TIDMTRS
RNS Number : 4539G
Tarsus Group PLC
04 March 2015
4 March 2015
Tarsus Group plc
Final results for year ended 31 December 2014
Strong results and 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 2014.
Tarsus continued to concentrate on the execution of its
"Quickening the Pace" strategy, which is focused on accelerating
the pace of financial returns to shareholders. Despite strong
currency headwinds for much of 2014, the Group made good progress
in strengthening and investing in its portfolio of events to drive
organic growth.
Financial results
2014 2013 2012
Revenue (GBPm) 60.6 75.9 51.5
Like-for-like* revenue growth 10% 11% 13%
Adjusted profit before tax* (GBPm) 17.0 24.2 14.8
Profit before tax (GBPm) 8.2 15.9 8.4
Adjusted EPS* (pence) 12.7 20.0 12.2
Dividend (pence) 7.8 7.3 6.8
Net debt (GBPm) 38.4 28.6 15.7
Financial highlights
-- Revenue up 18% compared with 2012
-- Group like-for-like revenues* up 10%
-- Proposed final dividend of 5.4p - total for year up 7% to 7.8p (2013: 7.3p)
-- Cash flow from operations up 31% against 2012
-- Banking facilities extended to 2019
Operational highlights
-- Combined emerging markets and US revenues comprised 80% of Group revenue
-- Good visitor growth across the portfolio of 6%
-- Major events performed well
-- Five strategic acquisitions in key geographical markets
-- Two brand replications successfully launched with editions of
AAITF and Zuchex held in Jakarta
-- US medical business successfully repositioned for renewed growth
Current trading and outlook
-- Good performances from major shows in January and February 2015
-- Forward bookings for 2015, on a like-for-like basis, are
currently over 10% ahead of those for 2014 (adjusted for biennials
and acquisitions)
-- Planned launch of 13 brand replications in 2015 in targeted geographies
-- Outlook for the Group's two largest exhibitions, Labelexpo
Europe and the Dubai Airshow, is very promising
-- Outlook for 2015 increasingly positive
Douglas Emslie, Group Managing Director of Tarsus,
commented:
"Our 'Quickening the Pace' growth strategy gained further
traction in 2014. Visitor numbers were up by 6%, our major events
performed well and we made good progress with our brand replication
strategy to drive organic growth.
"The quality of our assets and the geographical positioning of
our portfolio, targeted at faster-growing economies, is a key
differentiator for the Group. In addition, our ability to offer our
partners an entrepreneurial culture in which to further expand
their business has enabled us to capture attractive strategic
opportunities in 2014.
"Owing to the timing of our large exhibitions trading is heavily
biased in favour of odd years. Forward bookings for the Group's
major events in 2015 are strong across the board and the two
largest exhibitions, Labelexpo Europe and the Dubai Airshow, are
well ahead of their previous editions. Given the current global
geopolitical environment we have been deliberately cautious in our
budgeting for 2015 but are increasingly positive about our trading
prospects."
For further information contact:
Tarsus Group plc:
Douglas Emslie, Group Managing Director 020 8846 2700
Dan O'Brien, Group Finance Director
Neville Harris, Investor Relations 07909 976 044
The Company will be hosting a presentation to analysts at
11.00am today at the offices of Deloitte LLP, 2 New Street Square,
EC4A 3BZ. A webcast of the presentation will be made available on
Tarsus's website (www.tarsus.com) from 9.30 am on 5 March 2015.
Glossary *
Like-for-like revenue:
Constant exchange rates adjusted for biennial events, excluding
acquisitions impacting for the first time in 2014, 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
The Group made further progress in delivering its "Quickening
the Pace" strategy which is focused on accelerating financial
returns to shareholders. This is being achieved through a
combination of organic growth from the existing portfolio,
geographical replications of major brands across faster growth
economies and the identification of small strategic acquisitions in
our selected geographies.
Tarsus made five strategic acquisitions in the year and these
additions were aided by the attractiveness of the Group's
entrepreneurial culture to the vendors of those businesses. The
Group's size, flexibility and willingness to work with vendors to
develop their businesses in partnership with Tarsus is becoming
increasingly attractive to partners and helps accelerate the
overall strategy.
The Group assesses its performance against three KPIs:
1. Accelerating EPS growth
Through targeting underlying growth at its exhibitions in growth
markets, the Group aims to deliver enhanced financial returns to
its shareholders. By proactively managing its portfolio of events,
adjusted EPS grew (on a constant currency basis over the biennial
cycle) 5% to 12.7p, against a 5-10% growth target.
2. Increasing share of revenues from emerging markets and the US
The Group has identified geographies (certain emerging markets
and the US) which it believes provide higher potential for growth.
For the year ended 31 December 2014 the Group recorded 80% of
revenues from its emerging markets and US events, ahead of its 75%
target.
3. Driving visitor growth
The Group aims to drive visitor attendance at its events and
growth of 6% in 2014 compares favourably with the CEIR index (a key
barometer of the US exhibition industry) where visitor attendance
was up just 1.8% in 2014.
Financial results
The financial results were in line with Board's expectations.
Group revenues for the full year were GBP60.6m (2013: GBP75.9m), up
18% on a biennial basis (2012: GBP51.5m). Like-for-like revenues,
at constant exchange rates, increased by 10%. Revenues were 7%
adversely impacted by foreign exchange in 2014.
Group adjusted profit before tax was GBP17.0m (2013: GBP24.2m),
up 15% on a biennial basis (2012: GBP14.8m). Net interest expense
of GBP1.7m (2013: GBP1.5m) reflected increased debt levels across
2014 as a result of acquisitions. Reported profit before tax was
GBP8.2m (2013: GBP15.9m).
The adjusted tax charge of GBP2.5m (2013: GBP3.6m) represents
15% (2013: 15%) of the Group's adjusted profit before tax. The
reported tax charge is GBP1.4m (2013: GBP2.7m). 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 12.7p (2013: 20.0p), 4% up on a
biennial basis (2012: 12.2p). Basic earnings per share for 2014
were 5.0p (2013: 12.2p).
The Group generated GBP16.0m (2013: GBP24.5m) of cash from
operations, an increase of 31% against 2012, the comparative
biennial year (2012: GBP12.2m). The Group's net debt as at 31
December 2014 increased to GBP38.4m (2013: GBP28.6m).
The board is proposing a final dividend of 5.4p per share,
bringing the total for the year to 7.8p per share (2013: 7.3p per
share), up 7%.
The final dividend, subject to Shareholder approval, will be
paid on 8 July 2015 to Shareholders on the Register of Members on
29 May 2015. A scrip dividend will continue to be offered as an
alternative.
Corporate activity
Five strategic acquisitions were completed during the year.
In December 2013, the Group agreed to acquire 50% of China
(Shenzhen) International Brand Underwear Fair ("SIUF"), which runs
the leading Asian show for underwear. The acquisition completed in
March 2014.
Early in 2014, the Group purchased 60% of Komatek, which runs
Turkey's leading construction equipment event, thereby expanding
the Group's existing construction portfolio into a dominant
position in Ankara. The first event under Tarsus' ownership will
take place in May 2015 and bookings tracking in-line with
management expectations.
In March 2014, the Group purchased 100% of the assets of
HealthScienceMedia Inc. in the US, which organises the
Cardiometabolic Health Congress ("CMHC"). In November 2014, Tarsus
bought 100% of the South Beach Symposium ("SBS"), a leading
dermatology event based in Florida. Both of these acquisitions will
further accelerate the development and repositioning of the medical
business in the US.
In July 2014, the Group acquired 60% of 3D Printshow, which owns
a portfolio of market leading annual events in London, Paris and
New York. 3D Printshow is in a fast developing sector and has
strong growth opportunities.
The Group also agreed to sell up to 18% of its French business
to its French management, in line with a previously stated strategy
to reduce its exposure to France.
Operating Review
Emerging Markets
(GBPm) 2014 2013 2012
Biennial revenue 4.3 21.1 4.2
Annual revenue 19.4 16.0 14.4
Total revenue 23.7 37.1 18.6
Adjusted profit before tax 7.3 14.0 5.4
Dubai
The two principal events in 2014 were GESS (education) and MEBA
(business aviation). Both produced strong performances in terms
visitor numbers and revenues. In 2015, the GESS brand is being
extended with two replications in Mexico and Indonesia, while MEBA
is launching the first ever business aviation event into
Morocco.
Turkey
This portfolio of events performed well. The larger shows,
Zuchex, Ideal Home, The Flower Show and Sign, again recorded strong
performances. Zuchex (housewares and gifts) was launched into
Jakarta in November 2014 attracting over 150 exhibitors.
Looking ahead, 2015 will feature the first edition under Tarsus'
ownership of Komatek (construction) as well as the next biennial
edition of Asansor (lifts).
China
Hope, the Group's Central China operation has continued to
perform well with revenues significantly ahead of 2013, led by its
medical equipment events.
As previously announced, AAITF, held in February 2014, was
behind the previous edition owing to protracted venue discussions.
This event was moved to Shenzhen in January 2015 where it performed
well. With an increasing focus on in-car electronics and vehicle
customisation, forward bookings for 2016 are encouraging and a
return to growth is expected. The brand was successfully launched
into Indonesia in 2014. 2015 will see a further launch of the AAITF
brand into Thailand.
The Group's presence in China was strengthened by the
acquisition of 50% of SIUF, the leading Asian show for underwear.
The first edition under Tarsus' ownership in May 2014 performed
well.
Mexico
In Mexico, the Group established a 50% joint venture ("JV") with
EJ Krause in late 2013, based initially around Expo Manufactura,
the country's premier metalworking/manufacturing exhibition and
Plastimagen (plastics). Both produced strong results in 2014 and
the latest Expo Manufactura edition held in February 2015 also
performed well.
This JV provides a foothold for Tarsus in Mexico and an
opportunity to expand EJ Krause's brands into Tarsus' territories.
This initiative began with Expo Comm being launched in Jakarta in
November 2014. The JV plans to launch two further shows in 2015,
replicating GESS and Industrial Print Expo (IPE) into Mexico.
Indonesia
The Group's infrastructure event showed good progress.
Construction accounts for approximately 10% of Indonesian GDP
representing a market in transition with strong growth potential.
The Group has formed a JV with DMG Events to launch a "Big 5
Construct" building materials exhibition in Jakarta in May 2015.
DMG Events currently organize similar events using this major brand
in Dubai, Saudi Arabia, Kuwait and India.
In line with its "Quickening the Pace" strategy two replicated
events were launched in Jakarta in 2014, AAITF in May and Zuchex in
November - both events were well received by customers.
US
(GBPm) 2014 2013 2012
Biennial revenue 5.1 - 4.5
Annual revenue 19.5 18.7 18.1
Total revenue 24.6 18.7 22.6
Adjusted profit before tax 11.7 8.8 11.0
Medical
The Group's established anti-aging events in Orlando (May) and
Las Vegas (December) were both strong shows with record attendances
in 2014.
Overall, 2014 was a year of transition for the medical business.
Changes to its end markets, including the introduction of
Obamacare, have created some uncertainty owing to a lack of
visibility over reimbursements to doctors. The Group has embarked
on its stated strategy of broadening its preventative medical
education offering by moving into the mainstream medical market
with the launch of the Metabolic Medical Institute ('MMI'). Tarsus
made two strategic acquisitions addressing different areas of
preventative medicine. In February 2014, CMHC (cardiology) was
purchased and in November 2014 SBS (dermatology) was added.
The Group took the opportunity to reposition its educational
offering with the assistance of highly regarded medical
universities, such as George Washington. In 2015, Tarsus intends to
launch new education products, leveraging the databases acquired
with CMHC and SBS. In addition it will look to replicate CMHC
events regionally within the US to drive organic growth.
Labelexpo
Labelexpo Americas, the Group's largest event in 2014, took
place in September 2014 in Chicago and produced an excellent
performance with revenues up by 13%, strong visitor attendance and
record re-bookings for the 2016 event.
Offprice
Both Offprice events in Las Vegas during 2014 performed well
with solid revenue growth. Importantly, given increased competition
for exhibition space in Las Vegas, the Group extended its venue
contract to 2019.
Europe
(GBPm) 2014 2013 2012
Biennial revenue - 9.0 -
Annual revenue 12.3 11.1 10.3
Total revenue 12.3 20.1 10.3
Adjusted profit before tax 1.2 4.8 1.1
France
Trading in the Group's French business ended the year in line
with Board expectations. In January 2014 agreement was reached to
sell up to 18% of the French business for EUR1.5m to its French
management. This is in line with the Group's strategy of reducing
its exposure in France.
UK
The Group purchased the 3D Printshow in July 2014 giving
exposure to a rapidly transitioning market which has synergies with
Tarsus' existing business. The events in London and Paris were very
successful and the business has in place an aggressive launch plan
for 2015 which will see the addition of four new events
worldwide.
Outlook
Trading for the first two months of 2015 has been strong. AAITF
performed well in its new venue in Shenzhen and we are very
encouraged by the move. Offprice produced another good show and
Expo Manufactura performed well. In Dubai, AIME, MRO and GESS were
succesful. In addition, we are beginning to see some early benefit
from the broadening of our position into the mainstream medical
market.
Forward bookings for the Group's major events in 2015 are strong
and the two largest exhibitions, Labelexpo Europe and the Dubai
Airshow, are well ahead of their previous editions. Across the
portfolio, bookings are tracking 10%+ ahead on a like-for-like
basis.
Tarsus' revenues are very heavily US dollar orientated and we
are currently benefiting from its strength. This current strength,
if maintained, will be beneficial to the Group's reported results
for 2015.
Given the current global geopolitical environment we have been
deliberately cautious in our budgeting for 2015 but are
increasingly positive about our trading prospects.
Neville Buch, Chairman
Douglas Emslie, Group Managing Director
4 March 2015
Financing
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 2014 approximately 49% of revenues were generated in
US Dollars, 16% in Euros, 13% in Turkish Lira, 7% in Sterling and
11% 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 2014 were:
-- US$: 1.61 - a weakening against Sterling of 2% compared with 2013
-- Euro: 1.24 - a weakening against Sterling of 5% compared with 2013
-- Turkish Lira: 3.53 - a weakening against Sterling of 16% compared with 2013
2015 budgeted exchange rates are US$: 1.60, Euro: 1.25 and
Turkish Lira: 3.60.
Cash flows
Tarsus continues to generate strong cash flows from its
operations. The larger events in the Group's portfolio 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 a
decrease in working capital (excluding cash) in even years,
including 2014, which do not include the Group's two largest
events. This occurs as deferred income relating to these events
builds up in the Statement of Financial Position ahead of the
events in the following year.
During 2014, the Group generated GBP16.0m of cash from
operations (2013: GBP24.5m; 2012: GBP12.2m).
The key non-operating cash flows in 2014 included:
-- Dividends paid of GBP7.0m
-- Deferred consideration payments totaling GBP5.1m
-- Tax and interest paid totaling GBP3.4m
-- Acquisition of SIUF, 3D Print, Komatek, Cardio and SBS GBP17.9m
-- Net proceeds from issue of shares GBP9.6m
-- Proceeds from agreement to part dispose of France GBP0.8m
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.
In July 2014 Tarsus' external bank debt facility of GBP60m was
extended to remain in place until September 2019. At 31 December
2014 93% 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 GBP38.4m at 31 December 2014 (31
December 2013: GBP28.6m).
Net assets
As at 31 December 2014, the Group had net assets of GBP37.5m (31
December 2013: GBP40.2m).
Intangible assets
Intangible assets comprise goodwill, trademarks and customer
lists. The carrying value of intangible assets at 31 December 2014
was GBP126.8m (31 December 2013: GBP98.0m).
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 2014 is deferred income of
GBP28.5m (2013: GBP18.4m; 2012: GBP25.3m). Prepaid event costs of
GBP3.7m (2013: GBP2.8m; 2012: GBP2.5m) are included in Trade and
other receivables.
Dan O'Brien
Group Finance Director
4 March 2015
CONSOLIDATED INCOME STATEMENT
Note Year to 31 December 2014 Year to 31 December 2013
GBP000 GBP000
Group revenue 2 60,568 75,861
Operating costs excluding exceptional items (46,508) (54,175)
Impairment loss - (3,947)
Exceptional operating (costs) / income (3,014) 76
------------------------- -------------------------
Total operating costs (49,522) (58,046)
Share of profit of Joint Ventures 698 1,266
Group operating profit 11,744 19,081
Net finance costs (3,569) (3,181)
------------------------- -------------------------
Profit before taxation 8,175 15,900
Taxation expense 4 (1,422) (2,674)
------------------------- -------------------------
Profit for the financial year 6,753 13,226
========================= =========================
Profit for the financial year attributable to equity
shareholders of the parent company 4,989 11,582
Profit for the financial year attributable to
non-controlling interests 1,764 1,644
6,753 13,226
========================= =========================
Note Year to 31 December 2014 Year to 31 December 2013
Earnings per share (pence) 6
- basic 5.0 12.2
- diluted 5.0 12.1
GBP000 GBP000
Dividends 5
Equity - ordinary
Final 2013 dividend paid 4,996 4,377
Interim 2014 dividend paid 2,179 2,050
Minority dividend paid 1,224 550
8,399 6,977
========================= =========================
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to 31 December 2014 Year to 31 December 2013
GBP000 GBP000
Profit for the financial year 6,753 13,226
------------------------- -------------------------
Cash flow hedge reserve - movement in fair value (910) 512
Foreign exchange translation differences 1,977 (7,975)
------------------------- -------------------------
Other comprehensive income/(expense) 1,067 (7,463)
Total comprehensive income for the year 7,820 5,763
========================= =========================
Attributable to:
Equity shareholders of the parent company 6,056 4,119
Non-controlling interests 1,764 1,644
Total comprehensive income for the year 7,820 5,763
========================= =========================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2014 As at 31 December 2013
Note GBP000 GBP000
NON-CURRENT ASSETS
Property, plant and equipment 1,278 1,239
Intangible assets 126,756 97,967
Investment in Joint Ventures 15,924 15,432
Other investments 1 1
Deferred tax assets 5,006 2,703
148,965 117,342
CURRENT ASSETS
Trade and other receivables 32,178 25,030
Cash and cash equivalents 7 12,347 12,142
----------------------- -----------------------
44,525 37,172
CURRENT LIABILITIES
Trade and other payables (28,661) (26,336)
Deferred income (28,519) (18,384)
Provisions (130) (73)
Liabilities for current tax (3,689) (3,964)
----------------------- -----------------------
(60,999) (48,757)
----------------------- -----------------------
NET CURRENT LIABILITIES (16,474) (11,585)
----------------------- -----------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 132,491 105,757
----------------------- -----------------------
NON-CURRENT LIABILITIES
----------------------- -----------------------
Other payables (35,953) (19,286)
Deferred tax liabilities (8,048) (4,449)
Interest bearing loans and borrowings 7 (50,957) (41,800)
----------------------- -----------------------
(94,958) (65,535)
NET ASSETS 37,533 40,222
======================= =======================
EQUITY
Share capital 5,060 4,797
Share premium account 47,424 37,689
Other reserves (13,794) (14,862)
Retained (loss)/earnings (6,601) 8,767
Issued capital and reserves attributable to equity
shareholders of the parent 32,089 36,391
NON-CONTROLLING INTERESTS 5,444 3,831
TOTAL EQUITY 37,533 40,222
======================= =======================
CONSOLIDATED STATEMENT OF CASH FLOWS
Year to 31 December 2014 Year to 31 December 2013
GBP000 GBP000
Cash flows from operating activities
Profit for the year 6,753 13,226
Adjustments for:
Depreciation 535 613
Amortisation & Impairment 4,504 7,630
Other gains (1,669) (2,823)
(Loss)/profit on disposal of tangible assets (24) 4
Share option charge 1,180 1,041
Taxation charge 1,422 2,674
Interest payable 3,569 3,181
Share of joint venture profits (698) (1,266)
Dividend received from joint venture company - 775
------------------------- -------------------------
Operating cash flow before changes in working capital 15,572 25,055
Increase in trade and other receivables (6,799) (755)
Increase in trade and other payables 7,146 83
Increase in provisions 85 102
Cash generated from operations 16,004 24,485
Interest paid (1,760) (1,393)
Income taxes paid (1,682) (3,371)
Net cash from operating activities 12,562 19,721
Cash flows from investing activities
Proceeds from sale of tangible fixed assets 39 30
Acquisition of property, plant & equipment (645) (261)
Acquisition of intangible fixed assets (1,120) (801)
Acquisition of subsidiaries - cash paid (16,757) (2,698)
Acquisition of joint venture - cash paid - (2,812)
Proceeds on entering forward contract 833 -
Acquisition of subsidiaries - cash acquired 152 4
Deferred and contingent consideration paid (5,083) (18,829)
Net cash outflow from investing activities (22,581) (25,367)
------------------------- -------------------------
Cash flows from financing activities
Drawdown of borrowings 9,157 15,263
Bank facility fees (330) (176)
Proceeds from the issue of share capital 10,000 -
Cost of share issue (388) (76)
Dividends paid to shareholders in parent company (6,975) (6,279)
Dividends paid to non-controlling interests in
subsidiaries (1,224) (550)
Net cash inflow from financing activities 10,240 8,182
------------------------- -------------------------
Net increase in cash and cash equivalents 221 2,536
Opening cash and cash equivalents 12,142 10,255
Foreign exchange movements (16) (649)
------------------------- -------------------------
Closing cash and cash equivalents 7 12,347 12,142
========================= =========================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 - - - - - 1,977 - - 1,977
Profit for the - - - - - - - - -
period:
- Attributable to
equity
shareholders - - - - - - 4,989 - 4,989
- Attributable to
non-controlling
interests - - - - - - - 1,764 1,764
Cash flow hedge
reserve - - - - (910) - - - (910)
-------- -------- --------- ----------- -------- --------- --------- ---------- ---------
Total
comprehensive
income (expense)
for the period - - - - (910) 1,977 4,989 1,764 7,820
Scrip dividend 5 195 - - - - - - 200
New share capital
subscribed 258 9,927 - - - - - - 10,185
Cost of shares
issued - (387) - - - - - - (387)
Share option
charge - - - - - - 1,180 - 1,180
Movement in
reserves relating
to deferred tax - - - - - - (208) - (208)
Other movements in
reserves - - - - - - (1,917) - (1,917)
Dividend paid - - - - - - (7,175) - (7,175)
Dividend paid to
non-controlling
interests - - - - - - - (1,224) (1,224)
Written Put/Call
options over
non-controlling
interests - - - - - - (12,236) - (12,236)
Non-controlling
interests arising
on acquisition - - - - - - - 1,073 1,073
-------- -------- --------- ----------- -------- --------- --------- ---------- ---------
Net change in
shareholders'
funds 263 9,735 - - (910) 1,977 (15,367) 1,613 (2,689)
-------- -------- --------- ----------- -------- --------- --------- ---------- ---------
As at 31 December
2014 5,060 47,424 6,013 (443) (818) (18,546) (6,601) 5,444 37,533
======== ======== ========= =========== ======== ========= ========= ========== =========
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 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)
Profit for the - - - - - - - - -
period:
- Attributable to
equity
shareholders - - - - - - 11,582 - 11,582
- Attributable to
non-controlling
interests - - - - - - - 1,644 1,644
Cash flow hedge - - - - 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 arising
on acquisition - - - - - - (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
======== ======== ========= =========== ======== ========= ========= ========== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The results for the year ended 31 December 2014 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 2013 and to be adopted for the financial
year ended 31 December 2015. 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 2014
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 2014
or 2013 but is derived from those accounts. Statutory accounts for
2013 have been delivered to the Jersey Financial Services
Commission Companies Registry. Those for the year ended 31 December
2014 will be delivered following the Company's Annual General
Meeting on 22 June 2015.
This financial information has been extracted from the Group's
Annual Report and Accounts for the year ended 31 December 2014. 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 2014 Annual
Report and Accounts in March 2015.
2. SEGMENTAL ANALYSIS
As at 31 December 2014, 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 2014
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 23,736 24,557 12,275 - 60,568
========= ========= ========= ========= ==========
Profit/(loss) from operating activities 7,323 11,694 1,234 (8,507) 11,744
Net financing costs - - - (3,569) (3,569)
Profit/(loss) before taxation 7,323 11,694 1,234 (12,076) 8,175
Exceptional debits - - - 2,088 2,088
Share option charge - - - 1,180 1,180
Share of Joint Venture tax - - - 412 412
Amortisation charge - - - 3,213 3,213
Unwinding of discount - - - 1,884 1,884
Adjusted profit/(loss) before tax 7,323 11,694 1,234 (3,299) 16,952
========= ========= ========= ========= ==========
Segment non-current assets 70,468 55,237 18,254 - 143,959
Segment current assets 21,462 10,112 12,951 - 44,525
91,930 65,349 31,205 - 188,484
========= ========= ========= =========
Deferred tax assets 5,006
Total assets 193,490
==========
Segment liabilities (51,962) (16,804) (75,454) - (144,220)
========= ========= ========= =========
Liabilities for current tax (3,689)
Deferred tax liabilities (8,048)
Total liabilities (155,957)
==========
31 December 2013
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
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 costs - - - (1,117) (1,117)
Share option charge - - - 1,041 1,041
Amortisation charge - - - 2,710 2,710
Impairment of tangibles - - - 3,947 3,947
Unwinding of discount - - - 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) (57,534) - (105,878)
========= ========= ========= =========
Liabilities for current tax (3,964)
Deferred tax liabilities (4,449)
Total liabilities (114,291)
==========
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, tax on joint venture profits and adjustments to contingent
consideration.
2014 2013
GBP000 GBP000
Profit before taxation 8,175 15,900
Add back:
Exceptional debit/(credit) 2,088 (1,117)
Share option charge 1,180 1,041
Amortisation charge (excluding amounts charged to costs of sale) 3,213 2,710
Impairment of intangible assets - 3,947
Tax on Joint Venture profits 412 -
Unwinding of discount 1,884 1,691
Adjusted profit before tax 16,952 24,172
Tax thereon (2,546) (3,618)
Adjusted profit after tax 14,406 20,554
======== ========
In 2014, debits include exceptional one-off costs of GBP1.3
million resulting from acquisitions or potential acquisitions,
GBP0.3 million of one-off joint venture costs, and GBP0.7 million
from bank refinancing. A GBP0.2 million credit was booked against
the carrying value of put/call option liabilities.
4. INCOME TAX EXPENSE
2014 2013
GBP000 GBP000
Corporation tax:
Overseas tax on profits for the period 2,736 3,839
Adjustments to overseas corporation tax in respect of previous periods (628) (575)
Current tax charge for the period 2,108 3,264
------- -------
Deferred tax:
Origination and reversal of timing differences 215 (556)
Adjustment in respect of previous periods (tax losses recognised) - -
Adjustments in respect of previous periods (timing difference recognised) (901) (34)
Total deferred tax (686) (590)
------- -------
Tax charge for the year 1,422 2,674
======= =======
The tax charge below differs from the tax at the effective rate
on the profit for the year. The differences are explained
below:
2014 2013
GBP000 GBP000
Profit before taxation 8,175 15,900
Tax on profit on ordinary activities at 25% (2013 - 25%) 2,044 3,975
Effects of:
Net expenses not deductible 2,808 1,185
Current period losses unrecognised - 291
Recognition of previously unrecognised losses (104) -
Tax effect of results in associates (175) (317)
Utilisation of brought forward losses unrecognised (80) (73)
Effect of tax rates in overseas jurisdictions (667) (1,948)
(Over)/under provision in respect of prior periods (1,529) (608)
Current period (credit)/charge for current and historic exposures (875) 169
Tax on profit on ordinary activities 1,422 2,674
======== ========
2014 2013
GBP000 GBP000
Current tax on exercised employee share options 557 88
Deferred tax on losses and prepaid expenses (23) -
Deferred tax on intangible assets (292) 160
Deferred tax on unexercised employee share options (450) 441
Total tax recognised in equity (208) 689
======== ========
5. DIVIDENDS
2014 2013
GBP000 GBP000
Dividend paid in cash or scrip
2013/2012 interim dividend (2.3p / 2.2p per share) 2,179 2,050
2013/2012 final dividend (5.0p / 4.6p per share) 4,996 4,377
7,175 6,427
======= =======
Dividend paid and proposed post year end
2014/2013 interim dividend paid (2.4p / 2.3p per share) 2,416 2,179
2014/2013 final dividend proposed (5.4p / 5.0p per share) 5,494 4,989
7,910 7,168
======= =======
An interim dividend of 2.4p per share (2013: 2.3p) was paid on
15 January 2015 to shareholders on the Register of Members of the
Company as at 5 December 2014.
The directors announced the proposed final dividend for 2014, of
5.4p per share, on 4 March 2015. Subject to approval at the Annual
General Meeting on 22 June 2015, the proposed date of payment is 8
July 2015 to Shareholders on the Register of Members as at 29 May
2015.
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
2014 2013
Pence Pence
Basic earnings per share 5.0 12.2
Diluted earnings per share 5.0 12.1
Adjusted earnings per share 12.7 20.0
Adjusted diluted earnings per share 12.6 19.7
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):
2014 2013
Number Number
Weighted average number of ordinary shares 99,643,016 94,636,411
Dilutive effect of share options 540,814 1,238,069
Weighted average number of ordinary shares (diluted) 100,183,830 95,874,480
============ ===========
Dilutive and anti-dilutive share options were determined using
the average closing price for the period. The average share price
used was 212.68 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. OVERDRAFTS AND OTHER INTEREST-BEARING LOANS AND
BORROWINGS
2014 2013
GBP000 GBP000
Less than one year
Bank loans - -
------------- -------------
One to two years
Bank loans - -
------------- -------------
Two to five years
Bank loans 50,957 41,800
------------- -------------
Total financial liabilities 50,957 41,800
Cash balances (12,347) (12,142)
------------- -------------
Net financial liabilities and cash balances 38,610 29,658
Capitalised bank fees (1,018) (937)
Fair value of interest rate swaps 818 (92)
------------- -------------
Net debt 38,410 28,629
============= =============
The bank loans are secured by a fixed and floating charge over the undertakings and property
of certain subsidiaries. The parent and subsidiaries also act as guarantors for the loans.
2014 2013
GBP000 GBP000
Current liabilities
Secured bank loans - -
------------- -------------
Non-current liabilities
Secured bank loans 50,957 41,800
------------- -------------
Total financial liabilities 50,957 41,800
============= =============
8. ACQUISITION OF SUBSIDIARY
i) On 7 February 2014, the Group acquired 100% of the trade and
assets of Cardiometabolic Health Congress ("CMHC"), 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:
Book Value Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment - - -
Other intangibles - 2,772 2,772
Trade and other receivables - - -
Cash and cash equivalents - - -
Trade and other payables (247) (150) (397)
Deferred tax liability - (186) (186)
(247) 2,436 2,189
----------- ------------
Net assets acquired 2,189
Goodwill arising on acquisition 5,868
8,057
===========
Consideration paid and costs incurred:
Satisfied in cash 6,942
Contingent consideration (less than one year) 1,115
Contingent consideration (over one year) -
Total consideration incurred 8,057
===========
Consideration paid in cash 6,942
Cash acquired -
Total net cash outflow 6,942
===========
The values used in the 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. Since the release of the Interim
Financial Statements the Group has reviewed the values used in
accounting for the intangible assets, goodwill and liabilities
related to the acquisition. The change in the acquisition
accounting estimates has changed due to more accurate forecasts on
the performance of CMHC, and are therefore measurement period
adjustments.
From the date of acquisition to 31 December 2014, the
acquisition has contributed GBP2.6m of revenue to the Group.
Goodwill of GBP5.9 million, recognised on this acquisition,
relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, relationships of
key staff members with customers, customer loyalty and the
anticipated future profitability that the Group can bring to the
business acquired. Consistent with other media companies, goodwill
makes up a large percentage of the fair value of the
acquisition.
The Group incurred transaction costs of GBP48,000 in respect of
the acquisition, which were expensed.
ii) On 5 February 2014, the Group acquired 60% of the share
capital of Sada Uzmanhk Fuarlari A.S. ("Sada"), 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:
Book Value Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment 3 - 3
Other intangibles - 560 560
Trade and other receivables 70 - 70
Cash and cash equivalents 74 - 74
Trade and other payables (44) - (44)
Deferred tax asset - - -
Deferred tax liability - (112) (112)
103 448 551
----------- ------------
Non-controlling interest (40%) (220)
Net assets acquired 331
Goodwill arising on acquisition 1,351
1,682
===========
Consideration paid and costs incurred:
Satisfied in cash 1,407
Stamp duty paid 81
Contingent consideration (less than one year) -
Contingent consideration (over one year) 194
Total consideration incurred 1,682
===========
Consideration paid in cash 1,407
Cash acquired (74)
Total net cash outflow 1,333
===========
Tarsus and the vendor hold put/call options over the remaining
40% of the shares of the business, exercisable from now until 2019
and enforceable by either party, with consideration payable 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. The
non-controlling interest is measured at their proportionate share
of the fair value of 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 exhibition occurring in 2015
and 2017.
From the date of acquisition to 31 December 2014, the
acquisition has contributed GBPnil of revenue to the Group, as the
event did not occur in 2014.
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, relationships of
key staff members with customers, customer loyalty and the
anticipated future profitability that the Group can bring to the
business acquired. Consistent with other media companies, goodwill
makes up a large percentage of the fair value of the
acquisition.
The Group incurred transaction costs of GBP25,000 in respect of
the acquisition, which were expensed.
iii) On 18 March 2014, the Group acquired 50% of the share
capital of Shenzhen Shengshi Jiuzhou Exhibition Co. Ltd ("SIUF"),
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:
Book Value Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment - - -
Other intangibles - 1,099 1,099
Trade and other receivables 566 (174) 392
Cash and cash equivalents 122 - 122
Trade and other payables (505) - (505)
Deferred tax asset - - -
Deferred tax liability - (275) (275)
183 650 833
----------- ------------
Non-controlling interest (50%) (444)
Net assets acquired 389
Goodwill arising on acquisition 6,171
6,560
===========
Consideration paid and costs incurred:
Satisfied in cash 3,857
Contingent consideration (less than one year) 29
Contingent consideration (over one year) 2,674
Total consideration incurred 6,560
===========
Consideration paid in cash 3,857
Cash acquired (122)
Total net cash outflow 3,735
===========
The values used in the 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 net assets. Since
the release of the Interim Financial Statement the Group has
reviewed the values used in accounting for the intangible assets,
goodwill and liabilities related to the acquisition. The change in
the acquisition accounting estimates has changed due to more
accurate forecasts on the performance of SIUF, and are therefore
measurement period adjustments.
Tarsus holds enforceable put/call 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/call 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/call
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. The non-controlling interest is
measured at their proportionate share of the fair value of 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 exhibitions occurring in
2015.
From the date of acquisition to 31 December 2014, the
acquisition has contributed GBP2.6 million of revenue to the
Group.
Goodwill of GBP6.2 million, recognised on this acquisition,
relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, relationships of
key staff members with customers, customer loyalty and the
anticipated future profitability that the Group can bring to the
business acquired. Consistent with other media companies, goodwill
makes up a large percentage of the fair value of the
acquisition.
The Group incurred transaction costs of GBP56,000 in respect of
the acquisition.
iv) On 30 July 2014, the Group acquired 60% of the share capital
of 3D Print Limited ("3D Print"), 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:
Book Value Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment 45 - 45
Other intangibles - 1,695 1,695
Trade and other receivables 293 - 293
Cash and cash equivalents (49) - (49)
Trade and other payables (619) - (619)
Deferred tax asset - - -
Deferred tax liability - (339) (339)
(330) 1,356 1,026
----------- ------------
Non-controlling interest (40%) (410)
Net assets acquired 616
Goodwill arising on acquisition 1,829
2,445
===========
Consideration paid and costs incurred:
Satisfied in cash 520
Contingent consideration (less than one year) 570
Contingent consideration (over one year) 1,355
Total consideration incurred 2,445
===========
Consideration paid in cash 520
Cash acquired (49)
Total net cash outflow 471
===========
Tarsus and the vendor hold put/call options over the remaining
40% of the shares of the business, exercisable from now until 2017
by consent of both parties or from 2017 to 2020, 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. The
non-controlling interest is measured at their proportionate share
of the fair value of 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 exhibitions occurring in 2015
and 2016.
From the date of acquisition to 31 December 2014, the
acquisition has contributed GBP0.6 million of revenue to the
Group.
Goodwill of GBP1.8 million, recognised on this acquisition,
relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, relationships of
key staff members with customers, customer loyalty and the
anticipated future profitability that the Group can bring to the
business acquired. Consistent with other media companies, goodwill
makes up a large percentage of the fair value of the
acquisition.
The Group incurred transaction costs of GBP4,000 in respect of
the acquisition.
v) On 10 November 2014, the Group acquired 100% of the trade and
assets of South Beach Symposium ("SBS"), 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:
Book Value Adjustments Fair value
GBP000 GBP000 GBP000
Property, plant and equipment - - -
Other intangibles - 1,857 1,857
Trade and other receivables - - -
Cash and cash equivalents - - -
Trade and other payables (109) - (109)
Deferred tax asset - - -
Deferred tax liability - (141) (141)
(109) 1,716 1,607
----------- ------------
Net assets acquired 1,607
Goodwill arising on acquisition 4,851
6,458
===========
Consideration paid and costs incurred:
Satisfied in cash 3,388
Contingent consideration (less than one year) 321
Contingent consideration (over one year) 2,749
Total consideration incurred 6,458
===========
Consideration paid in cash 3,388
Cash acquired -
Total net cash outflow 3,388
===========
From the date of acquisition to 31 December 2014, the
acquisition has contributed GBPnil of revenue to the Group, since
no event has taken place since acquisition.
Goodwill of GBP4.9 million, recognised on this acquisition,
relates to certain assets that cannot be separated and reliably
measured. These items include sector knowledge, relationships of
key staff members with customers, customer loyalty and the
anticipated future profitability that the Group can bring to the
business acquired. Consistent with other media companies, goodwill
makes up a large percentage of the fair value of the
acquisition.
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 online revenues occurring in
2018.
The Group incurred transaction costs of GBP38,000 in respect of
the acquisition.
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 principal 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 2013 and to be adopted for the
financial year ended 31 December 2014, 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
David Gilberston Non-executive Director
Tim Haywood Non-executive Director
Robert Ware Non-executive Director
The Annual General Meeting will be held at the Writers Room,
Radisson BLU Hotel Dublin Airport, Dublin, Ireland on 22 June 2015
at 11.00am.
A copy of this report will also be available on the Group's
website at www.tarsus.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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