RNS Number:3471W
Future Network PLC
10 March 2004


PART 2




Group profit and loss account

for the year ended 31 December 2003




                                                                                               2003   2002
                                                                              Note               #m           #m
Turnover
Continuing operations                                                            1            174.9        165.3
Acquisitions                                                                     1              7.8            -
                                                                                 1            182.7        165.3
Operating profit/(loss)
Continuing operations
                                Operating profit before
                                amortisation of intangible
                                assets and other operating
                                income                  22.3         18.2
                                Amortisation of intangible
                                assets                                         2,9           (10.4)       (10.3)
                     Other operating income                           2                -          2.2
                                                                                               11.9         10.1
Acquisitions
                                Operating profit before
                                amortisation of intangible
                                assets                                                          0.2            -
                                Amortisation of intangible
                                assets                                           2            (2.6)            -
                                                                                              (2.4)            -
Operating profit   2              9.5         10.1
Profit on disposal of fixed
asset investments                                                                               0.1          0.3
Profit on ordinary activities
before interest                                                                                 9.6         10.4
Net interest receivable and
similar items                                                                    5            0.1          0.3
Profit on ordinary activities
before tax                                                                       1              9.7         10.7
Tax on profit on ordinary
activities                                                   6            (7.0)        (4.5)
Profit on ordinary activities
after tax                                                                                       2.7          6.2
Profit for the financial year                          20              2.7          6.2

Dividend proposed                                                             7,20            (4.0)            -
Retained (loss)/profit for the
financial year                                (1.3)          6.2





Earnings per 1 pence Ordinary share
                                                                                               2003          2002
                       pence         pence
Basic earnings per share                                                          8             0.8           1.9
Adjusted basic earnings per share             8             4.9           4.4
Diluted earnings per share                                                        8             0.8           1.9
Adjusted diluted earnings per share                                  8             4.8           4.4








Group statement of total recognised gains and losses
for the year ended 31 December 2003

                                                                                               2003        2002
                                                                                   Note          #m          #m
Profit for the financial year                                                        20         2.7         6.2
Dividend proposed                                                                     7       (4.0)           -
Retained (loss)/profit for the financial year                                                 (1.3)         6.2
Net exchange adjustments offset in reserves                                                     0.8         0.4
Tax on exchange adjustments offset in reserves                                                  0.1       (0.6)
Total recognised (loss)/gain relating to the year                 (0.4)         6.0





Group reconciliation of movements in shareholders' funds
for the year ended 31 December 2003

                                                                                               20032002
                                                                                   Note          #m          #m
Profit for the financial year                                                        20         2.7         6.2
Dividend proposed                                                                     7       (4.0)           -
Retained (loss)/profit for the financial year                                                 (1.3)         6.2
Premium on shares issued during the year19         0.3           -
Net exchange adjustments offset in reserves                                          20         0.8         0.4
Tax on exchange adjustments offset in reserves                     20         0.1       (0.6)
Net movement in shareholders' funds                                                           (0.1)         6.0
Opening equity shareholders' funds                                                            112.0       106.0
Equity shareholders' funds as at 31 December                                                  111.9       112.0





Group balance sheet
as at 31 December 2003

                                                                2003            2002
                                                                           Note              #m              #m
Fixed assets
Intangible assets                                                            9           117.3           108.6
Tangible assets                                                              10             3.3             3.2
                                                                                          120.6         111.8

Current assets
Stocks                                                                       12             3.5             3.6
Debtors                                                                      13            42.4            33.3
Investments                                                                  11             8.8             6.2
Cash at bank and in hand                                                                   11.3            12.4
                           66.0            55.5
Creditors: amounts falling due within one year                               14          (73.0)          (49.7)
Net current (liabilities)/assets                      (7.0)             5.8

Total assets less current liabilities                                                     113.6           117.6
Creditors: amounts falling due after more than one
year                       15               -           (2.5)
Provisions for liabilities and charges                                       17           (1.7)           (3.1)
Net assets                                            111.9           112.0

Capital and reserves
Called-up share capital                                                      18             3.2             3.2
Share premium account                                    19             0.2           169.6
Merger reserve                                                               21           109.0           109.0
Other reserves                                                               21     21.8            21.8
Profit and loss account                                                      20          (22.3)         (191.6)
Equity shareholders' funds                                                                111.9           112.0





Group cash flow statement
for the year ended 31 December 2003


                                                                                         2003             2002
                                                             Note               #m               #m
Net cash inflow from operating activities                                  A             22.6             27.0
Returns on investments and servicing of finance
Interest received                        0.6              0.3
Interest paid                                                                           (0.4)            (1.3)
Net cash inflow/(outflow) from returns on investments and
servicing of finance                                                                      0.2            (1.0)
Tax
Tax paid                                                                                (8.2)            (3.2)
Tax received                       1.5              1.8
Net tax paid                                                                            (6.7)            (1.4)
Capital expenditure and financial investment
Purchase of tangible fixed assets                                                       (1.4)            (0.7)
Sale of tangible fixed assets                                                               -              0.6
Sale of fixed asset investments                0.1              0.3
Net cash (outflow)/inflow from capital expenditure and financial
investment                                                                              (1.3)              0.2
Acquisitions and disposals
Purchase of subsidiary undertakings                                                     (7.0)                -
Net cash acquired with subsidiary undertakings                                            0.5                -
Purchase ofmagazine titles                                                            (11.8)                -
Purchase of subscription lists                                                          (0.1)            (0.1)
Payment of deferred consideration       (0.7)            (0.7)
Net cash (outflow) for acquisitions and disposals                                      (19.1)            (0.8)
Management of liquid resources
(Increase) in short term deposits with bank                                             (2.6)            (2.7)
Net cash (outflow) in management of liquid resources                                    (2.6)            (2.7)
Net cash (outflow)/inflow before financing                        (6.9)             21.3
Financing
Proceeds from issue of Ordinary share capital                                             0.3                -
Draw down of bank loans                                                             6.3                -
Movement on discounted bills                                                                -            (0.2)
Movement in other loan                                                                  (0.1)              0.1
Repayment of bank loans                                                                 (0.6)           (18.9)
Net cash inflow/(outflow) from financing                                                  5.9           (19.0)
(Decrease)/increase in cash inthe year                                                 (1.0)              2.3





Notes to the Group cash flow statement
for the year ended 31 December 2003



A. Cash flow from operating activities



The reconciliation of operating profit to net cash inflow from operating
activities is as follows:

                                                                                           2003              2002
                                                                   #m                #m
Operating profit                                                                            9.5              10.1
Depreciation charge                                                                       1.4               1.4
Amortisation of intangible assets                                                          13.0              10.3
Movement in provisions                                                                    (1.7)             (1.5)
Decrease/(increase) in stocks                                                               0.2             (0.3)
(Increase)/decrease in debtors                                                            (7.5)               8.3
Increase/(decrease) in creditors                                                            7.7             (1.3)
Net cash inflow from operating activities                                                  22.6              27.0





B. Analysis of net cash

       At 1 January                            Other
                                2003                         non-cash        Exchange
                                  #m           Cash flow      changes       movements       At 31 December 2003
                                                      #m           #m              #m                        #m
Cash at bank and in             12.4               (1.0)            -           (0.1)                      11.3
hand            
Debt due after one year        (1.8)                 0.1          1.7               -                         -
Debt due within one                -               (5.7)        (1.7)             0.7           (6.7)
year
Liquid resources                 6.2                 2.6            -               -                       8.8
Net cash                        16.8               (4.0)            -             0.6                      13.4







 C. Reconciliation of movement in net cash


                                                                                           2003            2002
                                                                                  #m              #m
Net cash/(debt) at 1 January                                                               16.8           (7.8)
(Decrease)/increase in cash                                                               (1.0)             2.3
Movement in deposits                                                                        2.6             2.7
Movement in borrowings                                                                    (5.6)            19.0
Amortisation of bank finance costs                                                            -           (0.1)
Exchange movements                                                                          0.6             0.7
Net cash at 31 December                           13.4            16.8


Basis of preparation of accounts


The preliminary statement of annual results for the year ended 31 December 2003
is unaudited and does not comprise statutory accounts with the meaning of
section 240 of the Companies Act 1985.


Accounting polices


The Group's accounting policies are consistent with those detailed in the
Group's Annual Report for the year ended 31 December 2002.


Notes to the financial statements


1.       Segmental reporting


The Group is involved in one class of business, the publication of magazines.
The analysis of turnover by  type, geographical analyses of turnover, profit/
(loss) before tax, and net assets by origin were as follows:


a)             Turnover by type



                                               Acquisitions        Continuing         Total           Total
                                                       2003              2003          2003        2002
                                                         #m                #m            #m              #m
Circulation                                             5.6             119.9         125.5           111.9
Advertising              2.1              50.9          53.0            48.6
Other                                                   0.1               4.1           4.2             4.8
Total                                                   7.8 174.9         182.7           165.3




b)             Turnover by origin

                                               Acquisitions        Continuing         Total           Total
                                                  2003              2003          2003            2002
                                                         #m                #m            #m              #m
United Kingdom                                          0.3             100.0        100.3            97.1
United States                                           2.1              44.1          46.2            40.5
Mainland Europe                                         5.4              33.2          38.6            29.5
Turnover between segments                                 -             (2.4)         (2.4)           (1.8)
Total                                                   7.8             174.9         182.7           165.3




c)             Turnover by destination

                                               Acquisitions        Continuing         Total           Total
                                                       2003              2003          2003            2002
                               #m                #m            #m              #m
United Kingdom                                          0.3              83.2          83.5            82.6
United States                                           1.9       45.6          47.5            40.5
Mainland Europe                                         5.4              39.5          44.9            35.1
Rest of the world                                       0.2               9.0           9.2          8.9
Turnover between segments                                 -             (2.4)         (2.4)           (1.8)
Total                                                   7.8             174.9         182.7           165.3





d)        Profit on ordinary activities before tax by origin

                                                                               Total              Total
                                                                                2003               2002
                                                                                  #m                 #m
United Kingdom                                                                  12.4               14.2
United States                          4.1                2.3
Mainland Europe                                                                (3.3)              (3.4)
Central costs                                                                  (3.5)              (2.4)
Total                                                                            9.7               10.7




e)       Net assets by origin

                                                                                  Total              Total
                                                                                   2003               2002
                                                                                     #m                 #m
United Kingdom                                                                     86.3               91.0
United States                                                                      20.7               11.7
Mainland Europe                                   11.6               11.1
Interest-bearing liabilities                                                      (6.7)              (1.8)
Total                                                                             111.9112.0




2. Operating (loss)/profit


                                                           Continuing            2003                2002
                                       Acquisitions        operations           TotalTotal
                                                 #m                #m              #m                  #m
Turnover                                        7.8             174.9           182.7               165.3
Cost of sales    (6.4)           (109.6)         (116.0)             (103.2)
Gross profit                                    1.4              65.3            66.7                62.1
Distribution expenses                         (0.5)     (11.5)          (12.0)              (10.4)
Administration expenses                       (0.7)            (31.5)          (32.2)              (33.5)
Amortisation of intangible assets             (2.6)            (10.4)          (13.0)          (10.3)
Other operating income                            -                 -               -                 2.2
Total administration expenses                 (3.3)            (41.9)          (45.2)              (41.6)
Operating (loss)/profit    (2.4)              11.9             9.5                10.1




                                                                                         2003         2002
                                                         #m           #m
Profit on ordinary activities before tax is stated after charging/(crediting):
Staff costs  (note 4)                                                                    37.2         36.0
Depreciation of owned assets (note 10)                                                    1.4          1.4
Amortisation of intangible assets (note 9)                                               13.0         10.3
Hire of machinery and equipment                    0.3          0.2
Other operating lease rentals                                                             3.4          2.5
Other operating income (see below)                                                      -        (2.2)
Net exchange gain on foreign currency borrowings less deposits                          (0.1)        (0.9)



Other operating income in 2002 represents a refund received from HM Customs and
Excise in the UK in respect of VAT overpaid in years prior to 2001.



3. Fees paid to auditors

                                                                                   2003          2002
                                                                                     #m            #m
Audit services
- statutory audit                                                                   0.2           0.2
- other audit and related regulatory reporting                                      0.2             -

Further assurance services                                                          0.1             -

Tax services
- compliance services                                                               0.1           0.2
- advisory services                       0.2           0.3
Total                                                                               0.8           0.7




4. Employees and Directors

                                                   2003          2002
Staff costs                                                                            #m            #m
Wages and salaries                                                                   31.2     30.9
Social security costs                                                                 5.3           4.5
Other pension costs                                                                   0.7           0.6
Total                           37.2          36.0

Average monthly number of people (including executive Directors)
Production                                                                            682           649
Administration                                                                        326           315
Total                                                                               1,008           964

At 31 December 2003 the actual number of people employed by the Group was 1,033
(2002: 934)



5. Net interest (receivable) and similar items

                                                                                    2003            2002
                                             #m              #m
Interest payable on bank loans and overdrafts                                        0.2             0.4
Amortisation of issue costs of bank loan                                              -             0.1
Other interest payable                                                               0.2             0.1
Amortisation of discount relating to property provisions                             0.1             0.2
Amortisation of discount arising on fair valuing of deferred                         0.1             0.1
consideration
Total interest payable and similar charges                                           0.6             0.9
Interest receivable                            (0.6)           (0.3)
Exchange gains                                                                     (0.1)           (0.9)
Total interest receivable and similar items                                        (0.7)(1.2)
Net interest (receivable) and similar items                                        (0.1)           (0.3)




6. Tax on profit on ordinary activities


(a) Analysis of tax charge in the year

                                  2003            2002
                                                                                      #m              #m

UK corporation tax at 30% (2002: 30%) on profits for the year            3.9             4.8
Adjustments in respect of previous years                                             0.3               -
                                                                                     4.2             4.8
Overseastaxes                                                                       3.3             1.1
Adjustments in respect of previous years                                           (0.8)           (0.8)
Total current tax                                6.7             5.1

Deferred tax origination and reversal of timing differences
    - Current year charge/(credit)                                                   0.7           (0.8)
    - Prior year (credit)/charge                                                   (0.4)             0.2
Tax on profit on ordinary activities                                                 7.0             4.5





(b) Factors affecting the tax charge for the year


Thetax assessed in each year differs from the standard rate of corporation tax
in the UK for the relevant year.  The differences are explained below:

                                                                                   2003          2002
                                                                                     #m            #m
Profit on ordinary activities before tax                                            9.7          10.7

Profit on ordinary activities at the standard UK tax rate of 30%                    2.9           3.2

Different tax rate applicable overseas                                              0.6           0.7
Expenses not deductible for tax purposes                                            0.1 0.6
Goodwill amortisation and impairment not deductible for tax purposes                2.9           2.4
Timing differences relating to goodwill amortisation deductible                     0.1             -
Overseas losses generated       0.8           0.5
Capital allowances in excess of depreciation                                      (0.2)         (0.4)
Other timing differences                                                       -         (1.1)
Impact of adjustment to prior year current tax                                    (0.5)         (0.8)
Current tax charge for the year                                                     6.7           5.1



(c) Factors that may affect future tax charges


The main factors that will impact future tax charges for the Group are:

i)                    The relative profitability and the differential in tax
rates between the UK and the US, the two main territories in which the Group
currently pays tax;

ii)                   The profitability of Mainland Europe where there are
significant unrecognised tax losses; and

iii)                  The timing of any successful resolution of certain steps
that the Group has taken to obtain value from historical tax losses.



7. Dividends


Equity dividends                                                                     2003          2002
Number of shares in issue at 31 December 2003 (million)                322.5         321.1
Final dividend proposed (pence per share)                                            1.25             -
Dividend proposed (# million)                                                         4.0             -



8. Earnings per share


Basic earnings per share are calculated using the weighted average number of
Ordinary shares outstanding during the year. Diluted earnings per share have
been calculated by taking into account the dilutive effect of shares thatwould
be issued on conversion into Ordinary shares of options held under employee
share schemes.


The adjusted earnings per share, removes the effect of the amortisation of
intangible assets and other operating income from the calculation as follows:


Adjustments to profit on ordinary activities after tax
                                                                                     2003          2002
                                                                                 #m            #m
Profit on ordinary activities after tax                                               2.7           6.2
Add: amortisation of intangible assets                                               13.0          10.3
Less: other operating income                                                            -         (2.2)
Adjusted profit on ordinary activities after tax                                     15.7          14.3

                                                            2003          2002
Weighted average number of shares outstanding during the period:
- basic                                                                       321,564,888   320,674,470
- dilutive effect of share options   1,453,980     1,818,424
- diluted                                                                     323,018,868   322,492,894
Basic earnings per share (in pence)                                             0.8           1.9
Adjusted basic earnings per share (in pence)                                          4.9           4.4
Diluted earnings per share (in pence)                                                 0.8           1.9
Adjusted diluted earnings per share (in pence)                                        4.8           4.4


The adjustments to profit have the following effects on EPS:

                                                                                     2003         2002
                                                                                    pence         pence
Basic earnings per share                                                              0.8           1.9
Amortisation of intangible assets   4.1           3.2
Other operating income                                                                  -         (0.7)
Adjusted basic earnings per share                                              4.9           4.4

Diluted earnings per share                                                            0.8           1.9
Amortisation of intangible assets                                                     4.0           3.2
Other operatingincome                                                                  -         (0.7)
Adjusted diluted earnings per share                                                   4.8           4.4



9.  Intangible fixed assets
                       Goodwill
Group                                                                                                #m
Cost
At 1 January 2003                                           299.3
Additions                                                                                          21.8
Exchange adjustments                                                                                0.2
At 31 December 2003                                                                               321.3


Amortisation
At 1 January 2003                                                                               (190.7)
Charge for the year    (13.0)
Exchange adjustments                                                                              (0.3)
At 31 December 2003                                               (204.0)
Net book amount at 31 December 2003                                                               117.3
Net book amount at 31 December 2002                                                               108.6


The goodwill arising on acquisitions is being amortised on a straight-line basis
over the estimated useful economic lives of the acquired businesses, being in
the range one to 20 years. These periods are the periods over which the
Directors estimate that the values of the underlying businesses acquired are
expected to exceed the values of the underlying assets.



10. Tangible fixed assets


                                                                          Equipment,
              Plant and       fixtures and
                            Land and buildings          machinery           fittings             Total
Group                                       #m                 #m            #m                #m                  
Cost
At 1 January 2003                          1.9                5.1                2.4               9.4
Reclassification                           0.4                0.9              (1.3)              -
Additions                                    -                1.3                0.1               1.4
Disposals                                (0.1)              (1.2)              (0.2)             (1.5)
Exchange adjustments                   -                  -                0.2               0.2
At 31 December 2003                        2.2                6.1                1.2               9.5

Depreciation
At 1 January 2003                        (0.5)              (3.9)   (1.8)             (6.2)
Reclassification                         (0.1)              (0.3)                0.4                 -
Charge for the year                      (0.1)              (1.1)              (0.2)             (1.4)
Disposals0.1                1.2                0.2               1.5
Exchange adjustments                     (0.1)              (0.4)                0.4             (0.1)
At 31 December 2003                      (0.7)        (4.5)              (1.0)             (6.2)

Net book value at 31                       1.5                1.6                0.2               3.3
December 2003
Net book value at 31                       1.4                1.2                0.6               3.2
December 2002





Analysis of net book value of land and buildings
                                                                                 Group            Group
                                                   2003             2002
                                                                                    #m               #m
Leasehold:
Over 50 years unexpired                                                           1.3              1.4
Under 50 years unexpired                                                           0.2                -
Total                                                                              1.5              1.4



11. Investments


Current asset investments

                                                                                Group             Group
                                                                                 2003              2002
       #m                #m
Short-term bank deposits                                                          8.8               6.2
Total                                             8.8               6.2



12. Stocks

                                                                                Group             Group
                                                                         2003              2002
                                                                                   #m                #m
Raw materials                                                                     1.2               1.1
Work in progress                                                                  2.2               1.9
Finished goods                                                                    0.1               0.6
Total                                                 3.5               3.6




13. Debtors

                                                                                    Group         Group
                                                                          2003          2002
                                                                                       #m            #m
Amounts falling due within one year:
Trade debtors                                                                  34.1          24.5
Amounts owed by Group undertakings                                                      -             -
Corporation tax recoverable                                                           1.6           2.6
Other debtors    3.3           2.4
Prepayments and accrued income                                                        2.5           3.0
                                                            41.5          32.5
Amounts falling due after more than one year:
Other debtors (see note 17)                                                           0.9           0.8
Total                                                   42.4          33.3



14. Creditors: amounts falling due within one year

                                                                                    Group         Group
                                       2003          2002
                                                                                       #m            #m
Bank and other borrowings                                                         6.7             -
Trade creditors                                                                      20.5          14.3
Amounts owed to Group undertakings                                                      -             -
Corporation tax     2.7           4.0
Other creditors including taxation and social security                               10.5           6.0
Accruals and deferred income                                   27.9          24.8
Proposed dividends                                                                    4.0             -
Deferred consideration for acquisitions                                               0.7           0.6
Total                                                                                73.0          49.7



15. Creditors: amounts falling due after more than one year

                                                                                Group         Group
                                                                                     2003          2002
                                                                                       #m            #m
Bank and other borrowings                                                               -           1.8
Deferred consideration for acquisitions                                                 -           0.7
Total                                                        -           2.5



16. Bank and other borrowings

i) Due within one year
                                                                                    Group         Group
                                         2003          2002
                                                                                       #m            #m
Bank loans: secured                                                                 5.1             -
Other loans: unsecured                                                                1.6             -
Total                                                                                 6.7             -


ii) Due after morethan one year

                                                                                    Group         Group
                                                                                     2003          2002
                         #m            #m
Bank loans: Secured                                                                     -             -
Other loans: Unsecured                                              -           1.8
Total                                                                                   -           1.8


The bank loans are secured by a fixed charge over The Future Network plc, Future
Holdings 2002 Limited, FXM International Limited, Future Media Italy SpA, Future
Network USA, Inc and Future Publishing Limited's land and buildings,
intellectual property and goodwill and a floating charge over the remainder of
their assets.



17. Provisions for liabilities and charges


Group

                                             Property and             
                                            dilapidations             Restructuring              Total
                                             #m                        #m                 #m
At 1 January 2003                                     2.9                       0.2                3.1
Acquisitions                                            -                       0.5       0.5
(Release)/charge in the year                        (0.5)                       0.1              (0.4)
Utilised in year                                    (1.1)                     (0.4)              (1.5)
Amortisation of discount       0.1                         -                0.1
Exchange adjustments                                (0.1)                         -              (0.1)
At 31 December 2003                                   1.3                   0.4                1.7



Deferred tax


At 31 December 2003 a deferred tax asset has been recognised within other
debtors as follows:

                                                                                Group             Group
                                                                                 2003              2002
                                                                                   #m                #m
Amounts falling due within one year      0.4               0.8

Amounts falling due after more than one year                                      0.9               0.8


The recognised amount relates to timing differences at 31 December 2003 which
are considered more likely than not to reverse in the foreseeable future and are
split as follows:

                                                                                Group             Group
                                            2003              2002
                                                                                   #m                #m

Capital allowances                                                                0.80.7
Other short term timing differences                                               0.5               0.9
Total                                                                             1.3               1.6




The movement ondeferred taxation in the year is as follows:

                                                                                Group             Group
                                                                                 2003              2002
                                                                                   #m                #m
As at 1 January                                                                   1.6               1.0
Current year (charge)/credit         (0.7)               0.8
Prior year credit/(charge)                                                        0.4             (0.2)
At 31 December                                                                  1.3               1.6


The unrecognised amounts of deferred taxation assets are as follows

                                                                                Group             Group
                                                2003              2002
                                                                                   #m                #m

Capital allowances                                                                  -    0.5
Losses                                                                            9.8               6.4
Other                                                                             2.2               2.3
Total                      12.0               9.2


The other short-term timing differences are items that are considered unlikely
to be utilised in the foreseeable future.


Vacant property and dilapidations


Following the reorganisations and significant downsizing which took place in
2001, the Group has obligations under short leasehold agreements on a number of
vacant properties. The provision made represents the following:


i)                    The bestestimate of the discounted future net cash flows
arising from the net shortfall on each of the leases held; and
ii)                   The best estimate of dilapidation obligations on
termination of specific leasehold agreements.


At 31 December 2003 the total amount of the provision was #1.3m (2002: #2.9m).
The leases against which the provisions have been made will terminate by
December 2017. The provisions have been discounted at a rate in line with the
Group's cost of capital.


Restructuring


The restructuring provisions as at 31 December 2003 relate to ongoing
restructuring at the Group's European subsidiaries.



18. Called up share capital

Authorised share capital                                                      2003              2002
Ordinary shares of 1 pence each                                                    #m                #m
At 1 January                                                                      6.0               6.0
Increase in the year                                                                -                 -
At 31 December                                                                    6.0               6.0


Allotted, issued and fully paid                        2003
Ordinary shares of 1 pence each                                         No. of Shares                #m
At 1 January                                                              321,110,607             3.2
Share Options Exercised                                                     1,376,978                 -
At 31 December                                                            322,487,585               3.2




19. Share premium account

                                                                                 2003              2002
Group                                                                              #m                #m
At 1 January                              169.6             169.6
Premium on shares issued during the year                                          0.3                 -
Cancellation of share premium account                                         (169.7)-
At 31 December                                                                    0.2             169.6


On 12 June 2003 the Company cancelled its share premium account as confirmed by
an Order of the High Court of Justice, Chancery Division.



20. Profit and loss account

                                                                                Group           Company
                                                                                   #m          #m
At 1 January 2003 - deficit                                                   (191.6)            (58.7)
Transfer on cancellation of share premium account                               169.7             169.7
Profit for the financial year    2.7               2.4
Dividends proposed                                                              (4.0)             (4.0)
Net exchange adjustments offset in reserves                                 0.8                 -
Tax on exchange adjustments offset in reserves                                    0.1                 -
At 31 December 2003                                                            (22.3)             109.4



21. Other reserves

                                                     Group            Group           Group          Company
                                                    Merger            Other           Total            Other
                   reserve         reserves                         reserves
                                                        #m               #m              #m               #m
At 1 January 2003                                   109.0             21.8           130.8             21.8
At 31 December 2003                                  109.0             21.8           130.8             21.8



22. Acquisitions


The results for the year include the undernoted contribution from acquisitions:

                                       HDP Guitar World    Guitar One  Computec UK      Other      Total
                                        #m           #m            #m           #m         #m         #m
Date acquired  28.04.03     10.09.03      31.10.03     21.11.03          -

Turnover                               5.4          1.9           0.2          0.3          -        7.8
Adjusted operating profit              0.2        (0.1)          -          0.1          -        0.2
Amortisation of intangible
assets                               (1.6)        (0.6)         (0.1)        (0.1)      (0.2)      (2.6)
Operating profit                     (1.4)        (0.7)         (0.1)         -      (0.2)      (2.4)





The most recent pre-acquisition annual results of those acquisitions showed the
undernoted estimated figures:

                                       HDP Guitar World    Guitar One  Computec UK      Other      Total
                                        #m           #m            #m           #m         #m         #m
Year ended:                       31.12.02     31.12.02      31.12.02     30.09.03          -
Turnover                               8.2     7.8           3.1          4.5          -       23.6
Operating profit/(loss)                  -          1.3           0.3        (1.4)          -        0.2


The accounting polices applied by previous owners of acquired business differed
from those applied by the Group and accordingly the pre-acquisition figures are
not strictly comparable with those set out above for the year 2003. In addition,
foreign exchange adjustments limit the comparability of the two tables.


23. Commitments and contingent liabilities


a)       Operating lease commitments


At 31 December 2003 the Group had annual commitments under non cancellable
operating leases as set out below:

                                      Land and                   2003      Land and               2002
                                     Buildings      Other         Total     Buildings   Other      Total
                                            #m         #m            #m            #m      #m         #m
Annual commitments under
non-cancellable operating leases
expiring:
Within one year                            0.2        0.1           0.3           0.1     0.2        0.3
Within two to five years                   2.2        0.2           2.4     2.6     0.3        2.9
After five years                           1.8          -           1.8           1.6       -        1.6
Total                                      4.2        0.3           4.5           4.3     0.5        4.8


b)     Contingent liabilities


At 31 December 2003, the Company had contingent liabilities outstanding in
respect of counter-indemnities #0.7m (2002: #1.3m) and guarantees given by it to
the Group's bankers in respect of amounts outstanding from its subsidiaries
under the Group bank facility arrangements.


A number of trading subsidiaries are defendants in various legal actions. In the
opinion of the Directors, after taking appropriate legal advice, the outcome
that such actions would give rise to a significant loss is considered remote.


c)       Capital commitments


There were no material capital commitments as at 31 December 2003.


Directors:

Roger Parry, Non-executive Chairman
Greg Ingham, Chief Executive Officer
John Bowman, Group Finance Director
Michael Penington, Non-Executive Director
Patrick Taylor, Non-Executive Director
Lisa Gordon, Non-Executive Director
John Mellon, Non-Executive Director

                      This information is provided by RNS
     The company news service from the London Stock Exchange
END

FR JLMTTMMAMTPI

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