Interim Results

Informa PLC 26 September 2006 26 September 2006 Informa plc Interim Results 2006 Strong Performance across Informa Powered by Organic Growth Unaudited, six months ended 30 June 2006 2005 Increase Organic(1) £m £m % % Revenue 533.7 259.7 105 11 Operating profit / (loss) 60.4 (50.3) Adjusted(2) operating profit 105.1 48.1 118 21 Profit / (loss) before tax 39.1 (58.9) Adjusted(2) profit before tax 83.8 39.6 112 Profit for period 29.5 48.8 (40) Adjusted(3) profit for period 61.2 27.6 122 Basic earnings per share (p) 7.0 14.6 (52) Diluted earnings per share (p) 7.0 14.5 (52) Adjusted(3)diluted earnings per share (p) 14.4 8.2 76 Dividend per share (p) 3.3 2.7 22 Cash conversion(4) 67% 26% 1. Adjusted for acquisitions and effects of changes in foreign currency exchange rates. 2. Excludes restructuring and reorganisation costs of £2.9m (2005: £2.5m) and intangible asset amortisation of £41.8m (2005: £7.9m). 2005 also excludes goodwill write off of £86.5m and discontinued operations of £1.5m. 3. Excludes restructuring and reorganisation costs of £2.9m (2005: £2.5m) and intangible asset amortisation of £41.8m (2005: £7.9m) and related tax of £13.0m (2005: £3.1m). 2005 also excludes goodwill write off of £86.5m, discontinued operations of £1.5m and a deferred tax credit of £116.6m. 4. Adjusted cash generated by operations (note 10 of the interim statements) divided by adjusted operating profit. Highlights of 2006 • Organic revenue up 11%, organic adjusted operating profit up 21% • Strong trading across all three divisions and business areas • Adjusted operating margin increased 1.2 percentage points to 19.7% • Academic book sales recover with 10% organic growth • IIR acquisition returns 9% pre-tax in its first 12 months of ownership • Interim dividend increased by 22% • Confident of second half outlook Commenting on the Group's performance, Peter Rigby, CEO of Informa said: 'We have had an excellent start to the year. These results underline the core strengths of Informa. The three arms of the business - publishing, performance improvement and events - are all performing well and demonstrating their unique combination of dynamic growth capture and resilience. The acquisition of IIR has proved a signal success, strengthening many of Informa's sector and geographic positions and helping drive revenue and cost synergy across the group. This is having its effect both in stimulating turnover growth and margin improvement. We look forward with confidence to completing another successful year for Informa.' Enquiries: Informa plc Tel: 020 7017 5000 Peter Rigby, Chief Executive David Gilbertson, Group Managing Director Tony Foye, Finance Director Susanna Kempe, Chief Marketing Officer Financial Dynamics Tel: 020 7831 3113 Tim Spratt / Charles Palmer / Darrel Connell Our interim results presentation will be webcast live today at 09.30 (GMT) and is available at www.informa.com Business and Financial Review Informa has enjoyed a strong start to 2006, reflected in an excellent set of financial results for the six months ended June 30. Informa's revenue in the period was £533.7m, more than double its prior year level, and adjusted operating profit increased by 118% to £105.1m. These results reflect the increased scale of the group following the acquisition of IIR in July 2005 but they also include strong organic revenue growth of 11%. This is almost twice the organic growth rate achieved in the same 2005 period and underlines the greater leverage within the enlarged business. Organic revenue growth was accelerated by increasing collaboration between the three divisions of the business which are now bringing their format expertise to bear on a wider range of market opportunities. Adjusted operating profit on an organic basis grew by 21% on the same period a year earlier, demonstrating the effect of operational gearing and greater cost efficiency. Adjusted operating margin, at 19.7%, was 1.2 percentage points higher than a year ago. Recent acquisitions traded strongly and contributed well to the half year results, particularly IIR which has achieved a pre-tax return on capital employed of 9% in its first twelve months of ownership. In each instance, either by sector or geography, where legacy IIR and Informa businesses have been co-located or merged to take advantage of management expertise and market leadership, profits have been enhanced. For example, the combined UK Life Sciences events business produced a 57% profit contribution increase on a proforma basis for the first half year. Similarly, the combined Australian events business achieved 29% growth. Informa's three revenue streams: publishing, performance improvement and events, are all performing well. Each demonstrated significant growth within its core market sectors and benefited in addition from both revenue and cost synergies across the enlarged Informa group. Publishing which constituted 36% of revenue within the period continues to enjoy good operating margins. On a proforma basis revenue was up 11%((1)). The resilient subscription based products again delivered robust results, underpinned by high academic journal renewal rates of over 95%. Journal productivity was strong in terms of both new journal launches and increased frequency of publication, reflecting particularly the continuing high volume of research in Humanities and Social Sciences. The new electronic delivery and pricing models have been well received and market uptake is expected to continue growing in the 2007 renewal cycle. Academic book sales rebounded well and were 10% higher on an organic basis after a rather flat 2005. All key subject areas are performing strongly: social sciences, reference, science and engineering were the largest contributors. Critically acclaimed new books released include: The War for Children's Minds, Urban Design Futures, Genocide: A Comprehensive Introduction, Introduction to Geopolitics and The English Legal System. Performance Improvement ('PI') which constituted 21% of revenue within the period, achieved proforma revenue growth of 16%(1), confirming and expanding its market leadership position. Adjusted operating profit rose by 21%(1), reflecting both the operational gearing that is a feature of this part of the business as well as the benefit of cost savings garnered from being part of Informa. Execution of Informa's global PI expansion plan has continued with the foundation of an Asian PI hub designed to fast track opportunities within this market. The first half year confirmed again the competitive advantage Informa enjoys from its international reach to meet client demands for global delivery. AchieveGlobal, for example, launched a large international engagement with State Street Bank to enable its global expansion plans: initiatives have already taken place in the US, Canada, UK, France, Germany, Benelux, Italy, EMEA, Australia, Japan, Singapore and Hong Kong. Events which constituted 43% of revenue within this period, saw dynamic growth across a wide range of geographies and vertical sectors, taking advantage of good market trading conditions, enlarged group synergies and enhanced operational expertise. Events revenue grew by 28% on a proforma basis(1). All events sectors performed well with notable proforma(1) operating profit growth in Telecoms of 36%, Maritime of 57% and Life Sciences of 60%. Geographically, Dubai profit grew by an impressive 52%, while among the smaller businesses the Czech Republic rose by 39% and Italy by 34%. The acquisition of the quadrennial print exhibition business, IPEX also contributed £17m in revenue. Benefiting significantly from increasing spend from clients seeking more targeted marketing opportunities, events' ancillary revenue from sponsorship and exhibition presence increased by 28% organically. Divisional Review Informa's three divisions: Academic & Scientific, Professional and Commercial, each of which combine growth capturing and resilient business models, all reported robust growth in the six months. Academic and Scientific Academic and Scientific 2006 2005 Increase Organic £'m £'m % % Revenue STM 86.1 66.3 30 7 HSS 52.7 45.9 15 11 138.8 112.2 24 8 Adjusted Operating Profit STM 21.2 15.1 40 17 HSS 8.7 7.0 24 17 29.9 22.1 35 17 Adjusted Operating Margin 21.5 19.7 Academic & Scientific divisional revenue increased by 24%, comprising an organic increase of 8% and contributions from acquisitions. Adjusted operating profit was 35% higher at £29.9m, which included organic growth of 17%. IIR contributed £10.5m to revenue and £2.8m to adjusted operating profit (2005 £8.2m and £2.0m respectively prior to acquisition and therefore not included in the 2005 comparative above). The adjusted operating margin rose to 21.5% from 19.7%, benefiting from the 10% organic increase in books sales as well as the impact of cost savings and efficiencies associated with the integration of the IIR businesses. The STM segment saw revenue grow 7% organically with solid journal growth supported by the rebound in book sales and good increases from life science events and associated publications. The combined Informa-IIR Life Science conference businesses in both the UK and US benefited from the integration to post a revenue increase of 32% and an operating profit increase of 60% on a proforma basis(1) from 2005, reversing trends experienced over the last two years. This result was driven by cost synergies from combining these legacy businesses and revenue increases associated with focusing on Large Scale Events which have an inherently higher margin. For example, the Large Scale Events, Partnerships with CROS, National Managed Health Care Congress and Drug Discovery Technologies together grew revenue in excess of 42% on a proforma basis(1). The PJB pharmaceutical information business strengthened its high margin revenue base by the addition of product from the M2M and Ashley acquisitions in 2005. Ashley saw particularly strong sales in its expert opinion information service. The division also saw excellent revenue growth in HSS revenues which were up 11% in organic terms with subscription renewals at or above the levels of recent years and a similar rebound in books to that reported by the STM business. HSS journals continue to see good growth in article submission levels, reflecting the rising volume of research in these disciplines. As reported last year, in response to the increase in demand from academic institutions for electronic delivery of journal content, the Academic & Scientific division announced new on-line information products and pricing models for 2006. These were well received by the library community and we will be expanding these initiatives during 2007. InformaWorld, our new group electronic content platform allows our customers comprehensive electronic access to our Academic and Scientific journal and book content. The new platform will be rolled out across the group over the next few years and incorporate progressively more of Informa's products and services. InformaWorld will also facilitate the introduction of our new open access model for journals called 'i-open'. This will be a hybrid offering for research journals initially in Chemistry, Physics, Mathematics and Statistics. The model allows us to offer full electronic open access to certain journal articles for which authors opt to pay an open access fee of $3,000. Journals operating the i-open model will therefore contain some subscriber-only articles alongside open access articles which can be web accessed via InformaWorld. All published articles, whether subscriber-only or open access, will continue to be subject to the same peer review process before acceptance. Professional Professional 2006 2005 Increase Organic £'m £'m % % Turnover Performance Improvement 109.9 - - - Financial Data Analysis 32.6 30.1 8 -3 Finance Insurance Law and tax 40.3 15.3 163 5 182.8 45.4 303 - Adjusted Operating Profit Performance Improvement 15.6 - - - Financial Data Analysis 9.1 7.6 20 8 Finance Insurance Law and tax 9.4 1.7 467 71 34.1 9.3 268 19 Adjusted Operating Margin 18.7 20.4 The Professional division's overall revenue increased by 303% and adjusted operating profits rose by 268%, driven by a strong contribution from Performance Improvement and good organic growth from Finance, Insurance, Law and Tax. IIR businesses, which now account for almost three quarters of the division's sales, contributed £135.5m to revenue and £22.2m to adjusted operating profit (2005 £116.3m and £19.0m respectively prior to acquisition and therefore not included in the 2005 comparative above). Performance Improvement ('PI') revenue grew 16% on a proforma basis to £109.9m from £94.9m in 2005 and profits were 21%(1) higher. Solid profit growth was reported by six of the seven PI businesses, led by Forum and Achieve Global which each recorded year on year profit rises of more than 25%. Only Communispond, the smallest of the PI companies accounting for 2% of PI revenue, did not contribute to growth, recording a flat performance for the first six months. Financial Data and Analysis saw high renewals and increased margins contributing to an increase of 8% in revenue and 20% rise in adjusted operating profits. The unit saw a slight decline in organic revenues as a result of some attrition in the Informa Global Markets business. This attrition reflects the more challenging and competitive market conditions for real-time trading-related information for the banking community. The other businesses in the unit all produced good growth and to this end M Solutions was acquired in February to add wealth management solutions to the Informa Investment Solutions product offering. The Finance, Insurance, Law and Tax businesses revenue grew 5% organically led by a strong performance from legal subscription publishing which was up 31% with strong electronic sales, and a continued improvement in the advertising income of the Insurance information portfolio. Financial events under IIR's ICBI brand traded strongly in the period with good performances from large scale events in the funds and private equity fields. This unit also benefited from the integration of IIR and Informa output in Europe which resulted in reduced staff costs and higher margins from growth in the larger events and the elimination of the weaker elements of the combined portfolio. Adjusted operating profit growth in this unit was particularly strong due to these reduced overheads and increased yields, growing by £7.7m to £9.4m with an organic profit rise of £1.2m. IIR contributed £6.5m profit compared with £6.1m in 2005 (prior to acquisition by Informa). Commercial Commercial 2006 2005 Increase Organic £'m £'m % % Revenue Regional events 134.3 44.2 204 7 Telecoms & Media 45.5 28.7 59 46 Maritime & Commodities 32.3 29.2 10 10 212.1 102.1 108 19 Adjusted Operating Profit Regional events 25.5 6.1 320 5 Telecoms & Media 12.1 7.7 57 49 Maritime & Commodities 3.5 2.9 19 19 41.1 16.7 146 27 Adjusted Operating Margin 19.3 16.3 Commercial division revenue increased 108% (£109.9m) and adjusted operating profit 146% (£24.3m). Organic revenue growth of 19% translated into a 27% improvement in organic operating profit, again reflecting the cost synergies of the enlarged group. IIR businesses contributed £73.2m to the division's revenue and £15.5m to its adjusted operating profit (2005 £63.8m and £11.2m respectively prior to acquisition and therefore are not included in the 2005 comparatives above). Regional Events, which includes a wide range of conferences, exhibitions and courses in a number of European, Middle East, Asian, Australian and Latin American markets, had a strong first half year despite the impact in June of the FIFA World Cup which caused the postponement of a number of events in Germany. The legacy Informa business which has a relatively higher proportion of its revenue in Germany, still recorded organic growth of 7%, while the IIR Regional Events showed a proforma organic revenue growth of 16%(1) (£9.4m). Informa's market-leading Telecoms & Media unit continues to find good opportunities in the growing strength and diversity of the mobile communications sector. The 3GSM World Congress was moved to Barcelona from Cannes and saw another healthy growth in visitors, exhibitors and delegates with overall attendance rising to some 50,000 from 39,000 a year earlier. The relocation of the event unlocked pent-up demand for exhibition space which had been limited by the physical constraints of the previous Cannes location. This, together with strong growth in the first half contribution from Informa's nine other large scale telecoms events in the GSM to 3G World Series, combined to help record an organic increase of 46% in revenue and 49% rise in adjusted operating profits. The Maritime unit grew revenue by 10% and adjusted operating profit by 19%, capturing growth from the strong trading conditions in the international maritime markets and continuing high energy prices. Events saw a good increase in delegate revenues and sponsorship income with profits up 57% as a result. Lloyd's List, Informa's flagship daily newspaper, contributed strongly to the unit's profit improvement after driving a 28% increase in advertising revenues in the period. Commodities revenue also saw good growth, up 9% over 2005. These gains were offset by a weaker performance in Freight Publishing. This came both from publishing and from conference income. There has also been a welcome rebound in the consultancy side of the business which has exposure to the US agriculture sector. Financial Results Informa plc for the six months ended June 30, 2006 recorded revenue of £533.7m, up 105% from £259.7m in the same period a year earlier. IIR Holdings, which was acquired on July 6, 2005, contributed £218.1m to revenue and a further £20.0m was contributed by other acquisitions in the period (mainly from IPEX, the quadrennial print exhibition, which contributed £17.0m). Organic revenue growth year on year was 11%. The translation impact of currency movements on the results was minimal despite some US dollar to sterling exchange rate volatility during the period. Operating profit increased by £110.7m to £60.4m from a loss of £50.3m in 2005. The latter included a one-off non cash related goodwill write off of £86.6m which depressed last year's interim operating profit and profit before tax. This year amortisation of intangibles has increased by £35.0m, reflecting principally the charge in respect of intangible assets acquired with the IIR acquisition. EPS Basic and diluted EPS were down 52% compared with 2005 due principally to the net benefit in 2005 of the one off £116.6m deferred tax credit, offset by the £86.6m goodwill write-off. Adjusted Results Adjusted operating profit, which is shown in note 4 of the interim results, is calculated after removing certain items not relating to the underlying trading operations of the group. This adjusted operating profit increased by 118% to £105.1m from £48.1m. Adjusted profit before tax increased 112% to £83.8m from £39.6m and adjusted profit for the period increased 122% to £61.2m from £27.6m. Adjusted Diluted EPS after deducting tax at 27% (2005: 30%) was up 76% to 14.4p from 8.2p, reflecting higher profit after tax offset by a partial dilution from the additional shares issued to help finance the acquisition of IIR. The board believes these adjusted operational figures provide additional information to explain the underlying performance and associated trends of the group. Further details are given in note 4 of the interim results. Finance Costs Finance costs, which consist predominantly of interest payable net of interest receivable and other income, increased from £8.6m in 2005 to £21.3m due to the extra debt incurred in financing acquisitions, principally IIR. Taxation The 2005 comparative interim results include a one off £116.6m deferred tax credit resulting from the reorganisation of Informa's UK businesses in 2005. Other tax which is provided at 25% (2005: 30%) was £9.6m, up £0.7m from £8.9m in 2005. The tax rate is lower than in 2005 due principally to the lower tax rates applicable to some IIR profit streams. Dividend In recognition of the enhanced trading prospects, Informa has declared an interim dividend of 3.3p per share. This represents an increase of 22% on the 2005 equivalent. The dividend will be payable on November 6, 2006 to ordinary shareholders registered as of the close of business on October 6, 2006. Balance sheet Goodwill decreased from £1,123.4m to £1,122.5m with additions from the acquisitions made during the period being offset by currency movements. Other intangible assets decreased from £935.7m to £900.4m due to the normal amortisation charge which came to £43.7m and exchange rate effects on US dollar denominated assets, offset by additions from acquisitions in the period. Net debt rose £6.9m from £735.4m to £742.3m compared with December 31, 2005, reflecting inter alia the seasonal nature of Informa's cash flows, capital expenditure of £10.1m and £29.8m spent on acquisitions in the first six months of 2006, offset by favourable exchange impacts of £15.8m. Cash conversion (expressed as adjusted cash generated by operations as a percentage of adjusted operating profit, note 10 of the interim results) was up on the same period last year at 67% (2005: 26%) partly due a change in mix in business resulting from the acquisition of IIR but also due to a one off pension contribution of £10.0m in the 2005 period. Informa's gross defined pension liabilities disclosed under 'retirement benefit obligations' have reduced by £6.5m compared with December 31, 2005 to £11.2m due mainly to actuarial gains of £6.7m. Deferred income, which represents income receivable in advance, was up £58.5m (55%) on the same period in 2005 to £165.6m from £107.1m, reflecting the increased scale of the business and the strong momentum into the second half of the year. This balance represents revenue still to be recognised in the income statement as it is earned in future periods. Current trading and outlook Informa had an excellent first half and trading conditions remain positive, providing a solid base for future organic growth. Informa generates revenue from three main areas which serve specific markets and specialist sectors: Publishing, Performance Improvement and Events with relatively little exposure to more volatile advertising which now accounts for just 3% of Informa's revenue. Informa is seeing steadily growing interest from subscriptions and copy sales customers in e-based product offerings and continues to develop new products to meet this demand. For example the new eCollections offering allows access to Informa's academic e book collection by subject area for an annual subscription. Informa is now increasingly exploiting this interest in digital content, providing an accelerator of organic growth. With the IIR integration now complete, Informa looks forward to taking advantage of the enlarged scope of products, opportunities and synergies that now present themselves. Informa is well placed to continue to grow organically and, where appropriate, through further selective acquisitions at a time when many of our client markets are developing positively. As a result, the Board remains confident of a successful outcome for 2006 and of the prospects for the future. Over the past two years Informa staff have wholeheartedly contributed to the successful fusion of Informa, Taylor & Francis and IIR. This has been a key factor in building a creative and energetic group with strong prospects and increased opportunities. We wish to take this opportunity to thank the staff for their professionalism and enthusiasm in seizing the opportunities that we now enjoy. INDEPENDENT REVIEW REPORT TO INFORMA PLC Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2006 which comprises the consolidated income statement, the consolidated statement of recognised income and expenses, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 14. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2006. Deloitte & Touche LLP Chartered Accountants Reading 26 September 2006 Notes: A review does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions. Consolidated Income Statement For the Six Months Ended 30 June 2006 - Unaudited 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Continuing operations Revenue 3 533,740 259,742 729,280 Change in inventories of finished goods and work 4,231 4,128 3,091 in progress Raw materials and consumables used (193,401) (74,640) (239,360) Employee benefit expense (150,910) (78,974) (210,710) Depreciation expense (4,258) (3,452) (8,175) Amortisation of intangible fixed assets (43,690) (8,680) (49,755) Goodwill written off 5 - (86,562) - Other expenses (85,348) (61,906) (132,953) Operating profit / (loss) 3 60,364 (50,344) 91,418 Non-operating income and expense 88 - (28) Finance costs (22,984) (9,772) (36,247) Investment income 1,675 1,210 5,902 Profit / (loss) before tax 39,143 (58,906) 61,045 Deferred tax adjustment recognised/(released) on 5 - 116,557 (35,224) UK restructuring Other tax (9,638) (8,882) (15,054) Tax 5 (9,638) 107,675 (50,278) Profit for the period from continuing operations 29,505 48,769 10,767 Discontinued Operations Loss for the period from discontinued operations - - (1,885) Profit for the period 29,505 48,769 8,882 Attributable to: - Equity holders of the parent 29,439 48,758 8,825 - Minority interests 66 11 57 Earnings per share 8 From continuing operations: - Basic (p) 6.99 14.55 2.76 - Diluted (p) 6.96 14.48 2.75 From continuing and discontinued operations: - Basic (p) 6.99 14.55 2.27 - Diluted (p) 6.96 14.48 2.26 Consolidated Statement of Recognised Income and Expense For the Six Months Ended 30 June 2006 - Unaudited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Gains / (losses) on cash flow hedges 7,114 (1,762) 3,373 Exchange differences on translation of foreign operations (17,781) 2,624 4,367 Actuarial gains / (losses) on defined benefit pension schemes 6,718 (2,130) (3,766) Tax on items taken directly to equity (3,475) - (3,752) Net (loss) / income recognised directly in equity (7,424) (1,268) 222 Transferred to profit or loss on cash flow hedges (621) 190 416 Profit for the period 29,505 48,769 8,882 Total recognised income and expense for the period 21,460 47,691 9,520 Attributable to: - Equity holders of the parent 9 21,394 47,680 9,463 - Minority interests 66 11 57 Consolidated Balance Sheet As at 30 June 2006 - Unaudited 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Assets Non-current assets Goodwill 1,122,458 545,786 1,123,418 Other intangible assets 900,388 488,095 935,687 Property and equipment 25,274 18,495 22,868 Available for sale investments 6,566 10,285 10,279 Deferred tax assets 8,479 68,352 13,106 2,063,165 1,131,013 2,105,358 Current assets Trade and other receivables 192,825 101,048 187,699 Inventory 35,849 36,455 31,138 Cash and cash equivalents 6,672 948 20,654 235,346 138,451 239,491 Non-current assets classified as held for sale 4,574 5,924 4,574 Total assets 2,303,085 1,275,388 2,349,423 Equity and liabilities Capital and reserves Called up share capital 42,236 30,074 42,152 Share premium account 499,026 195,870 496,826 Reserve for shares to be issued 1,903 1,893 1,124 Merger reserve 496,400 496,400 496,400 Other reserve 37,398 37,398 37,398 ESOP trust shares (3,334) (3,641) (3,334) Hedging and translation reserve (12,340) (6,696) 408 Retained losses (136,229) (88,430) (145,096) Equity attributable to equity holders of the parent 9 925,060 662,868 925,878 Minority interests 176 64 110 Total equity 925,236 662,932 925,988 Non-current liabilities Long-term borrowings 689,147 356,326 692,500 Deferred tax liabilities 233,626 15,339 240,431 Retirement benefit obligation 11,186 15,287 17,729 Provisions 2,212 390 1,847 Other payables 3,858 519 4,852 940,029 387,861 957,359 Current liabilities Short-term borrowings 59,770 9,725 63,521 Current tax liabilities 64,267 19,108 58,620 Provisions 3,467 - 2,014 Trade payables and other payables 144,712 88,676 154,476 Deferred income 165,604 107,086 187,445 437,820 224,595 466,076 Total liabilities 1,377,849 612,456 1,423,435 Total equity and liabilities 2,303,085 1,275,388 2,349,423 The Board of Directors approved this Interim Report on 26 September 2006. Consolidated Cash Flow Statement For the Six Months Ended 30 June 2006 - Unaudited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Operating activities Cash generated by operations 10 67,187 4,647 160,929 Income taxes paid (9,095) (7,558) (12,231) Interest element of finance lease payments (2) (2) (1) Interest paid (19,069) (11,850) (32,921) Net cash from / (used in) operating activities 39,021 (14,763) 115,776 Investing activities Investment income 1,675 1,210 4,708 Proceeds on disposal of property and equipment 49 176 200 Purchases of intangible software assets (2,704) (3,810) (5,605) Purchases of property and equipment (7,351) (1,505) (9,511) Purchases of available for sale investments - - (89) Acquisition of subsidiaries and businesses 14 (29,784) (27,516) (812,787) Net cash used in investing activities (38,115) (31,445) (823,084) Financing activities Dividends paid 7 (25,275) (15,926) (27,271) Repayments of borrowings (146,615) (77,884) (617,287) New bank loans raised 157,590 121,244 1,035,914 Repayments of obligations under finance leases (28) (19) (23) Proceeds from the issue of share capital 2,284 3,901 316,935 Net cash (used in) / from financing activities (12,044) 31,316 708,268 Net (decrease) / increase in cash and cash equivalents 11 (11,138) (14,892) 960 Cash and cash equivalents at beginning of period 16,085 15,125 15,125 Cash and cash equivalents at end of period 12 4,947 233 16,085 Notes to the Unaudited Interim Statements For the Six Months Ended 30 June 2006 1 General information Informa plc is a company incorporated in the United Kingdom. The unaudited consolidated interim financial statements as at 30 June 2006 and for the six months then ended comprise those of the Company and its subsidaries and its interests in associates and jointly controlled entities(together referred to as the 'Group'). The information for the year ended 31 December 2005 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The consolidated financial statements of the Group as at and for the year ended 31 December 2005 are available upon request from the Company's registered office at Mortimer House, 37-41 Mortimer Street, London, W1T 3JH or at www.informa.com. 2 Accounting policies and estimates The consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Group has chosen not to apply IAS 34 'Interim Financial Reporting' in the preparation of these consolidated interim financial statements. The accounting policies applied by the Group in the consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 December 2005. The preparation of consolidated interim financial statetments requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2005. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 3 Business Segments For management purposes, the Group is currently organised into three operating divisions, Academic & Scientific, Professional and Commercial. These divisions are the basis on which the Group reports its primary segment information. Analysis by market sector Revenue 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Academic & Scientific Division Scientific, Technical & Medical 86,112 66,257 161,747 Humanities & Social Sciences 52,737 45,940 98,790 138,849 112,197 260,537 Professional Division Financial Data Analysis 32,617 30,129 60,767 Finance, Insurance, Law & Tax 40,276 15,270 50,813 Performance Improvement 109,925 - 106,179 182,818 45,399 217,759 Commercial Division Regional Events 134,262 44,184 143,066 Telecoms & Media 45,528 28,696 48,441 Maritime & Commodities 32,283 29,266 59,477 212,073 102,146 250,984 Goodwill written off (Note 5) - - 533,740 259,742 729,280 Operating profit / (loss) 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Academic & Scientific Division Scientific, Technical & Medical 13,085 9,213 28,059 Humanities & Social Sciences 5,430 4,108 14,889 18,515 13,321 42,948 Professional Division Financial Data Analysis 7,326 7,065 17,074 Finance, Insurance, Law & Tax 4,789 1,559 5,085 Performance Improvement 4,414 - 5,508 16,529 8,624 27,667 Commercial Division Regional Events 11,144 4,243 12,845 Telecoms & Media 10,942 7,291 2,352 Maritime & Commodities 3,234 2,739 5,606 25,320 14,273 20,803 Goodwill written off (Note 5) (86,562) - 60,364 (50,344) 91,418 Adjusted operating profit 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Academic & Scientific Division Scientific, Technical & Medical 21,164 15,130 42,997 Humanities & Social Sciences 8,708 7,047 22,466 29,872 22,177 65,463 Professional Division Financial Data Analysis 9,128 7,600 17,938 Finance, Insurance, Law & Tax 9,382 1,653 9,860 Performance Improvement 15,631 - 17,613 34,141 9,253 45,411 Commercial Division Regional Events 25,532 6,077 18,622 Telecoms & Media 12,106 7,733 12,011 Maritime & Commodities 3,418 2,873 5,822 41,056 16,683 36,455 Adjusted operating profit (Note 4) 105,069 48,113 147,329 Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 4 Adjusted figures - continuing operations 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Reconciliation of operating profit to adjusted operating profit: Operating profit / (loss) 60,364 (50,344) 91,418 Adjusting operating profit items Discontinuing operations - 1,511 - Restructuring and re-organisation costs 2,863 2,496 8,277 Intangible asset amortisation(1) 41,842 7,888 47,634 Goodwill written off - 86,562 - Adjusting operating profit items 44,705 98,457 55,911 Adjusted operating profit from continuing operations 105,069 48,113 147,329 Reconciliation of profit before tax to adjusted profit before tax: Profit / (loss) before tax 39,143 (58,906) 61,045 Adjusting operating profit items 44,705 98,457 55,911 Finance (income) / costs Gain on exchange contract - - (3,426) Bank facility fees written off on acquisition of - - 1,827 business - - (1,599) Adjusting profit before tax items 44,705 98,457 54,312 Adjusted profit before tax from continuing operations 83,848 39,551 115,357 Reconciliation of profit for the period to adjusted profit for the period from continuing operations: Profit for the period from continuing operations 29,505 48,769 10,767 Adjusted profit before tax items from continuing 44,705 98,457 54,312 operations Deferred tax adjustment (released) / recognised on - (116,557) 35,224 restructuring Attributable tax expense on adjusting items (13,034) (3,115) (13,802) (13,034) (119,672) 21,422 Adjusting profit items for the period 31,671 (21,215) 75,734 Adjusted profit for the period from continuing 61,176 27,554 86,501 operations (1)Excludes software amortisation. Restructuring and re-organisation costs for the six months ended 30 June 2006 of £2,863,000 relate to acquisition integration. Restructuring and re-organisation costs of £2,496,000 in the six months ended 30 June 2005 consist of £1,200,000 Board level changes, £400,000 fees relating to acquisition integration and £896,000 costs of merging the UK back offices of Taylor & Francis Group plc and Informa Group plc post combination. Restructuring and re-organisation costs of £8,277,000 in the 12 months ended 31 December 2005 consist of re-organisation costs of £3,436,000, redundancies of £2,126,000, vacant property provisions of £1,515,000 and Board level changes of £1,200,000. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 5 Tax 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Current tax: United Kingdom corporation tax 9,922 5,201 18,912 Foreign tax 5,922 2,223 4,871 15,844 7,424 23,783 Deferred tax: Current year (6,206) 1,458 (8,729) Deferred tax adjustment (released) / recognised on UK - (116,557) 35,224 restructuring 9,638 (107,675) 50,278 UK corporation tax is calculated at 30 per cent (2005: 30 per cent) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions. On 1 January 2005 a deferred tax credit of £116,557,000 was booked in respect of the transfer of the UK trade and assets of the Taylor & Francis Group businesses to Informa UK Limited. Goodwill was also written down by £86,562,000 in relation to the UK deferred tax liability originally provided on the combination with Taylor & Francis Group plc. Both of these entries were then reversed in the Income Statement for the year to 31 December 2005. On the transfer of the trade and assets of PJB Publications Limited to T&F Informa UK Limited on 1 September 2004, a deferred tax credit of £35,386,000 was booked. The balance left on this credit of £35,224,000 was reversed through the Income Statement during the second half of 2005. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 6 Joint ventures The Group has a 50% interest in two joint ventures (2005: three) and includes results from these as follows: 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Revenue 770 1,098 1,803 Expenses (739) (1,158) (2,121) Profit / (loss) for the period from continuing operations 31 (60) (318) 7 Dividends 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Amounts recognised as distributions to equity holders in the period: Final dividend for the year ended 31 December 2004 of 5.33p per - 15,926 15,926 share (ex-Rights Issue 4.76p) Interim dividend for the year ended 31 December 2005 of 2.70p per - - 11,345 share Final dividend for the year ended 31 December 2005 of 6.00p per 25,275 - - share 25,275 15,926 27,271 The proposed interim dividend for the six months ended 30 June 2006 of 3.3 pence per share was approved by the Board on 26 September 2006 and has not been included as a liability as at 30 June 2006. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 8 Earnings per share Basic The basic earnings per share calculation is based on a profit attributable to equity shareholders of the parent of £29,439,000 (2005 profit: £48,758,000 six months and £8,825,000 twelve months). This profit on ordinary activities after taxation is divided by the weighted average number of shares in issue (less those non-vested shares held by employee share ownership trusts) which is 421,235,000 (2005: 335,255,000 six months and 388,231,000 twelve months). Diluted The diluted earnings per share calculation is based on the basic earnings per share calculation above except that the weighted average number of shares includes all potentially dilutive options granted by the Balance Sheet date as if those options had been exercised on the first day of the accounting period or the date of the grant, if later, giving a weighted average of 423,270,000 (2005: 336,820,000 six months and 390,004,000 twelve months). The table below sets out the adjustment in respect of diluted potential ordinary shares: 6 months 6 months 12 months 2006 2005* 2005 Weighted average number of shares used in basic earnings per 421,235,091 335,254,980 388,230,732 share calculation Effect of dilutive share options 2,035,370 1,230,032 1,772,953 Shares potentially to be issued or allotted - 334,734 - Weighted average number of shares used in diluted earnings per 423,270,461 336,819,746 390,003,685 share calculation * The weighted average number of shares at 30 June 2005 has been adjusted for the effects of the Rights Issue at 25 July 2005. Adjusted earnings per share The basic and diluted adjusted earnings per share calculations have been made to allow shareholders to gain a further understanding of the trading performance of the Group. They are based on the basic and diluted earnings per share calculations above except profits are based on continuing operations only, before minority interests, and are adjusted for items that are not perceived by management to be part of the underlying trends in the business and the tax effect on those adjusting items as follows: 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Profit for the period from continuing operations attributable to 29,439 48,758 10,710 Equity holders of the parent Adjusting items net of attributable taxation (Note 4) 31,671 (21,215) 75,734 Adjusted profit for the period from continuing operations 61,110 27,543 86,444 attributable to Equity holders of the parent Earnings per share: From continuing operations - Adjusted basic (p) 14.51 8.22 22.27 - Adjusted diluted (p) 14.44 8.18 22.16 Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 9 Statement of changes in equity Called up Share Reserve for share premium shares to be Merger capital issued reserve £'000 £'000 £'000 £'000 At 31 December 2004 29,946 192,097 1,647 496,400 Implementation of IAS 39 - - - - At 1 January 2005 29,946 192,097 1,647 496,400 Profit for the period attributable to equity holders of the parent - - - - Actuarial loss on defined benefit pension - - - - scheme Exchange differences on translation of foreign operations - - - - Decrease in fair value of hedging derivatives - - - - Transfer to income - - - - Dividends to shareholders - - - - Share award expense - - 246 - Options exercised 128 - - - Premium arising on options exercised during - 3,773 - - period At 30 June 2005 30,074 195,870 1,893 496,400 Loss for the period attributable to equity holders of the parent - - - - Actuarial loss on defined benefit pension - - - - scheme Tax on items taken directly to equity - - - - Exchange differences on translation of foreign operations - - - - Increase in fair value of hedging derivatives - - - - Transfer to income - - - - Issue of share capital (net of £7,095,000 transaction costs) 12,030 299,657 - - Dividends to shareholders - - - - Share award expense - - 498 - Options exercised 48 - - - Premium arising on options exercised during - 1,299 - - period Settlement of deferred consideration - - (1,267) - At 31 December 2005 42,152 496,826 1,124 496,400 Profit for the period attributable to equity holders of the parent - - - - Actuarial gain on defined benefit pension - - - - scheme Tax on items taken directly to equity - - - - Exchange differences on translation of foreign operations - - - - Increase in fair value of hedging derivatives - - - - Transfer to income - - - - Dividends to shareholders - - - - Share award expense - - 779 - Options exercised 84 - - - Premium arising on options exercised during - 2,200 - - period At 30 June 2006 42,236 499,026 1,903 496,400 Hedging and Other ESOP trust translation Retained reserve shares reserve losses £'000 £'000 £'000 £'000 At 31 December 2004 37,398 (4,731) (6,800) (114,132) Implementation of IAS 39 - - (948) (5,000) At 1 January 2005 37,398 (4,731) (7,748) (119,132) Profit for the period attributable to equity holders of the parent - - - 48,758 Actuarial loss on defined benefit pension - - - (2,130) scheme Exchange differences on translation of foreign operations - - 2,624 - Decrease in fair value of hedging derivatives - - (1,762) - Transfer to income - - 190 - Dividends to shareholders - - - (15,926) Share award expense - 1,090 - - Options exercised - - - - Premium arising on options exercised during - - - - period At 30 June 2005 37,398 (3,641) (6,696) (88,430) Loss for the period attributable to equity holders of the parent - - - (39,933) Actuarial loss on defined benefit pension - - - (1,636) scheme Tax on items taken directly to equity - - - (3,752) Exchange differences on translation of foreign operations - - 1,743 - Increase in fair value of hedging derivatives - - 5,135 - Transfer to income - - 226 - Issue of share capital (net of £7,095,000 transaction costs) - - - - Dividends to shareholders - - - (11,345) Share award expense - 307 - - Options exercised - - - - Premium arising on options exercised during - - - - period Settlement of deferred consideration - - - - At 31 December 2005 37,398 (3,334) 408 (145,096) Profit for the period attributable to equity holders of the parent - - - 29,439 Actuarial gain on defined benefit pension - - - 6,718 scheme Tax on items taken directly to equity - - (1,460) (2,015) Exchange differences on translation of foreign operations - - (17,781) - Increase in fair value of hedging derivatives - - 7,114 - Transfer to income - - (621) - Dividends to shareholders - - - (25,275) Share award expense - - - - Options exercised - - - - Premium arising on options exercised during - - - - period At 30 June 2006 37,398 (3,334) (12,340) (136,229) As at 30 June 2006 the Informa Employee Share Trust held 632,775 (2005: 632,775 at 30 June 2005 and at 31 December 2005) ordinary shares in the Company at a cost of £3,641,000 (2005: £3,641,000 at 30 June 2005 and at 31 December 2005) (market value £2,729,000). Informa Quest Ltd held 111,455 (2005: 114,419 at 30 June 2005, 2,842 at 31 December 2005) ordinary shares at a book cost of £nil (2005: £nil at 30 June 2005 and at 31 December 2005) (market value £480,650). These shares have not yet been allocated to individuals and accordingly, dividends on these shares have been waived. At 30 June 2006 the Group held 0.18% (2005: 0.25% at 30 June 2005, 0.15% at 31 December 2005) of its own called up share capital. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 10 Reconciliation of operating profit to net cash inflow from operating activities 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Operating profit / (loss) - continuing operations 60,364 (48,833) 91,418 Discontinuing / discontinued operations - (1,511) (1,885) Operating profit / (loss) 60,364 (50,344) 89,533 Goodwill written off - 86,562 - Profit from operations 60,364 36,218 89,533 Adjustments for: Depreciation of property and equipment 4,258 3,452 8,175 Amortisation of intangible assets 43,690 8,680 49,755 Gain on disposal of property and equipment 10 3 100 Operating cash flows before movements in working capital 108,322 48,353 147,563 Increase in inventories (4,437) (1,755) (2,421) Decrease / (increase) in receivables 11,868 (9,310) (5,637) (Decrease) / increase in payables (49,684) (36,134) 19,451 Movement in other operating items 1,118 3,493 1,973 Cash generated by operations 67,187 4,647 160,929 Adjusted cash generated by operations 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Adjusted operating profit (Note 4) 105,069 48,113 147,329 Cash generated by operations 67,187 4,647 160,929 Discontinuing operations - 1,511 - Restructuring and re-organisation costs 2,863 2,496 8,277 Adjusting items on a cash flow basis 70,050 8,654 169,206 Accrued in prior period 4,426 2,500 2,500 Accrued at period end (4,056) (948) (4,426) Prepaid for future periods - 2,095 - Adjusted cash generated by operations 70,420 12,301 167,280 6 months 6 months 12 months 2006 2005 2005 % % % Percentage of adjusted operating profit converted to adjusted 67 26 113 cash generated by operations 11 Reconciliation of net cash flow to movement in net debt 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 (Decrease)/increase in cash and cash equivalents (11,138) (14,892) 960 Decrease in debt financing (10,947) (43,341) (418,605) Change in net debt resulting from cash flows (22,085) (58,233) (417,645) Foreign exchange translation difference 15,818 (4,660) (13,160) Non-cash movements (583) (250) (2,618) Movement in net debt during the period (6,850) (63,143) (433,423) Opening net debt (735,410) (301,987) (301,987) Closing net debt (742,260) (365,130) (735,410) Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 12 Analysis of changes in net debt At 1 January 2006 Non-cash Cash flow Exchange At 30 June movements movements 2006 £'000 £'000 £'000 £'000 £'000 Cash at bank and in hand 20,654 - (13,982) - 6,672 Overdrafts (4,569) - 2,844 - (1,725) Cash and cash equivalents 16,085 - (11,138) - 4,947 Bank loans due in less than (58,659) 1,003 (91) (11) (57,758) one year Loan notes due in less than (293) - 6 - (287) one year Bank loans due after more (692,500) (1,586) (10,890) 15,829 (689,147) than one year Finance leases due in less (23) - 17 - (6) than one year Finance leases due after more (20) - 11 - (9) than one year (751,495) (583) (10,947) 15,818 (747,207) Total (735,410) (583) (22,085) 15,818 (742,260) Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less. 13 Post Balance Sheet events The Group has sold one of its properties held for sale. The proceeds were £2,500,000 which has resulted in a profit of £233,000 less costs. The following acquisitions were made subsequent to the period end. The cash consideration amounts disclosed are based on completion accounts and are subject to change. Librapharm Limited On 6 July 2006, the Group acquired 100% of the issued share capital of Librapharm Limited, a pharmaceutical journals publisher with an online journal platform, the Scientific World, for a cash consideration of £21,500,000 plus costs and a GBP for GBP net assets adjustment based on the draft final balance sheet which is due to be prepared by 90 days after closing. Abu Dhabi Wedding Show On 16 July 2006, the Group acquired the trading assets of the Abu Dhabi Wedding Show, an annual consumer exhibition in Dubai, for a cash consideration of £546,000 plus costs. Integrated Cultures Inc. On 31 July 2006, the Group acquired 100% of the issued share capital of Integrated Cultures Inc., a performance improvement franchise of AchieveGlobal, Inc., for a cash consideration of £1,582,000 plus costs and a US$ for US$ working capital adjustment between the estimated closing balance sheet and the draft final balance sheet which is due to be prepared by 60 days after closing. IPSA, Inc. On 31 July 2006, the Group acquired 100% of the issued share capital of IPSA, Inc., performance improvement franchises of AchieveGlobal, Inc. and ESI International, Inc., for a cash consideration of £3,546,000 plus costs and a US$ for US$ working capital adjustment between the estimated closing balance sheet and the draft final balance sheet which is due to be prepared by 60 days after closing. David Fulton Publishers Limited On 15 August 2006, the Group acquired 100% of the issued share capital of David Fulton Publishers Limited, an educational book publisher, for a cash consideration of £4,642,000 plus costs and a working capital adjustment which will be agreed within 100 days of closing. FAB4 On 16 August 2006, the Group acquired the trading assets of FAB4, an agricultural trade show in Dubai, for a cash consideration of £300,000 plus costs. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 14 Businesses acquired Cash paid on acquisition net of cash acquired 2006 2005 2005 6 months 6 months 12 months £'000 £'000 £'000 Current-year acquisitions Cavendish Publishing Limited 6,055 M-Solutions 10,194 IPEX 7,344 Other 6,110 Prior-year acquisitions 2005 acquisitions: Medic-to-Medic 6,270 6,491 Ashley Publications Limited 16,298 16,415 IIR Holdings Limited - 777,951 Other 81 4,948 6,517 2004 acquisitions: Other - 5,413 29,784 27,516 812,787 The combined impact on the Group's profit after tax from the newly acquired businesses for the first half of 2006 amounted to £3,823,000 on revenues of £20,018,000. The total liabilities of newly acquired businesses amounted to £1,545,000 as at 30 June 2006. All acquisitions were paid for in cash and in all acquisitions full control over the business has been acquired, either by acquiring 100% of the outstanding shares or by means of an asset purchase deal. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 Cavendish Publishing Limited On 4 January 2006, the Group acquired 100% of the issued share capital of Cavendish Publishing Limited, a legal book publishing business, for a cash consideration of £6,056,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000 Intangible assets 186 (186) - Property and equipment 26 (26) - Inventory 321 (47) 274 Trade and other receivables 323 (86) 237 Cash and cash equivalents 1 - 1 Trade and other payables (399) (35) (434) Deferred tax liability - (1,160) (1,160) Net assets 458 (1,540) (1,082) Intangible assets 3,867 Provisional goodwill 3,271 Total consideration 6,056 Satisfied by: Cash 6,056 Net cash outflow arising on acquisition Cash consideration 6,056 Cash and cash equivalents acquired (1) 6,055 Goodwill of £3,271,000 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is not deductible for tax purposes. The goodwill amount is provisional and subject to change following completion of a fair value exercise. The goodwill arising on the acquisition is attributable to the anticipated profitability of products as included into the existing list of legal publications. Cavendish Publishing Limited generated revenues of £659,000 and net income (based on estimated tax rate of 30%) of £22,000 in the post acquisition period from 4 January 2006 to 30 June 2006. The results of Cavendish Publishing Limited are included in the Humanities & Social Science market sector. If the acquisition of Cavendish Publishing Limited had taken place on the first day of the financial year, Group revenues and profit after tax attributable to Equity shareholders would not have been materially affected. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 M-Solutions On 6 February 2006, the Group acquired the trading assets of M-Solutions, a provider of data and information solutions to the global financial services industry, for a cash consideration of £10,194,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000 Intangible assets 4,804 (4,804) - Property and equipment 201 - 201 Trade and other receivables 641 - 641 Trade and other payables (2,633) 272 (2,361) Net assets 3,013 (4,532) (1,519) Intangible assets 6,834 Provisional goodwill 4,879 Total consideration 10,194 Satisfied by: Cash 10,194 Net cash outflow arising on acquisition Cash consideration 10,194 Cash and cash equivalents acquired - 10,194 Goodwill of £4,879,000 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is not deductible for tax purposes. The goodwill amount is provisional and subject to change following completion of a fair value exercise. The goodwill arising on the acquisition is attributable to the anticipated profitability of products as included into the existing financial data analysis portfolio. M-Solutions generated revenues of £1,720,000 and net income (based on assumed tax rate of 30%) of £328,000 in the post acquisition period from 6 February 2006 to 30 June 2006. The results of M-Solutions are included in the Financial Data Analysis market sector. If the acquisition of M-Solutions had taken place on the first day of the financial year, Group revenues for the first half of 2006 would have been £344,000 higher and the Group profit after tax attributable to Equity shareholders would have been £92,000 higher. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 IPEX On 31 March 2006 the Group acquired the trade and assets of IPEX, an exhibition business, for cash consideration of £12,634,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000 Trade and other receivables 5,766 - 5,766 Cash and cash equivalents 5,290 - 5,290 Trade and other payables (11,436) - (11,436) Net assets (380) - (380) Intangible assets 13,014 Provisional goodwill - Total consideration 12,634 Satisfied by: Cash 12,634 Net cash outflow arising on acquisition Cash consideration 12,634 Cash and cash equivalents acquired (5,290) 7,344 IPEX takes place once every four years and in 2006 was held post-acquisition. IPEX generated revenues of £20,871,000 and net income (based on assumed tax rate of 30%) of £4,379,000 in the post acquisition period from 31 March 2006 to 30 June 2006. Under the terms of an existing agreement with the previous owners to manage the event the Group would have recognised revenues and profits so the incremental impact was revenue of £17,000,000 and net income (based on assumed tax rate of 30%) of £3,150,000. The results of IPEX are included in the Regional Events market sector. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 Other Business Combinations The Group acquired the trading assets or 100% of the issued share capital of Cordial Events Limited, Parks & Company LLC, Maritime Quarterly, the 50% of the 3G Russia event not already owned and intellectual property. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000 Trade and other receivables 656 - 656 Trade and other payables (379) - (379) Net assets 277 - 277 Intangible assets 1,505 Provisional goodwill 5,430 Total consideration 7,212 Satisfied by: Cash 6,110 Deferred consideration 557 Contingent consideration 545 7,212 Net cash outflow arising on acquisition Cash consideration 6,110 6,110 Other acquisitions generated revenues of £639,000 and net income (based on an assumed tax rate of 30%) of £323,000 Goodwill of £5,430,000 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is not deductible for tax purposes. The goodwill amount is provisional and subject to change following completion of a fair value exercise. The goodwill arising on these acquisitions is attributable to anticipated profitability as they are integrated into the Group. Directors and Advisers Directors Registered Office Richard Hooper (Non-executive Chairman) Informa plc Peter Rigby (Chief Executive) Mortimer House David Gilbertson (Managing Director) 37-41 Mortimer Street Anthony Foye (Finance Director) London W1T 3JH Derek Mapp (Senior Non-executive Director) Sean Watson (Non-executive Director) Dr Pamela Kirby (Non-executive Director) John Davis (Non-executive Director) Secretary Registration John Burton Registered in England and Wales Number 3099067 Public Relations Auditors Financial Dynamics Deloitte & Touche LLP Holborn Gate Chartered Accountants 26 Southampton Buildings Abbots House, Abbey Street London WC2A 1PB Reading, Berkshire, RG1 3BD Principal Lawyers CMS Cameron McKenna Ashurst Mitre House Broadwalk House 160 Aldersgate Street 5 Appold Street London EC1A 4DD London EC2A 2HA Stockbrokers Hoare Govett Limited Merrill Lynch International 250 Bishopsgate Merrill Lynch Financial Centre London EC2M 4AA 2 King Edward Street London EC1A 1HQ Registrars Lloyds TSB Registrars The Causeway Worthing West Sussex BN99 6DA Pro Forma Results These results include IIR as if it was part of the Group from 1st January 2005. IIR was acquired on 6 July 2005 2006 2005 Total Total Increase Increase £'m £'m £'m % Turnover 533.7 448.0 85.7 19 PI 109.9 94.9 15.0 16 Subscriptions 116.7 105.7 11.0 10 Copy sales 59.4 51.9 7.5 14 Advertising 15.6 14.7 0.9 6 Delegates & Conferences 232.1 180.8 51.3 28 533.7 448.0 2006 2005 Total Total Increase £'m £'m % UK 88.9 62.6 42 US 211.7 178.4 19 CE 152.6 133.0 15 RoW 80.5 74.0 9 533.7 448.0 Turnover by Division 2006 2005 Total Total Increase £'m £'m % Academic 138.8 120.3 15 Professional 182.8 161.7 13 Commercial 212.1 166.0 28 533.7 448.0 Turnover by Business 2006 2005 Total Total Increase £'m £'m % Academic STM 86.1 74.4 16 HSS 52.7 45.9 15 138.8 120.3 Professional FDA 32.6 30.1 8 FILT 40.3 36.7 10 PI 109.9 94.9 16 182.8 161.7 Commercial Telecoms 45.5 32.3 41 MTT & Commodities 32.3 29.3 10 Regional events 134.3 104.4 29 212.1 166.0 Total 533.7 448.0 19 Adjusted Operating Profit 2006 2005 Increase Total Total £'m Increase £'m £'m % 105.1 80.3 24.8 31 Adjusted OP by Division 2006 2005 Total Total Increase £'m £'m % Academic 29.9 24.1 24 Professional 34.1 28.3 20 Commercial 41.1 27.9 47 105.1 80.3 2006 2005 Total Total Increase £'m £'m % Academic STM 21.2 17.1 24 HSS 8.7 7.0 24 29.9 24.1 Professional FDA 9.1 7.6 20 FILT 9.4 7.8 21 PI 15.6 12.9 21 34.1 28.3 Commercial Telecoms 12.1 8.6 41 MTT & Commodities 3.5 2.9 21 Regional events 25.5 16.4 55 41.1 27.9 Total 105.1 80.3 31 -------------------------- ((1))Proforma: assumes that IIR was part of the group from 1st January 2005. 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