TIDMTRS
RNS Number : 4061C
Tarsus Group PLC
07 March 2011
Tarsus Group plc
7 March 2011
Preliminary Annual Results for the year ended 31 December
2010
"Improving economic environment accelerates growth"
Tarsus Group plc ('Tarsus', the 'Group' or the 'Company'), the
international business-to-business media group is pleased to
announce strong results for the year ended 31 December 2010 and
increasing confidence about the outlook.
2010, the cyclically less active year in the two-year exhibition
cycle of the Group, saw good progress in both our Medical and
Middle East divisions, which combined with strong growth from
Off-Price (discount clothing), produced an adjusted profit before
tax of GBP9.5m.
Financial Highlights:
-- Revenue up 3% to GBP43.6m (vs. 2008)
-- Like-for-like revenue up 6% (vs. 2009)
-- Adjusted profit before tax GBP9.5m (2008: GBP10.7m)
-- Adjusted EPS of 10.4p (2008: 13.1p)
-- Net debt down to GBP28.6m (2009: GBP30.7m)
-- Dividend maintained at 6p for the full year (2009: 6p)
Operational Highlights
-- Strong performance from Emerging Markets
- MEBA (business aviation) had a 40% increase in revenues and a
13% rise in visitors
- Labelexpo India saw revenues up 22% and visitors up 27%
-- Medical revenues +18% with strong growth in educational
component
-- Off-Price momentum continues
-- Labelexpo Americas - revenue down 7%, strong attendance and
rebook
-- France - revenues down 5%, evidence of improved trading in
final quarter
Outlook
-- Improving economic environment is impacting positively on our
events portfolio
-- Forward bookings represent 63% of anticipated full year
revenues (2009: 58%)
-- Key Labelexpo Europe and Dubai Airshow sales strong
-- Dubai Airshow venue configuration confirmed
-- Further progress expected in Medical and Off-Price
-- Outlook improving for our business in France
-- Diversity of product and geography is an increasingly
important key strength
Neville Buch, Chairman, commented;
"As 2010 progressed it became increasingly apparent that the
global economic recovery had begun. With the geographic and product
diversity of our portfolio of events, we not only saw recovery but
also good growth, particularly from our Emerging Markets and
Medical events.
Our strategy to increase the Group's exposure to the faster
growing Middle and Far Eastern markets is already reaping rewards
with very strong growth in both revenue and visitor numbers at key
events like Labelexpo India and MEBA in Dubai. We expect to see
further acceleration in growth for the Group from these regions in
2011.
Further evidence of the successful entrepreneurial approach of
our management can be seen in the Medical division which has
experienced an acceleration in revenues driven by the increase in
the number of educational events staged. We are increasingly
excited by the outlook for this division.
2011 will be an exciting year for the Group with both Labelexpo
Europe and the Dubai Airshow taking place. The Board is
increasingly confident that the improving trends evidenced in the
fourth quarter of 2010 will flow into 2011. Encouragingly, forward
bookings for 2011 are strong, standing at 63% of anticipated full
year revenues compared with 58% for 2010 (as adjusted for biennial
events). The Group will continue to strive for organic growth
whilst looking for value enhancing acquisition opportunities".
FOR FURTHER INFORMATION, PLEASE CONTACT
Tarsus Group plc:
Douglas Emslie, Group Managing Director 020 8846 2700
Ashley Milton, Group Finance Director 020 8846 2700
Media
Madano Partnership:
Matthew Moth 020 7593 4000
The Company will be hosting a presentation to analysts at
12:30pm today at the offices of Investec, 2 Gresham Street, London,
EC2V 7QP. A webcast of the presentation will be made available on
Tarsus's website (www.tarsus.com) from 9:30am tomorrow.
OVERVIEW
2010 was a challenging period. The Group started the year facing
an economic backdrop which was far from clear and with real fears
of a double dip recession in both Europe and the US. This economic
uncertainty characterised trading in the early part of the year
with both exhibitors and visitors reluctant to make early
commitments to events. As the year progressed and exhibitors became
more confident, visibility started to improve and 2010 ended on a
more optimistic note.
In light of such an uncertain backdrop the Group's results are a
reflection of both the quality and diversity of the portfolio. Our
geographic coverage provides access to some of the faster growing
regions of the world in both the Middle and Far East and this was
reflected by very strong performances in both regions. We also
experienced good growth from the recovery of the US economy with
both Off-Price (discount clothing) and Medical showing improving
trends. Looking to the future, our strategy to grow our exposure to
the faster growing economies of the Middle and Far East through
Project 50/13 is gathering pace. The expansion of events through
organic growth is particularly evident in Medical, Aerospace and
Off-Price where the Group has been successful in broadening the
appeal of the shows through product enhancements.
Underlying organic revenue growth of 6% on a comparable basis
was achieved through a mixture of volume (+4%) and price (+2%)
highlighting the importance of brand leader events in difficult
times.
2011 will see the underlying strength of exhibitions as a medium
for marketing spend improve as customers increasingly value
face-to-face contact.
After a period where price expectations were too high and
discouraged M + A, activity levels are starting to pick up as
prices and growth prospects have come more into line. The Group
will continue to evaluate selective opportunities in the right
sectors and geographies.
FINANCIAL RESULTS
Group revenues were GBP43.6m (2009: GBP57.5m); profit before tax
after exceptional items was GBP5.3m (2009: GBP6.8m); and adjusted
profit before tax was GBP9.5m (2009: GBP14.6m). Like-for-like
revenue growth, excluding currency movements, increased by 6%.
Basic earnings per share were 5.4p (2009: 6.3p) and adjusted
earnings per share were 10.4p (2009: 17.4p).
The Group incurred exceptional one-off costs in 2010 resulting
from the transaction costs of the acquisition of the 20% of MCII
(medical division) acquired during the year and historic bank fees.
As a result of a change in accounting rules, transaction fees are
now written off to the income statement during the year. The
historic bank fees were written off as a result of an early bank
refinancing. These costs, amounting to GBP0.8m, have been excluded
from adjusted profits.
The Directors are proposing a final dividend of 4p per share,
bringing the total for the year to 6p per share (2009: 6p per
share). The final dividend, which is subject to Shareholder
approval, is proposed to be paid on 6 July 2011 to Shareholders on
the Register of Members of the Company on 27 May 2011. A scrip
dividend will continue to be offered as an alternative.
Debt
Management has continued its focus on cash generation, tight
cost control and making selective investments in the portfolio to
generate longer term growth, whilst ensuring that debt is
reduced.
During the year the Group generated GBP11.0m (2009:GBP10.1m) of
cash from continuing operations. Net debt at 31 December 2010 was
GBP28.6m, a reduction of GBP2.1m or 7% against 31 December 2009 -
better than expectations.
OPERATING REVIEW
Geographical Analysis
A summary of the performance of each of our divisions during the
period is as follows.
USA - good outcome with strong performances from Off-Price and
Medical.
Europe - trading conditions in the French division remained
challenging, however Q4 events showed signs of improved
trading.
Emerging Markets - MEBA in Dubai and Labelexpo India performed
strongly. A new Label event was launched in South China.
Emerging Markets Europe USA
(GBPm) 2010 2009 2008 2010 2009 2008 2010 2009 2008
------------- ------ ------ ----- ----- ----- ----- ----- ----- -----
Revenue 7.5 19.1 3.9 17.4 26.7 23.4 18.7 11.7 15.2
Adjusted
profit
before tax 0.6 5.5 - 2.9 6.2 5.1 8.7 5.5 8.2
USA
Off-Price continued to make good progress and is now of a record
size. Having seen a decline in sales in February 2009, every event
since then has seen good growth. Our latest event in February 2011
was the largest to date. The broadening of the offer to retailers
by the inclusion of footwear and accessories has been a major
factor in this division's success.
Medical continued to deliver excellent growth, both in the
number of events and attendees. Much of the growth can be traced to
the increasing demand for education from doctors and the fact that
pursuing a healthy lifestyle is becoming a mainstream concern. We
launched our educational programmes online in the second half of
the year and these have been well received by the market.
Labelexpo Americas in September was the most successful
exhibition for our customers in the last ten years. Whilst spend by
exhibitors was some 7% lower than the previous edition, the number
of companies taking space remained constant and visitor numbers
were up 5%. Strong customer sales generated at the event resulted
in a very encouraging re-book rate of 83%, providing Tarsus with a
high level of visibility for the next edition in 2012.
Europe
Our French trading remained challenging for much of the year
with the economic backdrop depressing sales. However, as the year
progressed, the actions of management to reduce costs, improve the
offering and innovate produced some encouraging signs.
The French division's revenues reduced by 5% compared with 2009
- a very creditable performance and ahead of its local peers.
The French portfolio continues to show signs of improvement and
we were pleased to finish the year with Educatec (education), and
start 2011 with Modamont (fashion accessories), as both exhibitions
grew in size.
Emerging Markets
The two key events in the region in 2010 were MEBA, the business
aviation exhibition in Dubai, and Labelexpo India in New Delhi.
MEBA took place in December and produced results well ahead of
its previous edition - revenues were up 40%, with visitors up 13%.
MEBA, in just 5 years, has become the third largest business
aviation event in the world. In addition to becoming a key sales
platform for business aircraft manufacturers, service providers and
suppliers to the Industry, MEBA is now an important venue for
signing major industry agreements. H.H Sheikh Ahmed bin Saeed Al
Maktoum, Chairman of Emirates, opened this year's show by signing
an agreement to build a new business aviation terminal at the Al
Maktoum International Airport in Dubai.
Labelexpo India took place in early December. Revenues and
visitors were up 22% and 27% respectively from its previous
edition. The event saw a major increase in international exhibitors
who made excellent sales at the event. As a result, the rebooking
for the 2012 edition has been exceptionally strong.
Labelexpo South China, an event launched in Guangzhou in
October, was profitable at its first edition and complements
Labelexpo Asia which takes place in Shanghai in 2011.
OUTLOOK
The improving trends witnessed in Q4 2010 look set to run into
2011 as the global economy continues its recovery.
Within each two-year cycle, odd years are by far the larger in
profit terms for the Group as they contain both Labelexpo Europe
(in September) and the Dubai Airshow (in November). Bookings for
both these biennial events remain strong.
-- For Labelexpo, space sales are tracking ahead of the 2009
edition.
-- The Dubai Airshow sales pipeline is strong and, with the
venue configuration confirmed for 2011, we remain confident of a
good performance from this event.
There were two significant events in the first quarter of 2011 -
the Off-Price Show in Las Vegas and the Mod'amont fashion
accessories exhibition in Paris. Off-Price has continued its recent
trends and was a record show. Mod'amont was well received by our
customers with a good increase in visitors.
The improving economic environment is impacting positively on
our portfolio of events in the US and the Emerging Markets. France
has traditionally benefited later in the economic cycle and the
second half weighting of our portfolio in 2011 should be helpful.
Encouragingly, forward bookings for 2011 remain strong, standing at
63% of anticipated full year revenues compared with 58% for 2010
(as adjusted for biennial events).
We remain committed to our long term strategy of increasing our
exposure to Emerging Markets (Project 50/13) and driving organic
growth within the business.
Neville Buch Douglas Emslie
7 March 2011 7 March 2011
FINANCIAL REVIEW
TRADING RESULTS
An analysis of the Group's trading results is set out above.
The geographical composition of Tarsus's International event
portfolio means that our revenues and profits are generated in a
range of currencies, principally the US Dollar, the Euro and
Sterling. In 2010 approximately 53% of our revenues were generated
in US dollars, 34% in Euros, 6% in Sterling and 7% others. As a
result, our Sterling translated trading results are significantly
affected by any changes to the prevailing exchange rates during the
year. The average exchange rates applicable for 2010 were:
US$: GBP1.55 - a strengthening against Sterling of 1% compared
with 2009
Euro: GBP1.15 - a weakening against Sterling of 5% compared with
2009
Our 2011 budgeted exchange rates are US$: GBP1.65 and Euro:
GBP1.20
Interest expense
The Group's interest cost of GBP1.4m (2009: GBP1.5m) relates to
the cost of servicing external bank debt and has reduced marginally
in 2010 as a result of a lower average level of net debt in the
period.
Profit before tax
Reported profit before tax was GBP5.3m (2009: GBP6.8m). Adjusted
profit before tax was GBP9.5m (2009: GBP14.6m). Adjusted profits in
2010 exclude exceptional costs relating to the write off of
unamortised banking fees upon early renegotiation of the Group's
bank facilities (GBP0.5m) and acquisition-related professional fees
charged against profits following the change in IFRS 3 accounting
for business combinations (GBP0.3m).
Adjusted profits also exclude goodwill amortisation of GBP3.4m
and share option credits of GBP31,000. A reconciliation of the
reported profit before tax to adjusted profit before tax for both
the year ended 31 December 2010 and the year ended 31 December 2009
is given in Note 3.
Taxation
The reported tax charge is GBP1.0m (2009: GBP1.9m). The adjusted
tax charge of GBP1.6m (2009: GBP2.5m) represents 17% (2009: 17%) of
the Group's adjusted* profit before tax.
Earnings per share
The Group reported basic earnings per share in 2010 of 5.4p
(2009: 6.3p) and adjusted* earnings per share of 10.4p (2009:
17.4p). Diluted earnings per share were 5.4p (2009: 6.3p).
Dividends
The Directors have proposed a final dividend of 4.0p per share,
bringing the total for the year ended 31 December 2010 to 6.0p
(2009: 6.0p).
FINANCING
Cash flows
Tarsus continues to generate strong cash flows from its
operations. The larger events typically have a positive working
capital cycle and our business in general has a low capital
investment requirement.
The biennial nature of the Group's event portfolio results in a
decrease in working capital (excluding cash) in the years,
including 2010, which don't include the two largest events. This
occurs as deferred income relating to these events builds up in the
Statement of Financial Position ahead of the events to be held in
the following year.
During 2010, the Group generated GBP11.0m of cash from
operations (2009: GBP10.1m).
The key non-operating cash flows in 2010 included:
-- Dividends paid of GBP2.7m
-- Deferred consideration payments totalling GBP1.1m
-- Tax and interest paid totalling GBP3.0m
Net debt
The Group's funding objective is to ensure that the business has
sufficient resources, secured on competitive terms, to meet its
various financial commitments as they arise. It achieves this
objective by actively monitoring its cash flows and requirements on
both an historic and forward looking basis. The Group is cautious
in its approach, applying appropriate sensitivities to both the
quantum and timing of its projections.
Tarsus's external bank debt was refinanced in September 2010 and
is now principally denominated in Sterling. Where foreign currency
borrowings do exist they are hedged using forward currency
contracts. At 31 December 2010, all of the Group's currency debt
was specifically hedged in this way. The forward currency contracts
mature at various dates up to September 2011, after which date all
borrowings will be denominated in Sterling.
The Group's net debt reduced by GBP2.1m to GBP28.6m at 31
December 2010 (31 December 2009: GBP30.7m), including cash of
GBP11.0m (2009: GBP10.3m). The new bank facilities mature at the
end of 2013.
NET ASSETS
As at 31 December 2010, the Group had net assets of GBP34.4m (31
December 2009: GBP35.2m).
Intangible assets
Intangible assets comprise goodwill, trademarks and customer
lists. The carrying value of intangible assets at 31 December 2010
was GBP93.4m (31 December 2009: GBP95.3m).
Working capital
It is the Group's policy to recognise profits upon the
completion of an event. Until completion, revenue and costs are
held on the Statement of Financial Position. Included in net
current liabilities as at 31 December 2010 is deferred income of
GBP20.3m (2009: GBP14.9m). Prepaid event costs of GBP1.6m (2009:
GBP1.3m) are included in trade and other receivables.
Acquisitions
On 19 August 2010 the Company acquired the remaining 20% of MCI
Opco, LLC that it did not already own. Consideration was in the
form of 5,820,878 ordinary shares of the Company.
Ashley Milton
7 March 2011
Glossary *
Adjusted profit before tax:
Calculated using profit before tax adjusted for share option
charges / credits, amortisation charges, exceptional items, tax on
profit from joint ventures and excludes profit/loss on disposal of
intangible assets.
Adjusted effective tax rate:
Calculated using the reported tax charge adjusted for the tax
effect of share option charges / credits, amortisation charges,
exceptional items and the profit / loss on disposal on intangible
assets.
Adjusted EPS:
Calculated using profit after tax attributable to equity
shareholders adjusted for share option charges, amortisation
charges, exceptional items and excludes profit / loss on disposal
of intangible assets.
Like-for-like revenue:
Calculated at constant exchange rates adjusted for biennial
events, excluding acquisitions impacting for the first time in
2010, disposals and non-recurring products and items.
CONSOLIDATED INCOME STATEMENT
Year to Year to
31 December 31 December
2010 2009
Notes GBP000 GBP000
======================================= ====== ============= =============
Group revenue 2 43,609 57,491
======================================= ====== ============= =============
Operating costs excluding exceptional
items (36,044) (47,448)
======================================= ====== ============= =============
Exceptional operating costs 3 (849) (1,863)
======================================= ====== ------------- -------------
Total operating costs (36,893) (49,311)
======================================= ====== ============= =============
Group operating profit 6,716 8,180
======================================= ====== ============= =============
Share of profit from joint ventures
(post tax) - 90
======================================= ====== ============= =============
Interest receivable - 1
======================================= ====== ============= =============
Interest payable and other financial
expenses (1,407) (1,475)
======================================= ====== ------------- -------------
Profit before taxation 3 5,309 6,796
======================================= ====== ============= =============
Taxation expense 4 (987) (1,897)
======================================= ====== ------------- -------------
Profit for the financial year 4,322 4,899
======================================= ====== ============= =============
Profit for the financial year
attributable to equity shareholders
of the parent company 3,847 4,098
======================================= ====== ============= =============
Profit for the financial year
attributable to non-controlling
interests 475 801
======================================= ====== ------------- -------------
4,322 4,899
======================================= ====== ============= =============
Earnings per share (pence) 6
======================================= ====== ============= =============
- basic 5.4 6.3
======================================= ====== ============= =============
- diluted 5.4 6.3
======================================= ====== ============= =============
Dividends 5 GBP000 GBP000
======================================= ====== ============= =============
Equity - ordinary
======================================= ====== ============= =============
Final dividend paid (2009/2008) 2,723 2,444
======================================= ====== ============= =============
Interim dividend paid (2010/2009) - 1,370
======================================= ====== ------------- -------------
2,723 3,814
=============================================== ============= =============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 December 31 December
2010 2009
GBP000 GBP000
Profit for the financial year 4,322 4,899
------------- -------------
Other comprehensive expense:
Foreign exchange translation differences (1,033) (11,157)
Revaluation of available for sale
investment - (43)
Other comprehensive expense (1,033) (11,200)
------------- -------------
Total comprehensive income / (expense)
for the year 3,289 (6,301)
============= =============
Attributable to:
Equity shareholders of the parent
company 2,814 (7,102)
Non-controlling interests 475 801
Total comprehensive income/ (expense)
for the year 3,289 (6,301)
============= =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 31 December
2010 2009
GBP000 GBP000
NON-CURRENT ASSETS
Property, plant and equipment 1,314 1,141
Intangible assets 93,441 95,315
Other investments 1 -
Deferred tax assets 1,242 1,917
95,998 98,373
CURRENT ASSETS
------------ ------------
Trade and other receivables 13,305 14,673
Cash and cash equivalents 10,968 10,288
------------ ------------
24,273 24,961
CURRENT LIABILITIES
------------ ------------
Trade and other payables (15,546) (21,043)
Deferred income (20,332) (14,925)
Provisions - (1,195)
Bank overdrafts - (1,002)
Other interest bearing loans
and borrowings (2,750) (8,356)
Liabilities for current tax (5,009) (4,315)
------------ ------------
(43,637) (50,836)
------------ ------------
NET CURRENT LIABILITIES (19,364) (25,875)
------------ ------------
TOTAL ASSETS LESS CURRENT LIABILITIES 76,634 72,498
NON-CURRENT LIABILITIES
------------ ------------
Other payables (2,632) (4,426)
Deferred tax liability (3,703) (4,798)
Interest bearing loans and borrowings (35,889) (28,057)
------------ ------------
(42,224) (37,281)
------------ ------------
NET ASSETS 34,410 35,217
============ ============
EQUITY
Share capital 3,757 3,422
Share premium account 12,133 6,033
Other reserves (5,224) (4,205)
Retained earnings 23,565 28,494
------------ ------------
Issued capital and reserves attributable
to equity holders of the parent 34,231 33,744
NON-CONTROLLING INTERESTS 179 1,473
------------ ------------
TOTAL EQUITY 34,410 35,217
============ ============
CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 December 31 December
2010 2009
GBP000 GBP000
Cash flows from operating activities
Profit for the year 4,322 4,899
Adjustments for:
Depreciation 419 378
Amortisation 3,350 5,713
Profit on the disposal of intangible
assets - (46)
Share option (credit)/ charge (31) 218
Share of operating profit in
joint venture - (135)
Share of tax in joint venture - 45
Taxation charge 987 1,897
Net interest 1,407 1,474
------------- -------------
Operating profit before changes
in working capital and provisions 10,454 14,443
Decrease in trade and other receivables 1,487 11,557
Decrease in current trade and
other payables (924) (15,902)
Cash generated from operations 11,017 10,098
Interest paid (1,971) (362)
Income taxes (paid)/ received (1,004) 989
------------- -------------
Net cash from operating activities 8,042 10,725
------------- -------------
Cash flows from investing activities
Proceeds from sale of intangible
fixed assets - 1,014
Acquisition of property, plant
and equipment (592) (280)
Acquisition of intangible fixed
assets (88) (3,165)
Acquisition of subsidiaries,
net of cash acquired - 3,427
Acquisition of other investments (27) (56)
Deferred and contingent consideration
paid (1,151) (6,617)
Net cash outflow from investing
activities (1,858) (5,677)
------------- -------------
Cash flows from financing activities
Net repayment of borrowings (665) (2,056)
Proceeds from the issue of share
capital 310 2,817
Cost of share issue (532) (32)
Dividends paid to shareholders
in parent company (2,702) (3,669)
Dividends paid to non-controlling
interests in subsidiaries (1,230) (70)
------------- -------------
Net cash outflow from financing
activities (4,819) (3,010)
------------- -------------
Net increase in cash and cash
equivalents 1,365 2,038
Opening cash and cash equivalents 9,286 7,692
Foreign exchange movements 317 (444)
------------- -------------
Closing cash and cash equivalents 10,968 9,286
============= =============
Consolidated Statement of Changes in
Equity
Other Reserves
-----------------------------------------------------
Share Share Capital Fair Foreign
Capital Premium Re-organisation Redemption Value Exchange Retained Non-Controlling
Account Account Reserve Reserve Reserve Reserve Earnings Interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 31 December
2010
Recognised
foreign exchange
losses for
period - - - - - (1,033) - - (1,033)
Profit for the
period: -
Attributable to
equity
shareholders - - - - - - 3,847 - 3,847
- Attributable to
non-controlling
interests - - - - - - - 475 475
Total
comprehensive
income for the
period - - - - - (1,033) 3,847 475 3,289
Scrip dividend 1 20 - - - - - - 21
New share capital
subscribed 334 6,611 - - - - - - 6,945
Cost of shares
issued - (531) - - - - - (531)
Share option
charge - - - - - - (31) - (31)
Movement in
reserves
relating to
deferred tax - - - - - - 225 - 225
Cashflow hedge
reserve - - - - 14 - - - 14
Dividend paid - - - - - - (2,723) - (2,723)
Dividend paid to
non-controlling
interests - - - - - - - (1,230) (1,230)
Acquisition of
non-controlling
interests - - - - - - (6,247) (539) (6,786)
Net change in
shareholders'
funds 335 6,100 - - 14 (1,033) (4,929) (1,294) (807)
Opening equity
shareholders'
funds 3,422 6,033 6,013 (443) - (9,775) 28,494 1,473 35,217
Closing equity
shareholders'
funds 3,757 12,133 6,013 (443) 14 (10,808) 23,565 179 34,410
======== ======== ================ ============ ======== =========== ========= ================ =========
Other Reserves
-----------------------------------------------------
Share Share Capital Fair Foreign
Capital Premium Re-organisation Redemption Value Exchange Retained Non-Controlling
Account Account Reserve Reserve Reserve Reserve Earnings Interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 31 December
2009
Recognised
foreign exchange
losses for
period - - - - - (11,157) - - (11,157)
Revaluation of
trade
investment - - - - (43) - - - (43)
Profit for the
period: -
Attributable to
equity
shareholders - - - - - - 4,098 - 4,098
- Attributable to
non-controlling
interests - - - - - - - 801 801
Total
comprehensive
income for the
period - - - - (43) (11,157) 4,098 801 (6,301)
Scrip dividend 9 136 - - - - - - 145
New share capital
subscribed 318 6,019 - - - - - - 6,337
Cost of shares
issued - (122) - - - - - - (122)
Share option
charge - - - - - - 218 - 218
Movement in
reserves
relating to
deferred tax - - - - - - (319) - (319)
Dividend paid - - - - - - (3,814) - (3,814)
Dividend paid to
non-controlling
interests - - - - - - - (70) (70)
-------- -------- ---------------- ------------ -------- ----------- --------- ---------------- ---------
Net change in
shareholders'
funds 327 6,033 - - (43) (11,157) 183 731 (3,926)
Opening equity
shareholders'
funds 3,095 - 6,013 (443) 43 1,382 28,311 742 39,143
Closing equity
shareholders'
funds 3,422 6,033 6,013 (443) - (9,775) 28,494 1,473 35,217
======== ======== ================ ============ ======== =========== ========= ================ =========
1. BASIS OF PREPARATION
The preliminary results for the year ended 31 December 2010 have
been prepared using accounting policies and methods of computation
consistent with those used in the Group's annual report for the
year ended 31 December 2009 and to be adopted for the financial
year ended 31 December 2010. The preliminary results have also been
presented and prepared in a form consistent with that which will be
adopted in the Group's annual report for the year ended 31 December
2010 and in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted by the European Union.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2010
or 2009 but is derived from those accounts. Statutory accounts for
2009 have been delivered to the Jersey Financial Services
Commission Companies Registry. Those for the year ended 31 December
2010 will be delivered following the Company's Annual General
Meeting on 17 June 2011. This financial information has been
extracted from the Group's Annual Report and Accounts for the year
ended 31 December 2010 on which the auditors have not yet expressed
an opinion. The Group intends to publish its 2010 Annual Report and
Accounts in March 2011.
2. SEGMENTAL ANALYSIS
As at 31 December 2010, the Group was organised into three main
segments - Europe, US and Emerging Markets.
The main activities of all segments are the production of
exhibitions supported by other media activities related to those
exhibitions.
The following table sets out the revenue and profit information
and certain asset and liability information for the Group's
business segments:
2. SEGMENTAL ANALYSIS (CONTINUED)
31 December 2010
Emerging Central
Europe US markets costs Group
GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 17,380 18,744 7,485 - 43,609
========= ========= ========= ======== =========
Profit/(loss) from
operating activities 2,887 8,705 601 (5,477) 6,716
Net financing costs - - - (1,407) (1,407)
Profit/(loss) before
taxation 2,887 8,705 601 (6,884) 5,309
Exceptional costs - - - 849 849
Amortisation of
intangible assets - - - 3,350 3,350
Credit from share
options - - - (31) (31)
Adjusted profit/(loss)
before tax 2,887 8,705 601 (2,716) 9,477
========= ========= ========= ======== =========
Segment assets 44,466 46,894 27,669 - 119,029
========= ========= ========= ========
Deferred tax assets 1,242
---------
Total assets 120,271
=========
Segment liabilities (40,594) (22,104) (13,590) - (76,288)
Unallocated liabilities - - - (861) (861)
--------- --------- --------- -------- ---------
(40,594) (22,104) (13,590) (861) (77,149)
========= ========= ========= ========
Liabilities for current
tax (5,009)
Deferred tax
liabilities (3,703)
---------
Total liabilities (85,861)
=========
2. SEGMENTAL ANALYSIS (CONTINUED)
31 December 2009
Emerging Central
Europe US markets costs Group
GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 26,742 11,673 19,076 - 57,491
--------- --------- --------- -------- ---------
Profit/(loss) from
operating activities 4,665 5,487 5,080 (7,052) 8,180
Net financing costs - - - (1,474) (1,474)
Share of profit from
joint ventures (post
tax) 90 - - - 90
Profit/(loss) before
taxation 4,755 5,487 5,080 (8,526) 6,796
Profit on disposal of
intangible asset (46) - - - (46)
Exceptional costs 1,443 - 420 - 1,863
Amortisation of
intangible assets - - - 5,713 5,713
Cost of share options - - - 218 218
Tax on share of joint
venture profit 45 - - - 45
--------- --------- --------- -------- ---------
Adjusted profit/(loss)
before tax 6,197 5,487 5,500 (2,595) 14,589
========= ========= ========= ======== =========
Segment assets 51,040 45,619 24,715 - 121,374
Unallocated assets - - - 43 43
--------- --------- --------- --------
51,040 45,619 24,715 43 121,417
========= ========= ========= ========
Deferred tax assets 1,917
---------
Total assets 123,334
=========
Segment liabilities (40,361) (27,104) (10,177) - (77,642)
Unallocated liabilities - - - (1,362) (1,362)
--------- --------- --------- -------- ---------
(40,361) (27,104) (10,177) (1,362) (79,004)
========= ========= ========= ========
Liabilities for current
tax (4,315)
Deferred tax
liabilities (4,798)
---------
Total liabilities (88,117)
=========
3. PROFIT AND LOSS ANALYSIS
The following analysis illustrates the performance of Tarsus's
activities and reconciles the Group's statutory profit to adjusted
profits. Adjusted results are presented to provide a better
indication of overall financial performance and to reflect how the
business is managed and measured on a day-to-day basis. The
adjusted profit before tax excludes exceptional costs, share option
charges, amortisation charges, tax on profit from joint ventures
and profit on disposal of intangible assets.
2010 2009
GBP000 GBP000
Group revenue 43,609 57,491
Operating costs (36,893) (49,311)
--------- ---------
Group operating profit 6,716 8,180
Share of profit from joint ventures
(post tax) - 90
Net interest (1,407) (1,474)
Profit before taxation 5,309 6,796
Add back:
Exceptional costs 849 1,863
Share option (credit)/ charge (31) 218
Amortisation charge 3,350 5,713
Tax on share of profit from joint ventures - 45
Profit on disposal of intangible assets - (46)
Adjusted profit before tax 9,477 14,589
========= =========
In 2010 the Group incurred exceptional one-off costs resulting
from the write-off of the balance of unamortized loan fees
following the early bank refinancing in September (GBP0.5 million)
and acquisition costs expensed following the adoption of IFRS 3
(revised) - Business Combinations for the first time (GBP0.3
million).
In 2009 the Group incurred exceptional one-off costs resulting
from the integration of F&E (Dubai) offices into the main UK
operation (GBP0.4 million) and expected costs of a historical
European tax dispute (GBP1.4 million).
4. INCOME TAX EXPENSE
2010 2009
GBP000 GBP000
========================================= ======== ========
Corporation tax:
========================================= ======== ========
Overseas tax on profits for the period 1,684 2,140
========================================= ======== ========
Adjustments to overseas corporation tax
in respect of previous periods 7 369
========================================= ======== ========
Current tax charge for the period 1,691 2,509
========================================= -------- --------
Deferred tax:
============================================ ====== ======
Origination and reversal of temporary
differences (801) (584)
============================================ ====== ======
Adjustment in respect of previous periods
(tax losses recognised) 100 (24)
============================================ ====== ======
Adjustments in respect of previous periods
(temporary difference recognised) (3) (4)
============================================ ------ ------
Total deferred tax (704) (612)
============================================ ------ ------
Tax charge for the year 987 1,897
============================================ ====== ======
The tax charge for the year differs from tax at the effective
rate on the profit for the year. The differences are explained
below:
2010 2009
GBP000 GBP000
=============================================== ======== ========
Profit before taxation 5,309 6,796
=============================================== -------- --------
Tax at the rate of 25% (2009: 25%) 1,327 1,699
=============================================== ======== ========
Effects of:
=============================================== ======== ========
Income not taxable (372) -
=============================================== ======== ========
Expenses not deductible - 238
=============================================== ======== ========
Current period losses unrecognised 209 -
=============================================== ======== ========
Utilisation of brought forward losses
unrecognised 145 -
=============================================== ======== ========
Overseas current period losses unrecognised 4 161
=============================================== ======== ========
Effect of tax rates in overseas jurisdictions 729 (1,233)
=============================================== ======== ========
Under provision in respect of prior periods 110 341
=============================================== ======== ========
Current period (credit) / debit for current
and historic exposures (268) 829
=============================================== ======== ========
Current period credit for intangible
assets (899) (154)
=============================================== ======== ========
Other temporary differences 2 16
=============================================== -------- --------
Tax on profit on ordinary activities 987 1,897
=============================================== ======== ========
5. DIVIDENDS
2010 2009
GBP000 GBP000
Dividend paid in cash or scrip
2009/2008 final dividend (4.0p/4.0p
per share) 2,723 2,444
2009 interim dividend (2.0p per share) - 1,370
-------- --------
2,723 3,814
======== ========
Dividend paid and proposed post year
end
2010 interim dividend paid (2.0p per
share) 1,479 -
2010/ 2009 final dividend proposed (4.0p/4.0p
per share) 2,958 2,709
4,437 2,709
======== ========
The directors announced the proposed final dividend for 2010, of
4.0p per share, on 7 March 2011. Subject to approval at the Annual
General Meeting on 17 June 2011, the proposed date of payment is 6
July 2011 to Shareholders on the Register of Members on 27 May
2011.
Dividends are recognised as a liability in the period in which
they are appropriately authorised and are no longer at the
discretion of the entity.
6. EARNINGS PER SHARE
2010 2009
Pence Pence
Basic earnings per share 5.4 6.3
Diluted earnings per share 5.4 6.3
Adjusted earnings per share 10.4 17.4
Adjusted diluted earnings per share 10.3 17.4
Basic earnings per share
Basic earnings per share has been calculated on profits after
tax attributable to ordinary shareholders for the year of
GBP3,846,911 (2009: GBP4,098,956) and 71,149,502 (2009: 64,876,159)
ordinary shares, being the weighted average number of shares in
issue during the year.
Diluted earnings per share
Diluted earnings per share has been calculated on profits after
tax attributable to ordinary shareholders for the year of
GBP3,846,911 (2009: GBP4,098,956) and 71,584,711 (2009: 65,024,534)
ordinary shares, being the diluted weighted average number of
shares in issue during the year calculated as follows:
Weighted average number of ordinary shares (diluted):
2010 2009
Weighted average number of ordinary
shares 71,149,502 64,876,159
Dilutive effect of share options 435,209 148,375
----------- -----------
Weighted average number of ordinary
shares (diluted) 71,584,711 65,024,534
=========== ===========
Dilutive and anti-dilutive share options were determined using
the average closing price for the period. The average share price
used was 118.96 pence.
Adjusted earnings per share
Adjusted earnings per share is calculated using profit after tax
attributable to equity shareholders, adjusted for exceptional
costs, share option charges, amortisation charges and loss/profit
on disposal of intangible assets, of GBP7,399,723 (2009:
GBP11,289,037) and 71,149,502 (2009: 64,876,159) ordinary shares,
being the weighted average number of shares in issue during the
year.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated using profit
after tax attributable to equity shareholders, adjusted for
exceptional costs, share option charges, amortisation charges and
loss/profit on disposal of intangible assets, of GBP7,399,723
(2009: GBP11,289,037) and 71,584,711 (2009: 65,024,534) ordinary
shares, being the diluted weighted average number of shares in
issue during the year.
7. GOING CONCERN
After considering the current financial projections of the Group
and taking into account the cash needs of the business and
availability of funds, the Directors have a reasonable expectation
that the Group has adequate resources to continue its operations
for the foreseeable future. For this reason, they continue to adopt
a "going concern" basis in preparing this Statement of Annual
Results.
8. PRINCIPAL RISKS AND UNCERTAINTIES
In accordance with the Disclosure and Transparency Rules issued
by the Financial Services Authority and applicable to all listed
companies, the Directors have identified below the key risks
relating to the Group's business.
Tarsus' events and exhibitions business may be adversely
affected by incidents which curtail travel, such as major terrorist
attacks, higher oil prices or health pandemics.
Tarsus' exhibitions businesses contribute in excess of 90% of
the Group's revenue. Visitors travel to these shows from around the
world. Any incident that curtails travel, such as the 11 September
2001 terrorist attacks in the US, may have an impact on the running
of an event that year and may, therefore, affect reported
revenues.
The Group operates in a highly competitive environment that is
subject to rapid change and Tarsus must continue to invest and
adapt to remain competitive.
The Group's business to business publishing and media businesses
operate in highly competitive markets that continue to change in
response to technological innovation and other factors. Tarsus
cannot predict with certainty the changes that may occur and affect
the competitiveness of its business. In particular, the means of
delivering products and services may be subject to rapid
technological changes. Tarsus cannot predict whether technological
innovations will, in the future, make some of the Group's products
or services, particularly those printed in traditional formats,
wholly or partially obsolete. If this were to occur, the Group may
be required to invest resources to adapt further to the changing
competitive environment.
Expansion into new geographic regions subjects the Group to new
operating risks.
As a result of acquisitions and organic growth, the Group has
operations in many geographic regions such as China, India, the
United Arab Emirates and Latin America. Whilst the Group conducts
its business on a global scale, growth in these regions presents
logistical and management challenges due to different business
cultures, laws and languages. This may result in incremental
operational risks for the Group.
The ability of Tarsus to implement and execute its strategic
plans depends on its ability to attract and retain the key
management personnel required.
The Group operates in a number of industry segments in which
there is intense competition for experienced and highly qualified
individuals. The Group cannot predict the future availability of
suitably experienced and qualified people; it places significant
emphasis on developing and retaining management talent.
Accordingly, the Group has and will continue to implement a number
of incentive schemes, to attract and motivate key senior managers.
There can be no certainty that such retention policies and
incentive plans will be successful for Tarsus in attracting and
retaining the right calibre of key management personnel.
Fluctuations in exchange rates may affect the reported
results.
The Group is exposed to movements in foreign exchange rates
against Sterling for trading transactions and the translation of
net assets and the income statements of overseas operations. The
principal exposure is to the US Dollar and Euro exchange rates,
which form the basis of pricing for the Group's customers.
Any increase in effective tax rates may adversely effect
operating results
The Group operates in multiple jurisdictions and its profits are
taxed pursuant to the tax laws of such jurisdictions. If Tarsus'
effective tax rate increases in a future period, its operating
results in general will be adversely impacted, and specifically its
net profit and earnings per share will decrease. The Group's
effective tax rate may be affected by changes in or interpretations
of tax laws in any given jurisdiction, utilisation of net operating
losses and tax credit carry forwards, changes in geographical
allocation of income and expense, and changes in management's
assessment of matters such as the ability to realise deferred tax
assets. The Group's effective income tax rates in a given fiscal
year reflect a variety of factors that may not be present in the
succeeding fiscal year or years. As a result, the Group's effective
corporation tax rate may increase in future periods.
There are inherent risks and uncertainties in connection with
the Group's acquisition strategy.
The Group will seek and effect appropriate acquisitions across
various geographic regions, consequently exposing Tarsus to
inherent risks and uncertainties associated with such acquisitions.
The risks associated with such a strategy include the availability
of suitable acquisitions, obtaining regulatory approval for any
acquisition, and assimilating and integrating acquired companies
into the Group. In addition, potential difficulties inherent in
mergers and acquisitions may adversely affect the results of an
acquisition. These include delays in implementation or unexpected
costs or liabilities, as well as the risk of failing to realise
operating benefits or synergies from completed transactions. Nor
can there be any certainty that the benefits of acquisitions and
strategic investments, including synergies, increased cash flows
and other operational benefits, will be realised.
Economic and financial uncertainty.
Recent turmoil in the financial, debt and commodities markets
has had a significant adverse impact on certain sectors of the
economy, in particular property, retail, banking and financial
services. Although, at present, the wider effect of such events is
unknown, there is a significant risk that there will be a negative
impact on businesses in other sectors (including Tarsus') and the
wider economy. This may include, inter alia, difficulty of access
to, or higher cost of, debt or equity financing, general economic
weakness, restrained fiscal expenditure, higher taxes and
inflationary pressures. Over the medium term (being longer than one
year) this may impact the Group's revenues and margins and
ultimately its earnings and share price.
Risks relating to Tarsus Shares.
The trading price of Tarsus shares may be volatile and subject
to wide fluctuations. The share price may fluctuate as a result of
a wide variety of factors, including further issues of shares, the
operating and share price performance of other companies in the
industry and markets in which the Group operates; speculation about
the business of the Group in the press, media or the investment
community; the publication of research reports by analysts; and
general market conditions.
9. RESPONSIBILITY STATEMENT OF THE DIRECTORS
To the best of the knowledge of the Directors (whose names and
functions are set out below), the preliminary announcement which
has been prepared using accounting policies and methods of
computation consistent with those used in the Group's annual report
for the year ended 31 December 2009 and to be adopted for the
financial year ended 31 December 2010, gives a true and fair view
of the assets, liabilities, financial position and profit for the
Company and the undertakings included in the consolidation taken as
a whole; and
Pursuant to Disclosure and Transparency Rules, Chapter 4, the
Directors' Report of the Company's annual report will include a
fair review of the development and performance of the business and
the position of the Company, and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties faced by the business.
Neville Buch Executive Chairman
Douglas Emslie Group Managing Director
Ashley Milton Group Finance Director
Roger Pellow Director Labels Group
Gary Marshall Chief Executive Officer Asia
Robert Ware Non Executive Director
Hugh Scrimgeour Non Executive Director
Paul Keenan Non Executive Director
The Annual General Meeting will be held at 26 Upper Pembroke
Street, Dublin, Ireland on 17 June, 2011 at 11.00am.
A copy of this report will also be available on the Group's
website at www.tarsus.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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