TIDMTRS
RNS Number : 7053Q
Tarsus Group PLC
02 March 2016
2 March 2016
Tarsus Group plc
Final results for year ended 31 December 2015
Record results - strong organic growth delivered
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 2015.
Tarsus continued to focus on "Quickening the Pace" - a strategy
to accelerate the pace of financial returns to shareholders. The
Group saw like-for-like revenue growth of 10% over the year (at
constant exchange rates) and across the portfolio grew
buyers/visitors by an industry-leading 9%.
Financial results
2015 2014 2013
Revenue (GBPm) 86.9 60.6 75.9
Like-for-like* revenue
growth 10% 10% 11%
Adjusted profit before
tax* (GBPm) 26.3 17.0 24.2
Profit before tax
(GBPm) 19.1 7.1 15.9
Adjusted EPS* (pence) 21.4 12.7 20.0
Dividend (pence) 8.4 7.8 7.3
Net debt (GBPm) 43.8 38.4 28.6
Financial highlights
-- Revenue up 15% against 2013
-- Group like-for-like revenues* up 10%
-- Adjusted profit before tax up 9% against 2013
-- Adjusted earnings per share up 7% against 2013
-- Proposed final dividend of 5.9p - total for year up 8% to 8.4p
-- Banking facilities increased to GBP75m and extended to 2020
Operational highlights
-- Combined Emerging Markets and US revenues comprised 86% of Group proforma revenue*
-- Strong buyer/visitor growth across the portfolio of 9%
-- Global brands - Labelexpo Europe and the Dubai Airshow performed strongly
-- Two strategic acquisitions - Painweek (Medical) and AMB (South East Asia)
-- 15 brand replications launched across nine show brands
-- Disposal of French business completed
Current trading and outlook
-- Good performance from 2016 year to date events
-- Forward bookings for 2016, on a like-for-like basis,
currently +10% ahead of those for 2015 (adjusted for biennials and
acquisitions)
-- Replication programme gaining momentum
-- Record rebook for global brands (Labelexpo Europe and the Dubai Airshow) in 2017
-- Well positioned to deliver a good performance in 2016
Douglas Emslie, Group Managing Director of Tarsus,
commented:
"2015 was an important year for Tarsus. We passed a significant
milestone in the strategic progress of the Group with the sale of
our French business. This will allow us to concentrate resources on
our selected core geographies which offer the best opportunities
for growth.
"Our 'Quickening the Pace' growth strategy gained further
traction and we achieved industry leading organic growth through
our focus on delivering larger numbers of buyers to our exhibitions
- up 9% in 2015.
"We achieved organic revenue growth of 10% and are continuing to
invest in replications of our successful brands to maintain
momentum over the medium-term. Forward bookings are strong and the
Group is well positioned to deliver a good performance in 2016"
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 Investec Bank at 2 Gresham St.,
London EC2V 7QP. A webcast of the presentation will be made
available on Tarsus's website (www.tarsus.com) from 9.30 am on 3
March 2016.
Glossary*
Like-for-like revenue:
Constant exchange rates adjusted for biennial events, excluding
acquisitions impacting for the first time in 2015, 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.
Proforma revenue:
Revenue excluding any disposals made in the year and including
Group's share of any revenues recorded in joint venture companies
not consolidated.
Adjusted operating cash:
Cash from operations adjusted for non-operating items and
disposals.
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 two strategic acquisitions in the year. The addition
of Painweek in the US completed our footprint for the Medical
Division and extends our coverage to address all four pillars of
preventative medicine. The acquisition of 50% of AMB gives us
further exposure to the fast growing markets of South East
Asia.
The Group's entrepreneurial culture, specifically its size,
flexibility and willingness to collaborate with its partners in the
development of their businesses, is proving increasingly attractive
to vendors and proved instrumental in enabling us to secure these
acquisitions for the Group helping to accelerate the overall
strategy.
In the future, there will be an emphasis on gradually buying in
the outstanding minority interests of our joint ventures in the
Group's Emerging Markets portfolio. This will help us deliver
sector leading earnings per share growth towards the top end of our
target range.
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) 7% per annum to 21.4p, against a 5-10% growth per annum
target.
2. Increasing share of revenues from faster growth economies in the 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 2015 the Group recorded 86% of
pro-forma revenues (79% of reported) 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
strong growth of 9% in 2015 compares favourably with an industry
average of 3% and an internal target of 5%. This is being assisted
by executing a focused programme for every show and by higher
levels of knowledge sharing and best practice disciplines
internally.
Financial results
The financial results were in line with the Board's
expectations. Group revenues for the full year were GBP86.9m (2014:
GBP60.6m), up 15% on a biennial basis (2013: GBP75.9m).
Like-for-like revenues, at constant exchange rates, increased by
10%. Revenues were not materially impacted by foreign exchange in
2015 with a strengthening in the US dollar offsetting a
depreciation of the Turkish Lira.
Group adjusted profit before tax was GBP26.3m (2014: GBP17.0m),
up 9% on a biennial basis (2013: GBP24.2m). Net interest expense of
GBP2.0m (2014: GBP1.7m) reflected increased debt levels across 2015
as a result of acquisitions. Reported profit before tax was
GBP19.1m (2014: GBP7.1m).
The Group incurred an amortisation charge of GBP5.2m (2014:
GBP4.5m) and an impairment charge of GBP1.8m (2014: nil) on the
disposal of its French business.
The adjusted tax charge of GBP3.8m (2014: GBP2.5m) represents
15% (2014: 15%) of the Group's adjusted profit before tax. The
reported tax charge is GBP2.2m (2014: GBP1.7m). 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 21.4p (2014: 12.7p), 7% up on a
biennial basis (2013: 20.0p). Basic earnings per share for 2015
were 14.4p (2014: 5.0p).
The group generated GBP27.0m of adjusted operating cash* during
the year (2014: GBP19.5m and 2013: GBP23.9m). The Group's net debt
as at 31 December 2015 increased to GBP43.8m (2014: GBP38.4m).
Reflecting the strong financial performance during 2015 the
Tarsus Board is proposing a final dividend of 5.9p per share,
bringing the total for the year to 8.4p per share (2014: 7.8p per
share), an increase of 8%. This proposed rise is the fifth
consecutive year of increases to the dividend and represents a
compound annual growth rate of 7.5%.
The final dividend, subject to Shareholder approval, will be
paid on 7 July 2016 to Shareholders on the Register of Members on
27 May 2016. A scrip dividend will continue to be offered as an
alternative.
Corporate activity
Two strategic acquisitions were completed during the year.
In May 2015, Tarsus acquired 100% of Painweek in the US. This
completes the exposure of the Group's medical business to the four
main sectors of the US preventative medical market - neurology,
endocrinology, cardiovascular and oncology. Painweek has enjoyed
strong growth since it was established in 2007 and its main annual
event is supported by a series of satellite events in the US and a
strong digital presence.
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In July 2015, the Group purchased 50% of the AMB Group, an
established South-East Asian exhibition organiser with a major
presence in Myanmar and Cambodia. This adds significant scale and
presence across the region, building on Tarsus' existing business
in Indonesia. Tarsus intends to scale up AMB's events and launch
new exhibitions in its existing markets.
The Group sold all of its French business in July 2015 to French
management, in line with the previously stated strategy of reducing
exposure to France and allowing the Group to concentrate resources
on its selected core geographies which offer the best opportunities
for growth.
Operating Review
Emerging Markets
(GBPm) 2015 2014 2013
Biennial revenue 24.8 4.3 21.1
Annual revenue 18.8 19.4 16.0
Total revenue 43.6 23.7 37.1
Adjusted profit before tax 15.0 7.3 14.0
Dubai
The Group's largest event, the Dubai Airshow, once again saw
strong revenue growth and buyer attendance increased by 9%. The
aerospace sector in the region continues to go from strength to
strength, this was reflected at the Dubai Airshow where a record
rebook for the next edition in 2017 was secured. The education
event GESS performed well with buyer growth of 11%. GESS is one of
the Group's key replication brands with successful launches during
2015 into both Mexico City and Jakarta.
Turkey
Overall the portfolio performed well and once again there were
strong performances from the larger shows, notably the biennials,
Asansor (lifts) and Komatek (construction), as well as the Flower
Show (landscaping equipment and services). Zuchex (Homewares) saw
buyer growth of 6% with its international visitors running at twice
that level supported by investment into multi-lingual marketing and
advertising. Ideal Home (Homewares) and Sign (Advertising) both
produced solid results. The Sterling translated results were
impacted during 2015 by a weakening of the Turkish lira by 30%
compared with prior events.
China
We were encouraged by the performance of our Chinese business in
2015 despite slowing GDP growth in China. Hope, the Group's Central
China operation turned in another year of good growth led by its
medical equipment events. SIUF, the leading Asian show for
underwear demonstrated good progress over the 2014 edition while
AAITF (auto aftermarket) was successfully repositioned in Shenzhen
in January 2015 where it performed well.
Mexico
There was a good performance from Expo Manufactura
(manufacturing) including a successful launch of the co-located
Industrial Print Expo. GESS (Dubai-based) also enjoyed a successful
replication launch into the Mexican market.
South-East Asia
In Indonesia the established IIICE (infrastructure) event
achieved strong buyer attendance following increased investment by
the Group in marketing. The first edition of Big 5 Construct, held
via a joint venture with DMGT, was launched successfully.
Construction and infrastructure are important and growing areas for
the Indonesian economy and the Group is well placed to take
advantage of developments. Our GESS education brand (Dubai-based)
also enjoyed a successful launch in Jakarta in 2015 and the outlook
for this event is very promising.
The Group substantially increased its regional presence with the
acquisition of 50% of AMB in July 2015 thereby adding Malaysia,
Myanmar, Cambodia and the Philippines to its Indonesian base. The
ASEAN economies are growing strongly and the joint venture will
offer Tarsus first-mover advantage in some key sectors in these
exciting markets. AMB performed in line with our expectations and
its acquisition business case.
US
(GBPm) 2015 2014 2013
Biennial revenue - 5.1 -
Annual revenue 25.4 19.5 18.7
Total revenue 25.4 24.6 18.7
Adjusted profit before
tax 11.4 11.7 8.8
Medical
The Group has continued to reposition the Medical Division to
address the larger mainstream medical market. Following the
acquisition of Painweek in July 2015, the Group now addresses all
four pillars of the preventative medicine market. Its key brands
are:
Neurology - Painweek
Cardiovascular - Cardiometabolic Health Congress (CMHC)
Oncology - South Beach Symposium (SBS)
Endocrinology - MMI
A number of initiatives were launched in 2015 to drive future
growth. Firstly, the Group has seen a number of opportunities arise
from collaboration and cross-working within the business units
which now make up the division. Secondly, building on the model
successfully employed by CMHC, this division is establishing a
central team focussed on obtaining educational grants from
pharmaceutical companies to develop an additional revenue stream
across the other business units. Finally, the business is launching
a new medical technology event in December 2016.
The Group's established anti-aging events in Orlando (May) and
Las Vegas (December) were both record shows with increased
attendances, while both SBS and Painweek performed well in their
first editions under Tarsus ownership.
Offprice
Both Offprice events in Las Vegas during 2015 performed well
with solid revenue growth of 5%.
Europe
(GBPm) 2015 2014 2013
Biennial revenue 10.5 - 9.0
Annual revenue 7.4 12.3 11.1
Total revenue 17.9 12.3 20.1
Adjusted profit before
tax 4.1 1.2 4.8
The Group's second largest event, Labelexpo Europe, produced a
very strong result with buyers up by 12% on the previous edition to
a record 35,700. In addition, re-bookings at the event for the 2017
edition reached a very encouraging 84%.
The 3D Printshow business successfully completed an aggressive
launch programme in 2015. We are looking to consolidate this
business in 2016 into two larger events, in Amsterdam and Pasadena,
California focused on industrial additive manufacturing, to address
the B2B market.
The Group completed the sale of its French business in July 2015
in line with its strategy to focus on markets with higher growth
potential.
Outlook
Trading for the first two months of 2016 has been in line with
management expectations. AAITF showed good growth in its second
edition in Shenzhen. AIME and MRO in Dubai also performed well. In
the US the South Beach Symposium and Off Price were solid events.
Expo Manufactura recorded a strong performance in Mexico in
February.
Forward bookings for the Group's major events in 2016 are
tracking +10% ahead of 2015 (adjusted for biennials and
acquisitions). We are mindful of the current global macroeconomic
uncertainty and geopolitical risk and have budgeted accordingly.
The Group is well positioned to deliver a good performance in
2016.
Neville Buch, Chairman
Douglas Emslie, Group Managing Director
2 March 2016
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 2015 approximately 55% of revenues were generated in
US Dollars, 6% in Euros, 12% in Turkish Lira, 16% in Sterling and
10% in Chinese Renminbi. As a result of the Group's currency
composition, Sterling translated trading results are significantly
affected by any changes in prevailing exchange rates during the
year. The average exchange rates applicable for 2015 were:
-- US$: 1.50
-- Euro: 1.38
-- Turkish Lira: 4.20
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 an
increase in working capital (excluding cash) in odd years
(including 2015) which 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 2015, the Group generated GBP27.0m of adjusted operating
cash* (2014: GBP19.5m; 2013: GBP23.9m).
The key non-operating cash flows in 2015 included:
-- Dividends paid of GBP7.6m
-- Deferred consideration payments totalling GBP7.2m
-- Tax and interest paid totalling GBP3.7m
-- Acquisition of PainWeek and AMB GBP5.9m
-- Proceeds on disposal of France GBP3.2m
-- Share purchases by Employee Benefit Trust GBP1.5m
Net debt
The Group's funding objective is to ensure that the business has
sufficient resources, secured on competitive terms, to meet its
various financial commitments as they arise. It achieves this
objective by actively monitoring its cash flows and requirements on
both an historic and forward looking basis. The Group is cautious
in its approach, applying appropriate sensitivities to both the
quantum and timing of its projections.
In June 2015 Tarsus' external bank debt facility of GBP60m was
extended to GBP75m and remains in place until September 2020. At 31
December 2015 all borrowings were denominated in Sterling. The
Group has entered into interest rate swaps to fix the interest
rates payable under its banking facilities.
The Group's net debt was GBP43.8m at 31 December 2015 (31
December 2014: GBP38.4m).
Net assets
As at 31 December 2015, the Group had net assets of GBP39.9m (31
December 2014: GBP37.5m).
Intangible assets
Intangible assets comprise goodwill, trademarks and customer
lists. The carrying value of intangible assets at 31 December 2015
was GBP127.1m (31 December 2014: GBP126.8m).
Working capital
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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 2015 is deferred income of
GBP24.1m (2014: GBP28.5m; 2013: GBP18.4m). Prepaid event costs of
GBP4.8m (2014: GBP3.7m; 2013: GBP2.8m) are included in Trade and
other receivables.
Dan O'Brien
Group Finance Director
2 March 2016
CONSOLIDATED INCOME STATEMENT
Notes Year to Year to
31 December 31 December
2015 2014
GBP000 GBP000
Total Revenue 86,877 60,568
Less: Revenue from discontinued
operations 9 (4,924) (9,694)
------------- -------------
Continuing Operations
Group revenue 2 81,953 50,874
Operating costs (58,245) (40,893)
Share of profit of Joint Ventures 783 698
Group operating profit 24,491 10,679
Net finance costs (5,422) (3,569)
------------- -------------
Profit before taxation 19,069 7,110
Taxation expense 4 (2,176) (1,706)
------------- -------------
Profit for the financial year
from continuing operations 16,893 5,404
------------- -------------
Discontinued Operations
(Loss) / profit for the financial
year from discontinued operations 9 (1,426) 1,349
------------- -------------
Profit for the financial year 15,467 6,753
============= =============
Profit for the financial year
attributable to equity shareholders
of the parent company 14,579 4,989
Profit for the financial year
attributable to non-controlling
interests 888 1,764
15,467 6,753
============= =============
Notes Year to Year to
31 December 31 December
2015 2014
Earnings per share (pence) 6
- basic 14.4 5.0
- diluted 14.4 5.0
GBP000 GBP'000
Dividends 5
Equity - ordinary
Final 2014 dividend paid 5,469 4,996
Interim 2015 dividend paid 2,416 2,179
Minority dividend paid 1,908 1,224
9,793 8,399
============= =============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year to Year to
31 December 31 December
2015 2014
GBP000 GBP000
Profit for the financial year 15,467 6,753
------------- -------------
Other comprehensive expense:
Cash flow hedge reserve -
movement in fair value (262) (910)
Foreign exchange translation
differences (1,835) 1,977
------------- -------------
Other comprehensive (expense)
/ income (2,097) 1,067
Total comprehensive income
for the year 13,370 7,820
============= =============
Attributable to:
Equity shareholders of the
parent company 12,482 6,056
Non-controlling interests 888 1,764
Total comprehensive income
for the year 13,370 7,820
============= =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 As at
December 31 December
2015 2014
Notes GBP000 GBP000
NON-CURRENT ASSETS
Property, plant and equipment 904 1,278
Intangible assets 127,127 126,756
Investment in Joint Ventures 23,595 15,924
Other investments 1 1
Deferred tax assets 2,503 5,006
154,130 148,965
CURRENT ASSETS
---------- -------------
Trade and other receivables 29,709 32,178
Cash and cash equivalents 7 10,693 12,347
---------- -------------
40,402 44,525
CURRENT LIABILITIES
---------- -------------
Trade and other payables (27,536) (28,661)
Deferred income (24,135) (28,519)
Provisions (200) (130)
Liabilities for current tax (1,510) (3,689)
---------- -------------
(53,381) (60,999)
---------- -------------
NET CURRENT LIABILITIES (12,979) (16,474)
---------- -------------
TOTAL ASSETS LESS CURRENT LIABILITIES 141,151 132,491
---------- -------------
NON-CURRENT LIABILITIES
---------- -------------
Other payables (38,364) (35,953)
Deferred tax liabilities (8,505) (8,048)
Interest bearing loans and borrowings 7 (54,350) (50,957)
---------- -------------
(101,219) (94,958)
NET ASSETS 39,932 37,533
========== =============
EQUITY
Share capital 5,091 5,060
Share premium account 48,280 47,424
Other reserves (15,891) (13,794)
Retained loss (1,972) (6,601)
---------- -------------
Issued capital and reserves
attributable to equity shareholders
of the parent 35,508 32,089
NON-CONTROLLING INTERESTS 4,424 5,444
TOTAL EQUITY 39,932 37,533
========== =============
CONSOLIDATED STATEMENT OF CASH FLOWS
Year to Year to
31 December 31 December
2015 2014
Notes GBP000 GBP000
Cash flows from operating activities
Profit for the year 15,467 6,753
Adjustments for:
Depreciation 434 535
Amortisation & Impairment 6,969 4,504
Other gains (4,469) (1,669)
Loss / (profit) on disposal
of tangible assets 93 (24)
Profit on disposal of subsidiary (165) -
Share option charge 1,706 1,180
Taxation charge 4 2,202 1,422
Interest payable 5,422 3,569
Share of joint venture profits (783) (698)
Dividend received from joint 975 -
venture company
------------- -------------
Operating cash flow before
changes in working capital 27,851 15,572
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Decrease / (increase) in trade
and other receivables 2,862 (6,799)
(Decrease) / increase in trade
and other payables (8,381) 7,146
Increase in provisions 62 85
Cash generated from operations 22,394 16,004
Interest paid (1,768) (1,760)
Income taxes paid (1,960) (1,682)
Net cash from operating activities 18,666 12,562
Cash flows from investing activities
Proceeds from sale of tangible
fixed assets 163 39
Acquisition of property, plant
& equipment (615) (645)
Acquisition of intangible fixed
assets (1,088) (1,120)
Acquisition of subsidiaries
- cash paid (3,258) (16,757)
Acquisition of joint venture (2,675) -
- cash paid
Proceeds on disposal of business 3,256 833
Acquisition of subsidiaries
- cash acquired - 152
Deferred and contingent consideration
paid (7,247) (5,083)
Net cash outflow from investing
activities (11,464) (22,581)
------------- -------------
Cash flows from financing activities
Drawdown of borrowings 3,393 9,157
Bank facility fees (243) (330)
Proceeds from the issue of
share capital - 10,000
Purchases for employee benefit
trust (1,445) (388)
Dividends paid to shareholders
in parent company (7,638) (6,975)
Dividends paid to non-controlling
interests in subsidiaries (1,908) (1,224)
Net cash (outflow) / inflow
from financing activities (7,841) 10,240
------------- -------------
Net (decrease) / increase in
cash and cash equivalents (639) 221
Opening cash and cash equivalents 12,347 12,142
Foreign exchange movements (1,015) (16)
------------- -------------
Closing cash and cash equivalents 7 10,693 12,347
============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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
2015 5,060 47,424 6,013 (443) (818) (18,546) (6,601) 5,444 37,533
Recognised foreign
exchange losses
for the period - - - - - (1,835) - - (1,835)
Profit for the
period:
- Attributable to
equity
shareholders - - - - - - 14,579 - 14,579
- Attributable to
non-controlling
interests - - - - - - - 888 888
Cash flow hedge
reserve - - - - (262) - - - (262)
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
Total comprehensive
income (expense)
for the period - - - - (262) (1,835) 14,579 888 13,370
Scrip dividend 6 240 - - - - - - 246
New share capital
subscribed 25 616 - - - - - - 641
Share option charge - - - - - - 1,422 - 1,422
Movement in
reserves relating
to deferred tax - - - - - - (1,237) - (1,237)
Other movements in
reserves - - - - - - (2,250) - (2,250)
Dividend paid - - - - - - (7,885) - (7,885)
Dividend paid to
non-controlling
interests - - - - - - - (1,908) (1,908)
Net change in
shareholders'
funds 31 856 - - (262) (1,835) 4,629 (1,020) 2,399
-------- -------- --------- ----------- -------- --------- --------- ---------- --------
As at 31 December
2015 5,091 48,280 6,013 (443) (1,080) (20,381) (1,972) 4,424 39,932
======== ======== ========= =========== ======== ========= ========= ========== ========
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
======== ======== ========= =========== ======== ========= ========= ========== =========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
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The results for the year ended 31 December 2015 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 2014 and to be adopted for the financial
year ended 31 December 2016. 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 2015
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 2015
or 2014 but is derived from those accounts. Statutory accounts for
2014 have been delivered to the Jersey Financial Services
Commission Companies Registry. Those for the year ended 31 December
2015 will be delivered following the Company's Annual General
Meeting on 20 June 2016.
This financial information has been extracted from the Group's
Annual Report and Accounts for the year ended 31 December 2015. 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 2015 Annual
Report and Accounts in March 2016.
2. SEGMENTAL ANALYSIS
As at 31 December 2015, 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
2015
Emerging Central
Markets USA Europe Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Total Revenue 43,562 25,401 17,914 - 86,877
Less: Revenue from
discontinued operations - - (4,924) - (4,924)
--------- --------- --------- --------- ----------
Group Revenue from
continuing operations 43,562 25,401 12,990 - 81,953
========= ========= ========= ========= ==========
Profit/(loss) from
operating activities 14,954 11,386 3,710 (5,559) 24,491
Net financing costs - - - (5,422) (5,422)
--------- --------- --------- --------- ----------
Profit/(loss) before
taxation 14,954 11,386 3,710 (10,981) 19,069
Total adjusting items
- note 3 - - 94 6,851 6,945
Adjusted profit from
discontinued operations
- note 3 - - 306 - 306
--------- --------- --------- --------- ----------
Adjusted profit/(loss)
before tax 14,954 11,386 4,110 (4,130) 26,320
========= ========= ========= ========= ==========
Segment non-current
assets 75,112 66,835 9,680 - 151,627
Segment current assets 16,930 9,597 13,875 - 40,402
--------- --------- --------- --------- ----------
92,042 76,432 23,555 - 192,029
========= ========= ========= =========
Deferred tax assets 2,503
----------
Total assets 194,532
==========
Segment liabilities (49,460) (26,280) (68,845) - (144,585)
========= ========= ========= =========
Liabilities for current
tax (1,510)
Deferred tax liabilities (8,505)
----------
Total liabilities (154,600)
==========
31 December
2014
Emerging Central
Markets USA Europe Costs Group
GBP000 GBP000 GBP000 GBP000 GBP000
Total Revenue 23,736 24,557 12,275 - 60,568
Less: Revenue from
discontinued operations - - (9,694) - (9,694)
--------- --------- --------- --------- ----------
Group Revenue from
continuing operations 23,736 24,557 2,581 - 50,874
========= ========= ========= ========= ==========
Profit/(loss) from
operating activities 7,323 11,694 169 (8,507) 10,679
Net financing costs - - - (3,569) (3,569)
--------- --------- --------- --------- ----------
Profit/(loss) before
taxation 7,323 11,694 169 (12,076) 7,110
Total adjusting items
- note 3 - - (100) 8,778 8,678
Adjusted profit from
discontinued operations
- note 3 - - 1,164 - 1,164
--------- --------- --------- --------- ----------
Adjusted profit/(loss)
before tax 7,323 11,694 1,233 (3,298) 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)
==========
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.
2015 2014
GBP000 GBP000
Adjusting items:
Exceptional (credit) / debit * (2,297) 2,013
Share option charge 1,706 1,180
Amortisation charge (excluding
amounts charged to costs of sale) 3,721 3,213
Loss / (gain) on disposal of tangible
fixed assets 93 (24)
-------- --------
Total adjusting items in operating
costs 3,223 6,382
Tax on joint venture profits 288 412
Unwinding of discount 3,434 1,884
Total adjusting items 6,945 8,678
Profit before tax 19,069 7,110
Adjusted profit before tax from
discontinued operations 306 1,164
-------- --------
Adjusted profit before tax 26,320 16,952
Tax thereon (3,819) (2,546)
-------- --------
Adjusted profit after tax 22,501 14,406
======== ========
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Unwinding of discount is interest on contingent consideration
and put/call liabilities caused by discounting on initial
recognition of liability.
4. INCOME TAX EXPENSE
2015 2014
GBP000 GBP000
Corporation tax:
Overseas tax on profits for the period 2,365 2,734
Adjustments to overseas corporation
tax in respect of previous periods (1,566) (628)
-------- -------
Current tax charge for the period 799 2,106
-------- -------
Deferred tax:
Origination and reversal of timing
differences 357 215
Adjustment in respect of previous (1) -
periods (tax losses recognised)
Adjustments in respect of previous
periods (timing difference recognised) 1,021 (615)
-------- -------
Total deferred tax 1,377 (400)
-------- -------
Tax charge for the year 2,176 1,706
======== =======
Current tax charge for the period
for discontinued operations 26 (284)
======== =======
The tax charge below differs from the tax at the effective rate
on the profit for the year. The differences are explained
below:
2015 2014
GBP000 GBP000
Profit before taxation 19,069 7,110
Tax on profit on ordinary activities
at 25% (2014 - 25%) 4,767 1,778
Effects of:
Net expenses not deductible 654 2,807
Current period losses unrecognised 127 (104)
Tax effect of share of results of
associates (288) (175)
Utilisation of brought forward losses
unrecognised (274) (80)
Effect of tax rates in overseas jurisdictions (2,603) (667)
Over provision in respect of prior
periods (547) (1,529)
Current period credit for current
and historic exposures (460) (875)
Other items 800 551
Tax on profit on ordinary activities 2,176 1,706
======== ========
2015 2014
GBP000 GBP000
Current tax on exercised employee
share options 532 557
Deferred tax on losses and prepaid
expenses - (23)
Deferred tax on intangible assets (1,134) (292)
Deferred tax on unexercised employee
share options (264) (450)
Total tax recognised in equity (866) (208)
======== ========
5. DIVIDENDS
2015 2014
GBP000 GBP000
Dividend paid in cash or scrip
2014/2013 interim dividend (2.4p
/ 2.3p per share) 2,416 2,179
2014/2013 final dividend (5.4p /
5.0p per share) 5,469 4,996
7,885 7,175
======= =======
Dividend paid and proposed post
year end
2015/2014 interim dividend paid
(2.5p / 2.4p per share) 2,530 2,416
2015/2014 final dividend proposed
(5.9p / 5.4p per share) 6,024 5,494
8,554 7,910
======= =======
An interim dividend of 2.5p per share (2014: 2.4p) was paid on
15 January 2016 to shareholders on the Register of Members of the
Company as at 4 December 2015.
The directors announced the proposed final dividend for 2015, of
5.9p per share, on 2 March 2016. Subject to approval at the Annual
General Meeting on 20 June 2016, the proposed date of payment is 7
July 2016 to Shareholders on the Register of Members as at 27 May
2016.
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
2015 2014
Pence Pence
Basic earnings per share 14.4 5.0
Diluted earnings per share 14.4 5.0
Adjusted earnings per share 21.4 12.7
Adjusted diluted earnings per share 21.3 12.6
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).
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.
Weighted average number of ordinary shares (diluted):
2015 2014
Number Number
Weighted average number of ordinary
shares 101,088,069 99,643,016
Dilutive effect of share options 289,250 540,814
Weighted average number of ordinary
shares (diluted) 101,377,319 100,183,830
============ ============
Dilutive and anti-dilutive share options were determined using
the average closing price for the period. The average share price
used was 218.83 pence.
7. OVERDRAFTS AND OTHER INTEREST-BEARING LOANS AND
BORROWINGS
2015 2014
GBP000 GBP000
Two to five years
Bank loans 54,350 50,957
--------- ---------
Total financial liabilities 54,350 50,957
Cash balances (10,693) (12,347)
--------- ---------
Net financial liabilities and cash
balances 43,657 38,610
Capitalised bank fees (930) (1,018)
Fair value of interest rate swaps 1,080 818
--------- ---------
Net debt 43,807 38,410
========= =========
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.
2015 2014
GBP000 GBP000
Current liabilities
Secured bank loans - -
--------- ---------
Non-current liabilities
54,350 50,957
--------- ---------
Total financial liabilities 54,350 50,957
========= =========
8. ACQUISITION OF SUBSIDIARY
On 21 May 2015, the Group acquired 100% of the trade and assets
of PAINWeek ("PAIN"), 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 Adjustments Fair
Value value
GBP000 GBP000 GBP000
Other intangibles - 4,966 4,966
Trade and other receivables 199 - 199
Cash and cash equivalents (1,357) - (1,357)
Trade and other payables (169) (169)
Deferred tax asset - 60 60
-------- ------------ --------
Net assets acquired (1,327) 5,026 3,699
-------- ------------
Goodwill arising on acquisition 6,179
--------
9,878
========
Consideration paid and
costs incurred:
Satisfied in cash 1,767
Contingent consideration
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(less than one year) 253
Contingent consideration
(over one year) 7,858
--------
Total consideration incurred 9,878
========
Consideration paid in
cash 1,767
Cash acquired -
--------
Total net cash outflow 1,767
========
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 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 PAIN, and are therefore measurement period
adjustments.
From the date of acquisition to 31 December 2015, the
acquisition has contributed GBP2.8m 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 GBP547,000 in respect of
the acquisition, which were expensed.
9. DISPOSAL OF INVESTMENT
On 3 September 2015, the Group completed the
sale of its 100% interest in Tarsus France Holdings
SAS to Magellan VI SAS for EUR 9.2 million (GBP6.5
million).
Based on the book values of the net assets disposed
of, the related sales proceeds and the effect
of recycling of foreign exchange, the profit
on disposal was as follows:
GBP000
Non-current
assets 11,828
Current assets 6,489
Non-current
liabilities (3,153)
Current liabilities (6,859)
-------------
Total carrying amount
of net assets disposed 8,305
Costs on disposal (194)
Impairment
on disposal (1,800)
-------------
Net assets
at disposal
date 6,311
-------------
Satisfied
by:
Cash and cash
equivalents 5,106
Deferred consideration 1,370
-------------
Total proceeds 6,476
Gain on disposal (165)
-------------
The deferred consideration will
be settled in cash by the purchaser
in 2016.
The business was impaired by GBP1.8m during the
year to reflect fair value.
An analysis of the results of
discontinued operations is as
follows:
Year to Year to
31 December 31 December
2015 2014
GBP000 GBP000
Group revenue 4,924 9,694
Operating costs excluding
exceptional items (4,618) (8,529)
Impairment (1,800) -
loss
Exceptional
operating
costs (71) (100)
------------- -------------
Total operating
costs (6,489) (8,629)
(Loss) / profit for
the financial year (1,565) 1,065
------------- -------------
Profit on 165 -
disposal of
subsidiary
(Loss) / profit before
taxation (1,400) 1,065
------------- -------------
Taxation expense (26) 284
------------- -------------
(Loss) / profit for the financial
year from continuing operations (1,426) 1,349
============= =============
10. GOING CONCERN AND VIABILITY
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.
The directors have assessed the viability of the Group over a
three year period to December 2018, taking account of the Group's
current position and the potential impact of the principal risks
documented in note 11. The choice of a 3 year period is aligned
with the Board's periodic strategic review and plan - it is also
used by the Remuneration Committee to set targets for the long term
incentive plan.
The plan makes certain assumptions about the acceptable
performance of the underlying portfolio of shows and the
availability of venues.
The directors' assessment considered the resilience of the
Group, taking account of its current position including committed
financing throughout the period, forward bookings, the principal
risks facing the business in severe but reasonable scenarios and
the effectiveness of any mitigating actions. This assessment has
considered the potential impacts of these risks on the plan,
including solvency and liquidity over the period - primarily
through reducing revenues and cash-flows in the plan. It has also
taken account of the mitigating actions including withholding
dividends and reducing launch investments and capex.
Based on this assessment, the directors have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period to
December 2018.
11. 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. The Group also has
key commercial relationships with venues which secure the Group's
rights to run its exhibitions in the future.
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