Preliminary results for the year ended 31 Dec 2019

RNS Number : 5858G

Centaur Media PLC

18 March 2020

Centaur Media Plc

Preliminary results for the year ended 31 December 2019

Excellent progress on business unit profitability and cost reduction

Stronger balance sheet with cash balance of over £9m

Coronavirus risks and mitigation plans under continuous review

Margin Acceleration Plan 2022 on track

Financial Highlights


£m	2019	2018
Statutory revenue	48.9	50.3
Adjusted¹ EBITDA	2.6	1.4
Adjusted¹ operating loss	(1.1)	(2.2)
Group statutory profit/(loss) after taxation	1.9	(14.2)

· Completion of disposal programme gave a profit on disposal of £7.8m and has created a simpler business with two divisions, Xeim focused on the marketing profession and The Lawyer focused on the legal profession

· Revenues fell 3% to £48.9m as management exited loss-making activities within Xeim

· Adjusted EBITDA grew by 24% at Xeim and 16% at The Lawyer

· Annualised reduction of £5m of overhead costs run-rate achieved on schedule

· Group adjusted EBITDA¹ (pre-IFRS 16) increased to £2.6m (2018: £1.4m)

· Proposing a final dividend of 0.5p per share in accordance with new dividend policy

· Net cash of 9.3m at 31 December 2019

Centaur Media, an international provider of business intelligence and specialist consultancy, is pleased to present its preliminary results for the year ended 31 December 2019.

The markets remain challenging as the impact of coronavirus on our clients and our business remains uncertain. Centaur is continuously evaluating its risks as the situation develops and is developing mitigating contingency plans to secure the business. Notwithstanding this, Centaur will endeavour to achieve its target of a double-digit Adjusted EBITDA margin in 2020 as it pushes ahead with its Margin Acceleration Plan to increase EBITD margins to at least 20% by 2022.

During the year, Centaur successfully sold its businesses in engineering, financial services, human resources and travel and meetings for gross proceeds of £21.75m. The completion of the disposal programme in July 2019 created a simpler, more focused Group with two businesses, Xeim in marketing services and The Lawyer in the legal sector.

The simplification has made it possible for Centaur to reduce its overhead costs run rate by an annualised £5m, the bulk of the benefit of which will flow through in 2020. An increased focus on profitability and cross-selling at Xeim and the continued growth of The Lawyer has enabled both businesses to improve their adjusted EBITDAs significantly.

Xeim is now managing and cross-selling marketing brands with more effective customer focus. Influencer Intelligence has developed its offering to remain at the forefront of its sector and Marketing Week has added a new brand eLearning course and enhanced its e-commerce capability. The Festival of Marketing attracted 48% more visitors - a new record. Econsultancy subscriptions and MarketMakers continue to face challenges.

The Lawyer continued its strong revenue and profit growth, with a strong performance on premium content revenues, successful launch of the Litigation Tacker and an encouraging debut for the Marketing Leadership Summit.

Centaur is proposing a final dividend payment of 0.5p per share, payable on 29^th May 2020. The Board was intending to propose the payment of another special dividend in May 2020 but has decided to defer this decision until there is more visibility around the impact of the coronavirus on the Group's cash flows. To date, we have deferred two of our larger The Lawyer events from Q2 to Q4 and the Festival of Marketing is expected to continue in October, as planned.

Swag Mukerji, Chief Executive Officer, commented:

"The coronavirus impact affects us all and has given rise to considerable uncertainty for the foreseeable future. Centaur has made good progress since completing its disposal programme last July, reducing our central overhead costs run-rate by £5m and improving the profitability of both our marketing and legal businesses, through an improved revenue mix, cross-selling and elimination of duplicate costs.

We will endeavour to keep our MAP22 plan on track, to increase EBITDA margins to at least 20% by 2022, as we focus on profitable growth opportunities. We have a strong balance sheet, supported by a £25m undrawn banking facility, and will continue to monitor our cash position closely as the current uncertainty develops.

Global health concerns apart, Centaur has begun 2020 as a far simpler and more focused Group, with new energy to address the many opportunities we see in our markets ."

Enquiries

Centaur Media plc
Swag Mukerji, Chief Executive	020 7970 4000
Simon Longfield, Chief Financial Officer

Teneo
Paul Durman/ Rebecca Hislaire	07793 522824/ 07876 879856

Notes:

¹ Adjusted results exclude adjusting items, as detailed in note 4 of the financial information. EBITDA is stated excluding the impact of IFRS 16 in order to show a true comparison with 2018.

Advise. Inform. Connect

Our vision

We will be the "go to" company in the international Marketing Services and Legal sectors to:

} Inform customers using data, content & insight with the provision of business intelligence products;

} Provide advice to businesses on how to improve their performance and ROI; and

} Connect specific communities through media and events.

We will provide cutting-edge insight and analysis, building strong and lasting relationships with our customers and aiming to deliver long-term sustainable returns to our shareholders.

Our business

Centaur is an international provider of business information and specialist consultancy that inspires and enables people to excel at what they do within the marketing and legal professions. Our Xeim and The Lawyer business units serve the marketing and legal sectors respectively and, across both, we offer our customers a wide range of products and services targeted at helping them add value.

Our reputation is based on the trust and confidence arising from a deep understanding of these sectors and we have developed a strong track record for providing insight, content and data. Our key strengths are the expertise of our people, the quality of our brands and products, and our ability to harness technology to innovate continually and develop our offering. This enables us to help our customers raise their aspirations and deliver better performance.

Highlights of the year

Strategic

· Centaur concluded a radical transformation programme to reshape the Group as a much simpler business focused on two sectors: the marketing and legal professions.

· We successfully completed the divestments of our non-core legacy businesses in financial services, human resources, business travel and meetings, and engineering for a gross consideration of £21.75m.

· The Group now consists of Xeim, the new name given to our marketing businesses at the beginning of last year, and The Lawyer.

· The simplification enables the Group to focus on growth, capitalise on synergies and deliver shareholder value.

· As we look towards Centaur's next stage of development, we announced our Margin Acceleration Plan 2022, MAP22. This is our three-year plan to improve EBITDA margins to at least 20% by 2022 through a combination of profitable revenue growth and operating cost efficiencies.

Operational

· The formation of Xeim enabled significant cost reduction during 2019, as duplicate brand management and processes were eliminated. Additionally, the simplification of the Group facilitated the reduction of central overhead costs by £5m on an annualised basis. The benefits of this will be seen in 2020.

· Xeim focused on growing its profitable revenue and rationalised its portfolio of low margin/loss making businesses, delivering a considerably enhanced margin:

o Influencer Intelligence continued to develop its international offering to remain at the forefront of the fast-growing influencer marketing sector;

o Marketing Week launched a digital subscription platform and redesigned website; and

o We built on the success of the Mini-MBA programme and launched a new marketing brand course.

· The Lawyer continued its growth through the successful launch of the Litigation Tracker and the Marketing Leadership Summit event was a successful addition to The Lawyer's events portfolio.

Financial

· The Group reported an adjusted¹ operating loss in 2019 of £1.1m (2018: a loss of £2.2m). On a statutory basis the Group made an operating loss in 2019 of £8.4m (2018: a loss of £20.3m). The Group's performance improved during the year with the benefit of trading seasonality and initial cost savings from the Group's simplification

· Xeim and The Lawyer combined have increased adjusted EBITDA¹ by 21% due to cost savings in Xeim and revenue growth in The Lawyer.

· A final ordinary dividend of 0.5p per share is proposed, which, together with the interim ordinary and special dividends of 3.5p per share, gives a total of £5.7m (4.0p per share) paid out as dividends relating to 2019.

· From 1 January 2020, Centaur has adopted a new progressive dividend policy targeting a pay-out ratio of 40% of adjusted earnings, subject to a minimum dividend of 1.0p per share.

¹ See financial performance review for explanation of adjusted results and alternative performance measures

PERFORMANCE: CEO REVIEW

Overview of 2019

I am pleased to deliver my first report to you as Centaur's CEO, having succeeded Andria Vidler in September. Having worked closely with Andria since joining Centaur as CFO in 2016, I have a thorough understanding of how the Group has undergone a profound transformation in recent years and I have set the MAP22 strategy going forward. I would like to thank Andria for her considerable guidance and support over the last few years.

2019 marked the start of a new chapter in Centaur's evolution. As described in the strategy section, the completion of our divestment programme has made Centaur a much simpler business focussed on two sectors: the marketing and legal professions.

These divestments were completed shortly before Centaur moved into attractive modern offices close to London's Waterloo station. Our new home was designed to foster collaboration, with 270 employees on a single floor, and I think I speak for all employees in saying that the move has injected fresh energy and momentum into our businesses.

The move is one example of how Centaur's simpler structure has unlocked important benefits and efficiencies. Through the elimination of costs needed to support the businesses sold last year and other measures, the Group has reduced annualised central overheads by the end of 2019 by £5m, as promised, and the full year effect of this will be seen in 2020.

Results for the year

2019 was a complex year for Centaur with many moving parts and the reporting requirements make it difficult to clearly articulate what has fundamentally happened to the Group. We earned profits from the disposed businesses until the day they were sold, and this is reported under discontinued operations. During this period, we maintained the full central overhead functions required to support these businesses and this is shown in continuing operations. Once they were sold, we continued to provide services to these businesses generating income for the Group from Transitional Service Agreements (TSA), the last of which expired at the end of 2019. We therefore could not eliminate a proportion of the overhead costs immediately after the disposal, although they were removed by the end of 2019 and will deliver the £5m annualised benefit in 2020.

While both Xeim and The Lawyer grew their profits in 2019, the impact of the higher central overhead resulted in Centaur achieving an adjusted operating loss of £1.1m and a statutory operating loss of £8.4m on revenues of £48.9m. Group adjusted EBITDA¹ margin has grown from 3% to 5%. It should be noted that the seasonal trading pattern of the new simplified group will result in the majority of profits arising in the last quarter of the year.

Centaur ended the year with £9.3m of cash (2018: £0.1m), having received net proceeds of £16.4m from the businesses sold during the year.

Details of the trading performance are contained within the Operational Review of my report.

The divestments encompassed the sale of our financial services division, including titles such as Money Marketing, Mortgage Strategy, Platforum, Taxbriefs and Headline Money to Metropolis Group. Centaur Media Travel and Meetings Ltd, the owner of the Business Travel Show and The Meetings Show, was sold to Northstar Travel Media UK Limited. Centaur Human Resources Limited, which includes Employee Benefits, was acquired by DVV Media International and our engineering titles, including the Engineer and Subcon, were sold to Mark Allen Group.

Dividend

The reshaping of the Group was a catalyst for the Board to review its dividend policy, having distributed more than 100% of cumulative earnings to shareholders over the previous three years. In September, we announced a new progressive dividend policy which targets a pay-out ratio of 40% of adjusted earnings, or 1.0p per share, whichever is the higher. This came into force on 1 January 2020.

We also announced a distribution of £5.0m, comprising an interim dividend of 1.5p per share and a special dividend of 2.0p per share, paid in October 2019. Under the new dividend policy, we will now pay a final ordinary dividend of 0.5p per share in May 2020. Dividends to shareholders, ordinary and special, relating to 2019 therefore total £5.7m (4.0p per ordinary share).

We had planned to pay a further special dividend alongside our ordinary dividend in May. However, we have decided to defer this decision until there is more visibility around the impact of coronavirus on the Group's cash flows.

¹ Excluding the impact of IFRS 16 in order to show a comparison to 2018

Operational review

Centaur now comprises two business units, Xeim and The Lawyer. Xeim is Centaur's largest business and contributes 83% of Group revenues, with The Lawyer making up the balance. Each business unit is run on a stand-alone basis with dedicated management teams. As explained above, the 2019 central overhead did not reflect the simplified group and going forward, in 2020, there is a lean central function, primarily focused upon external governance and reporting, following the £5m overhead saving.

Xeim

Xeim was formed in early 2019 and brings our marketing brands into a single business unit, allowing us to manage them more effectively, cross-sell our products more efficiently, eliminate duplication of effort and enhance their margins.

In 2019, Xeim delivered a turnover of £40.7m, a 4% decrease from the previous year as a result of management action to reduce low margin and loss-making revenue streams such as Marketing Week Live, together with and disappointing performances from MarketMakers and some parts of Econsultancy.

Xeim also identified further opportunities to eliminate costs and improve our operational efficiency. As a result, Xeim increased its adjusted EBITDA margin from 12% to 15%, achieving a business unit adjusted EBITDA of £6.3m, which represents a pleasing growth of 24% from the prior year. This growth was driven by the introduction of new products such as the Mini-MBA Brand course, growth in brand margins and eliminating duplicate costs in the brand management structures.

As discussed earlier, we interact with customers by using the power of our brands and generate different types of revenues from this. This creates both cross-selling opportunities and operational synergies and Xeim's customer centric strategy is achieving success with its largest customers as we create more tailored solutions and integrated services across multiple brands. Our Top 50 customers in 2019 renewed contracts on terms that were 35% higher than the prior year reflecting the value created from the additional services that we delivered. This reflects the new Xeim operational structure which successfully cross-sold a wider portfolio of Xeim's products and services and therefore increased the average value sold to each customer.

In Xeim, Premium content revenues are generated, in the main, from our Influencer Intelligence and Econsultancy brands. Creative Review has been successfully put behind a paywall and the recent move of Marketing Week to a digital platform, incorporating a paywall, is showing good early signs.

The global influencer marketing market, currently worth an estimated US$5.5bn, is projected to grow to US$22.3bn by 2024 (source: MarketsandMarkets 2019). Influencer Intelligence, our market leading source of trusted information and analytics for brands seeking to harness the power of global influencers, continued to perform well, with revenue increasing 11% in 2019.

This underpins our growth strategy in a dynamic sector and is one of our key subscription revenue growth drivers for MAP22. In 2020, we are adding c.100k international influencers to our content and making significant improvement to our products such as extended analytics on new social media networks, brand analytics, campaign management and measurement functionality.

At Econsultancy, we launched a new platform which has two clear and distinct customer offerings for subscribers:

· Insight: Econsultancy's proprietary content now sits behind an ecommerce-driven subscriber paywall as part of a fully integrated, easy-to-navigate service which makes the content easier to digest and more practical to use; and

· Learning: The platform includes a dedicated "Econ Learn" section which brings together all Econsultancy's digital learning content. Users can assess their skills using the Digital Skills Index and follow a tailored learning journey based on their results, dip into learning modules or engage in Econsultancy's structured eLearning courses - all within a single intuitive product environment.

Econsultancy saw renewals by value increasing to 63% in 2019, up from 54% in 2018. While still lower than desired, it is pleasing to see that the downward trend from 2018 has been reversed. Econsultancy is also a leading provider of training and has been strengthened through the addition of Oystercatchers into the Econsultancy brand. Our focus on blended learning underpins our growth strategy and is supported by both improved product design and an enhanced sales team. A key element of the Oystercatchers business model is the relationship and chemistry between agencies and clients and for 2019 we placed more emphasis on this important dynamic. While its revenues have shrunk, the decision to pull back the team responsible for selling and marketing Econsultancy in the US to the UK has worked and is improving Econsultancy margins while continuing to provide services to our US customers. Although the overall revenues from Econsultancy did not grow in 2019, billings and margins have, which will be reflected in improved performance in 2020.

Marketing Week has shown early positive signs following the launch of a new digital platform which incorporates a paywall to enable e-commerce, improved search functionality, new navigation and a cleaner design. It is possible to upgrade to a combined Marketing Week and Econsultancy service via a single log-in, which gives our customers an efficient way of accessing our products. The new Marketing Week Knowledge Bank allows Xeim to generate additional revenues from white papers and research on its website.

The Festival of Marketing, Xeim's flagship event, delivered another compelling line-up of speakers in 2019 and received positive feedback from delegates and sponsors. Attendance was up by 48% in comparison with 2018 and there was a double-digit improvement in e-commerce sales. The VIPs in attendance included almost 200 senior management and CMO level guests. This gave the Festival a palpable buzz and generated a positive experience for our event sponsors and strategic partners. Speakers at the event included Dave Lewis, CEO at Tesco, actress and activist Rose McGowan, TV presenter Davina McCall and Marketing Week columnist Mark Ritson who set the scene with a packed session on brand excellence. This success puts the event in a strong position for 2020.

eLearning, which includes the Mini-MBA, a joint initiative with Mark Ritson, has gone from strength to strength with revenue growing 75% in 2019 underpinned by a 47% year-on-year increase in delegates. The feedback is overwhelmingly positive across every intake with an average net promoter score of +76. Building on this success, in September 2019 we launched a new marketing brand course with two further courses planned for 2020. The new Mini-MBA Brand Management course is only available to Marketing Week Mini-MBA alumni and aims to help marketers with the skills they need to become brand managers.

MarketMakers had a challenging 2019 with marketing services revenues at Really down 4% year-on-year and telemarketing services down 3%. This was driven by increased customer churn within telemarketing services in the SME sector, reduced spend from certain key accounts and lower than anticipated renewals at Really in the first half of the year. Due to the relatively low margins in this business, the profit impact is limited.

At the end of 2019, Centaur announced the appointment of Jude Bridge as managing partner of Oystercatchers and Darren McGill as managing director of MarketMakers. Jude was an award-winning marketing director at Marks & Spencer and Save the Children and brings deep expertise in building some of the UK's strongest brands. Darren has a wealth of experience in senior commercial roles, most recently as chief revenue officer at Signal AI, the leading media information business. Both are already having an impact and will take on broader roles within Xeim. Jude will develop and lead a marketing excellence programme to ensure best-in-class marketing practice, while Darren will develop and lead a sales excellence initiative to improve customer retention and sales productivity.

The key drivers of Xeim going into 2020 are the growth of our Influencer Intelligence and Econsultancy subscription revenues, the continued success of the mini-MBA and building upon the success of the Festival of Marketing by attracting new and repeat delegates and sponsors. The disappointing performances of MarketMakers and Econsultancy are being addressed and, whilst improved performances are expected in 2020, they remain a challenge.

The Lawyer

The Lawyer is a leading provider of intelligence to the global legal market, generating revenue from digital subscriptions, live events and marketing solutions. The Lawyer represented 17% of Group revenues in 2019 and achieved a 9% increase in underlying revenue, a 16% increase in adjusted EBITDA and an adjusted EBITDA margin of 35%.

The successful move to a multi-channel digital platform continues to support The Lawyer's growth. Alongside a 12% increase in corporate clients since 2018, the website has seen a double-digit year-on-year increase in the frequency of subscriber visits and increased content consumption, with 50% of subscribers now visiting on a daily or weekly basis.

We have continued to develop The Lawyer's premium content business which represents just over 40% of its total revenue, with a growth of 17% in underlying revenue over the year.

In January 2019, The Lawyer launched the Litigation Tracker, an interactive tool that extends the functionality of The Lawyer's current market insight products and provides real-time insight into the UK litigation market. With over 40 corporate clients and extremely positive feedback from users, we are pleased with its reception and plan to build on this momentum, including the addition of further data sets in 2020.

The Lawyer's events business also grew by 17%, propelled by the first new event launches since 2016. This included the inaugural Marketing Leadership Summit, which was well-received with a net promoter score of +57 from attendees.

Encouragingly, our more established events also performed well with particularly strong year-on-year growth achieved in our GC Summit and In-House Financial Services conferences, our European Awards and our roundtable events for individual clients.

Revenue from marketing and advertising solutions continued to be a challenge and fell by 4% during the year, although the rate of decline has slowed.

People and culture

Our executive committee is committed to ensuring we maintain a culture that supports, engages and empowers employees to fulfil their potential. It is this culture that underpins our business ambitions and we continue to develop internal training plans and communication processes to ensure our employees' success.

Across the Group, the gender balance is good with a male-female ratio of 49:51. At Board level, half of our non-executive directors are female, but there is more work to be done to encourage and promote women onto our senior leadership team which only has a one-third female representation.

As a company, we understand the importance of family and we offer enhanced maternity and paternity leave. During 2019, we introduced a wider range of flexible working arrangements to coincide with our new office environment in London. We have a high rate of maternity returners (85% in 2019) and 8% of our workforce have part-time working arrangements.

In 2019 we established a workforce advisory panel to cover diversity, inclusion, culture and engagement (DICE) to ensure that our culture supports and empowers our employees and promotes their ongoing development. DICE reports to me and frequently meets with the executive committee. There is also a nominated non-executive director to oversee the working of DICE. Our policies and working practices embrace an inclusive working environment and takes a proactive and progressive approach to supporting diversity. Our hiring policy is focused on appointing the best person for the job irrespective of race, gender, sexual orientation or disability. The Company also offers a range of mental health, wellbeing and fitness sessions.

In 2019 we continued with our formal mentoring programme which was launched in 2018. We delivered face-to-face coaching sessions to more than 100 staff at all levels and now have qualified Mental Health First Aiders in the business. We ran workshops for line managers to support flexible and remote working, and staff continue to participate in and be advocates of our Mini-MBA programme.

Summary

In 2019, Centaur radically transformed the shape of our business. In simplifying our portfolio and concentrating our attention on two key markets, we have a more streamlined customer-facing group that can direct its focus at developing its product offerings and digital capabilities. Cross-selling, technology platform enhancement and employee expertise will enhance these product offerings and quality of revenue. The Lawyer, Influencer Intelligence and eLearning will be key drivers of revenue growth towards MAP22.

Coronavirus has brought uncertainty to global markets and whilst our customers remain committed, some of their decisions are being delayed. We have carried out detailed risk analysis across the business and have postponed two of The Lawyer's key events from Q2 to Q4. The Festival of Marketing will go ahead in October, as planned, and we shall keep our remaining events under review. We have a strong balance sheet and an undrawn £25m credit facility. We will be keeping a close eye on cash through these uncertain times.

The dramatic scale and pace of change in Centaur has made this a tough year for our employees. Centaur's transformation has only been achievable through their expertise and commitment and I am incredibly grateful for the energy, resilience and positive approach they have demonstrated during this period of change. As we now enter the next stage of the Group's development, I am confident that we have the strategy and structure and people in place to achieve our MAP22 goal. I look forward to building towards this in 2020.

Key performance indicators (financial and non-financial)

The Group has set out the following core financial and non-financial metrics to measure the Group's performance. The KPIs are monitored by the Board by reference to the annual budget and the focus on these measures will support the successful implementation of the MAP22 strategy. These indicators are discussed in more detail in the CEO report and Financial Review.

KPI	Graph	Commentary
Financial
Underlying revenue growth	2018: (1)%, 2019: (2)%	The growth in total revenue adjusted to exclude the impact of event timing differences, as well as the revenue contribution arising from acquired or disposed businesses.
Adjusted EBITDA margin*	2018: 3%, 2019: 5%	Adjusted EBITDA as a percentage of revenue where adjusted EBITDA is defined as adjusted operating profit before depreciation and impairment of tangible assets, and amortisation and impairment of intangible assets other than those acquired through a business combination. For comparative purposes, the 2019 figure excludes the impact of IFRS 16 (Leases) (see Financial Review).
Adjusted diluted EPS	2018: 2.6p, 2019: 0.3p	Diluted earnings per share calculated using the adjusted earnings, as set out in note 9 of the financial information.
Cash conversion	2018: 85%, 2019: 100%	The percentage by which adjusted operating cash flow covers adjusted EBITDA (on continuing and discontinued operations) as set out in the financial performance review.
Non-financial
Attendance at Festival of Marketing	2018: 2,780; 2019: 4,119	Number of unique delegates attending the Festival of Marketing
Delegates on mini-MBA course	2018: 1,960; 2019: 2,875	Number of delegates on mini-MBA and related eLearning courses in the year
Xeim customers >£50k	2018: 109 (£18.4m); 2019: 108 (£18.1m)	Number and value of Xeim customers that have sales in the year of greater than £50,000
Top 250 law firm customers	2018: 159 (64%); 2019: 170 (68%)	Number and percentage of top 200 UK law forms and top 50 US law firms

*See definitions in Financial Review.

PERFORMANCE: FINANCIAL REVIEW

Overview

2019 was a significant year for Centaur as it completed its restructuring through the divestment programme described in the CEO's review. Despite the impact of the divestment programme on the Group and its employees, I am delighted to report that both Xeim and The Lawyer grew adjusted operating profit, adjusted EBITDA and adjusted EBITDA margin in 2019. Combined with the annualised overhead cost savings of £5m that we promised at our interim results, the full year impact of which will be seen in 2020, this performance has put Centaur well on the path to obtaining our MAP22 target of at least 20% adjusted EBITDA margin by 2022 (without the benefit of the impact of IFRS 16).

2019 was dominated by the divestment programme in the first half of the year with income generating transitional arrangements continuing long into the second half of the year. The result of the divestment programme is a simpler, more streamlined Group with increased focus on its two core businesses. By removing non-core assets, we have been able to achieve a significant reduction in overhead costs and have recognised exceptional restructuring costs in the income statement as a consequence of the cost reduction plan of £2.5m.

Due to the divestment programme, the Group is required to report its current year, and also restate its prior year, results in line with IFRS 5 (Non-current assets held for sale and discontinued operations), so that only the results of the continuing business are reported as part of revenue and adjusted operating profit. The results of the disposed businesses up to the date of their divestment are therefore shown in net income from discontinued operations. However, as most of the £5m cost reduction took place in the second half of the year, the lost contribution of the disposed assets was not immediately offset by the cost savings. This caused the Group to report an adjusted operating loss for the year, albeit reduced compared to 2018 due to increases in business unit EBITDA.

The Group received total cash consideration of £20.4m from the divestment programme. After transaction costs of £2.3m and working capital adjustments of £1.7m, net cash received from the divestment programme was £16.4m.

The Group adopted IFRS 16 but took the exemption not to re-state comparatives for the prior year. As a result, year-on-year business unit profitability is not directly comparable except at a pre-IFRS 16 adjusted EBITDA level, reflected in the discussion below.

Performance

Group

The Group is reporting a statutory profit after taxation of £1.9m (2018: a loss of £14.2m) primarily due to the profit on disposal of £7.8m from the divestment programme. The Group's adjusted operating loss of £1.1m is an improvement from the restated adjusted operating loss of £2.2m for 2018. This was driven by significant cost reductions within Xeim resulting in a 24% increase in Xeim's adjusted EBITDA, together with adjusted EBITDA growth of 16% in The Lawyer. The adjusted EBITDA for the two business units is therefore 21% higher than 2018 despite a revenue decline of 3%.

Reported revenue of £48.9m represents a decline of 3% over 2018. On an underlying¹ basis, Group revenue fell 2% from £48.5m in 2018 to £47.7m in 2019. Xeim underlying revenue fell by 4% - increases in eLearning and Influencer Intelligence revenues were more than offset by reductions due to the withdrawal from public training within Econsultancy, and lower revenues at Oystercatchers, Really and MarketMakers. The Lawyer showed strong underlying revenue growth, up 9%, driven by growth in its subscriptions and events business.

Xeim

Influencer Intelligence was merged with Year Ahead during the year and saw strong revenue growth of 11%. Xeim substantially grew its eLearning revenues in 2019 which saw 75% revenue growth year on year, driven by the success of the Mini-MBA and the launch of the new marketing brand course. The mini-MBA saw volume growth of 47% with a pleasing corresponding increase in yield.

Econsultancy's training revenue fell in the year due to the decision to restructure its global sales operation in the US and withdraw from public training replacing this with a new set of courses. As planned, the loss in revenue was more than offset by cost savings and margin improvement. Econsultancy subscription products had a difficult period with lower volumes in the year partially offset by strong improvement in yields, especially on new business. Renewal rates continue to improve, both in terms of volume and yield, but the revenue benefits will not be felt until 2020, as the deferred income unwinds.

MarketMakers had a challenging year. Marketing services revenues at Really remained flat from the half year and consequently ended 4% down year on year. However, our telemarketing operations struggled in the second half of the year, with revenue declining 3% in 2019 due to lower realised revenue on some key contracts and lower than expected campaign renewals from its smaller clients.

We consider profitable revenue growth to be a key pillar to our future success and accordingly we decided to close Marketing Week Live and end public training in our Econsultancy business to focus on more profitable revenue streams and remove duplicate brand and management costs of £2.4m. The impact of this has been that adjusted business unit EBITDA (before the impact of IFRS 16) in Xeim has grown by 24% in the year despite a 4% reduction in underlying revenue.

¹ Underlying is a non-GAAP measure - see Measurements and non-statutory adjustments section of Financial Review for further explanation

The Lawyer

The Lawyer showed strong underlying revenue growth, up 9%, driven by:

· growth of 17% in its premium content business due in part to the launch of new products, such as Digital Litigation Tracker, and increases in corporate subscriptions; and

· excellent performance in its events business, up 17%, resulting from development of the new Marketing Leadership Summit and higher revenues across most of the other events.

Revenue from Marketing and Advertising Solutions fell by 4%, although this is a lower decline than in 2018. Adjusted EBITDA has increased by 16% from £2.5m to £2.9m with a healthy increase in adjusted EBITDA margin from 32% to 35%.

New Accounting Standards

IFRS 16 has been adopted for the current reporting period and the Group has elected to apply the modified retrospective transition approach where comparative periods are not restated. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019.

As at 31 December 2019, the right of use assets have been included in property, plant and equipment at a value of £3.7m and lease liabilities of £4.3m have been presented on the consolidated statement of financial position. This is after £1.6m depreciation expense and £0.2m impairment charge in the year. The overall impact of IFRS 16 on the income statement was an additional expense of £0.1m, with expenses now classified as depreciation on the right of use asset and interest expense on the finance liability.

Adjusted EBITDA in 2019 after applying IFRS 16 (post-IFRS 16) of £4.4m is £1.8m higher than if the new standard had not been applied giving an adjusted EBITDA (pre-IFRS 16) of £2.6m. For the purposes of comparison, the Adjusted EBITDA (pre-IFRS 16) and related margin have been compared to 2018 in this commentary. For further details of the transition to IFRS 16 please refer to note 20.

Measurement and non-statutory adjustments

The statutory results of the Group are presented in accordance with International Financial Reporting Standards ("IFRS"). The Group also uses alternative reporting and other non-GAAP measures as explained below and as defined in the 'Alternative Performance Measures' table below.

Adjusting items

Adjusted results are not intended to replace statutory results but are prepared to provide a better comparison of the Group's core business performance by removing the impact of certain items from the statutory results. The Directors believe that adjusted results and adjusted earnings per share are the most appropriate way to measure the Group's operational performance because they are comparable to the prior year and consequently review the results of the Group on an adjusted basis internally.

Statutory operating loss from continuing operations reconciles to adjusted operating loss and adjusted EBITDA as follows:

	Note		2019 £m		2018 £m
Statutory operating loss			(8.4)		(20.3)
Adjusting items:
Exceptional operating costs	4	4.7		2.0
Impairment of goodwill	10	-		12.8
Amortisation of intangible assets	11	2.4		2.5
Share based payments	25	0.1		0.8
Loss on disposal of subsidiary	14	0.1		-
			7.3		18.1
Adjusted operating loss			(1.1)		(2.2)
Depreciation, software amortisation and impairment	3		5.5		3.6
Adjusted EBITDA (post-IFRS 16)			4.4		1.4
Adjusted EBITDA margin (post-IFRS 16)			9%		3%
Adjusted EBITDA (pre-IFRS 16)			2.6		1.4
Adjusted EBITDA margin (pre-IFRS 16)			5%		3%

Adjusting items from continuing operations generated a loss before tax of £7.3m (2018: £18.1m) as follows:

Adjusting item	Description
Exceptional operating costs	Exceptional costs of £4.7m (2018: £2.0m) include £2.5m (2018: £0.4m) of staff restructuring costs related to the Group's cost reduction plan following the completion of the divestment programme in 2019, £2.2m (2018: £1.3m) of divestment programme related costs and £nil (2018: £0.3m) of costs relating to strategic corporate restructuring initiatives.
Impairment of goodwill	In 2019, £nil (2018: £12.8m) relates to the impairment of goodwill. The 2018 charge primarily related to the Xeim portfolio.
Amortisation of intangible assets	Amortisation of acquired intangible assets of £2.4m (2018: £2.5m) has decreased in the year following the full amortisation of certain intangible assets.
Share based payments	Share based payments in 2019 of £0.1m (2018: £0.8m) have decreased significantly due to the reduction in the number of share options from 10.6m to 7.6m. Forfeitures and lapses of 0.5m and 5.6m share options respectively resulted in a reversal of charges previously recognised. This was offset by an expense recognised for 3.6m new share options granted during the year and an additional charge recognised on 1.6m share options that vested during the year.
Loss on disposal of subsidiary	The loss on disposal of subsidiaries of £0.1m (2018: £nil) relates to the sale of Venture Business Research Limited ("VBR").

Underlying revenue and profit

The Group also measures and presents performance in relation to various other non-GAAP measures, such as underlying revenue. These have been presented to provide users with additional information and analysis of the Group's performance, consistent with how the Board monitors results. The Group's activities are predominantly UK-based and therefore currency movements do not have a material impact on results.

In the year, the Group disposed of VBR which was included in The Lawyer business unit. Due to its size it has not been treated as discontinued and its revenues are therefore reported as part of the Group's continuing revenue. However, for underlying reporting purposes, its revenue (2019: £0.1m 2018: £0.3m) has been excluded. Marketing Week Live, which was included in Xeim, has been closed and therefore its revenue has also been excluded for underlying reporting purposes.

CAP and segment profit

At the half year we disclosed our internal profitability performance measure by segment - contribution after portfolio costs ("CAP"). We reported CAP for three different segments - Xeim, The Lawyer and Central. CAP was an interim measure so that we could illustrate the contributions of the business units while the Group was transitioning to the new simplified model.

In order to increase clarity over the underlying profitability of our business units, Xeim and The Lawyer, we are now reporting the "segment profit" of our business units, being the adjusted operating profit of each segment. Segment profit builds upon and replaces the concept of CAP by including specific allocations of the central support teams and overheads that are directly related to each business unit, in order to demonstrate the stand-alone profitability. Any costs not specifically attributable to either Xeim or The Lawyer, remain as part of central costs. This is different from the concept of segmental reporting used in prior years when central overheads were fully allocated on a revenue basis to the operating segments.

The table below shows the statutory and underlying revenue for each business unit:

				Restated
	Xeim	The Lawyer	Total	Xeim	The Lawyer	Total
	2019 £m	2019 £m	2019 £m	2018 £m	2018 £m	2018 £m
Underlying revenue
Premium Content	11.0	3.4	14.3	11.2	2.9	14.1
Marketing Services	4.3	-	4.3	4.5	-	4.5
Training and Advisory	7.6	-	7.6	8.0	-	8.0
Events	3.1	2.1	5.3	3.2	1.8	5.0
Marketing and Advertising Solutions	4.3	2.6	6.9	4.6	2.7	7.3
Telemarketing Services	9.3	-	9.3	9.6	-	9.6
Total underlying revenue	39.6	8.1	47.7	41.1	7.4	48.5
Underlying revenue growth	(4)%	9%	(2)%
Revenue from closed or disposed businesses	1.1	0.1	1.2	1.5	0.3	1.8
Total statutory revenue	40.7	8.2	48.9	42.6	7.7	50.3

The table below reconciles the adjusted operating profit/(loss) for each segment to the adjusted EBITDA:

	Xeim	The Lawyer	Central	Total	Xeim	The Lawyer	Central	Total
	2019 £m	2019 £m	2019 £m	2019 £m	2018 £m	2018 £m	2018 £m	2018 £m
Revenue	40.7	8.2	-	48.9	42.6	7.7	-	50.3
Other income	-	-	1.6	1.6	-	-	0.8	0.8
Operating costs	(36.6)	(5.9)	(9.1)	(51.6)	(39.3)	(5.7)	(8.3)	(53.3)
Adjusted operating profit/(loss)	4.1	2.3	(7.5)	(1.1)	3.3	2.0	(7.5)	(2.2)
Adjusted operating margin	10%	28%		(2)%	8%	26%		(4)%
Depreciation, amortisation and impairment	3.5	0.9	1.1	5.5	1.8	0.5	1.3	3.6
Adjusted EBITDA (post-IFRS16)	7.6	3.2	(6.4)	4.4
Adjusted EBITDA margin (post-IFRS16)	19%	39%		9%
Adjusted EBITDA (pre-IFRS 16)	6.3	2.9	(6.6)	2.6	5.1	2.5	(6.2)	1.4
Adjusted EBITDA margin (pre-IFRS16)	15%	35%		5%	12%	32%		3%

As described above, the Group adopted IFRS 16 in 2019 but took the exemption not to re-state the comparatives for the prior year. As a result, year-on-year business unit profitability between 2019 and 2018 is not directly comparable except at a pre-IFRS 16 adjusted EBITDA level which for both years includes property rent charges. Both pre-IFRS 16 and post-IFRS 16 adjusted EBITDA for each business unit for 2019 are provided in the table above. Depreciation, amortisation and impairment for 2019 includes the higher depreciation charge arising from the application of IFRS 16.

Net finance costs

Net finance costs were £0.3m (2018: £0.2m). The Group reported an opening cash position at 1 January 2019 of £0.1m and has held more significant cash balances following the divestment programme. Consequently, the vast majority of finance costs in 2019 are as a result of the commitment fee payable for the revolving credit facility.

Taxation

A tax credit of £0.7m (2018: £1.1m) has been recognised on continuing operations for the year. The adjusted tax charge was £0.5m (2018: a credit of £0.4m) giving an adjusted effective tax rate (compared to adjusted profit before tax) of nil% (2018: 17%). The Company's profits were taxed in the UK at a blended rate of 19.0% (2018: 19.0%). On a reported basis, the effective tax rate is 8% (2018: 5%). See note 7 for a reconciliation between the statutory reported tax charge and the adjusted tax charge.

Discontinued operations

Discontinued operations relate to the four divestments made during the first half of the year as described in the CEO's report. The profit from discontinued operations in 2019 and a reconciliation of the 2018 results compared to the results reported last year is as follows:

	Discontinued	Discontinued	Continuing	As reported
	2019 £m	2018 £m	2018 £m	2018 £m
Revenue	7.0	20.2	50.3	70.5
Other operating income	-	-	0.8	0.8
Net operating expenses	(4.3)	(13.9)	(71.4)	(85.3)
Profit on disposal	7.8	0.1	-	0.1
Operating profit/(loss)	10.5	6.4	(20.3)	(13.9)
Finance costs	-	-	(0.2)	(0.2)
Profit/(loss) before tax	10.5	6.4	(20.5)	(14.1)
Taxation	(0.6)	(1.2)	1.1	(0.1)
Profit/(loss) after tax	9.9	5.2	(19.4)	(14.2)

Earnings/losses per share

The Group has delivered adjusted diluted earnings per share for the year of 0.3 pence (2018: 2.6 pence). Diluted earnings per share for the year were 1.3 pence (2018: a loss of 9.9 pence). Full details of the earnings per share calculations can be found in note 9 of the financial information.

Dividends

In October 2019, an interim dividend of 1.5p per share was paid relating to 2019 (2018: 1.5p). A return of cash of 2.0p per share, in the form of a special dividend, was also announced as part of the interim results and paid along with the interim dividend.

At the time of the interim results, the Group confirmed a new dividend policy, applicable from 1 January 2020, such that Centaur will target a pay-out ratio of 40% of adjusted earnings, subject to a minimum dividend of 1.0p per share per annum.

In light of this new policy, a final ordinary dividend of 0.5p per share is proposed by the Directors in respect of 2019 (2018: 1.5p), giving a total ordinary dividend for the year ended 31 December 2019 of 2.0p (2018: 3.0p). This brings the total of ordinary and special dividends paid to shareholders relating to 2019 to £5.7m (4.0p per share), which is £4.3m (3.0p per share) more than the dividends that would have been paid under the new policy.

The final dividend in respect of the year is subject to shareholder approval at the Annual General Meeting and, if approved, will be paid on 29 May 2020 to all ordinary shareholders on the register at the close of business on 11 May 2020.

After starting the year with only £0.1m of cash, the £16.4m net proceeds from divestments have been spent on the excess dividends of £4.3m and exceptional costs relating to the Group's central cost reductions and divestment programme of £4.7m, while retaining an acceptable minimum level of liquidity for the Group. The Board was planning a further return of cash as a special dividend alongside the ordinary dividend in May. However, the uncertainty resulting from coronavirus pandemic has caused the Board to take a prudent approach and there will be a delay in any further special dividends until we have better clarity of the potential impact on Centaur, if any. The Group closed 2019 with cash of £9.3m (2018: £0.1m).

Cash flow

	2019 £m	2018 £m
Adjusted operating loss	1.8	5.2
Depreciation, amortisation and impairment	5.5	3.7
Movement in working capital	(0.0)	(1.3)
Adjusted operating cash flow	7.3	7.6
Capital expenditure	(1.6)	(2.8)
Cash impact of adjusting items	(2.7)	(0.8)
Taxation	0.1	(1.2)
Repayment of lease obligations	(2.3)	-
Interest and finance leases	(0.2)	(0.4)
Loan arrangement fees	-	(0.2)
Free cash flow	0.6	2.2
Acquisitions	(0.1)	(1.8)
Disposal of subsidiaries	16.4	0.3
Share repurchases	(0.6)	(0.4)
Dividends paid to Company's shareholders	(7.1)	(4.3)
Increase/(decrease) in net cash	9.2	(4.0)
Opening net cash	0.1	4.1
Closing net cash	9.3	0.1
Cash conversion	100%	85%

Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines adjusted operating cash flow as cash flow from operations excluding the impact of adjusting items, which are defined above. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. A reconciliation between cash flow from operations and adjusted operating cash flow is shown in note 1(b) of the financial information. The cash impact of adjusting items primarily relates to exceptional restructuring costs in both years.

MAP22

As referred to in the CEO's report and our interim results presentation, the Group introduced its Margin Acceleration Programme (MAP22) in September 2019 which targets an adjusted EBITDA margin of at least 20% by 2022 (excluding the impact of IFRS 16). This will be achieved by the targeted costs savings of £5m per annum together with profitable revenue growth. Targeted cost savings represent roughly half of the increase in EBITDA required to meet the targeted 20% EBITDA margin. This cost saving target had been achieved on an annualised basis by the end of December 2019 and the full benefit will be reflected in the 2020 financial performance.

Financing and bank covenants

In November 2018, the Group agreed an amendment and extension of the existing £25 million revolving credit facility which had been signed in 2015. The facility's terms include quarterly testing of leverage and interest cover ratios and security has been granted over the Group's assets. The initial period of the extension was three years until November 2021 with the option to extend by two further single years subject to bank approval.

The principal financial covenants under the facility are: the ratio of net debt to adjusted EBITDA shall not exceed 2.5:1, and the ratio of EBITDA to net finance charges shall not be less than 4:1. The Group remained well within its banking covenants during the year and had not drawn down any of its £25 million revolving credit facility at the end of 2019.

Balance sheet

A summary of the Group's balance sheet as at 31 December 2019 and 2018 is set out below:

	2019 £m	Restated 2018 £m
Goodwill and other intangible assets	61.2	78.1
Property, plant and equipment	4.3	1.3
Deferred taxation	1.0	0.3
Deferred income	(8.7)	(15.0)
Other current assets and liabilities	(3.7)	2.0
Non-current liabilities	(2.3)	(0.1)
Net assets before cash	51.8	66.6
Net cash	9.3	0.1
Net assets	61.1	66.7

It should be noted that the prior year balance sheet, unlike the income statement, is not adjusted to reflect the divestment programme that occurred in 2019. However, trade receivables and other payables in 2018 have been restated to gross up credits of £0.8m which had been previously reported in trade receivables as described in note 1 (a) (ii).

In 2019, goodwill and other intangibles have reduced by £16.9m mainly due to the impact of the divestment programme (£12.8m). Property, plant and equipment have increased mainly as a result of the right-of-use property assets of £3.7m recognised under IFRS 16. Other current assets and liabilities have been significantly reduced year-on-year by the divestment programme as shown in note 14 of the financial information.

Going concern

After due consideration, as required under IAS 1 Presentation of Financial Statements, including consideration of the Group's net current liability position, the Group's forecasts for at least twelve months from the date of this report, and the effectiveness of risk management processes, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in the preparation of the consolidated financial statements for the year ended 31 December 2019. As detailed under the Risk Management section, the Directors have assessed the viability of the Group over a three-year period to December 2022 and 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 2022.

Conclusion

The Group has successfully completed its strategic divestment programme and is now leaner and fitter for the future as its focuses on Xeim and The Lawyer. Our balance sheet is stronger than before with over £9m of cash in the bank at year end and a £25 banking facility that the Group is not intending to draw down in the foreseeable future. Notwithstanding the impact of coronavirus, we stand in a strong place to execute MAP22 having met our targeted annualised cost reduction programme of £5m. I would like to thank all the employees of Centaur for their commitment and patience as the Group has completed its divestment and restructuring programmes.

Alternative performance measures

Measure	Definition
Adjusted EBITDA (pre-IFRS 16)	Adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination, before the impact of IFRS 16 to remove property rent charges.
Adjusted EBITDA (post-IFRS 16)	Adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination, after the impact of IFRS 16 to remove property rental charges. This measure is new, reflecting the adoption of IFRS 16.
Adjusted EBITDA margin	Adjusted EBITDA (pre-IFRS 16) as a percentage of revenue.
Adjusted effective tax rate	Adjusted tax charge as a percentage of Adjusted profit before tax.
Adjusted EPS	EPS calculated using Adjusted profit for the period.
Adjusting items	Items as set out in the statement of consolidated income and notes 1(b) and 4 of the financial information including exceptional items, and volatile items predominantly relating to investment activities and other separately reported items.
Adjusted operating profit/(loss)	Operating profit/(loss) excluding Adjusting items.
Adjusted profit before tax	Profit before tax excluding Adjusting items.
CAP	Revenue generated by a segment less its costs of sales and all costs attributable to marketing, selling, content production and delivery of that revenue.
Cash conversion	Adjusted operating cash flow / adjusted EBITDA (post-IFRS 16).
Exceptional items	Items where the nature of the item, or its magnitude, is material and likely to be non-recurring in nature as shown in note 4.
Free cash flow	Increase/decrease in cash for the year before the impact of debt, acquisitions, disposals, dividends and share repurchases.
Segment profit	Adjusted operating profit of a segment after allocation of central support teams and overheads that are directly related to each segment or business unit. As explained in the Financial Review, central costs were fully allocated in prior years.
Underlying revenue	Revenue adjusted to exclude the impact of revenue contribution arising from acquired, disposed or closed businesses ("excluded revenue").

RISK MANAGEMENT

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.

The Executive Committee, Company Secretary and the Head of Legal are responsible for identifying, managing and monitoring material and emerging 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 are 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 and the Head of Legal. The Executive Committee initially identifies the material risks and emerging risks facing the Group and then collectively assesses the severity of each risk (by ranking both the likelihood of its occurrence 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 2019, 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 and emerging risks facing the Group. Financial risks are shown in note 28 of the financial information.

Risk number 1 has been updated from last year's Annual Report to include the wider risk of failure to deliver a high growth performance culture. Risk number 2 has been updated from last year's Annual Report to include the wider risk of sensitivity to the UK/sector economic conditions, instead of just the risk related to print products.

Rank

Risk

Description of risk and impact

Risk mitigation/control procedure

Movement in risk

Failure to deliver a high growth performance culture.

The risk that Centaur is unable to attract, develop and retain an appropriately skilled, diverse and responsible workforce and leadership team, and maintain a healthy culture which encourages and supports ethical high-performance behaviours and decision-making.

Difficulties in recruiting and retaining staff could lead to loss of key senior staff.

Failure to implement the simplification programme.

Centaur's success depends on growing the business and completing the MAP22 strategy. In order to do this, it depends in large part on its ability to recruit, motivate and retain highly experienced and qualified employees in the face of often intense competition from other companies; especially in London.

In 2019 it was exacerbated by:

a) the simplification programme;

b) the formation of the Xeim group; and

c) the reduction of overheads.

Investment in training, development and pay awards needs to be compelling but will be challenging in the current economic climate.

Implementing a working environment that allows for agile and remote delivery is necessary to keep the "millennial" workforce engaged.

High staff churn (a challenge for all media and events companies) affects budget, productivity and continuity for customers.

Developing the 2022 business strategy and changes required in skill set and culture are challenging and costly.

We regularly review measures aimed at improving our ability to recruit and retain employees and to track employee engagement.

The move to WeWork in Waterloo, a bright, modern and flexible workspace, and with good transport connections should be a compelling environment for staff and improve our ability to recruit and retain employees and to track employee engagement.

Weekly "check-ins" via ENGAGE ensure we have a weekly "mood" of the business and an understanding of any key risks or challenges as they arise.

An employee engagement team has been set up, known as DICE to focus on Diversity, Inclusion, Culture and Engagement along with other key issues and opportunities that can challenge the business. This is sponsored by the CEO and a Non-Executive Director.

Key senior leaders have had their reward packages reviewed and, where appropriate, increased notice periods and restrictive covenants have been introduced.

A review takes place annually to ensure flight risks and training needs are identified which become the focus for pay, reward and development areas.

All London based staff continue to be paid at or above the London Living Wage.

Our HR processes include exit interviews for all leavers to resolve areas of concern.

The Board considers this risk to be broadly the same as the prior year, following the simplification programme.

Risk unchanged

Sensitivity to UK/sector economic conditions.

Centaur's UK focus makes Centaur highly sensitive to UK/sector economic conditions. This risk remained high during 2019 and continues while the terms of the UK leaving the EU are uncertain. The current uncertainties caused by coronavirus have also increased the short-term risk to the Group.

Most of the risk impacts Centaur indirectly from our customers.

Part of the strategic plan for Centaur is to increase international organic growth in the mid to longer term, focusing on the US and Asia in particular, in order to mitigate this risk.

Many of the Group's products are market-leading in their respective sectors and are an integral part of our customers' operational processes, which mitigates the risk of reduced demand for our products.

The Group regularly reviews the political and economic conditions and forecasts for the UK, including specific risks such as coronavirus, and the main sectors in which it operates to assess whether changes to its product offerings or pricing structures are necessary.

The Board considers this risk to have increased since the prior year.

Risk increased

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 risk 4: GDPR, PECR 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.

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.

External access to data is protected and staff are instructed to password protect or encrypt where appropriate.

The Group Head of Data 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 risk 4 below for specifics relating to GDPR compliance/data.

The Board considers this risk to be broadly the same as the prior year.

Risk unchanged

Regulatory; GDPR, PECR and other similar legislation both involve strict 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 data protection law that came into force in May 2018, involves much stricter requirements for Centaur regarding its handling of personal data.

This includes:

· customers and employees having greater rights on how we use their data;

· Centaur having to provide specific information to our customers on how we use their personal data;

· strict rules around how we conduct our direct marketing activities;

· personal data being kept more securely (time and access);

· contracts with suppliers that handle our data to include GDPR compliant clauses;

· new rules about notifying the ICO in the event of a breach of GDPR;

· a short time period for responding to "subject access requests "from customers and employees;

· a requirement to demonstrate how we comply with GDPR, which means more onerous internal record-keeping obligations;

· a requirement to carry out data impact assessments for new types of personal data processing undertaken; and

· a requirement to keep under review the need for a Data Protection Officer.

The Privacy and Electronic Communications Regulations (PECR) implements the EU "E-Privacy" Directive and sits alongside the GDPR. PECR includes specific obligations for businesses like Centaur regarding how they conduct electronic marketing calls, emails, texts and on their use of cookies and similar technologies, among other things.

In the event of a serious breach of the GDPR and or PECR, 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 maximum fine of 20 million Euro for breach of GDPR is much higher than fines under the old UK data protection legislation.

The maximum fine for breaches of PECR is £500,000, and directors' liability for serious breaches of marketing rules has recently been introduced.

The obligations for Centaur under the GDPR and PECR ae complex and continuing, meaning this area requires continued focus.

Following the adoption of the GDPR by EU member states, certain other countries and jurisdictions worldwide are also reviewing and updating their own laws relating to data and privacy. The extent to which Centaur is required to comply with the laws in each of these jurisdictions depends on the circumstances, and there is a risk that Centaur may not be compliant with all such laws and could therefore be subject to regulatory action and fines from the relevant regulators and data subjects.

Centaur has taken a wide range of measures aimed at complying with the key aspects of GDPR.

The measures taken include:

· updating the marketing permissions on our websites and event registration pages to ensure language is specific/unambiguous;

· updating the 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; and

· amending our contracts with suppliers who provide us with personal data (ie lists) or who handle data on our behalf.

More recent measures taken to improve the Company's compliance with the laws on electronic marketing include:ta deletion exercise in order to ensure data maintained is in line with our data retention policy.

· outsourcing CPTS screening to a third-party supplier for specific list screening;

· quarterly training for sales and marketing staff; and

· a newly formed Data Protection Compliance Committee is responsible for monitoring Centaur's ongoing compliance with data protection laws.

Recent guidance published by the ICO relating to the use of cookies, and further changes to the laws relating to data privacy, ad tech and electronic marketing expected in late 2019/20. will further increase the regulatory burden for businesses like Centaur, and the requirements in this regard will need to be kept under review.

The business has taken advice on what it needs to mitigate its risk in respect of the CCPA and has a plan in place for actioning this.

Staff training will be provided in-house on key legislation, and any changes to it, where appropriate including PECR.

Centaur's in-house lawyer keeps abreast of material developments in data protection law and regulation and advice from external law firms is sought where appropriate. Given the increasingly global nature of our business and our customers Centaur's approach to complying with data protection laws in other jurisdictions should be kept under review.

The Board considers this risk to be broadly the same as the prior year.

Risk unchanged

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 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 where services are outsourced to suppliers, contingency planning is carried out to mitigate risk of supplier failure.

The ongoing development of CRM (PCI compliance) and finance systems.

Lockton's, our insurance advisor, has advised us in relation to additional cover that is appropriate to insure against a serious failure of IT network security controls.

Our policies were upgraded in 2018 to further ensure our staff are clear and accountable for their IT compliance. This is checked on an ongoing basis.

In 2019 Centaur also implemented a number of security improvements to better protect and monitor our network, systems and data eg CloudStrike.

New starters receive both Terms and Conditions plus the staff IT policy.

The Board considers this risk to be broadly the same as the prior year.

Risk unchanged

Viability statement

In accordance with provision 31 of the UK Corporate Governance Code 2018, the Directors have assessed the viability of the Group over a three-year period to December 2022, 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 2022.

The Board has determined that the three-year period to December 2022 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 2022 (which allows extensions to 2023 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 main assumption sensitised included a scenario where the Group's forecast EBITDA dropped by 50%, as well as short term cash conversion issues. Scenarios relating to the current immediate risk relating to coronavirus were also considered. In a scenario where the Group's EBITDA fell by 86% over the three-year financial planning horizon, and without management taking mitigating actions, the Group would breach its banking covenants in the fourth quarter of 2022. Where appropriate, this analysis is carried out to evaluate the potential impact of the Group's principal risks actually occurring, such as failure to deliver a high growth performance culture, UK economic conditions, breach of security, data compliance and systems failure. Sensitising the model for changes in the assumptions and risks affirmed that the Group would remain viable over the three-year period to December 2022.

Going concern basis of accounting

In accordance with provision 30 of the UK Corporate Governance Code 2018, the Directors' consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements and their identification of any material uncertainties, including the principal risks outlined above, 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 information and for the foreseeable future.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

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

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 Company and of the profit or loss of the Group and company for that period. In preparing the 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 also responsible for safeguarding the assets of the Group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 and 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 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.

Directors' confirmations

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in Governance Report confirm 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 result of the company;

· the Group 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 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 of which the Group and company's auditors are unaware; and

· they have taken all the 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 the Company's auditors are aware of that information.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2019

	Note	Adjusted Results¹ 2019 £m	Adjusting Items¹ 2019 £m	Statutory Results 2019 £m	Restated² Adjusted Results¹ 2018 £m	Restated² Adjusting Items¹ 2018 £m	Restated² Statutory Results 2018 £m
Continuing operations
Revenue	2	48.9	-	48.9	50.3	-	50.3
Other operating income	2	1.6	-	1.6	0.8	-	0.8
Net operating expenses	3	(51.6)	(7.3)	(58.9)	(53.3)	(18.1)	(71.4)
Operating loss		(1.1)	(7.3)	(8.4)	(2.2)	(18.1)	(20.3)
Finance costs	6	(0.3)	-	(0.3)	(0.2)	-	(0.2)
Loss before tax		(1.4)	(7.3)	(8.7)	(2.4)	(18.1)	(20.5)
Taxation	7	(0.5)	1.2	0.7	0.4	0.7	1.1
Loss for the period from continuing operations	9	(1.9)	(6.1)	(8.0)	(2.0)	(17.4)	(19.4)
Discontinued operations
Profit / (loss) for the year from discontinued operations after tax	8,14	2.3	7.6	9.9	6.0	(0.8)	5.2
Profit / (loss) for the year attributable to owners of the parent after tax		0.4	1.5	1.9	4.0	(18.2)	(14.2)
Total comprehensive income / (loss) attributable to owners of the parent		0.4	1.5	1.9	4.0	(18.2)	(14.2)

Earnings / (loss) per share attributable to owners of the parent	9
Basic from continuing operations		(1.3p)	(4.3p)	(5.6p)	(1.4p)	(12.1p)	(13.5p)
Basic from discontinued operations		1.6p	5.3p	6.9p	4.2p	(0.6p)	3.6p
Basic from profit / (loss) for the year		0.3p	1.0p	1.3p	2.8p	(12.7p)	(9.9p)

Fully diluted from continuing operations		(1.3p)	(4.3p)	(5.6p)	(1.4p)	(12.1p)	(13.5p)
Fully diluted from discontinued operations		1.6p	5.3p	6.9p	4.0p	(0.4p)	3.6p
Fully diluted from profit / (loss) for the year		0.3p	1.0p	1.3p	2.6p	(12.5p)	(9.9p)

¹ Adjusted results exclude adjusting items, as detailed in note 1 (b)
² See note 1 (a) for description of prior year restatement

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2019

Attributable to owners of the Company

	Note	Share capital £m	Own shares £m	Share premium £m	Reserve for shares to be issued £m	Deferred shares £m	Foreign currency reserve m	Retained earnings £m	Total Equity £m
At 1 January 2018		15.1	(6.5)	1.1	1.1	0.1	-	74.0	84.9
Loss for the year and total comprehensive loss		-	-	-	-	-	-	(14.2)	(14.2)
Transactions with owners in their capacity as owners:
Dividends	26	-	-	-	-	-	-	(4.3)	(4.3)
Acquisition of treasury shares	24	-	(0.4)	-	-	-	-	-	(0.4)
Fair value of employee services	25	-	-	-	0.7	-	-	-	0.7
As at 31 December 2018		15.1	(6.9)	1.1	1.8	0.1	-	55.5	66.7

Profit for the year and total comprehensive income		-	-	-	-	-	-	1.9	1.9
Transactions with owners in their capacity as owners:
Dividends	26	-	-	-	-	-	-	(7.1)	(7.1)
Acquisition of treasury shares	24	-	(0.6)	-	-	-	-	-	(0.6)
Exercise of share awards	25	-	0.3	-	(0.1)	-	-	(0.2)	-
Fair value of employee services	25	-	-	-	0.1	-	-	-	0.1
Foreign currency on translation		-	-	-	-	-	0.1	-	0.1
As at 31 December 2019		15.1	(7.2)	1.1	1.8	0.1	0.1	50.1	61.1

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2019

Attributable to owners of the Company

	Note	Share capital £m	Own shares £m	Share premium £m	Reserve for shares to be issued £m	Deferred shares £m	Retained earnings £m	Total equity £m
At 1 January 2018		15.1	(6.3)	1.1	1.1	0.1	81.4	92.5
Loss for the year and total comprehensive loss		-	-	-	-	-	(13.7)	(13.7)
Transactions with owners in their capacity as owners:
Dividends	26	-	-	-	-	-	(4.3)	(4.3)
Fair value of employee services	25	-	-	-	0.7	-	-	0.7
As at 31 December 2018		15.1	(6.3)	1.1	1.8	0.1	63.4	75.2

Loss for the year and total comprehensive loss		-	-	-	-	-	(40.2)	(40.2)
Transactions with owners in their capacity as owners:
Dividends	26	-	-	-	-	-	(7.1)	(7.1)
Exercise of share awards	25	-	-	-	(0.1)	-	(0.1)	(0.2)
Fair value of employee services	25	-	-	-	0.1	-	-	0.1
As at 31 December 2019		15.1	(6.3)	1.1	1.8	0.1	16.0	27.8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2019

Registered number 04948078

	Note	31 December 2019 £m	Restated² 31 December 2018 £m
Non-current assets
Goodwill	10	52.2	62.6
Other intangible assets	11	9.0	15.5
Property, plant and equipment	12	4.3	1.3
Deferred tax assets	15	1.4	0.8
		66.9	80.2
Current assets
Inventories	16	-	1.4
Trade and other receivables	17	10.8	13.7
Cash and cash equivalents	18	9.3	0.1
Current tax assets	22	0.1	0.2
		20.2	15.4
Total assets		87.1	95.6
Current liabilities
Trade and other payables	19	(12.5)	(13.2)
Lease liabilities	20	(2.1)	-
Deferred income	21	(8.7)	(15.0)
Provisions	23	-	(0.1)
		(23.3)	(28.3)
Net current liabilities		(3.1)	(12.9)
Non-current liabilities
Lease liabilities	20	(2.2)	-
Provisions	23	(0.1)	(0.1)
Deferred tax liabilities	15	(0.4)	(0.5)
		(2.7)	(0.6)
Net assets		61.1	66.7

Capital and reserves attributable to owners of the parent
Share capital	24	15.1	15.1
Own shares		(7.2)	(6.9)
Share premium		1.1	1.1
Other reserves		1.9	1.9
Foreign currency reserve		0.1	-
Retained earnings		50.1	55.5
Total equity		61.1	66.7

² See note 1 (a) for description of prior year restatement

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 December 2019

Registered number 04948078

	Note	31 December 2019 £m	31 December 2018 £m
Non-current assets
Investments	13	90.1	125.8
Deferred tax assets		0.1	0.1
		90.2	125.9
Current assets
Trade and other receivables	17	1.0	3.1
Cash and cash equivalents	18	-	-
		1.0	3.1
Total assets		91.2	129.0
Current liabilities
Trade and other payables	19	(63.4)	(53.8)

Net current liabilities		(62.4)	(50.7)

Net assets		27.8	75.2

Capital and reserves attributable to owners of the parent
Share capital	24	15.1	15.1
Own shares		(6.3)	(6.3)
Share premium		1.1	1.1
Other reserves		1.9	1.9
Retained earnings		16.0	63.4
Total equity		27.8	75.2

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in this financial information. The movement in retained earnings is the Company's loss for the year of £40.2m (2018: £13.7m) and dividends of £7.1m (2018: £4.3m).

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2019

	Note	Year ended 31 December 2019 £m	Year ended 31 December 2018 £m
Cash flows from operating activities
Cash generated from operations	27	4.6	6.8
Tax refund / (paid)		0.1	(1.2)
Net cash generated from operating activities		4.7	5.6
Cash flows from investing activities
Cash consideration received on disposal of subsidiaries less cash and cash equivalents disposed of	14	18.7	0.3
Directly attributable costs of disposal of subsidiaries	14	(2.3)	-
Purchase of property, plant and equipment	12	(0.2)	(0.5)
Purchase of intangible assets	11	(1.4)	(2.3)
Acquisition of subsidiary	23	(0.1)	(1.8)
Net cash flows generated from / (used in) investing activities		14.7	(4.3)
Cash flows from financing activities
Payment for shares bought back	24	(0.6)	(0.4)
Loan arrangement fees	6	-	(0.2)
Interest paid	6	(0.2)	(0.4)
Repayment of obligations under lease arrangements	20	(2.3)	-
Dividends paid to Company's shareholders	26	(7.1)	(4.3)
Proceeds from borrowings	28	2.8	4.5
Repayment of borrowings	28	(2.8)	(4.5)
Net cash flows used in financing activities		(10.2)	(5.3)
Net increase / (decrease) in cash and cash equivalents		9.2	(4.0)
Cash and cash equivalents at beginning of the year		0.1	4.1
Cash and cash equivalents at end of year	18	9.3	0.1

COMPANY CASH FLOW STATEMENT

for the year ended 31 December 2019

	Note	Year ended 31 December 2019 £m	Year ended 31 December 2018 £m
Cash flows from operating activities
Cash generated from operating activities	27	7.3	4.7
Cash flows from investing activities
Net cash flows used in investing activities		-	-
Cash flows from financing activities
Interest paid	6	(0.2)	(0.4)
Dividends paid to Company's shareholders	26	(7.1)	(4.3)
Proceeds from borrowings	28	2.8	4.5
Repayment of borrowings	28	(2.8)	(4.5)
Net cash flows used in financing activities		(7.3)	(4.7)
Net increase in cash and cash equivalents		-	-
Cash and cash equivalents at beginning of the year		-	-
Cash and cash equivalents at end of year	18	-	-

1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated and Company financial information are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial information is for the Group consisting of Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc. Centaur Media Plc is a public company limited by shares and incorporated in England and Wales.

(a) Basis of preparation

The financial information in this preliminary announcement has been extracted from the audited Group Financial Statements for the year ended 31 December 2019 and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group Financial Statements and this preliminary announcement were approved by the Board of Directors on 17 March 2020.

The consolidated and Company financial information has been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and IFRS Interpretations Committee ('IFRS IC') and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial information has been prepared on the historical cost basis.

Going concern

The financial information has been prepared on a going concern basis. The Directors have carefully assessed the Group's ability to continue trading and have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least twelve months from the date of approval of this financial information and for the foreseeable future.

Net cash (see reconciliation in note 27) at 31 December 2019 amounted to £9.3m (2018: £0.1m). In November 2018, the Group renewed its £25m multi-currency revolving credit facility with the Royal Bank of Scotland and Lloyds, which runs to November 2021 with the option to extend for 2 periods of 1 year each. None of this was drawn-down at 31 December 2019. Our reported cash conversion rate for the year was 100% (2018: 85%).

The Group has net current liabilities at 31 December 2019 amounting to £3.1m (2018: £12.9m). In the prior year these primarily arose from its normal high levels of deferred income relating to events in the future rather than an inability to service its liabilities, as deferred income will not result in a cash outflow. In the current year net liabilities is at a lower level due to the disposal of businesses with high levels of deferred income during the year. An assessment of cash flows for the next three financial years, which has taken into account the factors described above, has indicated an expected level of cash generation which would be sufficient to allow the Group to fully satisfy its working capital requirements and the guarantee given in respect of its UK subsidiaries, to cover all principal areas of expenditure, including maintenance, capital expenditure and taxation during this year, and to meet the financial covenants under the revolving credit facility. The Company has net current liabilities at 31 December 2019 amounting to £62.4m (2018: £50.7m). These almost entirely arise from unsecured payables to subsidiaries which have no fixed date of repayment.

The preparation of financial information in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial information and the reported amounts of revenues and expenses during the year. 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.

Having assessed the principal risks and the other matters discussed in connection with the viability statement above, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing its consolidated financial information.

New and amended standards adopted by the Group

The following new standards that are mandatory for the first time for the financial year commencing 1 January 2019 have been adopted by the Group:

IFRS 16 'Leases'

IFRS 16 sets out the requirements for lessee and lessor lease accounting. The new standard replaces IAS 17, and eliminates the classification of leases as either operating leases or finance leases as required by IAS 17 and instead introduces a single accounting model for leases which requires lessees to recognise assets and liabilities for most leases.

Impact

The Group has performed an impact assessment on its existing and any expected upcoming lease arrangements. On adoption the Group has taken advantage of the 'short term lease' (lease term 12 months or under) and 'low value items' (those deemed to be immaterial) exemptions. The Group has also applied the practical expedient on transition where only contracts that were previously identified as leases applying IAS 17 are assessed for the purposes of IFRS 16, however the Group does not believe that any contracts other than those falling in scope after the practical expedient is applied would be deemed to contain a lease arrangement under IFRS 16.

The Group has elected to apply the modified retrospective transition approach where comparative periods are not restated, but the cumulative impact of applying IFRS 16 is reflected as an adjustment to the opening balance sheet at 31 December 2019. Arrangements already constituting finance leases under IAS 17are not impacted by the transition to IFRS 16. At adoption on 1 January 2019 there were three existing lease arrangements captured by IFRS 16 that were previously accounted for as operating leases under IAS 17. During the year, one contract commenced that constitutes a lease arrangement under IFRS 16.

Each lease arrangement has been accounted for over its lease term as outlined in the contract. Where options to extend or terminate exist in these contracts, the recognition of the lease liabilities and ROU assets represent the Directors understanding of likely future cash flows under these contracts. The assets and liabilities will continue to be reviewed and will be revalued where a change in the future cash flows is indicated.

Right-of-use assets with a value of £5.5m were recognised (£2.3m for existing leases transitioning on adoption of IFRS 16 and £3.2m for a new lease commencing on 1 October 2019). Lease liabilities with a value of £6.5m were recognised (£3.3m for existing leases transitioning on adoption of IFRS 16 and £3.2m for a new lease commencing on 1 October 2019). The value of the IFRS 16 impact to the P&L is immaterial, however the expenses are now classified as depreciation expense on the right-of-use asset and interest expense on the lease liability. Please see note 20 for details of these assets, liabilities and expenses. There is no impact to cash flow. All leases discussed here are property leases.

Disclosures

Disclosures have been made in line with IFRS 16 requirements. The accounting policy for leases is set out in note 1(i) and the use of the incremental borrowing rate as an accounting estimate in calculating the present value of leases is set out in note 1(t)(vii). Further disclosures on right-of-use assets and lease liabilities can be found in notes 12 and 20.

Other

No other new standards or amendments to standards (including the Annual Improvements (2015) to existing standards) that are mandatory for the first time for the financial year commencing 1 January 2019 affected any of the amounts recognised in the current year or any prior year and is not likely to affect future periods.

New standards and interpretations not yet adopted

There are no standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Prior year restatements

i) Discontinued operations

Where the requirements of IFRS 5 have been met, the operational results of subsidiaries disposed of have been presented in discontinued operations in the current period and restated to discontinued in the comparative period. See notes 8 and 14 for more details.

ii) Correction of prior period accounting errors

Where indicated, restatements have been made to prior year comparatives for trade receivables and other payables (presented in trade and other receivables and trade and other payables on the face of the consolidated statement of financial position). The restatement is in respect of credit balances which were reported in trade receivables in 2018, with the result of lowering the balances of both trade receivables and other payables by £0.8m. This was identified after the authorisation of the 2018 Annual Report, and therefore the balances are being retrospectively reclassified. This restatement has impacted the balances on the consolidated statement of financial position and notes 18, 20 and 28. This restatement has no impact to periods prior to 2018.

Comparative numbers

Certain prior year comparatives have been updated to reflect current year disclosures.

(b) Presentation of non-statutory measures

In addition to statutory measures, the Directors use various non-GAAP key financial measures to evaluate the Group's performance and consider that presentation of these measures provides shareholders with an additional understanding of the core trading performance of the Group. The measures used are explained and reconciled to their equivalent statutory headings below.

Adjusted operating profit and adjusted earnings per share

The Directors believe that adjusted results and adjusted earnings per share, split between continuing and discontinued operations, provide additional useful information on the core operational performance of the Group to shareholders, and review the results of the Group on an adjusted basis internally. The term 'adjusted' is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measurements of profit.

Adjustments are made in respect of:

· Exceptional items - the Group considers items of income and expense as exceptional and excludes them from the adjusted results where the nature of the item, or its magnitude, is material and likely to be non-recurring in nature so as to assist the user of the financial information to better understand the results of the core operations of the Group. Details of exceptional items are shown in note 4.

· Amortisation of acquired intangible assets - the amortisation charge for those intangible assets recognised on business combinations is excluded from the adjusted results of the Group since they are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group. Details of amortisation of intangible assets are shown in note 11.

· Share-based payments - share-based payment expenses or credits are excluded from the adjusted results of the Group as the Directors believe that the volatility of these charges can distort the user's view of the core trading performance of the Group. Details of share-based payments are shown in note 25.

· Impairment of goodwill - the Directors believe that non-cash impairment charges in relation to goodwill are generally volatile and material, and therefore exclude any such charges from the adjusted results of the Group. Previous impairment charges were presented as exceptional items. Details of the goodwill impairment analysis are shown in note 10.

· Profit or loss on disposal of assets or subsidiaries - profit or loss on disposals of businesses are excluded from adjusted results of the Group as they are unrelated to core trading and can distort a user's understanding of the performance of the Group due to their infrequent and volatile nature. See note 4.

· Other separately reported items - certain other items are excluded from adjusted results where they are considered large or unusual enough to distort the comparability of core trading results year on year. Details of these separately disclosed items are shown in note 4.

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes (primarily exceptional items), calculated using the standard rate of corporation tax. See note 7 for a reconciliation between reported and adjusted tax charges.

Further details of adjusting items are included in note 4. A reconciliation between adjusted and statutory earnings per share measures is shown in note 9.

Loss before tax reconciles to adjusted operating loss as follows:

	Note	2019 £m	Restated² 2018 £m
Loss before tax		(8.7)	(20.5)
Adjusting items
Exceptional operating costs	4	4.7	2.0
Impairment of goodwill	10	-	12.8
Amortisation of acquired intangible assets	11	2.4	2.5
Share-based payment expense	25	0.1	0.8
Loss on disposal of subsidiary (Venture Business Research Limited)	14	0.1	-
Adjusted loss before tax		(1.4)	(2.4)
Finance costs	6	0.3	0.2
Adjusted operating loss		(1.1)	(2.2)
Cash impact of adjusting items		(2.7)	(0.8)
Tax impact of adjusting items	7	(1.2)	(0.7)

² See note 1 (a) for description of prior year restatement

Adjusted operating cash flow

Adjusted operating cash flow is not a measure defined by IFRS. It is defined as cash flow from operations excluding the impact of adjusting items, which are defined above, and including capital expenditure. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. Statutory cash flow from operations reconciles to adjusted operating cash as below:

	Note	2019 £m	2018 £m
Reported cash flow from operating activities	27	4.6	6.8
Adjusting items from operations		4.8	2.5
Working capital impact of adjusting items from operations		(2.1)	(1.7)
Adjusted operating cash flow		7.3	7.6
Capital expenditure		(1.6)	(2.8)
Post capital expenditure cash flow		5.7	4.8

Underlying revenue growth

The Directors review underlying revenue growth in order to allow a like for like comparison of revenues between years. Underlying revenues therefore exclude the impact of event timing differences, revenue contribution arising from acquired or disposed businesses and other revenue streams that are not expected to be ongoing in future years.

Statutory revenue growth reconciles to underlying revenue growth as follows:

	Xeim £m	The Lawyer £m	Total £m
Reported revenue 2018	42.6	7.7	50.3
Disposed business - Venture Business Research ('VBR')	-	(0.3)	(0.3)
Closed event - Marketing Week Live	(1.5)	-	(1.5)
Underlying revenue 2018	41.1	7.4	48.5

Reported revenue 2019	40.7	8.2	48.9
Disposed business - Venture Business Research ('VBR')	-	(0.1)	(0.1)
Closed event - Marketing Week Live	(1.1)	-	(1.1)
Underlying revenue 2019	39.6	8.1	47.7
Reported revenue growth	(4%)	6%	(3%)
Underlying revenue growth	(4%)	9%	(2%)

Adjusted EBITDA

Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination. It is used by the Directors as a measure to review performance of the Group and forms the basis of some of the Group's financial covenants under its revolving credit facility. Adjusted EBITDA is calculated as follows:

	Note	2019 £m	Restated² 2018 £m
Adjusted operating loss (as above)		(1.1)	(2.2)
Depreciation of property, plant and equipment	12	2.3	0.9
Impairment of property, plant and equipment	12	0.4	-
Amortisation of computer software	11	2.5	2.7
Impairment of computer software	11	0.3	-
Adjusted EBITDA		4.4	1.4

² See note 1 (a) for description of prior year restatement

Net cash/(debt)

Net cash/(debt) is not a measure defined by IFRS. Net cash/(debt) is calculated as cash less overdrafts and bank borrowings under the Group's financing arrangements. The Directors consider the measure useful as it gives greater clarity over the Group's liquidity as a whole. A reconciliation between net debt and statutory measures is shown in note 27.

The consolidated financial information incorporate the financial information of Centaur Media Plc and all of its subsidiaries after elimination of intercompany transactions and balances.

(i) Subsidiaries

Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that the Group ceases to control them. In the statement of comprehensive income, the results of subsidiaries for which control has ceased are presented separately as discontinued operations in the year in which they have been disposed of and in the comparative year.

On the disposal of a subsidiary, assets and liabilities of that subsidiary are de-recognised from the consolidated statement of financial position, earnings up to the date of loss of control are retained in the Group, and a profit/(loss) on disposal is recognised measured as consideration received less the fair value of assets and liabilities disposed of.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. The accounting policies of subsidiaries are consistent with the policies adopted by the Group.

(d) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial information is presented in Pounds Sterling, which is the Group and Company's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in the statement of comprehensive income.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

(iii) Group Companies

The results and financial position of the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

· Income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

· All resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings are recognised in other comprehensive income. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the statement of comprehensive income as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(e) Revenue recognition

Revenue is recognised in accordance with IFRS 15. Revenue is measured at the transaction price, which is the amount of consideration to which Centaur expects to be entitled in exchange for transferring promised goods or services to the customer. Judgement may arise in timing and allocation of transaction price when there are multiple performance obligations in one contract, however an annual impact assessment is performed which has confirmed that the impact is immaterial in both the current year and comparative year. Revenue arises from the sales of premium content, marketing services, training and advisory, events, marketing and advertising solutions, and telemarketing services in the normal course of business, net of discounts and value added tax. Goods and services exchanged as part of a barter transaction are recognised in revenue at the fair value of the goods and services provided. Returns, refunds and other similar allowances, which have historically been low in volume and immaterial in magnitude, are accounted for as a reduction in revenue as they arise.

Where revenue is deferred it is held as a balance in deferred income on the consolidated statement of financial position. At any given statement of financial position date, this deferred income is current in nature and is expected to wholly be recognised in revenue in the following financial year, with the exception of returns and credit notes, which have historically been low in volume and immaterial in magnitude. Additionally, in the current year, deferred income held in a subsidiary at the point of its disposal will not have been recognised in revenue for the Group for the year.

The Group recognises revenue earned from contracts as individual performance obligations are met, on a stand-alone selling price basis. This is when value and control of the product or service has transferred, being when the product is delivered to the customer or the period in which the services are rendered as set out in more detail below.

Premium Content

Revenue from subscriptions is deferred and recognised on a straight-line basis over the subscription period reflecting the continuous provision of paid content services over this time. Revenue from individual publication sales is recognised at the point at which the publication is delivered to the customer. In general the Group bills customers for premium content at the start of the contract.

Marketing Services

Revenue from campaign work and consultancy contracts is recognised when the Group has obtained the right to consideration in exchange for its performance, which is when a separately identifiable phase (milestone) of a contract has been completed and the value and benefit of the services rendered have been transferred to the customer. In general the Group bills customers for marketing services up front on a milestone basis.

Training and Advisory

Revenue from training and advisory is deferred and recognised over the period of the training or when a separately identifiable milestone of a contract has been delivered to the customer. In general the Group bills customers for training and advisory up front on a milestone basis.

Events

Consideration received in advance for events is deferred and revenue is recognised at the point in time at which the event takes place. In general, the Group bills customers for events before the event date.

Marketing and Advertising Solutions

Marketing Solutions revenue from display and bespoke campaigns is recognised over the period that the service is provided. Sales of online advertising space are recognised over the period during which the advertisements are placed. Sales of advertising space in publications are recognised at the point at which the publication occurs. In general the Group bills customers for marketing and advertising solutions on delivery.

Telemarketing Services

Revenue from telemarketing services is deferred and recognised over the period that the service is delivered generally according to the number of hours expended as a proportion of the total hours contracted. In general the Group bills customers for telemarketing services in advance.

(f) Other operating income

Other operating income includes revenue from all other operating activities which are not related to the principal activities of the Group.

Included in other operating income is rental income and transitional services agreement income.

Rental income is for the sub-lease of properties under lease, which is recognised on a straight-line basis over the lease term using the exemption available for short-term leases under IFRS 16, see note 1(i).

Transitional services agreement income relates to services provided to the buyers of the Group companies disposed of during the year, which is recognised at the point in time at which the service is delivered. The costs associated with this income are included within net operating expenses on the consolidated statement of comprehensive income.

(g) Investments

In the Company's financial information, investments in subsidiaries are stated at cost less provision for impairment in value.

Investments are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the investments fair value less cost of disposal and its value-in-use. An asset's value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital. Any impairment is recognised in the statement of comprehensive income. If there has been a change in the estimates used to determine the investment's recoverable amount, impairment losses that have been recognised in prior periods may be reversed. This reversal is recognised in the statement of comprehensive income.

(h) Income tax

The tax expense represents the sum of current and deferred tax.

Current tax is based on the taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years, and it further includes items that are never taxable or deductible. The Group and Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial information and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available to utilise those temporary differences and losses. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax is calculated at the enacted or substantively enacted tax rates that are expected to apply in the year when the liability is settled or the asset is realised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is recognised in other comprehensive income.

(i) Leases

Lessee accounting

Under IFRS 16, leases are accounted for on a 'right-of-use model' reflecting that, at the commencement date, the Group as a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The financial obligation is recognised as a lease liability, and the right to use the underlying asset is recognised as a right-of-use ('ROU') asset. The ROU assets are recognised within property, plant and equipment on the face of the consolidated statement of financial position, and are presented separately in note 12.

The lease liability is initially measured at the present value of the lease payments using the rate implicit in the lease or, where that cannot be readily determined, the incremental borrowing rate (see note 1(t)(vii)). Subsequently the lease liability is measured at amortised cost, with interest increasing the carrying amount and lease payments reducing the carrying amount. The carrying amount is remeasured to reflect any reassessment or lease modifications, or to reflect revised in-substance fixed lease payments.

The ROU asset is initially measured at cost which comprises:

· the amount of the initial measurement of the lease liability;

· any lease payments made at or before the commencement date, less any lease incentives received;

· any initial direct costs; and

· an estimate of costs to be incurred at the end of the lease term.

Subsequently the ROU asset is measured at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write off the cost on a straight line-basis over the lease term.

Using the exemption available under IFRS 16 the Group elects not to apply the requirements above to:

· Short-term leases; and

· Leases for which the underlying asset is of a low value.

In these cases, the Group recognises the lease payments as an expense on a straight-line basis over the lease term, or another systematic basis if that basis is more representative of the agreement.

Lessor accounting

The Group had contracts for the sub-lease of areas of its Wells Street property lease. These arrangements were exempt from the requirements of IFRS 16 under the short-term lease exemption as they all had a lease term of under twelve months from the date of transition. As such, the income derived from these sub-leasing arrangements is recognised on a straight-line basis and is presented in the consolidated statement of comprehensive income in 'other operating income'. All arrangements in which the Group acted as a lessor ceased during the year.

(j) Impairment of assets

Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the asset's fair value less cost of disposal and its value-in-use. An asset's value in use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital.

(k) Inventories

Inventories are stated at the lower of cost and net realisable value. Work in progress comprises costs incurred relating to publications and exhibitions prior to the publication date or the date of the event. Cost is measured as all costs of purchase and other costs incurred in bring the inventories to their present location and condition.

(l) Property, plant and equipment

See note 1(i) for right-of-use assets. All other property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses. The historical cost of property, plant and equipment is the purchase cost together with any incidental direct costs of acquisition. Depreciation is calculated to write off the cost, less estimated residual value, of assets, on a straight line-basis over the expected useful economic lives to the Group over the following periods:

Leasehold improvements	- 10 years or the expected length of the lease if shorter
Fixtures and fittings	- 5 to 10 years
Computer equipment	- 3 to 5 years
Right-of-use assets	- over the lease term

The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting year, with the effect of any changes in estimate accounted for on a prospective basis.

(m) Intangible assets

(i) Goodwill

Where the cost of a business acquisition exceeds the fair values attributable to the separable net assets acquired, the resulting goodwill is capitalised and allocated to the cash-generating unit ('CGU') or groups of CGUs that are expected to benefit from the synergies of the business combination. Goodwill has an indefinite useful life and is tested for impairment annually on a Group level or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Each segment is deemed to be a CGU. Goodwill and acquired intangible assets are assessed for impairment in accordance with IAS 36. In assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with its recoverable amount. Recoverable amount is measured as the higher of fair value less cost of disposal and value-in-use. Any impairment is recognised in the statement of comprehensive income (in net operating expenses) and is classified as an adjusting item. Impairment of goodwill is not subsequently reversed.

On the disposal of a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(ii) Brands and publishing rights, customer relationships and non-compete arrangements

Separately acquired brands and publishing rights are shown at historical cost. Brands and publishing rights, customer relationships and non-compete arrangements acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses.

(iii) Software

Computer software that is not integral to the operation of the related hardware is carried at cost less accumulated amortisation. Costs associated with the development of identifiable and unique software products controlled by the Group that will generate probable future economic benefits in excess of costs are recognised as intangible assets when the criteria of IAS 38 'Intangible Assets' are met. They are carried at cost less accumulated amortisation and impairment losses.

(iv) Amortisation methods and periods

Amortisation is calculated to write off the cost or fair value of intangible assets on a straight-line basis over the expected useful economic lives to the Group over the following periods:

Computer software	- 3 to 5 years
Brands and publishing rights	- 5 to 20 years
Customer relationships	- 3 to 10 years or over the term of any specified contract
Separately acquired websites and content	- 3 to 5 years
Non-compete arrangements	- Over the term of the arrangement

(n) Employee benefits

(i) Post-employment obligations

The Group and Company contribute to a defined contribution pension scheme for the benefit of employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions to defined contribution schemes are charged to the statement of comprehensive income in net operating expenses when employer contributions become payable.

(ii) Share-based payments

The Group operates a number of equity-settled share-based compensation plans for its employees. The fair value of the share-based compensation expense is estimated using either a Monte Carlo or Black-Scholes option pricing model and is recognised in the statement of comprehensive income over the vesting period with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the awards granted:

· Including any market performance conditions;

· Excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets, cash flow performance and remaining an employee of the entity over a specified time period); and

· Including the impact of any non-vesting conditions (for example, the requirement for employees to save).

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting year, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity. The Company issues new shares or transfers shares from treasury shares to settle share-based compensation awards.

The award by the Company of share-based compensation awards over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution, only if it is left unsettled. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and the obligation can be reliably estimated.

Provisions for deferred contingent consideration are measured at fair value. Where the deferred consideration is contingent on the continued employment of the vendors, such arrangements are recognised in the consolidated statement of comprehensive income on a straight line basis over the period of the arrangement.

(p) Equity

Share capital and share premium

Ordinary and deferred shares are classified as equity. The excess of consideration received in respect of shares issued over the nominal value of those shares is recognised in the share premium account. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company's equity instruments, for example as the result of a share buyback or share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company.

Shares held by the Centaur Employees' Benefit Trust are disclosed as treasury shares and deducted from contributed equity. The Company also holds a non-distributable reserve representing the fair value of unvested share-based compensations plans.

Own shares

Own shares consist of treasury shares and shares held within an employee benefit trust. The Company has an employee benefit trust for the granting of shares to applicable employees.

Own shares are recognised at cost as a deduction from equity shareholders' funds. Subsequent consideration received for the sale of such shares is also recognised in equity, with any difference between the sale proceeds and the original cost being taken to retained earnings. No gain or loss is recognised in the financial information on transactions in treasury shares.

(q) Dividends

Dividends are recognised in the year in which they are paid or, in respect of the Company's final dividend for the year, approved by the shareholders in the Annual General Meeting.

(r) Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Executive Committee has been identified as the chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments. In light of the disposals of subsidiaries, the reportable segments of the Group have changed since the year ended 31 December 2018. In the year then ended (and in previous years) the three reportable segments of the Group, each of which were allocated a proportion of corporate income and costs, were:

· Marketing (renamed to Xeim);

· Financial Services (disposed 31 March 2019); and

· Professional, which comprised the following portfolios:

o Legal, which consisted of The Lawyer and Venture Business Research ('VBR') (VBR was disposed on 13 May 2019);

o Human Resources (disposed 30 April 2019);

o Travel & Meetings (disposed 30 April 2019); and

o Engineering (disposed 31 May 2019).

Consequently, the core operations are now organised around the two continuing reportable market-facing segments Xeim and The Lawyer (the remaining component of the previous Legal portfolio), with corporate income and costs presented separately as "Central".

Certain prior year comparatives have been updated to reflect current year presentation.

(s) Financial instruments

The Group has applied IFRS 9, Financial Instruments as outlined below:

(i) Financial assets

The Group classifies and measures its financial assets in line with one of the three measurement models under IFRS 9: at amortised cost, fair value through profit or loss, and fair value through other comprehensive income. Management determines the classification of its financial assets based on the requirements of IFRS 9 at initial recognition.

They are included in current assets, except for maturities greater than 12 months after the statement of financial position date. These are classified as non-current assets. The Group's financial assets comprise trade and other receivables and cash and cash equivalents in the statement of financial position. Please see the following sections.

(ii) Trade receivables

Trade receivables are accounted for under IFRS 9 being recognised initially at fair value and subsequently at amortised cost less any allowance for expected lifetime credit losses under the "expected credit loss" model. As mandated by IFRS 9, the expected lifetime credit losses are calculated using the 'simplified' approach.

The allowance for expected lifetime credit losses for trade receivables is established by considering, on a discounted basis, the cash shortfalls it would incur in various defaults scenarios for prescribed future periods and multiplying those shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The allowance is the sum of these probability weighted outcomes. The allowance and any changes to it are recognised in the statement of comprehensive income within net operating expenses. A provision matrix is used to calculate the allowance for expected lifetime credit losses on trade receivables which is based on historical default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against net operating expenses in the statement of comprehensive income. The Group defines a default as failure of a debtor to repay an amount due as this is the time at which our estimate of future cash flows from the debtor is affected.

(iii) Cash and cash equivalents

Cash and cash equivalents includes cash in hand and deposits repayable on demand or maturing within three months of the statement of financial position date.

(iv) Financial liabilities

Debt and trade payables are recognised initially at fair value based on amounts exchanged, net of transaction costs, and subsequently at amortised cost.

Interest expense on debt is accounted for using the effective interest method and is recognised in income.

(v) Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

(vi) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred and carried subsequently at amortised cost. Costs of borrowings are recognised in the statement of comprehensive income as incurred or, where appropriate, across the term of the related borrowing.

(vi) Receivables from and payables to subsidiaries

The Company has amounts receivable from and payable to subsidiaries which are recognised at fair value. Amounts receivable from subsidiaries are assessed annually for recoverability under the requirements of IFRS 9.

(vii) Derivative financial instruments

The Group does not hold derivative financial instruments either for trading purposes or designated as hedges.

(t) Key accounting assumptions, estimates and judgements

The preparation of financial information under IFRS requires the use of certain key accounting assumptions and requires management to exercise its judgement and to make estimates. The areas where assumptions and estimates are significant to the consolidated financial information are as follows:

i) Carrying value of goodwill, other intangible assets and Company investment estimate

In assessing whether goodwill, other intangible fixed assets and the Company's investment are impaired, the Group uses a discounted cash flow model which includes forecast cash flows and estimates of future growth. If the results of operations in future periods are lower than included in the cash flow model, impairments may be triggered. A sensitivity analysis has been performed on the value-in-calculations. Further details of the assumptions and sensitivities in the discounted cash flow model are included in notes 10 and 13.

Intangible assets arising on business combinations are identified based on the Group's understanding of the acquired business and previous experience of similar businesses. Consistent methods of valuation for similar types of intangible asset are applied where possible and appropriate, using information reviewed at Board level where available. Discount rates applied in calculating the values of intangible assets arising on the acquisition of subsidiaries are calculated specifically for each acquisition and adjusted to reflect the respective risk profile of each individual asset based on the Group's past experience of similar assets.

ii) Recoverability of trade receivables estimate

The allowance for expected lifetime credit losses for trade receivables is calculated in line with IFRS 9. This is established by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. Further details about trade receivables are included in note 17 and information about the credit risk and expected lifetime credit losses are shown in note 28.

iii) Adjusting items judgement

The term 'adjusted' is not a defined term under IFRS. Judgement is required to ensure that the classification and presentation of certain items as adjusting, including exceptional items, is appropriate and consistent with the Group's accounting policy. Further details about the amounts classified as adjusting are included in notes 1(b) and 4.

iv) Share based payments estimate

The fair value of the share-based compensation expense recognised in the statement of comprehensive income requires the use of estimates. Details regarding the determination of fair value of these costs are set out in note 1(n)(ii).

v) Deferred tax judgement and estimate

The calculation of deferred tax assets and liabilities requires judgement. Where the ultimate tax treatment is uncertain, the Group recognises deferred tax assets and liabilities based on an estimate of future taxable income and recoverability. Where a change in circumstances occurs, or the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax balances in the year in which that change or outcome is known. The accounting policy regarding deferred tax is set out above in note 1(h).

vi) Valuation of intangibles estimate

Intangibles assets acquired in a business combination are required to be recognised separately from goodwill and amortised over their useful life. The Group has separately recognised computer software, brands and customer relationships in the acquisitions made (see note 11).

The fair value of these acquired intangibles is based on valuation techniques that require inputs based on assumptions about the future and estimates related to current market conditions.

The Group also makes assumptions about the useful life of the acquired intangibles as outlined in note 1(m)(iv).

vii) Lease incremental borrowing rate estimate

The adoption of IFRS 16 on 1 January 2019 requires the use of an incremental borrowing rate ('IBR') to discount minimum future lease payments to present value. The IBR is an estimate used in accounting for leases under IFRS 16 where the interest rate implicit in the lease cannot be readily determined. The IBR is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. This is calculated by using LIBOR as a reference rate and adjusting for the Group's specific borrowing rate on its existing revolving credit facility. Additionally, for each individual contract a lease specific adjustment is made where necessary by using market yields on similar assets as a data point.

2 Segmental reporting

The Executive Committee has been identified as the chief operating decision-maker, reviewing the Group's internal reporting on a monthly basis in order to assess performance and allocate resources.

In light of the disposals of subsidiaries in the current year, the reportable segments of the Group have changed since the year ended 31 December 2018. In the year then ended (and in previous years) the three reportable segments of the Group were as follows, with corporate income and costs allocated to each on an appropriate basis:

· Marketing (renamed Xeim);

· Financial Services (disposed 31 March 2019); and

· Professional, the aggregate of the following portfolios:

o Legal (which consists of The Lawyer and VBR (until disposal of VBR on 13 May 2019));

o Human Resources (disposed 30 April 2019);

o Travel & Meetings (disposed 30 April 2019); and

o Engineering (disposed 31 May 2019).

Consequently, the core operations are now organised around the two continuing reportable market-facing segments: Xeim and The Lawyer (the remaining component of the previous Legal portfolio). Corporate income and costs have been presented separately as "Central". The Group believes this is the most appropriate presentation of segmental reporting in order for the user to understand the core operations of the Group. There is no inter-segmental revenue.

Segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, inventories and trade receivables. Segment liabilities comprise trade payables, accruals and deferred income.

Corporate assets and liabilities primarily comprise property, plant and equipment, intangible assets, current and deferred tax balances, cash and cash equivalents, borrowings and lease liabilities.

Capital expenditure comprises additions to property, plant and equipment, intangible assets and includes additions resulting from acquisitions through business combinations.

2019	Note	Xeim £m	The Lawyer £m	Core operations £m	Central £m	Continuing operations £m	Discontinued operations £m	Group £m
Revenue		40.7	8.2	48.9	-	48.9	7.0	55.9
Other operating income		-	-	-	1.6	1.6	-	1.6
Adjusted operating profit / (loss)	1 (b)	4.1	2.3	6.4	(7.5)	(1.1)	2.9	1.8
Exceptional operating costs	4	(0.5)	(1.0)	(1.5)	(3.2)	(4.7)	(0.1)	(4.8)
Amortisation of acquired intangibles	11	(2.4)	-	(2.4)	-	(2.4)	(0.1)	(2.5)
Share-based payments	25	-	-	-	(0.1)	(0.1)	-	(0.1)
Loss on disposal of subsidiary	14	-	(0.1)	(0.1)	-	(0.1)	-	(0.1)
Profit on disposal of subsidiaries	14	-	-	-	-	-	7.8	7.8
Operating profit / (loss)		1.2	1.2	2.4	(10.8)	(8.4)	10.5	2.1
Finance costs	6					(0.3)	-	(0.3)
(Loss) / profit before tax						(8.7)	10.5	1.8
Taxation	7					0.7	(0.6)	0.1
(Loss) / profit for the year						(8.0)	9.9	1.9
Segment assets		57.8	18.7	76.5	-	76.5	-	76.5
Corporate assets					10.6	10.6	-	10.6
Consolidated total assets						87.1	-	87.1
Segment liabilities		(17.4)	(3.8)	(21.2)	-	(21.2)	-	(21.2)
Corporate liabilities					(4.8)	(4.8)	-	(4.8)
Consolidated total liabilities						(26.0)	-	(26.0)
Other items
Capital expenditure (tangible and intangible assets)		0.8	0.1	0.9	0.6	1.5	-	1.5

Restated² 2018	Note	Xeim £m	The Lawyer £m	Core operations £m	Central £m	Continuing operations £m	Discontinued operations £m	Group £m
Revenue		42.6	7.7	50.3	-	50.3	20.2	70.5
Other operating income		-	-	-	0.8	0.8	-	0.8
Adjusted operating profit	1 (b)	3.3	2.0	5.3	(7.5)	(2.2)	7.4	5.2
Exceptional operating costs	4	(0.3)	(0.3)	(0.6)	(1.4)	(2.0)	(0.5)	(2.5)
Impairment of goodwill	10	(12.8)	-	(12.8)	-	(12.8)	(0.3)	(13.1)
Amortisation of acquired intangibles	11	(2.4)	(0.1)	(2.5)	-	(2.5)	(0.3)	(2.8)
Share-based payments	25	(0.2)	-	(0.2)	(0.6)	(0.8)	-	(0.8)
Profit on disposal of subsidiary	14	-	-	-	-	-	0.1	0.1
Operating (loss) / profit		(12.4)	1.6	(10.8)	(9.5)	(20.3)	6.4	(13.9)
Finance costs	6					(0.2)	-	(0.2)
(Loss) / profit before tax						(20.5)	6.4	(14.1)
Taxation	7					1.1	(1.2)	(0.1)
(Loss) / profit for the year						(19.4)	5.2	(14.2)
Segment assets		56.6	17.7	74.3	-	74.3	18.4	92.7
Corporate assets					2.9	2.9	-	2.9
Consolidated total assets						77.2	18.4	95.6
Segment liabilities		(11.4)	(2.4)	(13.8)	-	(13.8)	(8.4)	(22.2)
Corporate liabilities					(6.7)	(6.7)	-	(6.7)
Consolidated total liabilities						(20.5)	(8.4)	(28.9)
Other items
Capital expenditure (tangible and intangible assets)		1.9	0.3	2.2	0.8	3.0	-	3.0

² See note 1 (a) for description of prior year restatement

Supplemental Information

Revenue by Geographical Location

The Group's revenues from continuing operations from external customers by geographical location are detailed below:

	Xeim 2019 £m	The Lawyer 2019 £m	Total 2019 £m	Restated² Xeim 2018 £m	Restated² The Lawyer 2018 £m	Restated² Total 2018 £m
United Kingdom	32.7	6.6	39.3	34.5	6.1	40.6
Europe (excluding United Kingdom)	2.6	0.9	3.5	1.7	0.7	2.4
North America	4.4	0.4	4.8	4.2	0.4	4.6
Rest of world	1.0	0.3	1.3	2.2	0.5	2.7
	40.7	8.2	48.9	42.6	7.7	50.3

² See note 1 (a) for description of prior year restatement

Substantially all of the Group's net assets are located in the United Kingdom. The Directors therefore consider that the Group currently operates in a single geographical segment, being the United Kingdom.

Revenue by type

The Group's revenue from continuing operations by type is as follows:

	Xeim 2019 £m	The Lawyer 2019 £m	Total 2019 £m	Restated² Xeim 2018 £m	Restated² The Lawyer 2018 £m	Restated² Total 2018 £m
Premium Content	11.0	3.5	14.5	11.2	3.2	14.4
Marketing Services	4.3	-	4.3	4.5	-	4.5
Training and Advisory	7.6	-	7.6	8.0	-	8.0
Events	4.2	2.1	6.3	4.7	1.8	6.5
Marketing and Advertising Solutions	4.3	2.6	6.9	4.6	2.7	7.3
Telemarketing Services	9.3	-	9.3	9.6	-	9.6
	40.7	8.2	48.9	42.6	7.7	50.3

² See note 1 (a) for description of prior year restatement

The accounting policies for each of these revenue streams is disclosed in note 1 (e), including the timing of revenue recognition. There are some contracts for which revenue has not yet been recognised and is being held in deferred income, see note 21. This deferred income is all current and is expected to be recognised as revenue in 2020.

Other operating income

The Group's other operating income from continuing operations by type is as follows:

	2019 £m	2018 £m
Sale of goods and services
Rental income	0.8	0.8
Transitional services agreement income	0.8	-
	1.6	0.8

Rental income relates to the sublease of part of the Group's rented property in London. There is not expected to be income in respect of this going forward as this property has been vacated in December 2019. See note 29 for further details.

Transitional services agreement income relates to services provided to the buyers of the Group companies disposed of during the year. There is not expected to be income in respect of this going forward as all transitional services agreements have ceased during the year.

3 Net operating expenses

Continuing operating loss is stated after charging:

	Note	Adjusted Results¹ 2019 £m	Adjusting Items¹ 2019 £m	Statutory Results 2019 £m	Restated² Adjusted Results¹ 2018 £m	Restated² Adjusting Items¹ 2018 £m	Restated² Statutory Results 2018 £m

Employee benefits expense	5	28.0	3.4	31.4	30.3	1.6	31.9
Depreciation of property, plant and equipment	12	2.3	-	2.3	0.9	-	0.9
Impairment of property, plant and equipment	12	0.4	-	0.4	-	-	-
Amortisation of intangible assets	11	2.5	2.4	4.9	2.7	2.5	5.2
Impairment of intangible assets	11	0.3	-	0.3	-	-	-
Impairment of goodwill	10	-	-	-	-	12.8	12.8
Loss on disposal of subsidiary (Venture Business Research Limited)		-	0.1	0.1	-	-	-
Other exceptional operating costs	4	-	1.3	1.3	-	0.4	0.4
Property costs		2.1	-	2.1	3.3	-	3.3
Repairs and maintenance expenditure		0.1	-	0.1	0.1	-	0.1
Impairment of trade receivables	28	0.4	-	0.4	0.2	-	0.2
Share-based payment expense	25	-	0.1	0.1	-	0.8	0.8
IT expenditure		3.1	-	3.1	3.1	-	3.1
Other staff related costs		2.5	-	2.5	2.5	-	2.5
Marketing expenditure		2.0	-	2.0	2.1	-	2.1
Other operating expenses		7.9	-	7.9	8.1	-	8.1
		51.6	7.3	58.9	53.3	18.1	71.4

Cost of sales		22.6	-	22.6	19.6	-	19.6
Distribution costs		0.1	-	0.1	0.1	-	0.1
Administrative expenses		28.9	7.3	36.2	33.6	18.1	51.7
		51.6	7.3	58.9	53.3	18.1	71.4

¹ Adjusted results exclude adjusting items, as detailed in note 1 (b)
² See note 1 (a) for description of prior year restatement

Services provided by the Company's auditors

	2019 £'000	2018 £'000
Fees payable to the Company's auditors for the audit of the Company and consolidated financial statements	238	214
Fees payable to the Company's auditors and its associates for other services:
The audit of the Company's subsidiaries pursuant to legislation	44	58
Total audit fees	282	272

Audit related assurance services	22	25
Total non-audit fees	22	25
Total fees	304	297

Fees payable to the Company's auditors for the audit of the Company and consolidated financial statements include non-recurring fees of £72,000 (2018: £34,000).

4 Adjusting items

As discussed in note 1(b), certain items are presented as adjusting. These are detailed below:

Continuing operations	Note	2019 £m	Restated² 2018 £m
Exceptional operating costs
Staff related restructuring costs (including external employment advice costs)	5	2.5	0.4
Costs relating to strategic corporate restructuring initiatives		-	0.3
Divestment programme related costs		2.2	1.3
Exceptional operating costs		4.7	2.0
Impairment of goodwill	10	-	12.8
Amortisation of acquired intangible assets	11	2.4	2.5
Share-based payment expense	25	0.1	0.8
Loss on disposal of subsidiary	8,14	0.1	-
Adjusting items to profit before tax		7.3	18.1
Tax relating to adjusting items	7	(1.2)	(0.7)
Total adjusting items after tax for continuing operations		6.1	17.4
Discontinued operations
Profit on disposal of subsidiaries	8,14	(7.8)	(0.1)
Exceptional costs	8	0.1	0.5
Impairment of goodwill	10	-	0.3
Amortisation of acquired intangible assets	11	0.1	0.3
Tax relating to adjusting items	7	-	(0.2)
Total adjusting items after tax for discontinued operations		(7.6)	0.8

Total adjusting items after tax		(1.5)	18.2

² See note 1 (a) for description of prior year restatement

Exceptional costs

Staff related restructuring costs (including external employment advice costs)

In the current year staff related restructuring costs of £2.4m related to the Group's cost reduction plan following the completion of the divestment programme in 2019 and £0.1m of related external employment advice. During 2018, staff related restructuring costs of £0.2m related to the closure of the E-consultancy Asia Pacific office, £0.1m related to restructuring of the Xeim portfolio and £0.1m related to the restructuring of the in-house production function.

Costs relating to strategic corporate restructuring initiatives

In the prior year, these relate to professional fees for the corporate simplification programme to restructure the Group ahead of the divestment programme announced in October 2018.

Divestment programme related costs

In both the current and the prior year, divestment programme related costs include professional fees incurred relating to the sales process for The Lawyer of £1.2m (2018: £0.1m) and management incentives of £1.0m (2018: £1.2m) related to that programme. These management incentives sit in 'Employee benefits expense' in Note 3 along with staff related restructuring costs (excluding external employment advice costs).

Other adjusting items

Other adjusting items relate to the amortisation of acquired intangible assets (see note 11) and share-based payment costs (see note 25) as well as the items discussed below:

Goodwill impairment

In the prior year, an impairment of £13.1m (£12.8m and £0.3m in continuing and discontinued operations respectively) has been recognised against goodwill primarily relating to events to be closed and other businesses within the Xeim portfolio. See note 10 for further details.

Loss / profit on disposal of subsidiaries

In the current year the loss on disposal of a subsidiary in continuing operations of £0.1m related to the disposal of Venture Business Research Limited ('VBR'). This is not presented in discontinued operations as it does not represent a separate major line of business and therefore has been included in continuing operations.

The profit on disposal of subsidiaries in discontinued operations relates to the subsidiaries sold in the divestment programme. See note 14 for further details. In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group's Home Interest segment following the agreement of final completion accounts.

5 Directors and employees

	Note	2019 Group £m	Restated² 2018 Group £m	2019 Company £m	2018 Company £m
Wages and salaries		25.3	27.6	1.4	1.0
Social security costs		2.9	3.1	0.1	0.2
Other pension costs		0.8	0.8	0.1	0.1
Adjusted staff costs		29.0	31.5	1.6	1.3
Exceptional staff related restructuring costs (excluding external employment advice costs)	4	2.4	0.4	0.8	-
Equity-settled share-based payments	25	0.1	0.8	0.1	0.8
		31.5	32.7	2.5	2.1

² See note 1 (a) for description of prior year restatement

The staff costs presented above are for continuing operations and exclude all staff costs relating to the disposed subsidiaries as specified in note 14, which are presented in discontinued operations.

The average monthly number of employees employed during the year, including Directors, was:

	2019 Group Number	2018 Group Number	2019 Company Number	2018 Company Number
Xeim	514	605	-	-
The Lawyer	52	55	-	-
Central	10	10	4	4
Discontinued	85	88	-	-
	661	758	4	4

With the exception of MarketMakers, a brand under Xeim, the Group's employees have contracts of service with Centaur Communications Limited and are paid by Chiron Communications Limited, both of which are Group companies. As the employees provide services to the Company, their costs are recharged and the relevant disclosures are made in the financial statements. The MarketMakers' employees are employed and paid by MarketMakers Incorporated Limited.

Key management compensation

	2019 £m	2018 £m
Salaries and short-term employment benefits	2.9	1.8
Termination benefits	0.4	0.1
Post-employment benefits	0.1	0.1
Share-based payments	-	0.6
	3.4	2.6

Key management is defined as the Executive Directors and Executive Committee members.

Aggregate Directors' remuneration

	2019 £m	2018 £m
Salaries, fees, bonuses and benefits in kind	1.8	0.9
Termination benefits	0.4	-
Charge under long term incentive schemes	-	0.3
Post-employment benefits	0.1	0.1
	2.3	1.3

Highest paid Director's remuneration

	2019 £m	2018 £m
Salaries, fees, bonuses and benefits in kind	0.8	0.4
Termination benefits	0.4	-
Charge under long term incentive schemes	-	0.2
	1.2	0.6

No Directors exercised share options during the current or prior year. One Directors was paid compensation in respect of loss of office during the year (2018 - Nil).

6 Finance costs

	Note	2019 £m	2018 £m
Interest payable on revolving credit facility		-	-
Commitment fees and amortisation of arrangement fee in respect of revolving credit facility		0.2	0.2
Lease interest	20	0.1	-
Total finance costs		0.3	0.2

Interest and fees on revolving credit facility

These finance costs are in relation to the £25m revolving credit facility, none of which is drawn-down at 31 December 2019 (2018: £nil). As indicated by the consolidated cash flow statement, all draw-downs from this facility during the year were also repaid within the year. Finance costs in relation to this facility resulted in cash outflows by the Company and Group of £0.2m during the year (2018: £0.4m).

Lease interest

On the adoption of IFRS 16 on 1 January 2019, lease liabilities were recognised for the Group's property lease arrangements. £0.1m of interest on these leases was incurred during the year. There was no interest on lease liabilities in the prior year when these leases were accounted for under IAS 17 as operating leases. Please refer to notes 1 (a) and 20 for further details.

7 Taxation

	Note	2019 Continuing £m	2019 Discontinued £m	2019 Total £m	2018 Continuing £m	2018 Discontinued £m	2018 Total £m
Analysis of charge for the year
Current tax	22
UK Corporation Tax		-	0.6	0.6	(0.6)	1.4	0.8
Overseas tax		-	-	-	0.3	-	0.3
		-	0.6	0.6	(0.3)	1.4	1.1
Deferred tax	15
Current period		(0.8)	0.1	(0.7)	(0.7)	(0.2)	(0.9)
Adjustments in respect of prior years		0.1	(0.1)	-	(0.1)	-	(0.1)
		(0.7)	-	(0.7)	(0.8)	(0.2)	(1.0)

Taxation (credit) / charge		(0.7)	0.6	(0.1)	(1.1)	1.2	0.1

The tax charge for the year can be reconciled to the (loss) / profit in the statement of comprehensive income as follows:

	2019 Continuing £m	2019 Discontinued £m	2019 Total £m	2018 Continuing £m	2018 Discontinued £m	2018 Total £m
(Loss) / profit before tax	(8.7)	10.5	1.8	(20.5)	6.4	(14.1)
Tax at the UK rate of corporation tax of 19.00% (2018: 19.00%)	(1.6)	2.0	0.4	(3.9)	1.2	(2.7)
Effects of:
Expenses not deductible for tax purposes	0.7	-	0.7	2.7	-	2.7
Profit on disposal	-	(1.5)	(1.5)	-	-	-
Effects of changes in tax rate on deferred tax balances	0.1	-	0.1	-	-	-
Deferred tax adjustment on business disposal	0.1	0.1	0.2	-	-	-
Deferred tax not recognised	-	-	-	0.1	-	0.1
Adjustments in respect of prior years	-	-	-	(0.1)	-	(0.1)
Different tax rates of subsidiaries in other jurisdictions	-	-	-	0.1	-	0.1
Taxation (credit) / charge	(0.7)	0.6	(0.1)	(1.1)	1.2	0.1

The Finance Act 2015 included legislation to reduce the rate of corporation tax from 20% to 19% from 1 April 2017 and to 17% from 1 April 2020. This change had been substantively enacted at the balance sheet date, The government has announced that the rate of corporation tax will not be reduced from 1 April 2020 and that it will remain at 19%, but this has not yet been enacted and therefore, the Group's deferred tax balances continue to be recorded at 17%.

A reconciliation between the reported tax expense and the adjusted tax expense taking account of adjusting items as discussed in note 1(b) and 4 is shown below:

	2019 Continuing £m	2019 Discontinued £m	2019 Total £m	2018 Continuing £m	2018 Discontinued £m	2018 Total £m
Reported tax (credit) / expense	(0.7)	0.6	(0.1)	(1.1)	1.2	0.1
Effects of:
Amortisation of acquired intangible assets	0.5	-	0.5	0.3	0.1	0.4
Share-based payments	-	-	-	0.1	-	0.1
Exceptional expenses	0.7	-	0.7	0.3	0.1	0.4
Adjusted tax expense / (credit)	0.5	0.6	1.1	(0.4)	1.4	1.0

8 Discontinued operations

In the current year the Group disposed of the following subsidiaries:

- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;

- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;

- Centaur Human Resources Limited ('HR') on 30 April 2019; and

- Centaur Engineering Limited ('ENG') on 31 May 2019.

The disposals were effected in line with the Group's strategy to simplify its structure, to improve operational execution and to focus attention on leading brands.

A profit of £7.8m arose on the disposal of these subsidiaries being the difference between the proceeds of disposals and the carrying amount of the subsidiaries' net assets and attributable goodwill, less transaction costs. Details of these disposals can be found in note 14.

In addition to the above named subsidiaries, the Group disposed of its Venture Business Research Limited ('VBR') subsidiary on 13 May 2019 to an employee of VBR. A loss on disposal of £0.1m arose on this disposal as detailed in note 14. The loss on disposal, as well as the operational results of VBR, have not been included in discontinued operations as it does not represent a separate major line of business and these have therefore been included in continuing operations.

In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group's Home Interest segment ('HI') following the agreement of final completion accounts.

The results of the discontinued operations, which were included in the consolidated statement of comprehensive income and consolidated cash flow statement, were as follows:

	FIN	T&M	HR	ENG	HI	Total	FIN	T&M	HR	ENG	HI	Total
Statement of comprehensive income	Year ended 31 December 2019 £m						Year ended 31 December 2018 £m
Revenue	2.1	3.8	0.7	0.4	-	7.0	8.3	6.4	3.2	2.3	-	20.2
Expenses	(1.1)	(2.2)	(0.6)	(0.4)	-	(4.3)	(5.4)	(4.8)	(2.2)	(1.5)	-	(13.9)
(Loss) / profit on disposal	(0.8)	3.0	3.8	1.8	-	7.8	-	-	-	-	0.1	0.1
Profit before tax	0.2	4.6	3.9	1.8	-	10.5	2.9	1.6	1.0	0.8	0.1	6.4
Attributable tax expense	(0.2)	(0.3)	(0.1)	-	-	(0.6)	(0.6)	(0.3)	(0.2)	(0.1)	-	(1.2)
Statutory profit after tax	-	4.3	3.8	1.8	-	9.9	2.3	1.3	0.8	0.7	0.1	5.2
Loss / (profit) on disposal	0.8	(3.0)	(3.8)	(1.8)	-	(7.8)	-	-	-	-	(0.1)	(0.1)
Exceptional costs	-	-	0.1	-	-	0.1	0.3	0.1	0.1	-	-	0.5
Impairment of goodwill	-	-	-	-	-	-	0.3	-	-	-	-	0.3
Amortisation of acquired intangible assets	0.1	-	-	-	-	0.1	0.2	-	0.1	-	-	0.3
Tax relating to adjusting items¹	-	-	-	-	-	-	(0.2)	-	-	-	-	(0.2)
Total adjusting items¹	0.9	(3.0)	(3.7)	(1.8)	-	(7.6)	0.6	0.1	0.2	-	(0.1)	0.8
Adjusted profit¹ attributable to discontinued operations	0.9	1.3	0.1	-	-	2.3	2.9	1.4	1.0	0.7	-	6.0

¹ Adjusted results exclude adjusting items, as detailed in note 1 (b)

	FIN	T&M	HR	ENG	HI	Total	FIN	T&M	HR	ENG	HI	Total
Cash Flows	Year ended 31 December 2019 £m						Year ended 31 December 2018 £m
Operating cash flows	0.6	0.3	0.4	0.4	-	1.7	-	-	-	-	-	-
Investing cash flows	-	-	-	-	-	-	-	-	-	-	-	-
Financing cash flows	-	-	-	-	-	-	-	-	-	-	-	-
Total cash flows	0.6	0.3	0.4	0.4	-	1.7	-	-	-	-	-	-

The attributable tax expense stated in the table above is derived from the profit of discontinued operations. No income tax expense arose on the profit or loss on disposals.

9 Earnings/(loss) 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. 1,573,134 (2018: 857,991) shares held in the employee benefit trust and 6,964,613 (2018: 6,964,613) shares held in treasury 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 potentially dilutive ordinary shares. This comprises share options and awards (including those granted under the share save plan) 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.

Basic and diluted earnings per share have also been presented on an adjusted continuing and discontinued basis, as the Directors believe that these measures are more reflective of the underlying performance of the Group. These have been calculated as follows:

	Note	2019 Earnings / (Loss) attributable to owners of the parent £m	2019 Weighted average number of shares millions	2019 Earnings / (Loss) per share Pence	Restated² 2018 Earnings / (Loss) attributable to owners of the parent £m	Restated² 2018 Weighted average number of shares millions	Restated² 2018 Earnings / (Loss) per share Pence
Basic
Continuing operations		(8.0)	142.8	(5.6)	(19.4)	143.9	(13.5)
Continuing and discontinued operations		1.9	142.8	1.3	(14.2)	143.9	(9.9)
Effect of dilutive securities
Options: Continuing operations		-	-	-	-	-	-
Options: Continuing and discontinued operations		-	8.1	-	-	-	-
Diluted
Continuing operations		(8.0)	142.8	(5.6)	(19.4)	143.9	(13.5)
Continuing and discontinued operations		1.9	150.9	1.3	(14.2)	143.9	(9.9)
Adjusted¹
Continuing operations
Basic		(8.0)	142.8	(5.6)	(19.4)	143.9	(13.5)
Other exceptional costs	4	4.7	-	3.3	2.0	-	1.4
Impairment of goodwill	10	-	-	-	12.8	-	8.9
Amortisation of acquired intangibles	11	2.4	-	1.7	2.5	-	1.7
Share-based payments	25	0.1	-	0.1	0.8	-	0.6
Loss on disposal of subsidiary	14	0.1	-	0.1	-	-	-
Tax effect of above adjustments	7	(1.2)	-	(0.9)	(0.7)	-	(0.5)
Discontinued operations
Basic		9.9	142.8	6.9	5.2	143.9	3.6
Profit on disposal of subsidiaries	14	(7.8)	-	(5.5)	(0.1)	-	(0.1)
Other exceptional costs	4	0.1	-	0.1	0.5	-	0.4
Impairment of goodwill	10	-	-	-	0.3	-	0.2
Amortisation of acquired intangibles	11	0.1	-	0.1	0.3	-	0.2
Tax effect of above adjustment	7	-	-	-	(0.2)	-	(0.1)
Adjusted¹ basic
Continuing operations		(1.9)	142.8	(1.3)	(2.0)	143.9	(1.4)
Continuing and discontinued operations		0.4	142.8	0.3	4.0	143.9	2.8
Effect of dilutive securities
Options: Continuing operations		-	-	-	-	-	-
Options: Continuing and discontinued operations		-	8.1	-	-	10.8	(0.2)
Adjusted¹ diluted
Continuing operations		(1.9)	142.8	(1.3)	(2.0)	143.9	(1.4)
Continuing and discontinued operations		0.4	150.9	0.3	4.0	154.7	2.6

¹Adjusted results exclude adjusting items, as detailed in note 1 (b)
² See note 1 (a) for description of prior year restatement

	Adjusted Results¹ 2019 £m	Adjusted Items¹ 2019 £m	Statutory Results 2019 £m	Restated² Adjusted Results¹ 2018 £m	Restated² Adjusted Items¹ 2018 £m	Restated² Statutory Results 2018 £m
Earnings / (loss) per share attributable to owners of the parent
Fully diluted from continuing operations	(1.3p)	(4.3p)	(5.6p)	(1.4p)	(12.1p)	(13.5p)
Fully diluted from discontinued operations	1.6p	5.3p	6.9p	4.0p	(0.4p)	3.6p
Fully diluted from continuing and discontinued	0.3p	1.0p	1.3p	2.6p	(12.5p)	(9.9p)

¹Adjusted results exclude adjusting items, as detailed in note 1 (b)
² See note 1 (a) for description of prior year restatement

In 2019 and 2018, there was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share for continuing operations as the effect of all potentially dilutive shares outstanding was anti-dilutive.

10 Goodwill

Cost	Note	Group m
At 1 January 2018		159.4
Additions in the year		0.1
At 31 December 2018		159.5
Disposal of subsidiaries	14	(48.4)
At 31 December 2019		111.1

Accumulated impairment
At 1 January 2018		83.8
Impairment for the year		13.1
At 31 December 2018		96.9
Disposal of subsidiaries	14	(38.0)
At 31 December 2019		58.9

Net book value
At 31 December 2019		52.2
At 31 December 2018		62.6

Additions in the prior year relate to the additional consideration paid for the acquisition of MarketMakers in 2017 following the finalisation of contingent consideration paid during the year.

In the prior year, the largest adjusting item of £12.8m relates to the impairment of goodwill which primarily related to events to be closed and other businesses within the Xeim portfolio. Following a review of expected cash flows from the Financial Services portfolio, the carrying value of its goodwill was impaired by £0.3m.

Disposals in the current year relate to the disposal of Centaur Financial Platforms Limited (net book value £4.8m), Centaur Media Travel and Meeting Limited (net book value £5.6m), Centaur Human Resources Limited (net book value £nil) and Centaur Engineering Limited (net book value £nil). See note 14 for further details.

Goodwill by segment

Each brand is deemed to be a Cash Generating Unit ('CGU'), being the lowest level at which cash flows are separately identifiable. Goodwill is attributed to individual CGUs and has historically been reviewed at the operating segment level for the purposes of the annual impairment review as this is the level at which management monitors goodwill. In light of our simplification plan, Financial Services and Other Professional segments have been disposed of and the remaining segments are Xeim and The Lawyer:

	Note	Xeim £m	The Lawyer £m	Financial Services £m	Other Professional £m	Total £m
At 1 January 2018		48.9	16.0	5.1	5.6	75.6
Additions		0.1	-	-	-	0.1
Impairment charge		(12.8)	-	(0.3)	-	(13.1)
At 31 December 2018		36.2	16.0	4.8	5.6	62.6
Disposal of subsidiaries	14	-	-	(4.8)	(5.6)	(10.4)
At 31 December 2019		36.2	16.0	-	-	52.2

Impairment testing of goodwill and acquired intangible assets

At 31 December 2019, goodwill and acquired intangible assets (see note 11) were tested for impairment in accordance with IAS 36. In assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with its recoverable amount. Recoverable amounts are measured based on value-in-use ('VIU').

The Group estimates the VIU of its CGUs using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and discounts these using a pre-tax rate of 12.8% (2018: 11.3%). The discount rate used is consistent with the Group's weighted average cost of capital and is used across all segments, which are all based predominantly in the UK and considered to have similar risks and rewards.

The key assumptions used in calculating VIU are revenue growth, margin, adjusted EBITDA growth, discount rate and the terminal growth rate. The Group has used formally approved forecasts for the first three years of the calculation and applied a terminal growth rate of 2.5% (2018: 2.5%). This timescale and the terminal growth rate are both considered appropriate given the cyclical nature of the Group's revenues.

The assumptions used in the calculations of VIU for each segment have been derived based on a combination of past experience and management's expectations of future growth rates in the business. The forecasts have been prepared following a review of the business where management have identified the key growth and focus areas which will deliver the targets, and conversely which areas of the business will be de-prioritised over that period. The forecasts reflect the transformed Group which is more focussed and streamlined in order to deliver higher margins and profits.

In the prior year, before impairment testing, goodwill of £48.9m, £21.6m and £5.1m was allocated to the Xeim, Professional, and Financial Services segments respectively. Prior to a full impairment test, the goodwill of each segment was reviewed. This led to an impairment in 2018 of £12.8m to be recognised in Xeim primarily relates to events to be closed and other businesses within the portfolio, and an impairment of £0.3m in the Financial Services segment following a review of expected cash flows.

In the current year, the goodwill and acquired intangible assets carrying values of the two continuing segments, Xeim and The Lawyer, have been compared with their recoverable amount in the impairment tests. The forecast used in the calculation is the Group's MAP22 plan which is discussed in the CEO's Review. The key assumptions and variables in this plan are sensitised in isolation and in combination. The main sensitivities applied to the key drivers are outlined below.

Sensitivity analysis has been performed on the VIU calculations, holding all other variables constant, to:

I. apply a 10% reduction to forecast adjusted EBITDA in each year of the modelled cash flows. No impairment would occur in either of the segments.

II. apply a 1% increase in discount rate from 12.8% to 13.8%. No impairment would occur in either of the segments.

III. reduce the terminal value growth rate from 2.5% to 1.5%. No impairment would occur in either of the segments.

A key sensitivity is EBITDA growth in both Xeim and The Lawyer, which is driven by a combination of segment profit growth and the Group's disclosed annualised overhead cost savings target of £5m. As the Group has already achieved the run-rate savings for this target by the end of December 2019, further sensitivities have been performed only over the profitable revenue growth from Xeim and The Lawyer:

Xeim - In the base case the CAGR of EBITDA for the forecast period of 2019 to 2022 is 16%. VIU exceeds the carrying amount by £29.2m. EBITDA CAGR would have to fall by 9% to 7% in order for the VIU to equal the carrying amount.

The Lawyer - In the base case the CAGR of EBITDA for the forecast period of 2019 to 2022 is 12%. VIU exceeds the carrying amount by £13.8m. EBITDA CAGR would have to fall by 12% to nil in order for the VIU to equal the carrying amount.

11 Other intangible assets

	Note	Computer software* £m	Brands and publishing rights* £m	Customer relationships* £m	Separately acquired websites and content* £m	Total £m
Cost
At 1 January 2018		16.1	5.6	15.4	4.7	41.8
Additions - separately acquired		1.8	-	-	-	1.8
Additions - internally generated		0.7	-	-	-	0.7
At 31 December 2018		18.6	5.6	15.4	4.7	44.3
Additions - separately acquired		0.8	-	-	-	0.8
Additions - internally generated		0.4	-	-	-	0.4
Disposal of subsidiaries	14	(1.2)	(3.5)	(2.4)	(1.5)	(8.6)
At 31 December 2019		18.6	2.1	13.0	3.2	36.9

Accumulated amortisation
At 1 January 2018		9.5	1.9	7.2	4.6	23.2
Amortisation charge for the year		2.9	0.4	2.2	0.1	5.6
At 31 December 2018		12.4	2.3	9.4	4.7	28.8
Amortisation charge for the year		2.6	0.3	2.1	-	5.0
Impairment charge for the year		0.3	-	-	-	0.3
Disposals of subsidiaries	14	(1.1)	(1.7)	(1.9)	(1.5)	(6.2)
At 31 December 2019		14.2	0.9	9.6	3.2	27.9

Net book value at 31 December 2019		4.4	1.2	3.4	-	9.0
Net book value at 31 December 2018		6.2	3.3	6.0	-	15.5
Net book value at 1 January 2018		6.6	3.7	8.2	0.1	18.6

* Amortisation on acquired intangible assets from business combinations is presented as an adjusting item in note 4 (see note 1(b) for further information). Total amortisation of £2.5m (2018: £2.8m) on such assets is all amortisation on assets in the asset groups 'Brands and publishing rights', 'Customer relationships' and 'Separately acquired websites and content' of £2.4m (2018: £2.7m) in addition to £0.1m (2018: £0.1m) of amortisation on acquired intangible assets in the asset group 'Computer software'. These total amounts have been split between continuing and discontinued operations in note 4.

Amortisation and impairment of intangible assets is included in net operating expenses in the statement of comprehensive income.

The amortisation charge in continuing operations is £4.9m (2018: £5.2m) and in discontinued operations is £0.1m (2018: £0.4m). The impairment charge for the year is wholly in continuing operations and relates to obsolete software.

Other intangible assets are tested annually for impairment in accordance with IAS 36 at a segment level by comparing the carrying value with its recoverable amount. Please see note 10 for further details.

The Company has no intangible assets (2018: £nil).

12 Property, plant and equipment

	Note	Leasehold improvements £m	Fixtures and fittings £m	Computer equipment £m	ROU assets - property	Total £m
Cost
At 1 January 2018		2.2	0.6	1.3	-	4.1
Additions - separately acquired		-	0.1	0.4	-	0.5
At 31 December 2018		2.2	0.7	1.7	-	4.6
Recognised on adoption of IFRS 16 (1 January 2019)		-	-	-	2.3	2.3
Additions - separately acquired		-	-	0.2	3.2	3.4
At 31 December 2019		2.2	0.7	1.9	5.5	10.3

Accumulated depreciation
At 1 January 2018		1.3	0.3	0.8	-	2.4
Depreciation charge for the year		0.3	0.2	0.4	-	0.9
At 31 December 2018		1.6	0.5	1.2	-	3.3
Depreciation charge for the year		0.4	0.1	0.2	1.6	2.3
Impairment charge for the year		0.2	-	-	0.2	0.4
At 31 December 2019		2.2	0.6	1.4	1.8	6.0

Net book value at 31 December 2019		-	0.1	0.5	3.7	4.3
Net book value at 31 December 2018		0.6	0.2	0.5	-	1.3
Net book value at 1 January 2018		0.9	0.3	0.5	-	1.7

Depreciation and impairment of property, plant and equipment is included in net operating expenses in the statement of comprehensive income.

The depreciation and impairment charge for the year is wholly in continuing operations. The impairment relates to leasehold improvements in the Wells Street office which was vacated by December 2019.

The Company has no property, plant and equipment at 31 December 2019 (2018: £nil).

13 Investments

Company	Investments in subsidiary undertakings £m
Cost
At 1 January 2018	146.2
Transfer from amounts receivable from subsidiaries	4.9
At 31 December 2018 and 31 December 2019	151.1

Accumulated impairment
At 1 January 2018	12.2
Impairment charge for the year	13.1
At 31 December 2018	25.3
Impairment charge for the year	35.7
At 31 December 2019	61.0

Net book value at 31 December 2019	90.1
Net book value at 31 December 2018	125.8
Net book value at 1 January 2018	134.0

Following an internal corporate restructure in the prior year, £4.9m of intercompany balances due from subsidiaries of Centaur Media plc were capitalised.

Impairment testing of the investment

In assessing whether an impairment of the investment is required, the carrying value of the investment is compared with its recoverable amount. The recoverable amount is measured based on value-in-use ('VIU'). As outlined in the tables below the carrying value of the investment represents the Company's direct ownership of Centaur Communications Limited ('CCL'). CCL in turn directly or indirectly controls the rest of the Group's subsidiaries. Therefore, the VIU of the Company's investment in CCL is supported by the operations of the entire Group.

In the prior year the Company impaired its investment following an impairment test which identified the VIU no longer supported the carrying value of the investment. After this impairment at 31 December 2018, the carrying value of the investment was fully supported by the future cash flows of all of the subsidiaries owned by the Group at that date.

In the current year, due to the disposals of the Group's subsidiaries noted below, the Group's cash flows and therefore its VIU was reduced. This was identified as an indication of impairment of the Company's investment carrying value and a full impairment assessment was carried out. An impairment of £35.7m was identified and recognised in the Company's statement of comprehensive income. The remaining balance is supported by the underlying trade of the Group.

The Group estimates the VIU using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and discounts these using a pre-tax rate of 12.8% (2018: 11.3%). The discount rate used is consistent with the Group's weighted average cost of capital.

The assumptions used in the calculations of VIU have been derived based on a combination of past experience and management's expectations of future growth rates in the business. The forecasts have been prepared following a review of the business where management have identified the key growth and focus areas which will deliver the targets, and conversely which areas of the business will be de-prioritised over that period. The forecasts reflect the transformed Group which is more focussed and streamlined in order to deliver higher margins and profits. Sensitivities are applied to each of the key assumptions and variables in isolation and in combination, in line with those sensitivities applied for goodwill impairment testing as outlined in note 10.

EBITDA growth is driven by a combination of profit growth and the Group's disclosed annualised overhead cost savings target of £5m. As the Group has already achieved the run-rate savings for this target by the end of December 2019, further sensitivities have been performed only over the profitable revenue growth from Xeim and The Lawyer. In the forecast applied to derive the VIU which had resulted in the impairment noted above, EBITDA CAGR for the Group is 11%. If the EBITDA CAGR for the Group were to fall by 5% to 6% then the additional impairment indicated would be £22.6m.

The Group disposed of its interest in the following subsidiaries during the year:

Name	Proportion of ordinary shares and voting rights held (%)	Principal activities	Country of incorporation	Date of disposal
Centaur Engineering Limited	100	Other publishing activities	United Kingdom	31 May 2019
Centaur Financial Platforms Limited	100	Research data and analysis	United Kingdom	31 March 2019
Centaur Human Resources Limited	100	Events and information services	United Kingdom	30 April 2019
Centaur Media Travel and Meetings Limited	100	Other publishing activities	United Kingdom	30 April 2019
Venture Business Research Limited	100	Research data and analysis	United Kingdom	13 May 2019

The net profit on disposals of these subsidiaries was £7.7m (£0.1m loss on the disposal of VBR and £7.8m profit on the disposal of the other four subsidiaries). See note 14 for further details.

At 31 December 2019, the Group has control over the following subsidiaries:

Name	Proportion of ordinary shares and voting rights held (%)	Principal activities	Country of incorporation
Centaur Communications Limited ¹	100	Holding company and agency services	United Kingdom
Centaur Media USA Inc.²	100	Digital information, training and events	United States
Centaur Newco 2018 Limited	100	Media representation services	United Kingdom
Chiron Communications Limited	100	Digital information, training and events	United Kingdom
E-consultancy Asia Pacific Pty Limited ³	100	Dormant	Singapore
E-consultancy Australia Pty Limited ⁴	100	Digital information, training and events	Australia
E-consultancy LLC ⁵	100	Digital information, training and events	United States
E-consultancy.com Limited	100	Digital information, training and events	United Kingdom
MarketMakers Incorporated Limited ⁶	100	Telemarketing and Research	United Kingdom
Mayfield Publishing Limited	100	Investment company	United Kingdom
Pro-talk Ltd	100	Digital Publishing	United Kingdom
Taxbriefs Holdings Limited	100	Holding company	United Kingdom
Taxbriefs Limited	100	Digital and print publishing	United Kingdom
Thelawyer.com Limited	100	Publishing of consumer and business journals and periodicals	United Kingdom
Xeim Limited	100	Digital information services	United Kingdom
Your Business Magazine Limited	100	Investment company	United Kingdom

1 Directly owned by Centaur Media Plc

2 Registered address is 2711 Centerville Road, Suite 400 Wilmington, DE19808, USA. Functional currency is USD.

3 Registered address is 30 Cecil Street, #19-08 Prudential Tower, Singapore 049712. Functional currency is USD.

4 Registered address is Level 17, 383 Kent Street, Sydney, NSW, 2000, Australia. Functional currency is AUD.

5 Registered address is 41 East, 11 Street, 11FI, New York, NY 10003, USA. Functional currency is USD.

6 Registered address is 1000 Lakeside North Harbour Western Road, Portsmouth, Hampshire, PO6 3EN

The registered address of all subsidiary companies, with the exception of those identified above, changed from 79 Wells Street, London, W1T 3QN, United Kingdom to Floor M, 10 York Road, London, SE1 7ND, United Kingdom on 2 December 2019. The functional currency of all subsidiaries is GBP except for those identified above. The consolidated financial information incorporates the financial information of all entities controlled by the Company at 31 December 2019.

14 Disposal of subsidiaries

In the current year the Group disposed of the following subsidiaries:

- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;

- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;

- Centaur Human Resources Limited ('HR') on 30 April 2019; and

- Centaur Engineering Limited ('ENG') on 31 May 2019.

The disposals were effected in line with the Group's strategy to simplify its structure, to improve operational execution and to focus attention on leading brands. All disposals were executed by way of sale of 100% of the equity shares. The results of these subsidiaries have been included in discontinued operations as detailed in note 8.

The net assets of the subsidiaries at the date of disposal were as follows:

	FIN	T&M	HR	ENG	Total
	31 March 2019	30 April 2019	30 April 2019	31 May 2019
	£m	£m	£m	£m	£m
Goodwill	4.8	5.6	-	-	10.4
Other intangible assets	1.1	-	1.1	-	2.2
Inventories	-	1.2	0.1	0.4	1.7
Trade and other receivables	1.0	1.1	0.4	0.2	2.7
Intercompany	1.3	2.2	0.7	-	4.2
Cash and cash equivalents	0.6	0.3	0.4	0.4	1.7
Trade and other payables	(0.8)	(0.6)	(0.4)	(0.1)	(1.9)
Deferred income	(1.3)	(2.9)	(1.0)	(1.2)	(6.4)
Current tax liability	(0.1)	(0.3)	-	-	(0.4)
Net assets/(liabilities) disposed attributable to Shareholders of the Company	6.6	6.6	1.3	(0.3)	14.2
Directly attributable costs of disposal	0.8	0.6	0.6	0.6	2.6
(Loss) / gain on disposal	(0.8)	3.0	3.8	1.8	7.8
Fair value of consideration	6.6	10.2	5.7	2.1	24.6

Satisfied by:
Cash and cash equivalents	5.3	8.0	5.0	2.1	20.4
Settlement of intercompany balances	1.3	2.2	0.7	-	4.2
	6.6	10.2	5.7	2.1	24.6

The net cash flow arising on the disposals was as follows:

	FIN	T&M	HR	ENG	Total
	31 March 2019	30 April 2019	30 April 2019	31 May 2019
	£m	£m	£m	£m	£m
Net cash flow arising on disposal:
Consideration received in cash and cash equivalents	5.3	8.0	5.0	2.1	20.4
Less:
Directly attributable costs of disposal	(0.6)	(0.6)	(0.6)	(0.5)	(2.3)
Cash and cash equivalents disposed of	(0.6)	(0.3)	(0.4)	(0.4)	(1.7)
	4.1	7.1	4.0	1.2	16.4

In addition to the above named subsidiaries, the Group disposed of its Venture Business Research Limited ('VBR') subsidiary on 13 May 2019 to an employee of VBR for £1 settled by cash and £31k settlement of intercompany balances. Net assets of £0.2m, consisting wholly of other intangible assets were disposed of, resulting in a loss of £0.1m.

The loss on disposal, as well as the operational results of VBR have not been included in discontinued operations as it does not represent a separate major line of business and these have therefore been included in continuing operations.

In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group's Home Interest segment ('HI') following the agreement of final completion accounts.

15 Deferred tax

The movement on the deferred tax account is shown below:

	Accelerated capital allowances £m	Other temporary differences £m	Tax losses £m	Total £m

Net asset / (liability) at 1 January 2018	0.5	(1.4)	0.2	(0.7)
Adjustments in respect of prior period	0.1	-	-	0.1
Recognised in the statement of comprehensive income	0.1	0.9	(0.1)	0.9
Net asset / (liability) at 31 December 2018	0.7	(0.5)	0.1	0.3
Recognised in the statement of comprehensive income	(0.1)	0.1	0.7	0.7
Net asset / (liability) at 31 December 2019	0.6	(0.4)	0.8	1.0

Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.

	2019 Group £m	2018 Group £m
Deferred tax assets within one year	1.4	0.8
Deferred tax liabilities within one year	(0.4)	(0.5)
Total	1.0	0.3

At the statement of financial position date, the Group has unused tax losses of £4.2m (2018: £1.2m) available for offset against future profits. A deferred tax asset of £0.8m (2018: £0.1m) has been recognised in respect of £4.2m (2018: £0.6m) of such tax losses. Deferred tax assets and liabilities are expected to be materially utilised after 12 months.

16 Inventories

2019

Group

£m

2018

Group

£m

Work in progress

1.4

Work in progress comprises costs incurred relating to publications and exhibitions prior to the publication date or the date of the event. Inventories recognised as an expense during the year amounted to £0.9m (2018: £1.1m). These were included in cost of sales and employee benefits expense.

The Company had no inventory at 31 December 2019 (2018: £nil).

There are no provision amounts in respect of inventories (2018: £nil) and there were no write-downs of inventory in the year (2018: £nil).

17 Trade and other receivables

	Note	2019 Group £m	Restated² 2018 Group £m	2019 Company £m	2018 Company £m
Amounts falling due within one year
Trade receivables		7.9	11.0	-	-
Less: expected credit loss	28	(1.1)	(1.2)	-	-
Trade receivables - net		6.8	9.8	-	-
Receivables from subsidiaries		-	-	-	2.0
Receivable from Employee Benefit Trust		-	-	0.6	0.4
Other receivables		2.3	1.7	0.3	0.4
Prepayments		1.3	1.7	0.1	0.1
Accrued income		0.4	0.5	-	-
Social security and other taxes		-	-	-	0.2
		10.8	13.7	1.0	3.1

² See note 1 (a) for description of prior year restatement

Receivables from subsidiaries are unsecured, have no fixed due date and bear interest at an annual rate of 2.53% (2018: 2.67%).

Trade receivables are accounted for under IFRS 9 using the expected credit loss model, recognised initially at fair value and subsequently at amortised cost less any allowance for expected lifetime credit losses. For further detail refer to note 1(s)(ii).

Other receivables includes £1.5m in relation to the lease incentive receivable on exit of the Wells Street property in 2019 and £0.3m in relation to a deposit on the Waterloo property lease which is fully refundable at the end of the lease term.

18 Cash and cash equivalents

2019

Group

£m

2018

Group

£m

Cash at bank and in hand

9.3

0.1

The Company had no cash and cash equivalents at 31 December 2019 (2018: £nil).

19 Trade and other payables

	2019 Group £m	Restated² 2018 Group £m	2019 Company £m	2018 Company £m
Trade payables	1.1	2.7	-	-
Payables to subsidiaries	-	-	62.0	53.3
Social security and other taxes	1.0	2.1	-	-
Other payables	1.7	1.6	-	-
Accruals	8.7	6.8	1.4	0.5
	12.5	13.2	63.4	53.8

² See note 1 (a) for description of prior year restatement

Payables to subsidiaries are unsecured, have no fixed date of repayment and bear interest at an annual rate of 2.53% (2018: 2.67%).

The Directors consider that the carrying amount of the trade payables approximates their fair value.

20 Leases

This note explains the impact of the adoption of IFRS 16 Leases on the Group's financial information and discloses the new accounting policies that have been applied from 1 January 2019.

The Group has adopted IFRS 16 retrospectively from 1 January 2019 but has not restated comparatives for the 2018 period, as permitted under the specific transitional provisions in the standard. The reclassifications and adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019.

(a) The Group's leasing activities and how these are accounted for

The Group leases office spaces. Prior to the adoption of IFRS 16 these leases were classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to the profit or loss on a straight-line basis over the period of lease.

From 1 January 2019 relevant leases (i.e. excluding those to which a practical expedient has been applied) are recognised as a lease liability and a corresponding right-of-use ('ROU') asset at the date at which the leased asset is available for use by the Group.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The ROU asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value ('NPV') of future lease payments discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate ('IBR') is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Adjustments are made to the NPV for the initial measurement of the ROU asset. These adjustments are for any rental accrual or prepayments on the balance sheet at 31 December 2018 relating to the asset that arose under the previous accounting standard IAS 17. A further adjustment has been made in relation to a lease incentive receivable on the exit of a London property that had been fully vacated by 31 December 2019. The lease incentive receivable is in other receivables.

All ROU assets currently held by the Group relate to property leases. They are presented on the consolidated statement of financial positions within property, plant and equipment and are split out from other fixed assets in note 12. Lease liabilities are presented as a separate line on the face of the consolidated statement of financial position, split between current and non-current.

(b) Adjustments recognised on adoption of IFRS 16 at 1 January 2019

On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the IBR as of 1 January 2019. The weighted average lessee's IBR applied to the lease liabilities on 1 January 2019 was 3.8%.

The Group did not have any material leases previously classified as finance leases.

Lease liabilities

	1 January 2019
	£m

Operating lease commitments disclosed as at 31 December 2018	7.3
Less operating leases commitments related to contracts with future commencement dates	(3.4)
Operating lease commitments transitioning to IFRS 16 as at 1 January 2019	3.9

Impact of discounting using the lessee's IBR at the date of initial application	(0.6)
Lease liabilities recognised as at 1 January 2019	3.3

Current	2.3
Non-current	1.0
As at 1 January 2019	3.3

Right-of-use assets

The recognised ROU assets were measured at an amount equal to that of the lease liabilities at 1 January 2019 and adjusted for items as outlined above.

	1 January 2019
	£m
ROU assets - property	2.3

Additional information

As detailed in the table above, £3.4m of operating lease commitments in relation to a contract with a commencement date of 1 October 2019 were disclosed as at 31 December 2018. The lease liability and corresponding ROU asset was recognised as an addition during the year on commencement, see section (b) below. The commitments under this contract discounted at the IBR gave rise to a lease liability and corresponding ROU asset of £3.2m, recognised on 1 October 2019.

The change in accounting policy did not affect any other items on the consolidated statement of financial position at 1 January 2019 other than those discussed in this note.

The Group derived income from sub-leasing one of the properties during the year. This has not been included in the value of the ROU asset in accordance with the short-term lease practical expedient permitted by IFRS 16. The rental income generated in the period of £0.8m is presented in the consolidated statement of comprehensive income in 'other operating income' and is recognised on a straight-line basis. This source of income ceased in the current year, and no rental income is expected in 2020.

The lease liability and ROU assets presented in the consolidated statement of financial position as at 31 December 2019 were as follows:

Lease liabilities

	31 December 2019
	£m
Recognised on adoption of IFRS 16 at 1 January 2019	3.3
Additions	3.2
Interest expense	0.1
Cash outflow	(2.3)
As at 31 December 2019	4.3

Current	2.1
Non-current	2.2
As at 31 December 2019	4.3

ROU assets

	31 December 2019
	£m
Cost
Recognised on adoption of IFRS 16 at 1 January 2019	2.3
Additions	3.2
As at 31 December 2019	5.5

Accumulated depreciation
Depreciation charge for the period	1.6
Impairment charge for the period	0.2
As at 31 December 2019	1.8

Recognised on adoption of IFRS 16 at 1 January 2019	2.3
As at 31 December 2019	3.7

21 Deferred income

2019

Group

£m

2018

Group

£m

Deferred income

8.7

15.0

Deferred income arises on contracts with customers where revenue recognition criteria has not yet been met. See note 1 (e) for further details.

22 Current tax assets

2019

Group

£m

2018

Group

£m

Corporation tax receivables

0.1

0.2

The Company had no corporation tax receivables or payables at 31 December 2019 (2018: £nil).

23 Provisions

	Deferred consideration £m	Other £m	Total £m
Group
At 1 January 2018	1.8	0.1	1.9
Acquisition related	0.1	-	0.1
Utilised in the year	(1.8)	-	(1.8)
At 31 December 2018	0.1	0.1	0.2

Utilised in the year	(0.1)	-	(0.1)
At 31 December 2019	-	0.1	0.1

Current	-	-	-
Non-current	-	0.1	0.1
Total	-	0.1	0.1

Deferred consideration

Deferred consideration at 1 January 2018 related to the acquisition of MarketMakers. An additional amount of £0.1m contingent consideration was provided for during 2018 due to MarketMakers achieving a higher EBITDA than expected. £1.8m was settled in cash during 2018. The remaining £0.1m was settled in cash during the current year.

Other

The other provision relates to the dilapidation provision which was acquired on the acquisition of MarketMakers in relation to the building leased by the company in Portsmouth.

All amounts represent the Directors' best estimate of the balance to be paid at the statement of financial position date.

24 Equity

Ordinary shares of 10p each	Nominal value £m	Number of shares
Authorised share capital - Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019	20.0	200,000,000
Issued and fully paid share capital - Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019	15.1	151,410,226

Deferred shares reserve

The deferred shares reserve represents 800,000 (2018: 800,000) deferred shares of 10p each, which carry restricted voting rights and have no right to receive a dividend payment in respect of any financial year.

Reserve for shares to be issued

The reserve for shares to be issued is in respect of equity-settled share-based compensation plans. The changes to the reserve for shares to be issued represent the total charges for the year relating to equity-settled share-based payment transactions with employees as accounted for under IFRS 2.

Own shares reserve

The own shares reserve represents the value of shares held as treasury shares and in an employee benefit trust. At 31 December 2019, 6,964,613 (2018: 6,964,613) 10p ordinary shares are held in treasury and 1,573,134 (2018: 857,991) 10p ordinary shares are held in an employee benefit trust.

During 2019, the employee benefit trust purchased 1,247,205 (2018: 766,800) ordinary shares in order to meet future obligations arising from share-based rewards to employees. The shares were acquired at an average price of 51.7p per share (2018: 45.9p), with prices ranging from 45.6p to 54p. The total cost of £0.6m (2018: £0.4m) has been recognised in other reserves in the own shares reserve in equity.

25 Share-based payments

The Group's share-based payment expense for the year by scheme:

	2019 £m	2018 £m
Equity-settled plans
LTIP	0.1	0.8
Total equity-settled incentive plans and share based payment expense	0.1	0.8

The Group's share-based payment schemes upon vesting are equity-settled.

The prior year charge of £0.8m includes £0.1m in relation to national insurance payable on equity settled share-based schemes. This was included in liabilities as it was to be settled in cash.

The current year charge of £0.1m (2018: £0.8m) includes an immaterial amount of national insurance (2018: £0.1m) payable on equity settled share-based schemes and is included in liabilities as it is to be settled in cash.

Share based payments in 2019 of £0.1m (2018: £0.8m) have decreased significantly due to the overall reduction in the number of share options from 10.6m to 7.6m. This is due to forfeitures and lapses of 0.5m and 5.6m share options respectively resulting in a reversal of charges previously recognised since granted, mainly in 2016 and 2017. This was offset by an expense recognised for 3.6m new share options granted during the year and an additional charge recognised on truing up the expense for 1.6m share options that vested during the year.

Long-Term Incentive Plan

The Group operates a Long-Term Incentive Plan ('LTIP') for Executive Directors and selected senior management. This is an existing incentive policy and was approved by shareholders at the 2016 AGM. The share awards are valued at date of grant and the consolidated statement of comprehensive income is charged over the vesting period, taking into account the number of shares expected to vest. Full details of how the scheme operates are included in the Remuneration Report. These awards were priced using the following models and inputs:

	LTIP 2016	LTIP 2016	LTIP 2016	LTIP 2016	LTIP 2016	LTIP 2016
Grant date	03.10.2019	25.10.2019	25.07.2019	25.07.2018	6.04.2018	6.04.2018
Share price at grant date	41.50	32.50	46.00	44.40	50.20	50.20
Fair value	22.77	16.25	23.00	22.20	28.65	25.10
Exercise date	02.10.2022	5.04.2022	5.04.2022	24.07.2019	06.04.21	06.04.21
Exercise price (p)	£nil	£nil	£nil	£nil	£nil	£nil

Number of awards
Balance at 1 January 2019	-	-	-	53,590	1,246,879	2,104,890
Granted during the year	995,259	128,133	2,482,366	-	-	-
Forfeited during the year	-	-	(245,726)	-	-	(141,699)
Exercised during the year	-	-	-	(53,590)	-	-
Lapsed during the year	-	-	-	-	-	-
Balance at 31 December 2019	995,259	128,133	2,236,640	-	1,246,879	1,963,191
Exercisable at 31 December 2019	-	-	-	-	-	-
Average share price at date of exercise (p)	-	-	-	51.25	-	-

Balance at 1 January 2018	-	-	-	-	-	-
Granted during the year	-	-	-	53,590	1,246,879	2,145,375
Forfeited during the year	-	-	-	-	-	(40,485)
Exercised during the year	-	-	-	-	-	-
Lapsed during the year	-	-	-	-	-	-
Balance at 31 December 2018	-	-	-	53,590	1,246,879	2,104,890
Exercisable at 31 December 2018	-	-	-	-	-	-
Average share price at date of exercise (p)	-	-	-	-	-	-

Grant date	03.10.2019	25.10.2019	25.07.2019	25.07.2018	6.04.2018	6.04.2018
Expected volatility (%)	40.0	-	-	-	43.5	43.5
Expected dividend yield (%)	-	-	-	-	-	6.47
Risk free interest rate (%)	0.34	-	-	-	0.86	0.86
Valuation of model used	Stochastic	*	*	*	Stochastic	Black-Scholes

*Schemes granted on the 25 October 2019, 25 July 2019 and 25 July 2018 were nil-cost options with non-market based performance conditions. These schemes were valued based on the estimated vesting value of the non-market based conditions and expected forfeiture rates.

	LTIP 2016	LTIP 2016	LTIP 2016	LTIP 2016	LTIP 2006
Grant date	24.04.17	07.04.17	04.10.16	22.09.16	30.03.16
Share price at grant date	45.75	40.75	44.00	41.00	49.00
Fair value	24.46	21.08	18.04	16.81	20.92
Exercise date	24.04.20	07.04.20	04.10.19	22.09.19	30.03.19
Exercise price (p)	£nil	£nil	£nil	£nil	£nil

Number of awards
Balance at 1 January 2019	1,351,528	2,958,786	573,395	366,667	1,983,489
Granted during the year	-		-	-	-
Forfeited during the year	-	(92,035)	-	-	-
Exercised during the year	-	(478,472)	-	-	-
Lapsed during the year	(675,764)	(2,006,722)	(573,395)	(366,667)	(1,983,489)
Balance at 31 December 2019	675,764	381,557	-	-	-
Exercisable at 31 December 2019	675,764	381,557	-	-	-
Average share price at date of exercise (p)	-	39.49	-	-	-

Balance at 1 January 2018	1,351,528	3,589,405	573,395	366,667	2,059,390
Granted during the year	-	-	-	-	-
Forfeited during the year	-	(630,619)	-	-	(75,901)
Exercised during the year	-	-	-	-	-
Lapsed during the year	-	-	-	-	-
Balance at 31 December 2018	1,351,528	2,958,786	573,395	366,667	1,983,489
Exercisable at 31 December 2018	-	-	-	-	-
Average share price at date of exercise (p)	-	-	-	-	-

Grant date	24.04.17	07.04.17	04.10.16	22.09.16	30.03.16
Expected volatility (%)	45.4	45.4	43.8	43.8	31.8
Expected dividend yield (%)	-	-	-	-	-
Risk free interest rate (%)	0.12	0.12	0.06	0.06	0.48
Valuation of model used	Stochastic	Stochastic	Stochastic	Stochastic	Stochastic

The shares outstanding at 31 December 2019 had a weighted average exercise price of £nil (2018: £nil) and a weighted remaining life of 1.6 years (2018: 1.4 years).

Shares outstanding and exercisable at the end of the year had an initial expiry date of 25 March 2020, which has been extended to 30 June 2020.

The two schemes granted in 2017 were assessed for early vesting following the sale of four business units resulting in a significant change in the business. As a result the options related to the TSR performance conditions vested and options related to all other performance conditions lapsed.

Senior Executive Long-Term Incentive Plan ('SELTIP')

The Centaur Media Plc 2010 Senior Executive Long-Term Incentive Plan (the 'SELTIP') was introduced during 2011 and was approved by shareholders at the 2010 AGM. This is not an HMRC approved scheme and vests over a three-year period with service and performance conditions. Awards were granted under this scheme in 2011 for no consideration and no exercise price. This scheme has closed to new awards.

Awards of bonus units were made in 2013 as summarised in the following table:

Financial

year

Threshold

profit

PBTA

achieved

Profit

growth

SELTIP contribution

Total

bonus pool

Bonus pool allocated*

Number
of shares awarded in
total**

2013

£8.0m

£8.6m

£0.6m

30%

£0.1m

118,851

* The Remuneration Committee did not allocate the entire bonus pool in 2013.

** Awards were only made to participants with continuing employment.

Senior Executive Long-Term Incentive Plan

These awards were priced using the following models and inputs:

	SELTIP 2013
Grant date	15.09.11
Share price at grant date	33.88
Fair value	23.76
Exercise date	17.09.14
Exercise price (p)	£nil
Number of awards
Balance at 1 January 2019	6,862
Granted during the year	-
Forfeited during the year	-
Exercised during the year	-
Balance at 31 December 2019	6,862
Exercisable at 31 December 2019	6,862
Average share price at date of exercise (p)	-

Balance at 1 January 2018	6,862
Granted during the period	-
Forfeited during the period	-
Exercised during the period	-
Balance at 31 December 2018	6,862
Exercisable at 31 December 2018	6,862
Average share price at date of exercise (p)	-

The shares outstanding at 31 December 2019 had a weighted average exercise price of £nil (2018: £nil) and a weighted remaining life of 2.7 years (2018: 3.7 years).

These awards were priced using the following models and inputs:

	SELTIP 2013
Grant date	15.09.11
Expected volatility (%)	54.00
Expected dividend yield (%)	5.26
Risk free interest rate (%)	0.57
Valuation of model used	Black-Scholes

Share Incentive Plan

The Group has a Share Incentive Plan, which is a HRMC approved Tax-Advantaged plan, which provides employees with the opportunity to purchase shares in the Company. This plan is open to all employees who have been employed by the Group for more than 12 months. Employees may invest up to £1,800 per annum (or 10% of their salary if less) in ordinary shares in the Company, which are held in trust. The shares are purchased in open market and are held in trust for each employee. The shares can be withdrawn with tax paid at any time, or tax-free after five years. The Group matches the contribution with a ratio of one share for every two purchased. Other than continuing employment, there are no other performance conditions attached to the plan.

The Executive Directors are eligible to participate in the Share Incentive Plan, as are all employees of the Group.

	2019	2018
	Group	Group
Number of outstanding matching shares	48,071	57,298

26 Dividends

	2019	2018
	£m	£m
Equity dividends
Final dividend for 2017: 1.5p per 10p ordinary share	-	2.2
Interim dividend for 2018: 1.5p per 10p ordinary share	-	2.1
Final dividend for 2018: 1.5p per 10p ordinary share	2.1	-
Interim dividend for 2019: ordinary dividend of 1.5p and special dividend of 2.0p per 10p ordinary share	5.0	-
	7.1	4.3

In the current year the Board announced a new progressive dividend policy. An interim dividend payment of £5.0m was paid in October 2019. This comprised a £2.1m ordinary dividend at 1.5p per share and a £2.9m special dividend at 2.0p per share.

For the year ended 31 December 2019 the Board is recommending a final dividend payment of £0.7m at 0.5p per share. The dividend proposed by the Directors, subject to shareholder approval at the Annual General Meeting, will be paid on 29 May 2020 to all shareholders on the Register of Members on 11 May 2020.

The interim and final dividends of £5.0m and £0.7m together result in a total dividend pertaining to 2019 of £5.7m.

27 Notes to the cash flow statement

Reconciliation of (loss)/profit for the year to net cash inflow from operating activities:

	Note	2019 Group £m	2018 Group £m	2019 Company £m	2018 Company £m
Profit/(loss) for the year		1.9	(14.2)	(40.2)	(13.7)
Adjustments for:
Tax	7	(0.1)	0.1	1.4	(3.2)
Interest expense	6	0.3	0.2	1.7	1.6
Depreciation	12	2.3	0.9	-	-
Impairment of property, plant and equipment	12	0.4	-	-	-
Amortisation of intangible assets	11	5.0	5.6	-	-
Impairment of intangible assets	11	0.3	-	-
Impairment of goodwill	10	-	13.1	-	-
Loss on disposal of subsidiary	14	0.1	-	-	-
Gain on disposal of subsidiaries	14	(7.8)	(0.1)	-	-
Loss on impairment of investment	13	-	-	35.7	13.1
Share-based payment charge	25	0.1	0.8	0.1	0.3
Unrealised foreign exchange differences		-	-	-	-
Other		-	-	-	-
Changes in working capital (excluding effects of acquisitions and disposals of subsidiaries):
Decrease / (increase) in trade and other receivables		0.5	(1.3)	1.8	(2.3)
Increase in trade and other payables		1.3	1.4	6.8	8.9
Increase in deferred income		0.3	0.3	-	-
Cash generated from operating activities		4.6	6.8	7.3	4.7

Analysis of changes in net cash/(debt)

Group

Note

31 December

2018

£m

Net
cash flow

31 December

2019

£m

Cash and cash equivalents

0.1

9.2

9.3

Net cash

0.1

9.2

9.3

Company

Note

31 December

2018

£m

Net
cash flow

31 December

2019

£m

Cash and cash equivalents

Net cash

28 Financial instruments and financial risk management

Financial risk management

The Board has overall responsibility for the determination of the Group's risk management policies. The Board receives monthly reports from the Chief Financial Officer through which it reviews the effectiveness of policies and processes put in place to manage risk. The Board sets policies that reduce risk as far as possible without unduly affecting the operating effectiveness of the Group.

The Group's activities expose it to a variety of financial risks, including interest rate risk, credit risk, liquidity risk, capital risk and currency risk. Of these, credit risk and liquidity risk are considered the most significant. This note presents information about the Group's exposure to each of the above risks.

Categories of financial instruments

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1(s). All financial assets and liabilities are measured at amortised cost.

	Note	2019 £m	Restated² 2018 £m
Financial assets
Cash and bank balances	18	9.3	0.1
Trade receivables - net	17	6.8	9.8
Other receivables	17	2.3	1.7
Total financial assets		18.4	11.6
Financial liabilities
Lease liabilities	20	4.3	-
Trade payables	19	1.1	2.7
Accruals	19	8.7	6.8
Provisions	23	0.1	0.2
Other payables	19	1.7	1.6
Total financial liabilities		15.9	11.3

² See note 1 (a) for description of prior year restatement

Credit risk

The Group's principal financial assets are trade and other receivables (note 17). Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The carrying amount of financial assets recorded in the financial information, which is net of impairment losses, represents the Group's maximum exposure to credit risk in relation to financial assets. Credit risk is managed on a Group basis. The Group does not consider that it is subject to any significant concentrations of credit risk.

Trade receivables

Trade receivables consist of a large number of customers, of varying sizes and spread across diverse industries and geographies. The Group does not have significant exposure to credit risk in relation to any single counterparty or group of counterparties having similar characteristics. The Group's exposure to credit risk is influenced predominantly by the circumstances of individual customers as opposed to industry or geographic trends.

The business assesses the credit quality of customers based on their financial position, past experience and other qualitative and quantitative factors. The Group's policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days from the date of invoice. Under normal trading conditions, the Group is exposed to relatively low levels of risk, and potential losses are mitigated as a result of a diversified customer base and the requirement for events and certain premium content subscription invoices to be paid in advance of service delivery.

The credit control function within the Group's finance department monitors the outstanding debts of the Group, and trade receivables balances are analysed by the age and value of outstanding balances.

Any trade receivable balance which is objectively determined to be uncollectible is written off the ledger, with a charge taken through the statement of comprehensive income. The Group also records an allowance for the lifetime expected credit loss on its trade receivables balances under the simplified approach as mandated by IFRS 9. The impairment model for trade receivables, under IFSR 9, requires the recognition of impairment provisions based on expected lifetime credit losses, rather than only incurred ones as was the case under IAS 39. All balances past due are reviewed, with those greater than 90 days past due considered to carry a higher level of credit risk. Refer to note 1 (s) for further details on the approach to allowance for expected credit losses on trade receivables.

The allowance for expected lifetime credit losses, and changes to it, are taken through administrative expenses in the statement of comprehensive income.

The ageing of trade receivables according to their original due date is detailed below:

	2019 Gross £m	2019 Provision £m	Restated² 2018 Gross £m	2018 Provision £m
Not due	3.7	-	5.3	(0.1)
0-30 days past due	1.5	-	2.3	-
31-60 days past due	0.5	-	0.9	(0.1)
61-90 days past due	0.4	(0.1)	0.4	-
Over 90 days past due	1.8	(1.0)	2.1	(1.0)
	7.9	(1.1)	11.0	(1.2)

² See note 1 (a) for description of prior year restatement

Trade receivables that are less than 3 months past due are generally not considered to be impaired, except where specific credit issues or delinquency in payments have been identified. In making the assessment that unprovided trade receivables are not impaired, the Directors have considered the quantum of gross trade receivables which relate to amounts not yet included in income, including pre-event invoices in deferred income and amounts relating to VAT. The credit quality of trade receivables not yet due nor impaired has been assessed as acceptable.

The movement in the allowance for expected credit losses on trade receivables is detailed below:

	2019 Continuing £m	2019 Discontinued £m	2019 Total £m	2018 Continuing £m	2018 Discontinued £m	2018 Total £m
Balance at 1 January	1.1	0.1	1.2	1.5	-	1.5
Utilised	(0.4)	-	(0.4)	(0.6)	-	(0.6)
Additional provision charged to the statement of comprehensive income	0.4	-	0.4	0.3	-	0.3
Disposal of subsidiaries		(0.1)	(0.1)		-
Balance at 31 December	1.1	-	1.1	1.2	-	1.2

The Group's policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days from the date of invoice or, in the case of live events related revenue, no less than 30 days before the event. All credit and recovery risk associated with trade receivables has been provided for in the statement of financial position. The Group's policy for recognising an impairment loss is given in note 1 (s)(ii). Impairment losses are taken through administrative expenses in the statement of comprehensive income.

The Directors consider the carrying value of trade and other receivables approximates to their fair value.

Cash and cash equivalents

Banks and financial institutions are independently rated by credit rating agencies. We choose only to deal with those with a minimum 'A' rating. We determine the credit quality for cash and cash equivalents to be strong.

Other receivables

Other receivables are neither past due nor impaired. These are primarily made up of sundry receivables, including employee-related debtors and receivables in respect of distribution arrangements.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk by maintaining adequate reserves and working capital credit facilities, and by continuously monitoring forecast and actual cash flows. In November 2018 the Group renewed its £25m multi-currency revolving credit facility with the Royal Bank of Scotland and Lloyds which runs to November 2021 with the option to extend for two periods of one year each. As at 31 December 2019, the Group had cash of £9.3m (2018: £0.1m) with a full undrawn loan facility of £25.0m (2018: full undrawn loan facility of £25.0m).

The following tables detail the financial maturity for the Group's financial liabilities:

	Book value £m	Fair value £m	Less than 1 year £m	2-5 years £m
At 31 December 2019
Financial liabilities
Interest bearing	4.3	4.3	2.1	2.2
Non-interest bearing	11.6	11.6	11.5	0.1
	15.9	15.9	13.6	2.3
At 31 December 2018 (restated ²)
Financial liabilities
Interest bearing	-	-	-	-
Non-interest bearing	11.3	11.3	11.2	0.1
	11.3	11.3	11.2	0.1

² See note 1 (a) for description of prior year restatement

The Directors consider that book value is materially equal to fair value.

The book value of primary financial instruments approximates to fair value where the instrument is on a short maturity or where they bear interest at rates that approximate to the market.

The following table details the level of fair value hierarchy for the Group's financial asset and liabilities:

Financial Asset	Financial Liabilities
Level 1	Level 3
Cash and Bank balances	Lease liabilities
Level 3	Trade Payables
Trade receivables - net	Accruals
Other receivables	Provisions
	Other payables
	Borrowings*

*Borrowings are purely in relation to the Group's revolving credit facility which is discussed above. The amount drawn down from this facility at 31 December 2019 was £nil (2018: £nil).

All trade and other payables are due in one year or less, or on demand.

Interest rate risk

The Group has no significant interest-bearing assets but is exposed to interest rate risk when it borrows funds at floating interest rates through its revolving credit facility. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group evaluates its risk appetite towards interest rate risks regularly, and may undertake hedging activities, including interest rate swap contracts, to manage interest rate risk in relation to its revolving credit facility if deemed necessary.

The Group did not enter into any hedging transactions during the current or prior year and as at 31 December 2019, the only floating rate to which the Group is exposed was LIBOR. The Group's exposure to interest rates on financial assets and financial liabilities is detailed in the liquidity risk section of this note.

Interest rate sensitivity

The Group has exposure to interest rate risk, and sensitivity analysis has been performed based on exposure to variable interest rates at the reporting date.

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group's net profit after tax would increase / decrease by £nil (2018: £nil) and equity by £nil (2018: £nil)

Capital risk

The Group manages its capital to ensure that all entities in the Group will be able to continue as a going concern while maximising return to stakeholders, as well as sustaining the future development of the business.

The capital structure of the Group consists of net debt/cash, which includes cash and cash equivalents (note 18), and equity attributable to the owners of the parent, comprising issued share capital (note 24), other reserves and retained earnings. The Board also considers the levels of own shares held for employee share schemes, and the ability to issue new shares for acquisitions, in managing capital risk in the business.

The Group continues to benefit from its banking facilities (as renewed during November 2018), which features both a working capital facility, to assist in managing the Group's liquidity risk, and an acquisition facility to support the Group's acquisition strategy. The facility, available until November 2021 with an option to extend for a further 2 periods of 1 year each, allows for a maximum drawdown of £25m.

Interest is calculated on LIBOR plus a margin dependent on the Group's net leverage position, which is re-measured quarterly in line with covenant testing. The Group's borrowings are subject to financial covenants tested quarterly. The principal financial covenants under the facility are that the ratio of net debt to adjusted EBITDA (see note 1(b) for explanation and reconciliation of adjusted EBITDA) shall not exceed 2.5:1 and the ratio of EBITDA to net finance charges shall not be less than 4:1. At 31 December 2019 and throughout 2019 all these covenants were achieved.

Currency risk

Substantially all the Group's net assets are located in the United Kingdom. The majority of revenue and profits is generated in the United Kingdom and consequently foreign exchange risk is limited. The Group continues to monitor its exposure to currency risk, particularly as the business expands into overseas territories such as North America, however the results of the Group are not currently considered to be sensitive to movements in currency rates.

29 Operating lease commitments - minimum lease payments

Due to the adoption of IFRS 16 at 1 January 2019, the Group's future lease commitments are recognised as lease liabilities and ROU assets. The movement from the commitments of £7.3m at 31 December 2018 to the recognition of the lease liabilities and ROU assets are detailed in note 20.

Commitments payable under non-cancellable operating leases	2019 £m	2018 £m
Within one year	-	2.5
Later than one year and less than five years	-	4.8
	-	7.3

At 31 December 2018, the Group had contracted with tenants to receive payments in respect of operating leases on land and buildings. These arrangements were excluded from the requirements of IFRS 16 under the short-term lease exemption (see note 20 for further details). All sub-leasing arrangements ceased during the year.

Commitments receivable under non-cancellable subleases	2019 £m	2018 £m
Within one year	-	0.5
Later than one year and less than five years	-	-
	-	0.5

The Company does not have any operating lease commitments.

30 Pension schemes

The Group contributes to individual and collective money purchase pension schemes in respect of Directors and employees once they have completed the requisite period of service. The charge for the year in respect of these defined contribution schemes is shown in note 5. Included within other payables is an amount of £0.1m (2018: £0.1m) payable in respect of the money purchase pension schemes.

31 Capital commitments

At 31 December 2019, the Group had no capital commitments. At 31 December 2018, the Group had capital commitments totalling £0.1m in relation to fit-out costs for the new WeWork property lease.

32 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:

	2019	2018
	£m	£m
Interest payable	1.7	1.3

There were no borrowings at the year end.

The balances outstanding with subsidiary companies are disclosed in notes 17 and 19.

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 2019 the Company has provided a guarantee pursuant to sections 479A-C of 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	42.8
Centaur Newco 2018 Limited	11725322	-
Chiron Communications Limited	01081808	67.5
Econsultancy.com Limited	04047149	2.9
Mayfield Publishing Limited	02034820	0.4
Pro-Talk Limited	03939119	0.3
Taxbriefs Holdings Limited	03572069	-
Taxbriefs Limited	01247331	0.7
Thelawyer.com Limited	11491880	3.0
Xeim Limited	05243851	11.3
Your Business Magazine Limited	01707331	0.3

See note 13 for changes to subsidiary holdings during the year.

MarketMakers Incorporated Limited will have its statutory audit for the year ended 31 December 2019 performed by PwC.

33 Post balance date events

No material events have occurred after the reporting date.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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