TIDMTRS
RNS Number : 6722N
Tarsus Group PLC
30 July 2014
30 July 2014
Tarsus Group plc
Interim results for the six months ended 30 June 2014
Tarsus Group plc ('Tarsus', the 'Group' or 'Company'), the
international business-to-business media group, announces its
results for the six months ended 30 June 2014.
Financial highlights
Financial highlights - six months to 30 June
-----------------------------------------------------------
2014 2013 2012
----------------------------------- ------ ------ ------
Revenue (GBP'm) 23.1 26.0 19.2
----------------------------------- ------ ------ ------
Adjusted profit before tax*
(GBP'm) 3.0 3.9 1.8
----------------------------------- ------ ------ ------
Profit/ (loss) before tax (GBP'm) 0.3 0.8 (0.2)
----------------------------------- ------ ------ ------
Adjusted EPS* (p) 1.5 2.6 1.0
----------------------------------- ------ ------ ------
EPS (p) (1.1) (0.9) (1.0)
----------------------------------- ------ ------ ------
Operating Cash Flow (GBP'm) 1.9 8.9 (0.8)
----------------------------------- ------ ------ ------
Interim dividend per share (p) 2.4 2.3 2.2
----------------------------------- ------ ------ ------
-- Like-for-like revenue up 9% on 2013 as adjusted for biennial exhibitions and acquisitions
-- Adjusted* profit before tax and EPS up significantly over the biennial cycle
-- Interim dividend raised to 2.4p (2013: 2.3p)
Operational highlights
-- Good strategic progress in the first half of year
-- Strong performance from Emerging Markets
-- Further brand replications launched into new territories
-- Banking facilities extended to 2019 to support "Quickening the Pace" strategy
Outlook
-- Forward bookings currently 9% ahead of 2013 (adjusted for biennial exhibitions)
-- Promising outlook for larger events in second half, including
Labelexpo Americas, Zuchex and MEBA
-- Group remains confident of delivering a good performance in 2014 on a constant currency basis
-- Bookings for major 2015 biennial events strongly ahead of previous editions
Douglas Emslie,Group Managing Director, said:
"Tarsus has delivered a solid performance in what is the
quietest six months for trading in our two-year cycle.
"We are continuing to progress our "Quickening the Pace"
strategy which has seen us make a number of strategic acquisitions
in the last year as well as accelerate launch activity as we seek
to replicate some of our leading brands internationally.
"We have good visibility for 2014 as a whole and remain
confident of a positive full year outcome on a constant currency
basis. The Group is well positioned for the future to deliver its
"Quickening the Pace" strategy."
For further information contact:
Tarsus Group plc:
Douglas Emslie, Group Managing Director 020 8846 2700
Dan O'Brien, Group Finance Director
IR Focus
Neville Harris 07909 976044
The Group will be hosting a presentation to analysts at 11.30am
today at the offices of Investec Bank plc, 2 Gresham Street, London
EC2V 7QP. A webcast of the presentation will be available on
Tarsus's website (www.tarsus.com) from 9.30am on 31 July 2014.
Notes
*Reconciliation between reported profits and adjusted profits is
included in note 6.
Like-for-like revenues are on a constant currency basis and
after adjusting for the impact of acquisitions, disposals and
biennials.
Overview
We continue to concentrate on the execution of our "Quickening
the Pace" strategy, focusing on accelerating financial returns to
shareholders. This is being achieved by investing in and
strengthening our core businesses, in particular driving organic
growth and adding value to our key brands through replication into
faster growing economies, supplemented by selective small strategic
acquisitions.
We are focused on replicating some of the Group's leading
brands, thereby expanding our geographical coverage. In May 2014 we
successfully held our first replication of AAITF in Jakarta, and
have announced a further eight replications of Tarsus' brands
during the remainder of 2014 and 2015.
Our joint venture in Mexico with EJ Krause presents an exciting
opportunity to replicate a number of Tarsus' existing brands into
the fast growing Mexican markets.
The Group has acquired 60% of 3D Printshow, which has a current
portfolio of market leading annual events in London, Paris and New
York. This fast developing sector has strong growth opportunities
in many territories and has good synergies with the existing Tarsus
portfolio.
Financial review
Group revenue for the period was GBP23.1 million (2013: GBP26.0
million), adversely impacted by foreign exchange in the period
reflecting the strength of Sterling against the US Dollar and the
Euro.
Adjusting for acquisitions and biennial shows, on a constant
currency basis the Group achieved underlying like-for-like revenue
growth of 9% in the quietest half of the Group's biennial
cycle.
Adjusted profit before tax was GBP3.0 million (2013: GBP3.9
million; 2012: GBP1.8 million), which compared with 2012 reflects
strong revenue growth in the portfolio together with the enhanced
operational gearing as a result of the move towards higher growth
markets. The Group incurred exceptional costs of GBP0.2 million
(2013 GBP0.4 million) in respect of completed and pending
acquisitions. Profit before tax was GBP0.3 million (2013: GBP0.8
million).*
Adjusted earnings per share were 1.5p (2013: 2.6p). Basic loss
per share was 1.1p (2013: 0.9p).
An interim dividend of 2.4p per share (2013: 2.3p) has been
declared and will be paid on 15 January 2015 to Shareholders on the
Register on 5 December 2014. The Group will continue to offer a
scrip alternative.
Operating cash inflow was GBP1.9 million (2013: inflow GBP8.9
million) which compares favorably with the GBP0.8 million outflow
in 2012. Net debt at 30 June 2014 was GBP34.7 million (2013:
GBP29.2 million). Tarsus has extended its existing GBP60m bank
facility through to 2019 with improved terms. This extended bank
facility is expected to provide the financial resources to support
our "Quickening the Pace" strategy.
Note
*The reconciliation of adjusted profit before tax is shown in
note 6.
Operating review
Geographic Analysis
Emerging Markets - strong performances from Dubai and China
USA - growth in Off Price; transitional year for Medical
Europe - growth in France in a challenging market
Emerging Markets US Europe
----------------- --------------------- ------------------- ---------------------
GBP'm 2014 2013 2012 2014 2013 2012 2014 2013 2012
----------------- ------ ------ ----- ----- ----- ----- ----- ------ ------
Revenue 11.1 12.3 7.3 6.8 8.3 7.8 5.3 5.5 4.1
----------------- ------ ------ ----- ----- ----- ----- ----- ------ ------
Adjusted Profit
before tax 2.8 3.3 1.5 2.0 2.6 2.4 0.3 (0.1) (0.5)
----------------- ------ ------ ----- ----- ----- ----- ----- ------ ------
Emerging markets
In Dubai, Tarsus' education event GESS performed strongly with
excellent visitor attendance and revenues up 37%. The Group's
largest event in Dubai in 2014 is MEBA (Middle East Business
Aviation) and forward bookings for this show are tracking ahead of
its previous edition.
Tarsus' position in China has been strengthened by the
acquisition in April 2014 of SIUF, Asia's leading underwear show.
The first edition under Tarsus ownership, held in May 2014,
performed strongly and slightly ahead of management expectations.
Hope, the Group's Central China operation has continued to perform
well with revenues significantly ahead of 2013. As previously
reported GZ Auto, held in February 2014, was behind the previous
edition. Forward bookings for 2015 are encouraging but we are
exploring repositioning this exhibition for the future.
Trading in Turkey was in line with our cautious expectations for
the first half. The largest event Ideal Homex in April 2014 showed
good year-on-year growth. The outlook for the Group's larger 2014
events in the second half: Zuchex, Sign (both September 2014) and
the Flower Show (November 2014), is good.
The Group's presence in Turkey was reinforced in February 2014
with the acquisition of Komatek, Turkey's largest construction
equipment show. This adds critical mass to the Group's construction
events in both Turkey and Indonesia.
In Mexico, the Group established a joint venture ("JV") with EJ
Krause in late 2013. There was a strong performance at Expo
Manufactura, the country's premier metalworking/manufacturing
exhibition which took place in March 2014. The outlook for
Plastimagen in November 2014 is also promising and as part of our
"Quickening the Pace" strategy, the JV plans to launch three
further shows in 2015, replicating Tarsus brands into Mexico.
USA
The February 2014 Off Price show in Las Vegas was a strong
event, with good visitor growth. Bookings for the August 2014
edition of the exhibition are ahead of the 2013 edition.
The Medical business held its established medical event, the
Anti-aging congress in Orlando in May 2014, producing a record
edition. The Cardiometabolic Health Congress (acquired in February
2014) will be held in October 2014 and the event is progressing in
line with our expectations.
The Medical business is undergoing a transitional period as the
Group extends its reach to address a broader medical practitioner
market. As part of this the division launched the Medical Metabolic
Institute (MMI) in February 2014 and successfully held the first
MMI event in June 2014 in Miami.
The introduction of Obama care in January has caused uncertainty
for doctors and delayed investments. In the medium term this should
be a positive driver for the preventative medicine market as
doctors seek to diversify their practices.
During this transitional period we expect the educational
revenues to be lower than 2013, whilst we lay the foundations to
ensure future growth from this business.
The Group's largest event in the US in 2014 is Labelexpo
Americas in September where a record edition is expected.
Europe
Like-for-like sales in France were slightly ahead of 2013 but
with the largest exhibitions taking place in the second half of the
year against a backdrop of a difficult macroeconomic environment,
the Group remains cautious for the full year outlook.
Outlook
The Group's "Quickening the Pace" strategy is gaining momentum.
We have seen good levels of organic growth supplemented by brand
replications and selective acquisitions.
Trading in even years is heavily weighted towards the second
half of the year. The outlook for the second half of 2014 is good,
with bookings for the Group's larger shows including Labelexpo
Americas, Zuchex and MEBA, comfortably ahead of previous editions.
Forward bookings across the portfolio as a whole are currently 9%
ahead of 2013 on a like-for-like basis, adjusting for acquisitions
and biennial events.
Owing to the incidence of large biennial exhibitions within the
portfolio, profits generated in even years are typically smaller
than those generated in odd years. Adjusting for this biennial
effect, the Group remains confident of delivering a good
performance in 2014 on a constant currency basis.
Forward bookings for the larger biennial events in 2015 are
tracking well ahead of their previous editions.
N D Buch J D Emslie
Chairman Group Managing Director
30 July 2014
INDEPENDENT REVIEW REPORT TO TARSUS GROUP PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2014 which comprises the Condensed
Consolidated Interim Income Statement, Condensed Consolidated
Interim Statement of Comprehensive Income, Condensed Consolidated
Interim Statement of Financial Position, Condensed Consolidated
Interim Statement of Changes in Equity, the Condensed Consolidated
Interim Statement of Cash Flows and the related notes. We have read
the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2014 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
30 July 2014
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
Note Period to Period to
30 June 2014 30 June 2013
GBP000 GBP000
Unaudited Unaudited
Group revenue 7 23,148 26,016
Total operating costs (22,099) (25,094)
Share of profit of joint ventures 693 1,294
------------------- --------------
Group operating profit 1,742 2,216
Net finance costs (1,425) (1,452)
------------------- --------------
Profit before taxation 317 764
Taxation expense 8 (286) (693)
------------------- --------------
Profit for the financial period 31 71
=================== ==============
(Loss) for the financial period attributable
to equity shareholders of the parent company (1,057) (833)
Profit for the financial period attributable
to non-controlling interests 1,088 904
31 71
=================== ==============
Note Period to Period to
30 June 2014 30 June 2013
Earnings per share (pence) 9
- basic (1.1) (0.9)
- diluted (1.1) (0.9)
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 30 June
Period to Period to
30 June 2014 30 June
2013
GBP000 GBP000
Unaudited Unaudited
Profit for the financial period 31 71
--------------- ----------
Other comprehensive expense recognised
directly in equity:
Cash flow hedge reserve - movement
in fair value 22 338
Foreign exchange translation differences (2,685) 3,112
Other comprehensive (expense)/income (2,663) 3,450
Total comprehensive (expense)/income
for the period (2,632) 3,521
=============== ==========
Attributable to:
Equity shareholders of the parent company (3,720) 2,617
Non-controlling interests 1,088 904
Total comprehensive (expense)/income
for the period (2,632) 3,521
=============== ==========
Other comprehensive income relating to foreign exchange
translation differences, fair value movements in cash flow hedges
and the tax effects thereon may all subsequently be reclassified to
profit and loss if certain conditions are met.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
Note Period to Period to At 31
30 June 30 June December
2014 2013 2013
GBP000 GBP000 GBP000
Unaudited Unaudited Unaudited
NON-CURRENT ASSETS
Property, plant and equipment 1,169 1,365 1,239
Intangible assets 10 111,923 112,531 97,967
Investment in Joint Ventures 16,088 12,365 15,432
Other investments 1 1 1
Deferred tax assets 2,631 684 2,703
131,812 126,946 117,342
CURRENT ASSETS
Trade and other receivables 31,044 23,735 25,030
Cash and cash equivalents 8,554 8,031 12,142
---------- ---------- ----------
39,598 31,766 37,172
CURRENT LIABILITIES
Trade and other payables (22,044) (18,982) (26,336)
Deferred income (29,982) (31,363) (18,384)
Provisions - - (73)
Liabilities for current tax (3,311) (908) (3,964)
---------- ---------- ----------
(55,337) (51,253) (48,757)
---------- ---------- ----------
NET CURRENT LIABILITIES (15,739) (19,487) (11,585)
---------- ---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 116,073 107,459 105,757
---------- ---------- ----------
NON-CURRENT LIABILITIES
Other payables (27,740) (21,534) (19,286)
Deferred tax liabilities (5,855) (5,354) (4,449)
Interest bearing loans and borrowings (44,200) (38,025) (41,800)
---------- ---------- ----------
(77,795) (64,913) (65,535)
NET ASSETS 38,278 42,546 40,222
========== ========== ==========
EQUITY
Share capital 15 5,052 4,794 4,797
Share premium account 47,303 37,614 37,689
Other reserves (17,526) (3,942) (14,862)
Retained earnings (1,136) 765 8,767
Issued capital and reserves attributable
to equity shareholders of the parent 33,693 39,231 36,391
NON-CONTROLLING INTERESTS 4,585 3,315 3,831
TOTAL EQUITY 38,278 42,546 40,222
========== ========== ==========
The financial statements of Tarsus Group plc, registered number
101579 (Jersey), were approved by the board and authorised for
issue on 30 July 2014 and signed on its behalf by:
J D Emslie D P O'Brien
Group Managing Director Group Finance Director
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Period to Period to
30 June 2014 30 June
2013
Unaudited Unaudited
GBP000 GBP000
Cash flows from operating activities
Profit for the period 31 71
Adjustments for:
Depreciation 227 284
Amortisation & impairment 1,822 1,911
Loss on disposal of intangible assets - 7
Loss on disposal of tangible assets 2 1
Share option charge 551 507
Taxation charge 286 693
Interest payable 1,425 1,452
Share of profit from joint ventures (693) (1,294)
Operating cash flow before changes in
working capital 3,651 3,632
(Increase)/decrease in trade and other
receivables (5,902) 58
Increase in trade and other payables 4,133 5,257
Cash generated from operations 1,882 8,947
Interest paid (640) (541)
Income taxes paid (847) (1,358)
Net cash from operating activities 395 7,048
Cash flows from investing activities
Proceeds from sale of tangible fixed
assets 14 64
Acquisition of property, plant & equipment (142) (268)
Acquisition of intangible fixed assets (303) (27)
Acquisition of subsidiaries - cash paid (10,610) (372)
Acquisition of subsidiaries - cash acquired 196 4
Sale of French minority 833 -
Deferred and contingent consideration
paid (2,161) (18,229)
Net cash outflow from investing activities (12,173) (18,828)
------------------ ----------
Cash flows from financing activities
Drawdown of borrowings 2,400 11,488
Proceeds from the issue of share capital 10,065 145
Cost of share issue (388) (38)
Dividends paid to shareholders in parent
company (2,144) (2,025)
Dividends paid to non-controlling interests
in subsidiaries (1,092) (542)
Net cash inflow from financing activities 8,841 9,028
------------------ ----------
Net decrease in cash and cash equivalents (2,937) (2,752)
Opening cash and cash equivalents 12,142 10,255
Foreign exchange movements (651) 528
Closing cash and cash equivalents 8,554 8,031
================== ==========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Attributable to equity holders
of the parent
------------------------------------------------------
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
As at 1 January
2014 4,797 37,689 6,013 (443) 92 (20,523) 8,766 3,831 40,222
Recognised foreign
exchange losses
for the period - 2 1 - - (2,688) - - (2,685)
(Loss)/Profit
for the period:
- Attributable
to equity shareholders - - - - - - (1,057) - (1,057)
- Attributable
to non-controlling
interests - - - - - - - 1,088 1,088
Cashflow hedge
reserve - - - - 22 - - - 22
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Total comprehensive
income (expense)
for the period - 2 1 - 22 (2,688) (1,057) 1,088 (2,632)
Scrip dividend 1 62 - - - - - - 63
New share capital
subscribed 258 9,550 - - - - - - 9,808
Cost of shares
issued (4) - - - - - - - (4)
Share option charge - - - - - - 551 - 551
Movement in reserves
relating to deferred
tax - - - - - - (540) - (540)
Dividend paid - - - - - - (2,208) - (2,208)
Dividend paid
to non-controlling
interests - - - - - - - (1,094) (1,094)
Written Put options
over non-controlling
interests - - - - - - (6,795) - (6,795)
Non-controlling
interests arising
on acquisition - - - - - - 147 760 907
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Net change in
shareholders'
funds 255 9,614 1 - 22 (2,688) (9,902) 754 (1,944)
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Period to 30 June
2014 5,052 47,303 6,014 (443) 114 (23,211) (1,136) 4,585 38,278
======== ======== ========= =========== ======== ========= ========= ========== ========
*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.
Attributable to equity holders
of the parent
------------------------------------------------------
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
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 - - - - - 3,118 (6) - 3,112
Tax effect of - - - - - - - - -
foreign exchange
translation
differences
Profit for the - - - - - - - - -
period:
- Attributable
to equity
shareholders - - - - - - (833) - (833)
- Attributable
to non-controlling - - - - - - - 904 904
interests - - - - - - - - -
Cashflow hedge - - - - 338 - - - 338
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Total comprehensive
income (expense)
for the period - - - - 338 3,118 (839) 904 3,521
Scrip dividend 1 45 - - - - - - 46
New share capital
subscribed 21 123 - - - - - - 144
Cost of shares
issued - (38) - - - - - - (38)
Share option charge - - - - - - 203 - 203
Movement in
reserves
relating to
deferred
tax - - - - - - 42 - 42
Dividend paid - - - - - - (2,072) - (2,072)
Dividend paid
to non-controlling
interests - - - - - - - (542) (542)
Written Put options
over
non-controlling
interests - - - - - - (5,956) - (5,956)
Non-controlling
interests arising
on acquisition - - - - - - - 170 170
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Net change in
shareholders'
funds 22 130 - - 338 3,118 (8,622) 532 (4,482)
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Period to 30 June
2013 4,794 37,614 6,013 (443) (82) (9,430) 765 3,315 42,546
======== ======== ========= =========== ======== ========= ========= ========== ========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. REPORTING ENTITY
Tarsus Group plc (the "Company") is a company incorporated in
Jersey and resident in Ireland. The condensed consolidated
financial statements of the Company as at and for the six months
ended 30 June 2014 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interest in
jointly controlled entities.
The consolidated financial statements of the Group as at and for
the year ended 31 December 2013 are available upon request from the
Company Secretary at 17 Upper Pembroke Street, Dublin 2,
Ireland.
In July 2014 the Group renegotiated their borrowing facilities.
The new facility will extend until July 2019. Having reviewed the
Group's liquid resources, borrowing facilities and cash flow
forecasts, the directors believe that the Group has adequate
resources to continue as a going concern for the foreseeable
future.
2. STATEMENT OF COMPLIANCE
These condensed consolidated interim financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) IAS 34 Interim Financial Reporting. They do not
constitute the Group's statutory accounts.
The interim financial statements should be read in conjunction
with the consolidated financial statements of the Group as at and
for the year ended 31 December 2013 which were prepared under
International Financial Reporting Standards, as adopted by the
European Union, and have been reported on by the Company's auditor.
The auditor report was unqualified.
The financial statements of Tarsus Group plc, registered number
101579 (Jersey), were approved by the board and authorised for
issue on 30 July 2014.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2013.
4. ESTIMATES
The preparation of consolidation interim financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements as at and for the year ended 31
December 2013.
5. FINANCIAL RISK MANAGEMENT
The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the year ended 31 December 2013.
6. PROFIT AND LOSS ANALYSIS
The following analysis illustrates the performance of the
Group's activities, and reconciles the Group's profit as shown in
the condensed consolidated interim income statement, to adjusted
profits. Adjusted profit is prepared 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
excludes share option charges, amortisation of intangible assets
and unwinding of discount charges.
Six months Six months
to to
30 June 30 June
2014 2013
GBP000 GBP000
Unaudited Unaudited
Profit for the financial period after taxation 31 71
Add back:
Taxation charge 286 693
317 764
Add back:
Exceptional costs * 194 376
Share option charge 551 507
Amortisation charge (excluding amounts charged
to costs of sale) 1,312 1,498
Loss on disposal of tangible fixed assets 1 1
Loss on disposal of intangible fixed assets - 7
Unwinding of discount 628 769
Adjusted profit before tax 3,003 3,922
Tax thereon (481) (588)
Adjusted profit after tax 2,522 3,333
=========== ===========
*In 2014, the Group incurred exceptional one-off costs resulting
from acquisition costs or potential acquisition costs.
7. SEGMENTAL ANALYSIS
As at 30 June 2014, the Group is organised into three main
operating segments - Europe, USA and Emerging Markets. These
segments are the basis on which the Group reports its segments are
the basis on which the Group reports its segment information for
management purposes.
The main activities of all segments are the production of
exhibitions, conferences, magazines, directories and online
media.
The following table sets out the revenue and profit information
and certain asset and liability information for the Group's
reportable segments:
30 June
2014 Unaudited
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 11,063 6,749 5,336 - 23,148
========= ======= ================ ======== ========
Profit/(loss) from operating
activities 2,770 2,048 298 (3,374) 1,742
Net financing costs - - - (1,425) (1,425)
--------- ------- ---------------- -------- --------
Profit/(loss) before taxation 2,770 2,048 298 (4,799) 317
Exceptional costs - - - 194 194
Share option charge - - - 551 551
Amortisation charge - - - 1,312 1,312
Loss on disposal of assets - - - 1 1
Unwinding of discount -
contingent consideration - - - 628 628
--------- ------- ---------------- -------- --------
Adjusted profit/(loss)
before tax 2,770 2,048 298 (2,113) 3,003
========= ======= ================ ======== ========
30 June 2013
Unaudited
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 12,301 8,254 5,461 - 26,016
========= ======= ============= ======== ========
Profit/(loss) from operating
activities 3,342 2,561 (108) (3,579) 2,216
Net financing costs - - - (1,452) (1,452)
--------- ------- ------------- -------- --------
Profit/(loss) before taxation 3,342 2,561 (108) (5,031) 764
Exceptional costs - - - 376 376
Share option charge - - - 507 507
Amortisation charge - - - 1,498 1,498
Loss on disposal of intangible
assets - - - 8 8
Unwinding of discount -
contingent consideration - - - 769 769
--------- ------- ------------- -------- --------
Adjusted profit/(loss)
before tax 3,342 2,561 (108) (1,873) 3,922
========= ======= ============= ======== ========
Total assets within Emerging Markets have significantly
increased due to the acquisition of SADA on 05 February 2014 and
SIUF on 18 March 2014. The segmental analysis of total assets is as
follows:
Total assets
Unaudited
Emerging USA Europe Group
Markets
GBP000 GBP000 GBP000 GBP000
At 30 June 2014 87,691 53,529 30,190 171,410
=========== ======= ======= ========
Total assets
Unaudited
Emerging USA Europe Group
Markets
GBP000 GBP000 GBP000 GBP000
30 June 2013 79,429 48,588 30,695 158,712
=========== ======= ======= ========
Total assets
audited
Emerging USA Europe Group
Markets
GBP000 GBP000 GBP000 GBP000
At 31 December 2013 79,228 45,390 29,896 154,514
=========== ======= ======= ========
8. TAXATION CHARGE
The taxation charge for the six months ended 30 June 2014 is
based upon the estimated effective tax rate of 15.9% on adjusted
profit before tax (2013: 15.4%) for the year ending 31 December
2014.
9. EARNINGS PER SHARE
Six months Six months
to to
30 June 2014 30 June
2013
Pence Pence
Unaudited Unaudited
Basic earnings per share (1.1) (0.9)
Diluted earnings per share (1.1) (0.9)
Adjusted earnings per share 1.5 2.6
Adjusted diluted earnings per share 1.4 2.5
Basic earnings per share
Basic earnings per share has been calculated on loss after tax
attributable to ordinary shareholders for the six months of
GBP1,056,620 (June 2013 loss: GBP833,000) and 98,387,303 (June
2013: 94,539,919) ordinary shares, being the weighted average
number of shares in issue during the period.
Diluted earnings per share
Diluted earnings per share has been calculated on loss after tax
attributable to ordinary shareholders for the six months of
GBP1,056,620 (June 2013 loss: GBP833,000) and 99,625,372 (June
2013: 95,776,435) ordinary shares, being the diluted weighted
average number of shares in issue during the period.
Adjusted earnings per share
Adjusted earnings per share is calculated using adjusted profit
after tax as reconciled in note 6 and the weighted average number
of ordinary shares (as below) in issue in the year.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated using profit
after tax as reconciled in note 6 and the weighted average number
of diluted ordinary shares (as below) in issue in the year.
Weighted average number of ordinary shares (diluted):
Six months Six months
to to
30 June 30 June
2014 2013
Unaudited Unaudited
Weighted average number of ordinary shares 98,387,303 94,539,919
Dilutive effect of share options 1,238,069 1,236,516
Weighted average number of ordinary shares
(diluted) 99,625,372 95,776,435
=========== ===========
10. INTANGIBLE FIXED ASSETS
Goodwill Trademarks, Total
lists and
other
GBP000 GBP000 GBP000
Unaudited Unaudited Unaudited
COST
As at 1 January 2014 91,622 40,932 132,554
Additions through business acquisition 13,405 4,088 17,493
Additions 302 303 605
Foreign exchange (2,221) (1,225) (3,446)
---------- ------------ ----------
At 30 June 2014 103,108 44,098 147,206
---------- ------------ ----------
AMORTISATION
As at 1 January 2014 11,701 22,886 34,587
Charge for the year - 1,822 1,822
Foreign exchange (432) (694) (1,126)
---------- ------------ ----------
At 30 June 2014 11,269 24,014 35,283
---------- ------------ ----------
NET BOOK VALUE
At 30 June 2014 91,839 20,084 111,923
========== ============ ==========
At 31 December 2013 79,921 18,046 97,967
========== ============ ==========
At 30 June 2013 90,016 22,515 112,531
========== ============ ==========
11. ACQUISITIONS
The Group completed three acquisitions during the first half of
2014, in line with the Group's "Quickening the Pace" strategy.
Effective Name Type of business Percentage
date
acquired
07 February Cardiometabolic Exhibition
2014 Health business 100%
Congress
("CMHC")
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 the acquisition made during 2014:
CMHC Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment 8 - 8
Other intangibles - 2,365 2,365
Trade and other receivables 255 - 255
Cash and cash equivalents - - -
Trade and other payables (354) - (354)
Deferred tax asset - - -
Deferred tax liability - (473) (473)
Net assets acquired (91) 1,892 1,801
------- ------------
Goodwill arising on acquisition 6,736
8,537
===========
Consideration paid and costs incurred:
Satisfied in cash 5,743
Deferred consideration (less than
one year) 1,947
Deferred consideration (greater
than one year) 847
Total consideration incurred 8,537
===========
Consideration paid in cash 5,743
Cash acquired -
Total net cash outflow 5,743
===========
From the date of acquisition to 30 June 2014, the acquisition
has contributed GBPnil of revenue to the Group.
Goodwill of GBP6.7 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.
The Group incurred transaction costs of GBP48,000 in respect of
the acquisition, which were expensed.
Effective Name Type of business Percentage
date
acquired
05 February Sada Uzmanhk Fuarlari Exhibition
2014 A.S. business 60%
("Sada")
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 the acquisition made during 2014:
Sada Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment 2 - 2
Other intangibles - 560 560
Trade and other receivables 71 - 71
Cash and cash equivalents 74 - 74
Trade and other payables (22) - (22)
Deferred tax asset - - -
Deferred tax liability - (112) (112)
125 448 573
------- ------------
Non-controlling interest 40% (229)
Net assets acquired 344
Goodwill arising on acquisition 1,401
1,745
===========
Consideration paid and costs incurred:
Satisfied in cash 1,407
Stamp duty paid 81
Contingent consideration (less than -
one year)
Contingent consideration (greater
than one year) 257
Total consideration incurred 1,745
===========
Consideration paid in cash 1,407
Cash acquired (74)
Total net cash outflow 1,333
===========
Tarsus and the vendor hold put options over the remaining 40% of
the shares of the business, exercisable from now until 2019 and
enforceable by either party, with consideration payables based on a
multiple of annualised EBIT in the relevant year. The group has
recognised a liability for this in accordance with IAS 32,
"Financial Instruments", with a corresponding debit in equity.
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 performance of the exhibition occurring in 2015
and 2017.
From the date of acquisition to 30 June 2014, the acquisition
has contributed GBPnil of revenue to the Group.
Goodwill of GBP1.4 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.
The Group incurred transaction costs of GBP25,000 in respect of
the acquisition, which were expensed.
Effective Name Type of business Percentage
date
acquired
Exhibition
18 March 2014 Shenzhen Shengshi business 50%
Jiuzhou Exhibition
Co. Ltd
("SIUF")
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 the acquisition made during 2014:
SIUF Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment - - -
Other intangibles - 1,185 1,185
Trade and other receivables 565 - 565
Cash and cash equivalents 122 - 122
Trade and other payables (555) - (555)
Deferred tax asset - - -
Deferred tax liability - (237) (237)
132 948 1,080
------- ------------
Non-controlling interest 50% (540)
Net assets acquired 540
Goodwill arising on acquisition 5,370
5,910
===========
Consideration paid and costs incurred:
Satisfied in cash 3,070
Stamp & other costs -
Contingent consideration (less than
one year) 2,340
Contingent consideration (greater
than one year) 500
Total consideration incurred 5,910
===========
Consideration paid in cash 3,070
Cash acquired (122)
Total net cash outflow 2,948
===========
Tarsus holds enforceable put options over a further 20% of the
shares of the business, exercisable until May 2015, with
consideration payables based on a multiple of EBIT in the relevant
year. Tarsus and the vendors hold put options over this 20%, if not
already exercised by Tarsus, from the lapse date above for a
further 12 months. Tarsus and the vendor hold a final put option
for 30% of the shares of the business, exercisable until 2022. Each
option has consideration payables based on a multiple of EBIT in
the relevant year. The group has recognised a liability for this in
accordance with IAS 32, "Financial Instruments", with a
corresponding debit in equity.
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 performance of the exhibitions occurring in
2015.
From the date of acquisition to 30 June 2014, the acquisition
has contributed GBP2.5 million of revenue to the Group.
Goodwill of GBP5.4 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.
The Group incurred transaction costs of GBP56,000 in respect of
the acquisition.
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. If necessary, adjustments will be made
to these carrying values and the related goodwill, within 12 months
of the acquisition date. The non-controlling interest is measured
as their proportionate share of the fair value of the net
assets.
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 performance of the various exhibitions, conferences and
publications acquired during 2014 and 2015.
12. DIVIDENDS
The following dividends were paid and proposed by the Group:
2014 2013
GBP000 GBP000
Unaudited Unaudited
Dividend paid in current period in cash or
scrip
2013/2012 interim dividend (2.1p per share) 2,144 2,025
2,144 2,025
========== ==========
Dividend paid and proposed post period end
2013 final dividend paid 5.0p per share (2012:
4.6p per share) 4,989 4,376
Dividend proposed in the period 2.4p per share
(2013: 2.3p per share) 2,361 2,205
7,350 6,581
========== ==========
13. FOREIGN EXCHANGE TRANSLATION DIFFERENCES
Other Comprehensive Income includes foreign exchange translation
loses of GBP2.7 million (June 2013: gains of GBP3.1 million)
relating to the retranslation of foreign currency denominated net
assets, including goodwill.
14. RELATED PARTIES
As at 30 June 2014, directors of the company controlled 10.2%
(31 December 2013: 10.6%) of the voting shares of the company.
Executive officers also participate in the Group's share option
programme and share acquisition plan.
15. ISSUE OF SHARE CAPITAL
On 13 February 2014, the Group announced the successful
completion of the placing of 5,000,000 new ordinary shares of
nominal value of 5p each raising GBP10m in total and GBP9.7 million
net of expenses.
16. POST BALANCE SHEET EVENTS
Since 30 June 2014, the Group has agreed to acquire 60% of the
3D Print Show Limited, which has a current portfolio of market
leading annual events in London, Paris and New York.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
We confirm that to the best of our knowledge:
-- The condensed set of financial statements, which has been
prepared in accordance with the applicable set of accounting
standards, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group;
-- The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Principal risks and uncertainties
The Board consider the principal risks and uncertainties
relating to the Group for the next six months to be the same as
details in our last Annual Report and Accounts to 31 December 2013
and include:
-- Economic and financial uncertainties;
-- Events and exhibitions may be adversely affected by incidents which can curtail travel;
-- Expansion into new geographic regions subjects the group to new operating risks;
-- Fluctuation in exchange rates may affect the reported results;
-- The ability to implement and execute strategic plans depends
on the ability to attract and retain key management.
Full details of the risks and uncertainties are detailed in the
Directors' Report of the 2013 accounts.
J D Emslie D P O'Brien
Group Managing Director Group Finance Director
30 July 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QKCDQFBKDNOB
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