TIDMTRS
RNS Number : 4125B
Tarsus Group PLC
04 March 2014
4 March 2014
Tarsus Group plc
Final results for year ended 31 December 2013
Record results and strong strategic progress
Tarsus Group plc (LSE: TRS, "Tarsus" or "the Group"), the
international business-to-business media group, announces its
results for the year ended 31 December 2013.
Tarsus launched its "Quickening the Pace" strategy early in 2013
focusing on accelerating the pace of financial returns to
shareholders. The Group has made significant progress during the
year on strengthening and investing in its core business to drive
organic growth.
Financial highlights
-- Revenue up 23% vs. 2011 to GBP75.9m
-- Like-for-like revenues* up 11%
-- Adjusted profit before tax* GBP24.2m (2011: GBP16.8m)
-- Profit before tax GBP15.9m (2011: GBP3.0m)
-- Adjusted earnings per share* 20.0p (2011: 17.0p)
-- Earnings per share 12.2p (2012: 5.6p)
-- Proposed final dividend of 5.0p - total for year up 7% to 7.3p (2012: 6.8p)
-- Net debt GBP28.6m (2012: GBP15.7m)
Operational highlights
-- Dubai Air Show revenues up 25%
-- Dubai Air Show customers generated record orders of $206bn
-- Record performance at Labelexpo Europe with revenues up 11%
-- Emerging Market portfolio grew strongly
-- Substantially completed geographic footprint with acquisitions in Indonesia and Mexico
-- Brand replication strategy underway - eight launches in 2013
and strong programme for 2014 and 2015
Current trading and outlook
-- Forward bookings for 2014, on a like-for-like basis, are
currently 11% ahead of those for 2013 (adjusted for biennials and
acquisitions)
-- Three recent strategic acquisitions - SIUF(China), Komatek (Turkey) and Cardio (US)
-- GBP10m equity fundraising maintains balance sheet strength
Financial Results
2013 2012 2011
Revenue (GBPm) 75.9 51.5 61.7
Like-for-like* revenue growth 11% 13% 8%
Adjusted profit before tax* (GBPm) 24.2 14.8 16.8
Profit before tax (GBPm) 15.9 8.4 3.0
Adjusted EPS* (pence) 20.0 12.2 17.0
Dividend (pence) 7.3 6.8 6.3
Net Debt (GBPm) 28.6 15.7 13.7
Neville Buch, Chairman of Tarsus, commented:
"Our "Quickening the Pace" growth strategy gained momentum in
2013. Visitor numbers were strong and we increased our share of
revenues from Emerging Markets and the US. The moves made during
the year into Indonesia and Mexico substantially complete our
geographical footprint. Our strategy to replicate our major brands
across our Emerging Market portfolio continues to gather pace.
"We have made a good start to 2014 operationally and the recent
strategic acquisitions will provide us with additional momentum and
opportunity. Despite the recent currency headwinds affecting some
of our markets, with our portfolio of leading event brands we are
confident Tarsus can deliver a strong performance in 2014."
For further information contact:
Tarsus Group plc:
Douglas Emslie, Group Managing Director 020 8846 2700
Dan O'Brien, Group Finance Director 020 8846 2700
Neville Harris 07909 976 044
The Company will be hosting a presentation to analysts at
11.00am today at the offices of Investec Bank plc, 2 Gresham St,
London, EC2V 7QP. A webcast of the presentation will be made
available on Tarsus's website (www.tarsus.com) from 9.30 am on 5
March 2014.
Glossary *
Like-for-like revenue:
Constant exchange rates adjusted for biennial events, excluding
acquisitions impacting for the first time in 2013, prior year
disposals and non-recurring products and items.
Adjusted profit before tax:
Profit before tax adjusted for exceptional items, share option
charges / credits, amortisation charges, impairment of intangibles,
profit / loss on disposal of intangibles and tangible fixed assets,
profit on sale of subsidiary and unwinding of discount for
contingent consideration.
Adjusted EPS:
Profit after tax attributable to equity shareholders adjusted
for exceptional items, share option charges / credits, amortisation
charges, impairment of intangibles, profit / loss on disposal of
intangibles and tangible fixed assets, profit on sale of subsidiary
and unwinding of discount - contingent consideration.
Strategic overview
At the start of 2013 Tarsus launched the next phase of its
growth strategy - "Quickening the Pace." This followed the
completion ahead of schedule of the Group's Project 50/13 target of
deriving 50% of revenues from Emerging Markets by 2013.
The core focus of the "Quickening the Pace" strategy is to
accelerate financial returns to the Company's shareholders. This is
being driven by a combination of geographical replications of major
brands into fast growth economies; organic growth from the existing
portfolio; tight cost control and selective small strategic
acquisitions in the US and Emerging Markets which the Group
believes will continue to outpace mature Western economies.
During 2013, the Group made progress on all fronts. Visitor
numbers at its key events showed strong increases; margins were
maintained and the Group launched a number of replications of GZ
Auto and Zuchex into new territories.
Financial Results
Group revenues for the full year were strong at GBP75.9m (2012:
GBP51.5m) and up 23% on a biennial basis (2011: GBP61.7m).
Like-for-like revenues, excluding acquisitions and foreign exchange
movements, increased by 11%.
Group adjusted profit before tax was GBP24.2m (2012: GBP14.8m)
and up 44% on a biennial basis (2011: GBP16.8m). Net interest
expense rose to GBP1.5m (2012: GBP1.2m) reflecting increased debt
levels across 2013 as a result of acquisitions completed. Reported
profit before tax was GBP15.9m (2012: GBP8.4m).
The Group incurred a number of one-off costs relating to
acquisitions and the extension of the Group's banking facilities
during the year. These costs, amounting to GBP1.4m, have been
excluded from adjusted profits. Additionally, a GBP3.9m impairment
has been booked against the carrying value of goodwill of some of
the older French IT events and a GBP2.5m credit resulting from a
reduction in put/ call option liabilities based on fair value
movements. None of these adjustments have been included in the
adjusted profit figure.
The adjusted tax charge of GBP3.6m (2012: GBP2.2m) represents
15% (2012: 15%) of the Group's adjusted profit before tax. The
reported tax charge is GBP2.7m (2012: GBP1.8m). The Group continues
to focus on tax efficiency and generates nearly all of its profits
outside of the UK, including markets with significantly lower tax
rates.
Adjusted earnings per share were 20.0p (2012: 12.2p), 18% up on
a biennial basis (2011: 17.0p). Basic earnings per share for 2013
were 12.2p (2012: 5.6p).
The Group generated GBP24.5m (2012: GBP12.2m) of cash from
operations, an increase of 100% against 2011, the comparative
biennial year (2011: GBP11.8m).
Acquisition costs during the year were offset by the strong
operational cash generation. The Group's net debt at 31 December
2013 was GBP28.6m (2012: GBP15.7m).
The Board is proposing a final dividend of 5.0p per share,
bringing the total for the year to 7.3p per share (2012: 6.8p per
share), up 7%.
The final dividend, subject to Shareholder approval, will be
paid on 9 July 2014 to Shareholders on the Register of Members on
30 May 2014. A scrip dividend will continue to be offered as an
alternative.
Corporate Activity
The Group made two small acquisitions during the year. In
January 2013, it acquired 51% of Indonesian exhibition organiser PT
Infrastructure Asia ("PTIA") and in November 2013 it acquired 50%
of two Mexican events from EJ Krause. These acquisitions, in two
attractive markets, mean that the Group's desired geographical
footprint is now substantially complete.
Tarsus agreed in December 2013 to acquire 50% of China
(Shenzhen) International Brand Underwear Fair ("SIUF") in China,
which runs the leading Asian show for underwear, to increase the
percentage representation of China's economy in the Group's
portfolio. Tarsus believes that SIUF will provide synergies with
its US Off-Price business where lingerie is one of the largest
categories.
Also in December 2013, the Group acquired the outstanding 25% of
the issued share capital of Istanbul-based IFO having purchased the
initial 75% in June 2011. IFO has shown strong growth under Tarsus'
ownership and the acquisition will further consolidate the Group's
position in the fast-growing Turkish market.
Early in 2014 the Group made two small acquisitions - 60% of
Komatek, which runs Turkey's leading construction event and 100% of
the assets of HealthScienceMedia Inc. in the US which organises the
Cardiometabolic Health Congress ("Cardio"). These moves extend the
Group's existing construction portfolio into a dominant position in
Ankara, Turkey and further accelerate the development of its highly
successful Medical Division in the US.
Operating Review
Emerging Markets
(GBPm) 2013 2012 2011
Biennial revenue 21.1 4.2 15.9
Annual revenue 16.0 14.4 8.9
Total revenue 37.1 18.6 24.5
Adjusted profit
before tax 14.0 5.4 7.2
Dubai
The Group's major event of 2013 was the biennial Dubai Air Show
in November which was held for the first time at a new
purpose-built venue. The event was a great success for exhibitors
who received world record customer orders of $206bn. The
performance of the event was ahead of expectations with revenues
25% higher than the 2011 show coupled with strong rise in visitor
numbers of 11% on a like-for-like basis.
Earlier in the year, the education event GESS performed very
well with excellent visitor attendance and revenues up 22%. Gulf
Pack and Print also performed well in a difficult local commercial
print market.
Turkey
The portfolio continued its impressive performance with
like-for-like revenues increasing 13%. Zuchex (housewares and
gifts) recorded a strong performance whilst Ideal Home (housewares
and gifts) recorded revenues in line with expectations, its growth
limited by venue constraints. Asansor (elevators) performed well
with revenues up significantly on its previous edition. Yapi Decoor
(decorative construction) held its first edition under Tarsus'
ownership in Ankara, performing slightly ahead of pre-acquisition
expectations. REW (recycling, environment technologies and waste
management) had its third edition under Tarsus' ownership and again
achieved revenue growth in line with management's expectations.
The Group has launched a number of replications of Zuchex into
new territories beginning with Jakarta in Indonesia in November
2014.
China
Hope, the Group's Chinese joint venture, again performed well in
2013 with like-for-like revenues up 22%. Growth was driven
primarily by a strong performance of the medical equipment
portfolio in Central China.
GZ Auto (auto aftermarket) had its first event under Tarsus'
ownership, following its purchase in late 2012, and delivered a
very good result. This brand has been launched into other
territories in 2014 including Indonesia and Thailand.
Labelexpo Asia, in its tenth edition, saw visitor numbers up 19%
and revenues up 11%.
Indonesia
PTIA owns and organises three annual exhibitions and one seminar
series in Indonesia, providing Tarsus with an important hub in the
fast growing Indonesian exhibition market. It will enable the Group
to develop a range of infrastructure sector exhibitions and provide
a platform with which to launch a number of new exhibitions drawing
on Tarsus' existing brands. PTIA held its infrastructure show in
November 2013 which performed very strongly and is expected to
benefit in 2014 from the joint venture with EJ Krause to run Expo
Comm (information and communications) alongside it.
Mexico
In November 2013, the Group acquired 50% of two Mexican events
from EJ Krause. These were Plastimagen, the leading event for the
plastics industry in Mexico and Expo Manufactura, a leading event
in metalworking and manufacturing. This joint venture provides a
platform to launch Tarsus' brands into Mexico and to expand EJ
Krause's brands into Tarsus' territories, beginning with Expo Comm
in Jakarta in November 2014.
US
(GBPm) 2013 2012 2011
Biennial revenue - 4.5 -
Annual revenue 18.7 18.1 16.2
Total revenue 18.7 22.6 16.2
Adjusted profit
before tax 8.8 11.0 7.6
Medical
Overall, the Medical division's revenues for the year were
slightly ahead of the previous year. This division's largest event
was held in December 2013 in Las Vegas and performed well, with
revenues up 24%. The Group is continuing to see a change in the mix
of its education revenue streams with more being delivered online
and a reduction in the volumes of on-site educational revenues.
The Group's acquisition of Cardio in early 2014 compliments
Tarsus' existing Medical business and provides an established
audience for the division's recently launched new mainstream
product, the Metabolic Medicine Institute ("MMI"), in addition to a
number of possible synergies with the Group's existing Medical
division.
Off-Price
The February 2013 Off-Price show in Las Vegas was a record event
and the 2013 August show also recorded good growth. Overall,
revenues were up 4%.
Europe
(GBPm) 2013 2012 2011
Biennial revenue 9.0 - 8.4
Annual revenue 11.1 10.3 15.9
Total revenue 20.1 10.3 24.3
Adjusted profit before tax 4.8 1.1 5.1
Labelexpo Europe
Labelexpo Europe took place in September 2013 in Brussels. It
produced record increases of 11% in both like-for-like revenue and
visitor attendance. As a result of this very strong event,
re-bookings of 87% for the 2015 exhibition were secured.
France
Trading in the Group's French business ended the year broadly in
line with the Board's expectations. The larger events were positive
held back by IT shows and directories.
In January 2014 the Group sold up to 18% of its French business
for EUR1.5m to Romuald Gadrat, the incumbent Managing Director of
the division who will continue to run the business. This is in line
with the Group's strategy of reducing its exposure in France.
Outlook
The Group's major events continue to go from strength to
strength underlining the importance of our continuing to invest in
Tarsus' market leading brands. Moves into Mexico and Indonesia in
2013 substantially complete the footprint of the geographical
markets Tarsus is aiming to develop, whilst the Group's corporate
activity in early 2014 will strengthen the portfolio and promote
additional growth opportunities.
In the US, the purchase Cardio and the launch of MMI in February
2014 will enhance the prospects for the Medical business as it
moves progressively into the mainstream.
Like-for-like bookings for 2014 are tracking 11% ahead of the
equivalent time last year.
Off-Price was held in Las Vegas in February 2014 with revenues
in line with expectations.
Owing to the incidence of large biennial events within the
portfolio, profits generated in odd years are typically larger than
those generated in even years. Adjusting for this biennial effect,
the Group remains confident of delivering a good performance in
2014 on a constant currency basis.
Neville Buch Douglas Emslie
Chairman Group Managing Director
4 March 2014
Financing and Net Assets
The geographical composition of Tarsus' international event
portfolio means that revenues and profits are generated in a range
of currencies, principally US Dollars, Euros, Turkish Lira and
Sterling. In 2013 approximately 49% of revenues were generated in
US Dollars, 14% in Euros, 14% in Turkish Lira, 14% in Sterling and
8% in Chinese Renminbi. As a result, the Group's Sterling
translated trading results are significantly affected by any
changes in prevailing exchange rates during the year. The average
exchange rates applicable for 2013 were:
-- US$: 1.58 - a strengthening against Sterling of 1% compared with 2012
-- Euro: 1.18 - a strengthening against Sterling of 3% compared with 2012
-- Turkish Lira: 3.05 - a weakening against Sterling of 6% compared with 2012
2014 budgeted exchange rates are US$: 1.65, Euro: 1.20 and
Turkish Lira: 3.60.
Cash flows
Tarsus continues to generate strong cash flows from its
operations. The larger events typically have a positive working
capital cycle and the business in general has a low capital
investment requirement.
The biennial nature of the Group's event portfolio results in an
increase in working capital (excluding cash) in odd years,
including 2013, which include the two largest events. This occurs
as previously deferred income relating to these is released from
the balance sheet and recognised as income.
During 2013, the Group generated GBP24.5m of cash from
operations (2012: GBP12.2m).
The key non-operating cash flows in 2013 included:
-- Dividends paid of GBP6.3m
-- Deferred consideration payments totalling GBP18.8m
-- Tax and interest paid totalling GBP4.8m
-- Acquisition of PTIA and EJ Krause GBP5.5m
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' external bank debt facility was extended in November
2013 to GBP60m and is a multi-currency facility which is in place
until September 2017. Where foreign currency borrowings do exist
they are hedged using forward currency contracts. At 31 December
2013 98% of all borrowings were denominated in Sterling with the
remainder denominated in US dollars. The Group has entered into
interest rate swaps to fix the interest rates payable under its
banking facilities.
The Group's net debt was GBP28.6m at 31 December 2013 (31
December 2012: GBP15.7m).
Net Assets
As at 31 December 2013, the Group had net assets of GBP40.2m (31
December 2012: GBP47.0m).
Intangible assets
Intangible assets comprise goodwill, trademarks and customer
lists. The carrying value of intangible assets at 31 December 2013
was GBP98.0m (31 December 2012: GBP102.6m).
Working capital
It is the Group's policy to recognise profits upon the
completion of an event. Until completion, revenues and costs are
held on the Statement of Financial Position. Included in net
current liabilities as at 31 December 2013 is deferred income of
GBP18.4m (2012: GBP25.3m). Prepaid event costs of GBP2.8m (2012:
GBP2.5m) are included in trade and other receivables.
Acquisitions
On 28 February 2013 the Company acquired 51% of the issued share
capital of PTIA.
On 26 November 2013 the Company acquired a 50% interest in a
company that owns exhibitions in Mexico from E.J. Krause &
Associates, Inc. ("EJK") to establish a joint venture (the "JV")
with EJK.
On 18 December 2013 the Group agreed to acquire a 50% interest
in the China (Shenzhen) International Brand Underwear Fair
("SIUF").
On 20 December 2013 the Group acquired the outstanding 25% of
the issued share capital of Istanbul based IFO not already owned by
Tarsus from Mr Selahattin Durak, a related party of the Company.
The total consideration for the remaining 25% acquisition of IFO is
capped at TL12.57m (approximately GBP3.7m) payable in cash. The
Company purchased the initial 75% of IFO in June 2011.
Post balance sheet events
On 6 January 2014 the Company sold up to 18% of its French
business to Romuald Gadrat, the incumbent Managing Director of the
division and a related part of the Company, for EUR1.5m in
cash.
On 7 February 2014 the Company acquired 60% of SADA Uzmanlik
Fuarlari A.S. ("SADA") in Turkey. SADA organises a single event -
Komatek - which is Turkey's largest trade exhibition for
construction equipment and related products.
On 10 February 2014 the Company acquired 100% of the assets of
HealthScienceMedia Inc. in the US. The total consideration for the
acquisition of the assets is US$14.0m in aggregate payable in
cash.
The Company also raised GBP10m (gross) through the placing of
5.0m new ordinary shares with existing and new investors on 10
February 2014 reducing the Company's gearing level following these
acquisitions to be in-line with the Board's preferred and
conservative target of 1.5 times net debt:EBITDA.
Key Performance Indicators
The Group measures its performance using a number of financial
and operational measures which are commented upon throughout the
Operating Review. These financial measures principally include
like-for-like revenue growth, adjusted profit before tax, adjusted
EPS and dividend per share.
The Group also focuses on the geographical and divisional
composition of its business with the stated strategy of increasing
the proportion of revenues from Emerging Markets and the US. Tarsus
also has an operational target to grow the number of visitors
attending its events by at least 5% per annum.
Dan O'Brien
Group Finance Director
4 March 2014
CONSOLIDATED INCOME STATEMENT
Note Year to Year to
31 December 31 December
2013 2012
GBP'000 GBP'000
Group revenue 2 75,861 51,538
Operating costs excluding
exceptional items (54,179) (39,207)
Impairment loss (3,947) -
Exceptional operating credits/
(costs) 3 80 (2,244)
------------- -------------
Total operating costs (58,046) (41,451)
Share of profit of Joint 1,266 -
Ventures
Group operating profit 2,3 19,081 10,087
Net finance costs (3,181) (1,726)
------------- -------------
Profit before taxation 15,900 8,361
Taxation expense 4 (2,674) (1,809)
------------- -------------
Profit for the financial
year 13,226 6,552
============= =============
Profit for the financial year
attributable to equity shareholders
of the parent company 11,582 5,196
Profit for the financial
year attributable to non-controlling
interests 1,644 1,356
13,226 6,552
============= =============
Note Year to Year to
31 December 31 December
2013 2012
Earnings per share (pence) 6
- basic 12.2 5.6
- diluted 12.1 5.6
GBP'000 GBP'000
Dividends 5
Equity - ordinary
Final 2012 dividend paid 4,377 3,949
Interim 2013 dividend paid 2,050 1,800
Minority dividend paid 550 -
6,977 5,749
============= =============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 December 31 December
2013 2012
GBP'000 GBP'000
Profit for the financial year 13,226 6,552
------------- -------------
Other comprehensive expense:
Cash flow hedge reserve -
movement in fair value 512 (125)
Foreign exchange translation
differences (7,975) (2,631)
Tax effect of foreign exchange
translation differences - 461
------------- -------------
Other comprehensive expense (7,463) (2,295)
Total comprehensive income/(expense)
for the year 5,763 4,257
============= =============
Attributable to:
Equity shareholders of the
parent company 4,119 2,901
Non-controlling interests 1,644 1,356
Total comprehensive income/(expense)
for the year 5,763 4,257
============= =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 As at
December 31 December
2013 2012
GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment 1,239 1,424
Intangible assets 97,967 102,592
Investment in Joint Ventures 15,432 11,058
Other investments 1 1
Deferred tax assets 2,703 1,122
117,342 116,197
CURRENT ASSETS
Trade and other receivables 25,030 22,679
Cash and cash equivalents 12,142 10,255
---------- -------------
37,172 32,934
CURRENT LIABILITIES
Trade and other payables (26,336) (32,376)
Deferred income (18,384) (25,335)
Provisions (73) -
Liabilities for current tax (3,964) (2,299)
---------- -------------
(48,757) (60,010)
---------- -------------
NET CURRENT LIABILITIES (11,585) (27,076)
---------- -------------
TOTAL ASSETS LESS CURRENT LIABILITIES 105,757 89,121
---------- -------------
NON-CURRENT LIABILITIES
Other payables (19,286) (12,645)
Deferred tax liabilities (4,449) (3,929)
Interest bearing loans and borrowings (41,800) (25,519)
---------- -------------
(65,535) (42,093)
NET ASSETS 40,222 47,028
========== =============
EQUITY
Share capital 4,797 4,772
Share premium account 37,689 37,484
Other reserves (14,862) (7,398)
Retained earnings 8,767 9,387
Issued capital and reserves
attributable to equity shareholders
of the parent 36,391 44,245
NON-CONTROLLING INTERESTS 3,831 2,783
TOTAL EQUITY 40,222 47,028
========== =============
The financial statements of Tarsus Group plc, registered number
101579 (Jersey), were approved by the board and authorised for
issue on 4 March 2014 and signed on its behalf by:
J D Emslie D P O'Brien
Group Managing Director Group Finance Director
CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 December 31 December
2013 2012
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 13,226 6,552
Adjustments for:
Depreciation 613 588
Amortisation & Impairment 7,630 3,296
Other (gains)/losses (2,823) -
Loss on disposal of tangible 4 -
assets
Share option charge 1,041 430
Taxation charge 2,674 1,809
Interest payable 3,181 1,726
Share of joint venture profits (1,266) -
Dividend received from joint 775 -
venture company
------------- -------------
Operating cash flow before
changes in working capital 25,055 14,401
Increase in trade and other
receivables (755) (5,791)
Increase in trade and other
payables 83 3,608
Increase in provisions 102 -
Cash generated from operations 24,485 12,218
Interest paid (1,393) (1,347)
Income taxes paid (3,371) (2,314)
Net cash from operating activities 19,721 8,557
Cash flows from investing activities
Proceeds from sale of tangible 30 -
fixed assets
Acquisition of property, plant
& equipment (261) (317)
Acquisition of intangible fixed
assets (801) (731)
Acquisition of subsidiary -
cash paid (2,698) (12,116)
Acquisition of joint venture
- cash paid (2,812) (643)
Acquisition of subsidiary -
cash acquired 4 1,289
Deferred and contingent consideration
paid (18,829) (2,257)
Net cash outflow from investing
activities (25,367) (14,775)
------------- -------------
Cash flows from financing activities
Drawdown of borrowings 15,263 4,000
Bank facility fees (176) (1,072)
Proceeds from the issue of
share capital - 11,366
Cost of share issue (76) (390)
Dividends paid to shareholders
in parent company (6,279) (5,695)
Dividends paid to non-controlling (550) -
interests in subsidiaries
Net cash outflow/(inflow) from
financing activities 8,182 8,209
------------- -------------
Net increase in cash and cash
equivalents 2,536 1,991
Opening cash and cash equivalents 10,255 8,505
Foreign exchange movements (649) (241)
------------- -------------
Closing cash and cash equivalents 12,142 10,255
============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Reorgan- Capital Fair Foreign Retained Non- Total
Capital Premium isation Redemptn Value Exchange Earnings Controlling
Account Reserve Reserve* Reserve Reserve Reserve Interests
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January
2013 4,772 37,484 6,013 (443) (420) (12,548) 9,387 2,783 47,028
Recognised foreign
exchange losses
for the period - - - - - (7,975) - - (7,975)
Tax effect of foreign - - - - - - - - -
exchange translation
differences
Profit for the - - - - - - - - -
period:
- Attributable
to equity
shareholders - - - - - - 11,582 - 11,582
- Attributable
to non-controlling
interests - - - - - - - 1,644 1,644
Cash flow hedge
reserve - - - - 512 - - - 512
-------- -------- --------- --------- -------- --------- --------- ---------- --------
Total comprehensive
income (expense)
for the period - - - - 512 (7,975) 11,582 1,644 5,763
Scrip dividend 3 144 - - - - - - 147
New share capital
subscribed 22 61 - - - - - - 83
Share option charge - - - - - - 1,041 - 1,041
Movement in reserves
relating to deferred
tax - - - - - - 476 - 476
Dividend paid - - - - - - (6,427) - (6,427)
Dividend paid to
non-controlling
interests - - - - - - - (550) (550)
Written Put/Call
options over
non-controlling
interests - - - - - - (4,431) (4,431)
Non-controlling
interests - - - - - - (2,862) (46) (2,908)
-------- -------- --------- --------- -------- --------- --------- ---------- --------
Net change in
shareholders'
funds 25 205 - - 512 (7,975) (621) 1,048 (6,806)
-------- -------- --------- --------- -------- --------- --------- ---------- --------
As at 31 December
2013 4,797 37,689 6,013 (443) 92 (20,523) 8,766 3,831 40,222
======== ======== ========= ========= ======== ========= ========= ========== ========
*The reorganisation reserve was created as a result of the
Scheme of Arrangement effective from 26 November 2008. Tarsus Group
Limited, previously Tarsus Group plc, registered in England and
Wales under company number 2000544, entered into a "Share for
Share" exchange on a one-for-one basis with Tarsus Group plc,
registered in Jersey under company number 101579.
Share Share Reorgan- Capital Fair Foreign Retained Non- Total
Capital Premium isation Redemption Value Exchange Earnings Controlling
Account Reserve Reserve Reserve Reserve Reserve Interests
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2012 4,342 26,884 6,013 (443) (295) (10,378) 15,371 912 42,406
Recognised foreign
exchange losses
for the period - - - - - (2,631) - - (2,631)
Tax effect of
foreign exchange
translation
differences - - - - - 461 - - 461
Profit for the - - - - - - - - -
period:
- Attributable
to equity
shareholders - - - - - - 5,196 - 5,196
- Attributable
to non-controlling
interests - - - - - - - 1,356 1,356
Cash flow hedge - - - - (125) - - - (125)
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Total comprehensive
income (expense)
for the period - - - - (125) (2,170) 5,196 1,356 4,257
Scrip dividend 2 52 - - - - - - 54
New share capital
subscribed 428 10,938 - - - - - - 11,366
Cost of shares
issued - (390) - - - - - - (390)
Share option charge - - - - - - 430 - 430
Movement in
reserves
relating to
deferred
tax - - - - - - 559 - 559
Dividend paid - - - - - - (5,749) - (5,749)
Written Put/Call
options over
non-controlling
interests - - - - - - (6,420) (329) (6,749)
Non-controlling
interests arising
on acquisition - - - - - - - 844 844
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Net change in
shareholders'
funds 430 10,600 - - (125) (2,170) (5,984) 1,871 4,622
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
As at 31 December
2012 4,772 37,484 6,013 (443) (420) (12,548) 9,387 2,783 47,028
======== ======== ========= =========== ======== ========= ========= ========== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The results for the year ended 31 December 2013 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 2012 and to be adopted for the financial
year ended 31 December 2014. The 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 2013
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 2013
or 2012 but is derived from those accounts. Statutory accounts for
2012 have been delivered to the Jersey Financial Services
Commission Companies Registry. Those for the year ended 31 December
2013 will be delivered following the Company's Annual General
Meeting on 23 June 2014.
This financial information has been extracted from the Group's
Annual Report and Accounts for the year ended 31 December 2013. The
auditors have reported on these accounts; their reports were
unqualified, did not draw attention to any matters by the emphasis
without qualifying their report and did not contain statements
under s.113B(3) or (4) Companies (Jersey) Law 1991 or equivalent
preceding legislation. The Group intends to publish its 2013 Annual
Report and Accounts in March 2014.
2. SEGMENTAL ANALYSIS
As at 31 December 2013, the Group was organised into three main
segments - Europe, USA 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
reportable segments:
31 December
2013
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group revenue 37,089 18,719 20,053 - 75,861
========= ========= ========= ========= ==========
Profit/(Loss)
from operating
activities 13,955 8,796 4,770 (8,440) 19,081
Net financing
costs - - - (3,181) (3,181)
Profit/(Loss)
before taxation 13,955 8,796 4,770 (11,621) 15,900
Exceptional credits - - - (1,121) (1,121)
Share option charge - - - 1,041 1,041
Amortisation charge - - - 2,710 2,710
Impairment of
intangibles - - - 3,947 3,947
Loss on disposal
of tangible assets - - - 4 4
Unwinding of discount
- contingent consideration - - - 1,691 1,691
Adjusted profit/(Loss)
before tax 13,955 8,796 4,770 (3,349) 24,172
========= ========= ========= ========= ==========
Segment non-current
assets 65,419 37,824 11,396 - 114,639
Segment current
assets 13,809 7,566 15,797 - 37,172
79,228 45,390 27,193 - 151,811
========= ========= ========= =========
Deferred tax assets 2,703
Total assets 154,514
==========
Segment liabilities (35,354) (12,990) (57,535) - (105,879)
========= ========= ========= =========
Liabilities for
current tax (3,964)
Deferred tax liabilities (4,449)
Total liabilities (114,292)
==========
31 December
2012
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group revenue 18,551 22,638 10,349 - 51,538
========= ========= ========= ======== ==========
Profit/(Loss)
from operating
activities 5,395 10,952 1,112 (7,372) 10,087
Net financing
costs - - - (1,726) (1,726)
Profit/(Loss)
before taxation 5,395 10,952 1,112 (9,098) 8,361
Exceptional costs - - - 2,244 2,244
Share option charge - - - 430 430
Amortisation charge - - - 3,204 3,204
Unwinding of discount
- contingent consideration - - - 513 513
Adjusted profit/(Loss)
before tax 5,395 10,952 1,112 (2,707) 14,752
========= ========= ========= ======== ==========
Segment non-current
assets 58,276 37,896 18,903 - 115,075
Segment current
assets 17,453 4,839 10,642 - 32,934
75,729 42,735 29,545 - 148,009
========= ========= ========= ========
Deferred tax assets 1,122
Total assets 149,131
==========
Segment liabilities (40,753) (14,912) (40,210) - (95,875)
========= ========= ========= ========
Liabilities for
current tax (2,299)
Deferred tax liabilities (3,929)
Total liabilities (102,103)
==========
3. PROFIT AND LOSS ANALYSIS
The following analysis illustrates the performance of the
Group's activities and reconciles the Group's pre-tax profit to
adjusted profit. Adjusted results are presented to provide an
indication of underlying 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 and impairment charges, profit on sale of
subsidiary, profit or loss on disposal of tangible and intangible
assets and adjustments to contingent consideration.
2013 2012
GBP000 GBP000
Group revenue 75,861 51,538
Operating costs (56,780) (41,451)
Group operating profit 19,081 10,087
Finance cost (3,181) (1,726)
Profit before taxation 15,900 8,361
Add back:
Exceptional credit (1,121) 2,244
Share option charge 1,041 430
Amortisation charge (excluding
amounts charged to costs of sale) 2,710 3,204
Impairment of intangible assets 3,947 -
Loss on disposal of tangible fixed 4 -
assets
Unwinding of discount - contingent
consideration 1,691 513
Adjusted profit before tax 24,172 14,752
Tax thereon (3,618) (2,191)
Adjusted profit after tax 20,554 12,561
========= =========
In 2013, the Group incurred exceptional one-off costs of GBP1.4
million resulting from acquisitions or potential acquisitions. A
GBP2.5 million credit was booked against the carrying value of
put/call option liabilities.
4. INCOME TAX EXPENSE
2013 2012
GBP'000 GBP'000
Corporation tax:
Overseas tax on profits for the period 3,839 2,077
Adjustments to overseas corporation
tax in respect of previous periods (575) 24
Current tax charge for the period 3,264 2,101
-------- --------
Deferred tax:
Origination and reversal of timing
differences (556) (472)
Adjustment in respect of previous
periods (tax losses recognised) - 2
Adjustments in respect of previous
periods (timing difference recognised) (34) 178
Total deferred tax (590) (292)
-------- --------
Tax charge for the year 2,674 1,809
======== ========
The tax charge below differs from the tax at the effective rate
on the profit for the year. The differences are explained
below:
2013 2012
GBP'000 GBP'000
Profit before taxation 15,900 8,361
Tax on profit on ordinary activities
at 25% (2012 - 25%) 3,975 2,090
Effects of:
Net expenses not deductible 933 344
Current period losses unrecognised 291 (287)
Utilisation of brought forward losses
unrecognised (73) (30)
Effect of tax rates in overseas jurisdictions (1,948) (339)
(Over)/under provision in respect
of prior periods (608) 204
Current period charge for current
and historic exposures 169 309
Current period credit for intangible
assets (65) (482)
Tax on profit on ordinary activities 2,674 1,809
======== ========
Tax charge/(credit) recognised directly other comprehensive
income
2013 2012
GBP'000 GBP'000
Current tax on exercised employee
share options 88 106
Current and deferred tax on foreign
exchange on loans, investments and
intangible assets - 461
Deferred tax on intangible assets 160 (198)
Deferred tax on unexercised employee
share options 441 651
Total tax recognised in equity 689 1,020
======== ========
5. DIVIDENDS
2013 2012
GBP000 GBP000
Dividend paid in cash or scrip
2012/2011 final dividend (4.6p
/ 4.2p per share) 4,377 3,949
2012/2011 interim dividend (2.2p
/ 2.1p per share) 2,050 1,800
6,427 5,749
======= =======
Dividend paid and proposed post
year end
2013/2012 interim dividend paid
(2.3p / 2.2p per share) 2,179 2,089
2013/2012 final dividend proposed
(5.0p / 4.6p per share) 4,989 4,376
7,168 6,465
======= =======
An interim dividend of 2.3p per share (2012: 2.2p) was paid on
16 January 2014 to shareholders on the Register of Members of the
Company as at 6 December 2013.
The directors announced the proposed final dividend for 2013, of
5.0p per share, on 4 March 2014. Subject to approval at the Annual
General Meeting on 23 June 2014, the proposed date of payment is 9
July 2014 to Shareholders on the Register of Members as at 30 May
2014.
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
2013 2012
Pence Pence
Basic earnings per share 12.2 5.6
Diluted earnings per share 12.1 5.6
Adjusted earnings per share 20.0 12.2
Adjusted diluted earnings per
share 19.7 12.1
Basic earnings per share
Basic earnings per share has been calculated on profit after tax
attributable to ordinary shareholders for the year (as shown on the
Consolidated Income Statement) and the weighted average number of
ordinary shares in issue during the period (see below table).
Diluted earnings per share
Diluted earnings per share has been calculated on profit after
tax attributable to ordinary shareholders for the year (as shown on
the Consolidated Income Statement) and the diluted weighted average
number of ordinary shares in issue during the period (see below
table):
Weighted average number of ordinary shares (diluted):
2013 2012
Weighted average number of ordinary
shares 94,636,411 92,034,460
Dilutive effect of share options 1,238,069 672,596
Weighted average number of ordinary
shares (diluted) 95,874,480 92,707,056
=========== ===========
Dilutive and anti-dilutive share options were determined using
the average closing price for the period. The average share price
used was 229.77 pence.
Adjusted earnings per share
Adjusted earnings per share is calculated using adjusted profit
after tax as reconciled in note 3 and the weighted average number
of ordinary shares (as above) in issue in the year.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated using adjusted
profit after tax as reconciled in note 3 and the weighted average
number of diluted ordinary shares (as above) in issue in the
year.
7. ACQUISITION OF SUBSIDIARY
On 28 February 2013, the Group acquired 51% of the share capital
of PT Infrastructure Asia ("PTIA"), an exhibition business.
The following table sets out the book values of the identifiable
assets and liabilities acquired and their fair value to the Group,
in respect of this acquisition:
PTIA Adjustments Fair
value
GBP'000 GBP'000 GBP'000
Property, plant and equipment 24 - 24
Other intangibles - 1,974 1,974
Trade and other receivables 140 - 140
Cash and cash equivalents 4 - 4
Trade and other payables (192) - (192)
Deferred tax liability - (395) (395)
(24) 1,579 1,555
-------- ------------
Non-controlling interest
(49%) (762)
Net assets acquired 793
Goodwill arising on acquisition 1,238
2,031
========
Consideration paid and
costs incurred:
Satisfied in cash 372
Contingent consideration
(less than one year) 885
Contingent consideration
(over one year) 774
Total consideration incurred 2,031
========
Consideration paid in
cash 372
Cash acquired (4)
Total net cash outflow 368
========
The values used in accounting for the identifiable assets and
liabilities and related contingent consideration of this
acquisition are estimates and are therefore provisional in nature
at the balance sheet date. The non-controlling interest is measured
as their proportionate share of the fair value of the net assets.
Since the release of the Interim Statement the Group has reviewed
the values used in accounting for the intangible assets, goodwill
and liabilities related to the acquisition. The change in fair
value has changed due to more accurate forecasts on the performance
of PTIA.
Contingent consideration relates to payments to vendors, payable
after completion, that are dependent on the outcome of future
events. This contingent consideration is dependent on the future
financial performances of the various exhibitions, conferences and
publications acquired.
From the date of acquisition to 31 December 2013, the business
has contributed GBP1.2 million to Group revenue and GBP0.3 million
to profit before tax. If the acquisition had occurred on 1 January
2013, the business would have contributed GBP1.2 million to Group
revenue and GBP0.3 million to profit before tax.
Goodwill of GBP1.2 million, recognised on this acquisition,
relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, customer loyalty
and the anticipated future profitability that the Group can bring
to the business acquired.
As part of the acquisition of PTIA, a put option has been put in
place by the Vendor for the further 49% of the shares of the
business in 2017. The fair value of the put option liability is
GBP3.3 million.
8. ACQUISITION IN JOINT VENTURES
On 26 November 2013 the Company acquired a 50% interest in a
company that owns two major exhibitions in Mexico from E.J. Krause
& Associates, Inc. ("EJK") to establish a joint venture (the
"JV") with EJK. This JV with EJK enables Tarsus to acquire a stake
in two leading events in Mexico - Plastimagen and Expo Manufactura.
The estimated total consideration for the 50% acquisition of the JV
is GBP3.4m.
The investment of GBP3.4 million as shown in the balance sheet
represents the Group's 50 per cent share of the assets and
liabilities as at 31 December 2013. As at the year end, the JV has
no reported revenue.
GBP'000
Consideration paid
and costs incurred:
Satisfied in cash 2,813
Contingent consideration
(less than 1 year) 501
Contingent consideration
(greater than 1 year) 83
Total consideration
and costs incurred 3,397
========
Consideration paid
in cash 2,813
Total net cash outflow 2,813
========
9. 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.
10. PRINCIPAL RISKS AND UNCERTAINTIES
The directors have identified below the key risks and
uncertainties relating to the Group's business.
Tarsus' events and exhibitions business may be adversely
affected by incidents which curtail travel, such as 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 the relevant event and may, therefore, affect reported
revenues.
Expansion into new geographic regions subjects the Group to new
operating risks
As a result of acquisitions and organic growth, the Group
operates in many geographic regions such as China, India, the
United Arab Emirates, Turkey, Indonesia 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 the Company 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 in allowing the Company to
attract and retain 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
the net assets and 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.
Venue availability
Damage to or unavailability of a particular venue could impact
specific events within the Group's portfolio.
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 the Company 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.
Breaches of the Group's data security systems or other
unauthorised access to its databases, intellectual property or
information could adversely affect its businesses and
operations
The Group has valuable databases and intellectual property and,
as part of its businesses, provides its customers with access to
database information such as treatises, journals and publications
as well as other data. There are persons who may try to breach the
Group's data security systems or gain other unauthorised access to
its databases in order to misappropriate such information for
potentially fraudulent purposes. Due to the rapid change in the
nature of these threats to the Group's databases, intellectual
property and other information, it may be unable to anticipate or
protect against the threat of breaches of data security or other
unauthorised access. Such breaches could damage the Group's
reputation and expose it to a risk of loss or litigation and
possible liability, as well as increase the likelihood of more
extensive governmental regulation of these activities in a way that
could adversely affect this aspect of the Group's business. Legal
actions against the Group could have a material adverse effect on
the Group's business, financial condition and results of
operations.
11. 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 2012 and to be adopted for the
financial year ended 31 December 2013, 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
Dan O'Brien Group Finance Director
Gary Marshall Chief Executive Officer Asia
Hugh Scrimgeour Non-executive Director
Robert Ware Non-executive Director
Paul Keenan Non-executive Director
The Annual General Meeting will be held at the Writers Room,
Radisson BLU Hotel Dublin Airport, Dublin, Ireland on 23 June 2014
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
FR KMGGFNFFGDZM
Tarsus (LSE:TRS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tarsus (LSE:TRS)
Historical Stock Chart
From Jul 2023 to Jul 2024
