RNS Number:7392P
Tarsus Group PLC
15 September 2003
Tarsus Group plc
Tarsus Group announces interim results
Tarsus Group plc, the integrated media group, today announced interim figures
for the six months to 30 June 2003. The figures are not representative of the
anticipated full-year outcome owing to most of the major events organised by the
Group taking place in the second half of the year.
Financial Highlights
Business Performance 'like-for-like'*
Interim results ahead of internal expectations with:
* Turnover - down 11.9% to #5.1 million
* Loss before tax - improved by #0.9 million to #0.6 million
* Net cash inflow from operating activities of #1.7 million (2002: #1
million outflow)
Statutory Results
* Turnover - down 27% to #4.9 million
* Operating loss before - improved by #0.9 million to #0.5 million
goodwill and exceptional
items
* Group operating loss - improved by #3.1 million to #2.4 million
* Loss on ordinary activities - improved by #3.1 million to #2.5 million
before tax
*'Like-for-like' results are presented to provide a better indication of overall
financial performance and to reflect how the business is managed on a day-to-day
basis. The 'like-for-like' results are adjusted for discontinued operations,
launches, biennial events, goodwill amortisation and exceptional items.
Operating Highlights
United States - February Las Vegas exhibition very strong
- successful launch of new May Las Vegas exhibition
- publishing revenues up strongly
United Kingdom - operating loss substantially improved by #350,000
- three successful new Labelexpo launches
- cash disposal of non-core products for #231,000 exceptional
profit
France - overall economic conditions very difficult
- exhibitions stabilising
- strong performance from directories
- publishing weak
Current Trading
US - Strong
UK - Good
France - Exhibitions - stablising
- Directories - good
- Magazines - weak
In his review, Chairman, Neville Buch said: 'We continue to trade in line with
our internal expectations for the full year to 31 December 2003 notwithstanding
continuing difficult trading conditions in France and a change in the timing of
one of our significant annual exhibitions in the training sector from November
2003 to April 2004.
We are particularly encouraged by the performances of our Off-Price discount
clothing and Labelling divisions. The first major event of the second half, the
Off-Price August discount clothing exhibition in Las Vegas, has achieved another
record performance. We anticipate revenues from our largest event of the year,
Labelexpo Europe in September in Brussels, will be slightly ahead of its last
edition - an excellent result in the context of the economic conditions which
have prevailed for the past two years. Sales for the three Labelexpo launches in
China, Russia and Latin America are most encouraging.
Our French exhibition and directory business are responding well to the new
management team installed at the beginning of the year - this team is now
focusing on the best ways to improve the performance of our magazine division by
the end of the year.'
For further information:
Douglas Emslie, Group Managing Director
Tel: 020 8846 2700
CHAIRMAN'S AND MANAGING DIRECTOR'S STATEMENT
INTRODUCTION
We are pleased to report interim results for the period to 30 June 2003 in
excess of internal expectations with adjusted loss on ordinary activities before
taxation (before goodwill amortisation*, exceptional items and discontinued
operations) reduced by 55 per cent to #521,000. After goodwill amortisation,
exceptional items and discontinued operations the loss on ordinary activities
before tax has reduced by 56 per cent to #2,461,000.
These results reflect a very strong trading performance in our United States
operation, a solid outcome in the United Kingdom, continuing weak results from
France and significant cost reduction throughout the Group.
* Including #110,000 of joint venture goodwill amortisation
RESULTS
As in 2002, these first half results are not representative of the anticipated
outcome for the full year as the Group's revenues are heavily second half
weighted owing to most of our major events taking place in the latter part of
the financial year.
Turnover for the period under review amounted to #4,930,000 (2002: #6,762,000)
resulting in an adjusted loss on ordinary activities before tax of #521,000
(2002: #1,154,000). Loss on ordinary activities before tax was #2,461,000 (2002:
#5,542,000) after goodwill amortisation of #2,044,000 and an exceptional profit
of #231,000.
On a like-for-like basis (continuing activities adjusted for acquisitions,
launches and biennial events) revenues were down 11.9% from #5,805,000 to
#5,113,000 and the like-for-like adjusted operating loss improved from
#1,433,000 to #550,000.
Net cash inflow from operating activities was #1.7 million (2002: outflow of
#1.0 million).
As before, a dividend for the year will be recommended at the time of the
preliminary results in March 2004.
OPERATING REVIEW
USA
Our operations in the United States performed very well with strong revenue
growth from our continuing products. Of particular note were another record
performance from the Off-Price February clothing exhibition in Las Vegas, and
the successful launch of a May show in Las Vegas to replace the New York event.
Publishing revenues were up 20% to $267,000. This division is benefiting from
strong management and excellent prospects in the discount clothing sector.
UK
In the United Kingdom like-for-like revenues from continuing businesses were
down 11% and like-for-like adjusted operating losses were improved by #350,000
to #718,000.
There were no exhibitions during the period. Publishing revenues from Labels and
Labelling International were up 3% to #224,000. Our internet business saw
revenues fall by 28% to #207,000 owing to the rationalisation of our portfolio
of web-sites.
France
Our French business continued to suffer from a very difficult economic
environment. Revenue from continuing businesses, including our share of joint
ventures, was down 17%. Our exhibitions have continued to receive strong visitor
support but have suffered from reduced exhibitor sales and marketing budgets in
the information technology and marketing sectors which are particularly
sensitive to economic conditions.
An excellent performance from our directory division was more than offset by
continuing weak performances from our three supporting information technology
and marketing magazines.
DEVELOPMENTS
During the period, as part of our strategy to focus on our core products, we
disposed of our UK organic food exhibition for a cash consideration of up to
#750,000 of which #135,000 was received on completion. In addition, we disposed
of the Exhibition Bulletin magazine for a cash consideration of #1.1 million of
which #657,000 was received on completion with the balance receivable in
tranches by January 2005.
Our new launch programme continued with the successful occurrence in May of a
direct marketing exhibition in France as a 50:50 joint venture with Reed
Elsevier plc and, as mentioned above, a new Off-Price discount clothing
exhibition in May in Las Vegas.
Additional launches during the period were focused on the extension of the
Labelexpo brand for the labelling market with new shows scheduled for China in
December this year, Russia in March 2004 and Latin America in June 2004. A
planned bottling, packaging and canning exhibition to run alongside Labelexpo
Europe in Brussels in September 2003 was cancelled.
CURRENT TRADING AND PROSPECTS
We continue to trade in line with our internal expectations for the full year to
31 December 2003 notwithstanding continuing difficult trading conditions in
France and a change in the timing of one of our significant annual exhibitions
in the training sector from November 2003 to April 2004.
We are particularly encouraged by the performances of our Off-Price discount
clothing and Labelling divisions. The first major event of the second half, the
Off-Price August discount clothing exhibition in Las Vegas, has achieved another
record performance. We anticipate revenues from our largest event of the year,
Labelexpo Europe in September in Brussels, will be slightly ahead of its last
edition - an excellent result in the context of the economic conditions which
have prevailed for the past two years. Sales for the three Labelexpo launches in
China, Russia and Latin America are most encouraging.
Our French exhibition and directory businesses are responding well to the new
management team installed at the beginning of the year - this team is now
focusing on the best ways to improve the performance of our magazine division by
the end of the year.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Notes Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
#000 #000 #000
Turnover (including share of
joint ventures) 2
- continuing 5,786 6,953 18,141
- discontinued 292 906 1,636
less: share of turnover of
joint ventures (1,148) (1,097) (1,220)
--------- --------- ----------
Group turnover 4,930 6,762 18,557
Operating costs including
goodwill amortisation (7,371) (12,317) (34,009)
------------------------- ------ --------- --------- ----------
Operating loss
Before goodwill amortisation
- continuing (380) (1,107) 2,891
- discontinued 4 (127) (281) (951)
- exceptional items - (2,120) (2,876)
--------- --------- ----------
(507) (3,508) (936)
Goodwill amortisation
- continuing (1,887) (1,928) (3,766)
- impairment - - (10,226)
- discontinued (47) (119) (524)
--------- --------- ----------
(1,934) (2,047) (14,516)
------------------------- ------ --------- --------- ----------
Operating loss
- continuing (2,267) (5,155) (13,977)
- discontinued (174) (400) (1,475)
--------- --------- ----------
Group operating loss (2,441) (5,555) (15,452)
Share of operating profit/(loss)
in joint venture (after #110,000
goodwill amortisation) 176 467 (2,600)
Profit on sale of discontinued
operation 231 - 5
Interest receivable and similar
income 115 118 227
Interest payable and similar
charges (542) (572) (1,109)
--------- --------- ----------
Loss on ordinary activities
before taxation (2,461) (5,542) (18,929)
Taxation credit / (charge) 8 175 (125) 90
--------- --------- ----------
Loss for the financial period
after taxation (2,286) (5,667) (18,839)
Dividend - (702) (1,536)
--------- --------- ----------
Retained loss for the financial
period (2,286) (6,369) (20,375)
========= ========= ==========
(Loss)/Earnings per share
(pence) 7
- adjusted (0.9) (3.4) 4.9
- basic (5.9) (17.1) (52.2)
- diluted (5.9) (17.1) (52.2)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
#000 #000 #000
Loss for the financial period (2,286) (5,667) (18,839)
Foreign exchange gains and losses
offset
in reserves (8) 101 (202)
--------- --------- ----------
Total recognised losses for the
period (2,294) (5,566) (19,041)
========= ========= ==========
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' (DEFICIT)/FUNDS
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
#000 #000 #000
Loss attributable to shareholders (2,286) (5,667) (18,839)
Nominal value of share options
exercised - 2 2
Nominal value of scrip dividend 141 - 13
Proceeds of ordinary shares issued
for cash - placing and open offer - 4,682 4,613
Premium on options exercised - 10 11
Premium on scrip dividend 393 - 216
Recognised foreign exchange gains
and losses for the period (8) 101 (202)
Dividend paid - - (703)
Dividend declared - (703) (833)
--------- --------- ----------
Net change in shareholder deficit (1,760) (1,575) (15,722)
Opening equity shareholders'
(deficit)/ funds (2,085) 13,637 13,637
--------- --------- ----------
Closing equity shareholders'
(deficit) / funds (3,845) 12,062 (2,085)
========= ========= ==========
CONSOLIDATED BALANCE SHEET
Notes 30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
FIXED ASSETS
Intangible assets 5 16,206 31,190 18,170
Tangible assets 291 649 427
Interests in joint venture 2,008 4,786 2,100
--------- --------- ----------
- Share of gross assets 875 1,992 1,736
- Share of gross liabilities (168) (1,189) (1,047)
- Goodwill arising on acquisition 1,301 3,983 1,411
--------- --------- ----------
--------- --------- ----------
18,505 36,625 20,697
CURRENT ASSETS
Debtors 6 8,653 10,323 7,113
Cash at bank 5,954 6,834 5,824
--------- --------- ----------
14,607 17,157 12,937
--------- --------- ----------
CREDITORS: Amounts falling due (16,773) (24,852) (20,530)
within one year
--------- --------- ----------
NET CURRENT LIABILITIES (2,166) (7,695) (7,593)
--------- --------- ----------
TOTAL ASSETS LESS CURRENT
LIABILITIES 16,339 28,930 13,104
CREDITORS: Amounts falling due (19,520) (14,634) (13,799)
after more than one year
Provisions for liabilities and
charges (664) (2,234) (1,390)
--------- --------- ----------
NET (LIABILITIES)/ASSETS (3,845) 12,062 (2,085)
========= ========= ==========
CAPITAL AND RESERVES
Share capital 2,032 1,878 1,891
Share premium account 23,828 23,286 23,435
Capital redemption reserve 15 15 15
Other reserves (443) (443) (443)
Profit and loss account (29,277) (12,674) (26,983)
--------- --------- ----------
SHAREHOLDERS' (DEFICIT)/FUNDS (3,845) 12,062 (2,085)
========= ========= ==========
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
#000 #000 #000
Operating Activities
Net cash flow from operating
activities 1,711 (1,012) (1,065)
Joint venture dividend received - 328 331
--------- --------- ----------
1,711 (684) (734)
Returns on investment and servicing of
finance
Interest received on cash deposit 93 139 304
Interest paid on bank overdraft (844) (489) (779)
--------- --------- ----------
Net cash outflow from returns on
investment and servicing of finance (751) (350) (475)
Tax paid - overseas (53) - (128)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (73) (69) (98)
Purchase of intangible assets - (107) -
Proceeds on disposal of tangible
fixed assets - - 20
--------- --------- ----------
Net cash outflow from capital
expenditure and financial
investment (73) (176) (78)
Acquisitions and disposals
Purchase of subsidiary undertaking - - (249)
Costs of disposal of goodwill (246) - -
Proceeds on disposal of goodwill 831 - -
Deferred consideration paid (448) (543) (751)
Consideration adjustment on prior
year acquisitions - - 262
--------- --------- ----------
Net cash inflow/(outflow) for
acquisitions and disposals 137 (543) (738)
Equity dividend paid to
shareholders (299) - (474)
--------- --------- ----------
Cash inflow/(outflow) before
financing 672 (1,753) (2,627)
--------- --------- ----------
Financing
Net repayment of loan (328) - -
Payment of loan note instalment - (100) (500)
Issue of ordinary share capital - 4,693 5,079
Cost of share issue - - (452)
--------- --------- ----------
Net cash (outflow) / inflow from
financing (328) 4,593 4,127
--------- --------- ----------
Increase in cash in the period 344 2,840 1,500
========= ========= ==========
RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
#000 #000 #000
Group operating loss (2,441) (5,555) (15,452)
Depreciation 178 255 402
Amortisation of goodwill 1,934 2,047 3,950
Impairment of goodwill - - 10,566
Loss on disposal of fixed assets 52 - 189
(Increase)/decrease in debtors (681) (1,494) 1,515
Increase/(decrease) in creditors 3,395 2,748 (2,271)
(Decrease)/increase in provisions (726) 987 36
--------- --------- ----------
Net cash inflow/(outflow) 1,711 (1,012) (1,065)
========= ========= ==========
RECONCILIATION OF NET CASH FLOWS TO MOVEMENTS IN NET DEBT
2003
#000
Increase in cash in the period 344
Cash outflow from decrease in debt 328
----------
Change in net debt resulting from cash flows 672
Translation differences on loans (542)
Net debt at 1 January 2003 (15,351)
----------
Net debt at 30 June 2003 (15,221)
==========
ANALYSIS OF CHANGES IN NET DEBT
At 1 January Cash Exchange At 30 June
2003 Flow Adjustment 2003
#000 #000 #000 #000
Cash in bank and at
hand including on
deposit 5,824 130 - 5,954
Overdraft (1,565) 214 - (1,351)
--------- --------- --------- ----------
4,259 344 - 4,603
Bank loans
Debt due within one
year (5,200) (303) - (5,503)
Debt due after one
year (14,410) 631 (542) (14,321)
--------- --------- --------- ----------
(15,351) 672 (542) (15,221)
========= ========= ========= ==========
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The interim results for the six months to 30 June 2003 have been prepared in
accordance with the accounting policies set out in the 2002 Annual Report.
2. SEGMENTAL ANALYSIS
Group turnover (including share of joint venture turnover) and Group operating
loss is split below by media origin and geographical segment.
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
Turnover Turnover Turnover
#000 #000 #000
(i) Media Segment
Traditional media 5,781 7,354 18,835
New Media 297 505 942
--------- --------- ----------
Total including joint venture 6,078 7,859 19,777
========= ========= ==========
Continuing 5,786 6,953 18,141
Discontinuing 292 906 1,636
--------- --------- ----------
6,078 7,859 19,777
========= ========= ==========
(ii) Geographical Segment
United Kingdom 746 1,124 2,222
United States 2,125 2,112 7,377
Europe 2,059 2,849 8,288
Asia - 677 670
Joint venture 1,148 1,097 1,220
--------- --------- ----------
6,078 7,859 19,777
========= ========= ==========
Six months Six months Year
to 30 June to 30 June to 31 December
2003 2002 2002
Operating Operating Operating
Profit/(loss) Profit/(loss) Profit/(loss)
#000 #000 #000
(i) Media Segment
Traditional media (580) (1,292) 1,618
New Media (1,511) (1,276) (2,364)
--------- --------- ----------
Total including joint venture (2,091) (2,568) (746)
========= ========= ==========
(ii) Geographical Segment
United Kingdom (1,881) (1,624) (2,695)
United States 470 (213) 2,556
Europe (842) (901) (430)
Asia (14) (297) (306)
Joint venture 176 467 129
--------- --------- ----------
(2,091) (2,568) (746)
Impairment - - (10,226)
Exceptional Items - (2,120) (2,876)
Operating loss on discontinued
items (174) (400) (1,475)
Operating profit on joint
venture (176) (467) (129)
--------- --------- ----------
Group operating loss (2,441) (5,555) (15,452)
========= ========= ==========
3. PROFIT RECOGNITION
Profits on events are recognised when an event is completed. Most of the Group's
major 2003 exhibitions take place in the second half of the year. Income for all
future events of #8,086,000 is included in creditors, #6,989,000 of which
relates to events to occur in 2003 and the balance to events in 2004.
4. DISCONTINUED ITEMS
On 17 January 2003, Tarsus Organex Limited, a wholly owned subsidiary of Tarsus
Group plc, sold its UK Organic Food Exhibition, Organex, to Diversified Business
Communications Inc. for a cash consideration of up to #750,000.
Tarsus received #135,000 cash on completion. A further #29,000 was received upon
completion of the 2003 event, with the balance dependant upon the outcome of the
2004 event, to be run by Diversified Business Communications Inc.
On 9 June 2003 the Group sold the goodwill and contracts relating to Exhibition
Bulletin for #1,100,000. Tarsus received #500,000 cash on completion and
retained advanced subscription and advertising revenues of #167,000. In addition
the Company will receive #150,000 in February 2004, #150,000 in July 2004 and
#133,000 in January 2005.
5. INTANGIBLE FIXED ASSETS
2003
#000
Cost:
At 1 January 2003 55,161
Foreign exchange adjustments 657
Adjustments for deferred consideration 101
Disposals (2,809)
----------
At 30 June 2003 53,110
----------
Amortisation:
At 1 January 2003 36,991
Amortisation charge 1,934
Disposals (2,021)
----------
At 30 June 2003 36,904
----------
Net book value at 30 June 2003 16,206
==========
Net book value at 31 December 2002 18,170
==========
6. DEBTORS
Included within debtors is an amount of #283,000, which relates to deferred
consideration, which is receivable after more than twelve months.
7. LOSS PER SHARE
The adjusted loss per share is based on losses after tax from continuing
operations, including joint ventures, before amortisation of goodwill and
exceptional items, of #346,853 (December 2002 #1,777,851 profit) and 38,800,235
(December 2002: 36,107,914) ordinary shares being the weighted average number of
shares in issue during the period.
The basic loss per share has been calculated on losses after tax attributable to
ordinary shareholders for the six months of #2,286,598 (December 2002:
#18,838,754) and 38,800,235 (December 2002: 36,107,914) ordinary shares being
the weighted average number of shares in issue during the period.
Under Financial Reporting Standards 14 ("FRS14") the share options have no
dilutive effect on the loss per share.
8. TAX ON LOSS ON ORDINARY ACTIVITIES
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Current tax credit (283) - (182)
Overseas tax on joint venture 108 125 92
--------- --------- ----------
Tax (credit)/ charge for the period (175) 125 (90)
========= ========= ==========
The taxation credit for the six months ended 30 June 2003 is based on the
estimated effective tax rate of 27%, after adjusting for goodwill amortisation
and exceptional items for the year ending 31 December 2003.
9. INTERIM FINANCIAL STATEMENTS
The interim financial statements are unaudited but have been reviewed by the
auditors.
The comparative figures for the financial year ended 31 December 2002 are not
the Company's statutory accounts for that financial year. Those accounts have
been reported on by the company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not include a
statement under Section 237(2) or 237(3) of the Companies Act 1985.
Copies of this document have been sent to Shareholders and are available for
public inspection at the Company's registered office during normal business
hours.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UUABROBRKAAR