - - - - -
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Profit for the
year attributable
to equity
shareholders 6.7 2.8 2.9 2.7 0.1 (3.8) 11.4
---------------------------------------------------------------------------------------------------------------
Segment assets 68.6 51.9 40.7 15.1 11.2 - 187.5
---------------------------------------------------------------------------------------------------------------
Consolidated total
assets 68.6 51.9 40.7 15.1 11.2 - 187.5
---------------------------------------------------------------------------------------------------------------
Segment
liabilities 4.7 5.5 6.9 2.8 3.7 - 23.6
Corporate
liabilities - - - - - 6.0 6.0
---------------------------------------------------------------------------------------------------------------
Consolidated total
liabilities 4.7 5.5 6.9 2.8 3.7 6.0 29.6
---------------------------------------------------------------------------------------------------------------
Other items:
Capital
expenditure 1.6 0.5 7.9 1.2 4.9 - 16.1
Impairment of
trade receivables 0.2 0.2 0.1 - 0.1 - 0.6
---------------------------------------------------------------------------------------------------------------
2 Taxation
(a) Analysis of charge in year
2007 2006
£m £m
Current tax
- Current year 4.6 3.3
- Adjustment in respect of prior year - 0.6
----------------
4.6 3.9
----------------
Deferred tax
- Current year (0.1) 0.5
- Adjustment in respect of prior year 0.1 (0.7)
-----------------
- (0.2)
-----------------
Taxation 4.6 3.7
-----------------
(b) Tax on items charged to equity
Deferred tax charge/(credit) on share based payments 0.1 (0.2)
-----------------
(c) Factors affecting tax charge for the year
The tax assessed for the year is lower (2006: lower) than the standard rate
of corporation tax in the UK (30%). The differences are explained below:
2007 2006
£m £m
Profit before tax 16.9 15.1
-----------------
Profit before tax multiplied by standard rate of
corporation tax in the UK of 30% (2006: 30%) 5.1 4.5
Effects of:
Non taxable release of deferred consideration provision - (0.8)
Expenses not deductible for tax purposes 0.2 0.2
Non-taxable gain on sale of associate (0.2) -
Current tax deduction on share options exercised (0.2) -
Deferred tax credit on share based payments taken to
income statement (0.5) (0.1)
Losses not recognised 0.1 -
Adjustments to tax charge in respect of previous years 0.1 (0.1)
-----------------
Total taxation 4.6 3.7
-----------------
There was no tax arising on discontinued operations during the current or
previous year.
A number of changes to the UK Corporation tax system were announced in the March
2007 Budget Statement and have been enacted in the 2007 Finance Act. The changes
had been substantively enacted at the balance sheet date and, therefore, are
included in these financial statements. These changes have not had a significant
impact on the tax balances of the Group
3 Earnings per share
Basic earnings per share (EPS) is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of shares
in issue during the year. Shares held in the employee benefit trust have been
excluded in arriving at the weighted average number of shares.
For diluted earnings per share the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Company has two classes of dilutive potential ordinary shares: share
options granted to Directors and employees where the exercise price is less than
the average market price of the Company's ordinary shares during the year; and
the contingently issuable shares under the Company's long term incentive plan to
the extent that the conditions are met at the period end.
An alternative measure of adjusted earnings per share has been provided as the
Directors believe that this measure is more reflective of the ongoing trading of
the Group.
2007 2006
Earnings Weighted Per Earnings Weighted Per
average share average share
number amount number amount
of of
shares shares
£m millions Pence £m millions Pence
--------------------------------------------------------------------------------
Basic EPS 12.3 149.1 8.2 11.4 149.3 7.6
--------------------------------------------------------------------------------
Effect of dilutive
securities
Options - 1.8 - - 0.7 -
Contingently issuable
shares - 0.4 - - 0.1 -
--------------------------------------------------------------------------------
Diluted basic EPS 12.3 151.3 8.1 11.4 150.1 7.6
--------------------------------------------------------------------------------
Adjusted EPS
Earnings attributable to
ordinary shareholders 12.3 149.1 8.2 11.4 149.3 7.6
Amortisation of acquired
intangibles 0.7 - 0.5 0.3 - 0.2
Profit on disposal of
associated undertakings (0.7) - (0.5) - - -
Exceptional
administrative credit - - - (2.2) - (1.5)
Tax effect of above
adjustments (0.1) (0.2) - (0.1)
--------------------------------------------------------------------------------
Adjusted EPS 12.2 149.1 8.2 9.3 149.3 6.2
--------------------------------------------------------------------------------
Effect of dilutive
securities
Options - 1.8 - - 0.7 -
Contingently issuable
shares - 0.4 - - 0.1 -
--------------------------------------------------------------------------------
Diluted adjusted EPS 12.2 151.3 8.1 9.3 150.1 6.2
--------------------------------------------------------------------------------
There is no difference between EPS for the financial year and EPS for continuing
operations.
4 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 30 June
2007 on which the auditors have not yet expressed an opinion, but for which an
unqualified report is expected. Copies of the Annual Report and Accounts will be
posted to shareholders shortly and will be available from the Company's
registered office at 50 Poland Street, London, W1F7AX.
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