TIDMTRS
RNS Number : 7900V
Tarsus Group PLC
26 July 2018
Tarsus Group plc
("Tarsus", the "Company" or the "Group")
Interim results for six months to 30 June 2018
Strong organic growth, led by China
Financial results
H1 2018 H1 2017 H1 2016
Revenue (GBPm) 35.6 39.8 27.0
-------- -------- --------
Like-for-like revenue
growth 12% 4% 11%
-------- -------- --------
Adjusted profit before
tax* (GBPm) 5.8 6.8 4.0
-------- -------- --------
Loss before tax (GBPm) (1.3) (1.4) (3.1)
-------- -------- --------
Adjusted EPS (pence) 2.8 3.5 2.8
-------- -------- --------
Basic EPS (pence) (3.2) (3.2) (3.1)
-------- -------- --------
Dividend (pence) 3.3 3.0 2.7
-------- -------- --------
Net Debt (GBPm) 94.7 85.3 57.3
-------- -------- --------
Financial highlights
-- Revenue of GBP35.6m up 32% against 2016
-- Group like-for-like revenues* up 12%
-- Adjusted profit before tax of GBP5.8m up 45% against 2016 (statutory loss before tax GBP1.3m)
-- Adjusted earnings per share of 2.8p unchanged against 2016 (statutory loss per share 3.2p)
-- Interim dividend of 3.3p per share up 10% on 2017
Operational highlights
-- Buyer/visitor growth across the portfolio of 13%, led by Chinese events in first half
-- Launch of Labelexpo Southeast Asia - one of the Group's
strongest ever launches and profitable in its first edition
-- Bolt-on acquisitions in Mexico and the US (Connect) and the
purchase of an additional 25% minority interest in SIUF (China)
-- Strong replications programme delivering accelerated returns
Current trading and outlook
-- Forward bookings for 2018 up 10% on a like-for-like basis
(adjusted for biennials and acquisitions)
-- 43 launch portfolio events scheduled to be held in 2018, of which 17 are new this year
-- Well positioned to deliver encouraging growth in 2018, in line with expectations
Douglas Emslie, Group Managing Director, said:
"An integral part of our strategy for organic growth is to
invest in and expand our leading brands globally through our
growing launch programme. We are delighted by the performance of
the first edition of Labelexpo Southeast Asia, demonstrating the
strength of the Labelexpo brand.
"We have traded well in the first half, forward bookings are
well up and we remain confident of delivering a strong performance
in 2018 in line with the Board's expectations."
Overview
2018 has seen the launch of the next phase of the Quickening the
Pace strategy - "QTP2: driving scale and momentum", a programme
that builds on the original QTP strategy. The Group will deepen its
presence in higher growth markets, look to maximise the scale of
existing events and acquire new platforms for growth with the aim
of continuing to drive strong shareholder returns.
Financial review
Group revenue for the period was GBP35.6m (2017: GBP39.8m).
Adjusting for acquisitions and biennial events, underlying organic
revenue growth of 12% was achieved in the smaller first half.
Adjusted profit before tax was GBP5.8m (2017: GBP6.8m; 2016:
GBP4.0m), reflecting strong revenue growth, primarily in our
Chinese portfolio. The Group incurred exceptional costs of GBP0.4m
(2017: GBP0.6m) in respect of completed and pending corporate
transactions. The Group also incurred an amortisation charge of
GBP3.3m (2017: GBP3.7m). Other adjusting items are set out in note
6 to the financial statements below. Loss before tax was GBP1.3m
(2017: GBP1.4m; 2016 GBP3.1m).
Adjusted earnings per share were 2.8p (2017: 3.5p). Basic loss
per share was 3.2p (2017: 3.2p).
An interim dividend of 3.3p per share (2017: 3.0p) has been
declared and will be paid on 11 January 2019 to Shareholders on the
Register on 30 November 2018. The Group will continue to offer a
scrip alternative to qualifying shareholders.
Operating cash inflow in the first half was GBP2.4m (2017:
GBP16.1m). As expected net debt at 30 June 2018 increased to
GBP94.7 million (2017: GBP85.3m), driven primarily by acquisitions.
The Group remains on target to return to its stated long-term
target range of 1.5 - 2.0x net debt: EBITDA by the end of the
year.
Corporate activity
Tarsus and EJ Krause jointly acquired 60% of Expo Restaurantes,
the leading restaurant show in Mexico which successfully ran its
first event under our ownership in June.
In the US, Connect acquired 80% of eTourism Summit, an event
linking travel destination marketing executives with the latest
products and services in digital marketing. The travel industry is
one of the largest consumers of digital media.
In China, Tarsus has acquired a further 25% in SIUF, taking its
overall stake to 75%, in line with our strategy to acquire
minorities where appropriate.
Operating review
Geographic breakdown of results
Asia Americas EMEA
GBP'm 2018 2017 2016 2018 2017 2016 2018 2017 2016
----- ----- ----- ----- ----- ----- ----- ----- -----
Revenue 15.3 13.1 7.7 15.2 16.3 12.2 5.2 10.5 7.1
----- ----- ----- ----- ----- ----- ----- ----- -----
Adjusted
Profit
before
tax 6.5 5.0 1.9 2.9 3.0 4.3 0.1 2.2 0.5
----- ----- ----- ----- ----- ----- ----- ----- -----
Asia
In the Group's Chinese portfolio, which is heavily first half
weighted, performance was strong and our Shenzhen events all
performed well - in particular Hometex. The outlook for the second
half events in China remains positive.
Labelexpo Southeast Asia, held in Bangkok in May was one of the
Group's most successful launches ever, attracting nearly 8,000
attendees from 62 countries. The majority of other events in
South-East Asia fall in the second half of the year.
Americas
Connect held 13 events in the first half and these performed in
line with expectations. The Medical portfolio continues to perform
well, including a strong launch of the Cardiometabolic West event.
Off Price February 2018 performed in line with the previous
edition.
In Mexico, trading was positive with another strong performance
from Expo Manufactura. Plastimagen (the Group's largest event in
Mexico) takes place on an 18 month cycle and did not occur in the
period.
EMEA
Dubai saw a good performance across the events in the first half
and the outlook for the second half is in line with our
expectations.
The pattern of trading in Turkey is similar to 2017. Trade in
the first half has been affected by both political uncertainty
around the election and by a further depreciation of the Turkish
lira. The outlook for the large shows in the second half is
good.
Launch portfolio
A key part of our strategy will be continued investment in
Tarsus' organic growth programme, particularly the replication of
our events, which drives the growth of the Group's leading brands
around the world and provides a lower risk, lower cost approach to
driving organic growth. Tarsus has invested consistently in this
portfolio over the last four years, leveraging strong brands
including Labelexpo, GESS and Connect. The launch portfolio
continues to be actively managed to ensure we focus on events that
can scale in a reasonable timeframe. There are 17 new events
planned for 2018 of which 8 were held in the first half. 14
previous events are not being repeated. Including 6 biennial events
running next in 2019, the launch portfolio stands at 49.
With a growing launch portfolio the Group is confident of
building on this progress going forward.
Outlook
Owing to the timing of the Group's events, revenues for the year
as a whole are heavily weighted to the second half. Bookings for
the full year are strong and are 10% ahead of 2017 on a
like-for-like basis.
The Group is well placed to continue to deliver encouraging
growth in 2018 and beyond.
Neville Buch Douglas Emslie
Chairman Group Managing Director
25 July 2018
For further information contact:
Tarsus Group plc:
Douglas Emslie, Group Managing
Director 020 8846 2700
Dan O'Brien, Group Finance Director
IR Focus
Neville Harris 07909 976044
The Group will be hosting a presentation to analysts at 11.00am
today at the offices of Deutsche Bank plc, Winchester House, 1
Great Winchester St, London EC2N 2DB. A webcast of the presentation
will be available on Tarsus's website (www.tarsus.com) from 9.30am
on 27 July 2018.
*Definitions can be found in note 17 to the financial
statements
INDEPENT REVIEW REPORT TO TARSUS GROUP PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2018 which comprises the Condensed
Consolidated Interim Income statement, Condensed Consolidated
Interim Statement of Comprehensive Income, Condensed Consolidated
Interim Statement of Financial Position, the Condensed Consolidated
Interim Statement of Cash Flows, Condensed Consolidated Interim
Statement of Changes in Equity and the related notes 1 to 16. We
have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2018 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
25 July 2018
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
Period to 30 June 2018 Period to 30 June 2017
Unaudited Unaudited
Note Adjusted Adjusting Reported Adjusted Adjusting Reported
items * items *
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 7 35,636 - 35,636 39,777 - 39,777
Operating
costs (28,927) (5,237) (34,164) (32,761) (6,266) (39,027)
Share of
profit of
joint
ventures 1,526 (444) 1,082 1,703 (464) 1,239
--------- ---------- --------- --------- ---------- -------------
Group
operating
profit/(loss) 8,235 (5,681) 2,554 8,719 (6,730) 1,989
Net finance
costs (2,408) (1,476) (3,884) (1,928) (1,429) (3,357)
--------- ---------- --------- --------- ---------- -------------
Profit/(loss)
before
taxation 5,827 (7,157) (1,330) 6,791 (8,159) (1,368)
Tax on
profit/(loss)
on ordinary
activities 8 (1,048) 401 (647) (1,091) 667 (424)
Profit/(loss)
for the
financial
period 4,779 (6,756) (1,977) 5,700 (7,492) (1,792)
========= ========== ========= ========= ========== =============
Attributable
to:
Profit/(loss) for the
financial period
attributable to equity
shareholders of the
parent company 3,104 (6,756) (3,652) 3,941 (7,492) (3,551)
Profit for the financial
period attributable to
non-controlling
interests 1,675 - 1,675 1,759 - 1,759
4,779 (6,756) (1,977) 5,700 (7,492) (1,792)
========= ========== ========= ========= ========== =============
Note Headline Reported Headline Reported
- basic 9 2.8 (3.2) 3.5 (3.2)
- diluted 2.7 (3.2) 3.5 (3.2)
* See note 6 for adjusting item
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 30 June
Period to Period to
30 June 2018 30 June 2017
GBP000 GBP000
Unaudited Unaudited
Loss for the financial period (1,977) (1,792)
-------------- --------------
Other comprehensive income/(expense) recognised directly in equity:
Cash flow hedge reserve - movement in fair value 1,045 525
Foreign exchange translation differences (243) (7,414)
Other comprehensive income/(expense) 802 (6,889)
Total comprehensive expense (1,175) (8,681)
============== ==============
Attributable to:
Equity shareholders of the parent company (2,774) (10,440)
Non-controlling interests 1,599 1,759
Total comprehensive expense for the period (1,175) (8,681)
============== ==============
Other comprehensive income relating to foreign exchange
translation differences, fair value movements in cash flow hedges
and the tax effects thereon may all subsequently be reclassified to
profit and loss if certain conditions are met.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
Note At 30 June 2018 At 30 June 2017 At 31 December 2017
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
Restated Restated
NON-CURRENT ASSETS
Property, plant and equipment 1,072 1,241 1,082
Intangible assets 10 190,806 193,909 188,344
Investment in Joint Ventures 41,026 32,426 38,490
Deferred tax assets 1,851 2,928 3,003
234,755 230,504 230,919
CURRENT ASSETS
Trade and other receivables 32,995 31,620 28,909
Cash and cash equivalents 19,839 26,996 22,373
52,834 58,616 51,282
CURRENT LIABILITIES
Trade and other payables (30,722) (38,360) (36,457)
Deferred income (36,920) (44,057) (22,450)
Provisions (139) (134) (120)
Liabilities for current tax (2,807) (1,306) (3,155)
(70,588) (83,857) (62,182)
---------------- ---------------- --------------------
NET CURRENT LIABILITIES (17,754) (25,241) (10,900)
---------------- ---------------- --------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 217,001 205,263 220,019
---------------- ---------------- --------------------
NON-CURRENT LIABILITIES
Other payables (23,521) (22,056) (27,981)
Deferred tax liabilities (9,999) (10,918) (10,059)
Interest bearing loans and borrowings (114,511) (111,000) (106,239)
----------------
(148,031) (143,974) (144,279)
NET ASSETS 68,970 61,289 75,740
================ ================ ====================
EQUITY
Share capital 5,670 5,650 5,654
Share premium account 73,762 73,200 73,303
Other reserves (18,823) (12,498) (19,701)
Retained earnings 3,154 (9,388) 11,914
--------------------
Issued capital and reserves attributable to
equity shareholders of the parent 63,763 56,964 71,170
NON-CONTROLLING INTERESTS 5,207 4,325 4,570
TOTAL EQUITY 68,970 61,289 75,740
================ ================ ====================
The financial statements of Tarsus Group plc, registered number
101579 (Jersey), were approved by the board and authorised for
issue and signed on its behalf by:
Douglas Emslie Daniel O'Brien
Group Managing Director Group Finance Director
25 July 2018
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Period to Period to
30 June 2018 30 June 2017
Unaudited Unaudited
GBP000 GBP000
Cash flows from operating activities
Loss for the period (1,977) (1,792)
Adjustments for:
Depreciation 234 269
Amortisation & impairment 4,208 4,642
Other losses (265) (925)
(Gain)/loss on disposal of tangible assets (4) 29
Share option charge 1,376 1,328
Taxation charge/(credit) 647 424
Interest payable 3,884 3,357
Share of profit from joint ventures (1,082) (1,239)
Dividends received from joint venture company - 2,533
Operating cash flow before changes in working capital 7,021 8,626
Decrease in trade and other receivables 4,379 1,100
(Decrease)/increase in trade and other payables (9,060) 6,452
Increase/(decrease) in provisions 44 (45)
Cash generated from operations 2,384 16,133
Interest paid (2,400) (1,802)
Income taxes (paid)/received (1,699) 632
Net cash from operating activities (1,715) 14,963
Cash flows from investing activities
Proceeds from sale of tangible fixed assets 9 -
Acquisition of property, plant & equipment (153) (191)
Acquisition of intangible fixed assets (403) (509)
Acquisition of subsidiaries (net of cash acquired) (1,094) (15,896)
Acquisition of joint venture (635) -
Deferred and contingent consideration paid (900) (5,938)
Put call option liability paid (1,841) (5,073)
Net cash outflow from investing activities (5,017) (27,607)
-------------- --------------
Cash flows from financing activities
Drawdown of borrowings 7,830 27,200
Dividends paid to shareholders in parent company (3,352) (2,736)
Dividends paid to non-controlling interests in subsidiaries (312) (24)
Net cash inflow from financing activities 4,166 24,440
-------------- --------------
Net (decrease)/increase in cash and cash equivalents (2,566) 11,796
Opening cash and cash equivalents 22,373 15,946
Foreign exchange movements 32 (746)
Closing cash and cash equivalents 19,839 26,996
============== ==============
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Attributable to equity holders of the parent
Share Share Reorganisation Capital Fair Foreign Retained Non- Total
Capital Premium Reserve Redemption Value Exchange Earnings Controlling
Account Reserve Reserve Reserve Reserve Interests
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January 2018 5,654 73,303 6,013 (443) (1,624) (23,647) 11,914 4,570 75,740
Recognised foreign
exchange gains/(losses)
for the period - - - - - (167) - (76) (243)
(Loss)/profit for the
period:
- Attributable to equity
shareholders - - - - - - (3,652) - (3,652)
- Attributable to
non-controlling
interests - - - - - - - 1,675 1,675
Cashflow hedge reserve - - - - 1,045 - - - 1,045
-------- -------- --------------- ----------- -------- --------- ---------- ---------- ----------
Total comprehensive
income/(expense) for
the period - - - - 1,045 (167) (3,652) 1,599 (1,175)
Scrip dividend - 18 - - - - - - 18
New share capital
subscribed 16 441 - - - - - - 457
Share option charge - - - - - - 1,218 - 1,218
Movement in reserves
relating to deferred tax - - - - - - (1,331) - (1,331)
Other movements in
reserves - - - - - - (1,902) - (1,902)
Dividend paid - - - - - - (3,371) - (3,371)
Dividend paid to
non-controlling
interests - - - - - - - (314) (314)
Written Put options over
non-controlling
interests - - - - - - (370) - (370)
Non-controlling interests
arising on acquisition - - - - - - 648 (648) 0
-------- -------- --------------- ----------- -------- --------- ---------- ---------- ----------
Net change in
shareholders' funds 16 459 - - 1,045 (167) (8,760) 637 (6,770)
-------- -------- --------------- ----------- -------- --------- ---------- ---------- ----------
As at 30 June 2018 5,670 73,762 6,013 (443) (579) (23,814) 3,154 5,207 68,970
======== ======== =============== =========== ======== ========= ========== ========== ==========
Attributable to equity holders of the parent
Share Share Reorganisation- Capital Fair Foreign Retained Non- Total
Capital Premium Reserve Redemption Value Exchange Earnings Controlling
Account Reserve Reserve Reserve Reserve Interests
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 January
2017 5,637 72,304 6,013 (443) (2,434) (8,754) (3,047) 2,363 71,639
Recognised foreign
exchange losses
for the period - - - - - (7,405) - (9) (7,414)
(Loss)/profit for
the period:
- Attributable to
equity
shareholders - - - - - - (3,551) - (3,551)
- Attributable to
non-controlling
interests - - - - - - - 1,759 1,759
Cashflow hedge
reserve - - - - 525 - - - 525
-------- -------- ---------------- ----------- -------- ---------- ---------- ---------- ----------
Total
comprehensive
income/(expense)
for the period - - - - 525 (7,405) (3,551) 1,750 (8,681)
Scrip dividend - 14 - - - - - - 14
New share capital
subscribed 13 882 - - - - - - 895
Share option charge - - - - - - 1,163 - 1,163
Movement in
reserves relating
to deferred tax - - - - - - 198 - 198
Other movements in
reserves - - - - - - (1,407) - (1,407)
Dividend paid - - - - - - (2,744) - (2,744)
Acquisition of
non-controlling
interests - - - - - - - 212 212
-------- -------- ---------------- ----------- -------- ---------- ---------- ---------- ----------
Net change in
shareholders'
funds 13 896 - - 525 (7,405) (6,341) 1,962 (10,350)
-------- -------- ---------------- ----------- -------- ---------- ---------- ---------- ----------
As at 30 June 2017 5,650 73,200 6,013 (443) (1,909) (16,159) (9,388) 4,325 61,289
======== ======== ================ =========== ======== ========== ========== ========== ==========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. REPORTING ENTITY
Tarsus Group plc (the "Company") is a company incorporated in
Jersey and resident in Ireland. The condensed consolidated
financial statements of the Company as at and for the six months
ended 30 June 2018 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interest in
jointly controlled entities.
The consolidated financial statements of the Group as at and for
the year ended 31 December 2017 are available upon request from the
Company Secretary at 15 Harcourt Street, Dublin 2, Ireland.
Having reviewed the Group's liquid resources, borrowing
facilities and cash flow forecasts, the directors believe that the
Group has adequate resources to continue as a going concern for the
foreseeable future.
2. STATEMENT OF COMPLIANCE
These condensed consolidated interim financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) IAS 34 Interim Financial Reporting. They do not
constitute the Group's statutory accounts.
The interim financial statements should be read in conjunction
with the consolidated financial statements of the Group as at and
for the year ended 31 December 2017 which were prepared under
International Financial Reporting Standards, as adopted by the
European Union, and have been reported on by the Company's auditor.
The auditor report was unqualified.
The financial statements of Tarsus Group plc, registered number
101579 (Jersey), were approved by the board and authorised for
issue on 26 July 2018.
3. SIGNIFICANT ACCOUNTING POLICIES
Aside from the adoption of IFRS 9 and IFRS 15, which are
described below, the accounting policies applied by the Group in
these condensed consolidated interim financial statements are the
same as those applied by the Group in its consolidated financial
statements as at and for the year ended 31 December 2017.
IFRS 15
In the current financial year the Group has adopted IFRS 15
Revenue from Contracts with Customers. The Group has elected to
restate comparative information from prior periods upon adoption of
IFRS 15 and has applied the practical expedient under which
contracts that began and ended in 2017 or that were completed prior
to January 1(st) 2017 are not restated.
The core principle of IFRS 15 if that an entity should recognise
revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or
services.
Under IFRS 15, deferred income and trade debtors may not both be
recognised where neither the service has been performed or payment
is due by the customer. The impact of this change on the balance
sheets as at 30 June 2017 and 31 December 2017 is shown in the
table below. There was no impact on the income statement for the
six month period ended 30 June 2017 and year ended 31 December
2017.
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
IFRS 15 (CONTINUED)
31 December 2017 As previously IFRS 15 reclassifications Restated
reported
Current assets
Trade and other receivables 44,452 (15,543) 28,909
-------------- -------------------------- ---------
Impact on total assets 44,452 (15,543) 34,766
-------------- -------------------------- ---------
Current liabilities
Deferred income (37,993) 15,543 (22,450)
-------------- -------------------------- ---------
Impact on liabilities (37,993) 15,543 (28,307)
-------------- -------------------------- ---------
30 June 2017 As previously IFRS 15 reclassifications Restated
reported
Current assets
Trade and other receivables 37,874 (6,254) 31,620
-------------- -------------------------- ---------
Impact on total assets 37,874 (6,254) 31,620
-------------- -------------------------- ---------
Current liabilities
Deferred income (50,311) 6,254 (44,057)
-------------- -------------------------- ---------
Impact on liabilities (50,311) 6,254 (44,057)
-------------- -------------------------- ---------
IFRS 9
In the current period the Group has applied IFRS 9 Financial
Instruments (as revised in July 2014) and the related consequential
amendments to other IFRSs. IFRS 9 introduces new requirements for
1) the classification and measurement of financial assets and
financial liabilities, 2) impairment for financial assets and 3)
general hedge accounting. The only significant impact on the Group
is in relation to the impairment of trade receivables and hedge
accounting as detailed below.
In relation to the impairment of financial assets, IFRS 9
requires an expected credit loss model as opposed to an incurred
credit loss model under IAS 39. The expected credit loss model
required the Group to account for expected credit losses and
changes in those expected credit losses at each reporting date to
reflect changes in credit risk since initial recognition of the
financial assets. In other words, it is no longer necessary for a
credit event to have occurred before credit losses are
recognised.
As at 1 January 2018, the directors of the Company reviewed and
assessed the Group's existing trade receivables for impairment
using reasonable and supportable information that is available
without undue cost of effort in accordance with the requirements of
IFRS 9 to determine the credit risk of the respective items at the
date they were initially recognised. No material adjustments were
identified.
In accordance with IFRS 9's transition provisions for hedge
accounting, the Group has applied the IFRS 9 hedge accounting
requirements prospectively from the date of initial application on
1 January 2018. The Group's qualifying hedging relationships in
place as at 1 January 2018 also qualified for hedge accounting in
accordance with IFRS 9 and were therefore regarded as continuing
hedge relationships. No rebalancing of any of the hedging
relationships was necessary on 1 January 2018. As the critical
terms of the hedging instruments match those of their corresponding
hedged items, all hedging relationships continue to be effective
under IFRS 9's effectiveness assessment requirements. The Group has
also not designated any hedging relationships under IFRS 9 that
would not have met the qualifying hedge accounting criteria under
IAS 39.
Apart from this, the application of the IFRS 9 hedge accounting
requirements has had no impact on the results and financial
position of the Group at 1 January 2018 or in the current period.
No accounting policy changes have been made as a result of the
adoption of this standard.
4. ESTIMATES
The preparation of consolidated interim financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements as at and for the year ended 31
December 2017.
5. FINANCIAL RISK MANAGEMENT
The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the end for the year ended 31 December
2017.
6. ADJUSTING ITEMS
The following analysis details the adjusting items in the
consolidated interim income statement. Adjusted profit is prepared
to provide a better indication of overall financial performance and
to reflect how the business is managed and measured on a day to day
basis. The adjusted profit excludes share option charges,
amortisation of intangible assets arising from business
combinations, unwinding of discount charges, changes in fair value
of contingent consideration and put/call liabilities, acquisition
related costs and the related taxation impact.
Six months to Six months to
30 June 2018 30 June 2017
GBP000 GBP000
Unaudited Unaudited
Operating items:
Operating costs:
Acquisition and potential acquisition costs 429 650
Changes in fair value of put/call and contingent consideration 114 514
Share option charge 1,376 1,328
Amortisation charge (excluding amounts charged to costs of sale) 3,322 3,745
(Profit)/loss on disposal of tangible fixed assets (4) 29
Total adjusting items in operating costs 5,237 6,266
Tax on joint venture profits 444 464
-------------- --------------
Total adjusting items in operating profit 5,681 6,730
Finance item - Unwinding of discount 1,476 1,429
-------------- --------------
Adjusting items before tax 7,157 8,159
Taxation:
Tax on joint venture profits (444) (464)
Tax relating to adjusting items 43 (203)
Total adjusting items 6,756 7,492
============== ==============
7. SEGMENTAL ANALYSIS
As at 30 June 2018, the Group is organised into three main
operating segments - Americas, Asia and EMEA.
The main activities of all segments are the production of
exhibitions, conferences, magazines, directories and online
media.
The following table sets out the revenue and profit information
and certain asset and liability information for the Group's
reportable segments:
30 June 2018
Unaudited
Central
Americas Asia EMEA Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 15,183 15,250 5,203 - 35,636
========= ======= =========== ========== ========
Profit/(loss) from operating activities 2,923 6,499 82 (6,950) 2,554
Net financing costs - - - (3,884) (3,884)
Profit/(loss) before taxation 2,923 6,499 82 (10,834) (1,330)
Adjusting items - see note 6 - - - 7,157 7,157
Adjusted profit/(loss) before tax 2,923 6,499 82 (3,677) 5,827
========= ======= =========== ========== ========
Segment non-current assets 117,664 71,695 43,545 - 232,904
Segment current assets 17,978 21,913 12,943 - 52,834
--------
135,642 93,608 56,488 - 285,738
========= ======= =========== ==========
Deferred tax assets 1,851
Total assets 287,589
========
Segment liabilities 54,910 22,905 127,998 - 205,813
========= ======= =========== ==========
Liabilities for current tax 2,807
Deferred tax liabilities 9,999
Total liabilities 218,619
========
30 June 2017
Unaudited
Restated
Central
Americas Asia EMEA Costs Group
Revenue by sector GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue 16,251 13,056 10,470 - 39,777
========= ========= ========== ========== ==========
Profit/(loss) from operating activities 2,959 4,978 2,175 (8,123) 1,989
Net financing costs - - - (3,357) (3,357)
Profit/(loss) before taxation 2,959 4,978 2,175 (11,480) (1,368)
Adjusting items - see note 6 - - - 8,159 8,159
Adjusted profit/(loss) before tax 2,959 4,978 2,175 (3,321) 6,791
========= ========= ========== ========== ==========
Segment non-current assets 116,695 65,482 45,399 - 227,576
Segment current assets 14,304 19,480 24,832 - 58,616
----------
130,999 84,962 70,231 - 286,192
========= ========= ========== ==========
Deferred tax assets 2,928
Total assets 289,120
==========
Segment liabilities (38,274) (23,668) (153,665) - (215,607)
========= ========= ========== ==========
Liabilities for current tax (1,306)
Deferred tax liabilities (10,918)
Total liabilities (227,831)
==========
8. TAXATION CHARGE
The taxation charge for the six months ended 30 June 2018 is
based upon the estimated effective tax rate of 18.0% on adjusted
profit before tax (2017: 16.0%) for the year ending 31 December
2018.
9. EARNINGS PER SHARE
Six months to Six months to
30 June 2018 30 June 2017
Pence Pence
Unaudited Unaudited
Basic earnings per share (3.2) (3.2)
Diluted earnings per share (3.2) (3.2)
Adjusted earnings per share 2.8 3.5
Adjusted diluted earnings per share 2.7 3.5
Basic earnings per share
Basic earnings per share has been calculated on loss after tax
attributable to ordinary shareholders for the six months (as shown
on the Consolidated Income Statement) and the weighted average
number of ordinary in issue during the period (see below
table).
Diluted earnings per share
Diluted earnings per share has been calculated on loss after tax
attributable to ordinary shareholders for the six months (as shown
on the Consolidated Income Statement) and the diluted weighted
average number of ordinary 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 6 and the weighted average number
of ordinary shares (as below) in issue in the year.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated using loss
after tax as reconciled in note 6 and the weighted average number
of diluted ordinary shares (as below) in issue in the year.
Weighted average number of ordinary shares (diluted):
Six months to Six months to
30 June 2018 30 June 2017
Unaudited Unaudited
Weighted average number of ordinary shares 112,851,730 112,249,882
Dilutive effect of share options 435,174 412,804
Weighted average number of ordinary shares (diluted) 113,286,904 112,662,686
============== ==============
10. INTANGIBLE FIXED ASSETS
Goodwill Trademarks, lists and other Total
GBP000 GBP000 GBP000
Unaudited Unaudited Unaudited
COST
As at 1 January 2018 142,751 92,342 235,093
Additions through business acquisition 664 848 1,512
Additions - 4,626 4,626
Foreign exchange (103) 1,379 1,276
At 30 June 2018 143,312 99,195 242,507
---------- ---------------------------- ----------
AMORTISATION
As at 1 January 2018 139 46,610 46,749
Charge for the year - 4,208 4,208
Foreign exchange 2 742 744
At 30 June 2018 141 51,560 51,701
---------- ---------------------------- ----------
NET BOOK VALUE
At 30 June 2018 143,171 47,635 190,806
========== ============================ ==========
At 31 December 2017 142,612 45,732 188,344
========== ============================ ==========
At 30 June 2017 142,943 50,966 193,909
========== ============================ ==========
The additions not through business combinations primarily relate
to the recognition of the DAC licence for the period from 2020 to
2027.
11. FINANCIAL INSTRUMENTS
The carrying value of all financial instruments held in the
Statement of Financial Position equals their fair value.
Liabilities Measured 30 June 2018 Level 1 Level 2 Level 3
At Fair Value
GBP000 GBP000 GBP000 GBP000
Interest rate swaps (583) - (583) -
Contingent
consideration (27,309) - - (27,309)
Put and call option
liabilities (8,496) - - (8,496)
(36,388) - (583) (35,805)
====================== ====================== ====================== ======================
30 June 2017 Level 1 Level 2 Level 3
GBP000 GBP000 GBP000 GBP000
Interest rate swaps (1,909) - (1,909) -
Contingent
consideration (28,944) - - (28,944)
Put and call option
liabilities (9,568) - - (9,568)
(40,421) - (1,909) (38,512)
====================== ====================== ====================== ======================
31 December 2017 Level 1 Level 2 Level 3
GBP000 GBP000 GBP000 GBP000
Interest rate swaps (1,651) - (1,651) -
Contingent
consideration (27,744) - - (27,744)
Put and call option
liabilities (8,671) - - (8,671)
(38,066) - (1,651) (36,415)
====================== ====================== ====================== ======================
Reconciliation of level 3 fair value
measurements
2018 2017
Put and call option Contingent Put and call option Contingent
liabilities consideration liabilities consideration
GBP000 GBP000 GBP000 GBP000
At 1 January (8,671) (27,744) (14,504) (34,575)
Acquisitions (370) (424) - (805)
Consideration paid - 900 - 5,938
Exercise of put
option 1,841 - 5,073 -
Change in estimates (1,183) 1,146 (457) (90)
Unwinding of discount (382) (854) (430) (822)
Foreign exchange 269 (333) 750 1,410
At 30 June (8,496) (27,309) (9,568) (28,944)
====================== ====================== ====================== ======================
Level 1 - fair values measured using quoted prices (unadjusted)
in active markets for identical assets or liabilities.
Level 2 - fair values measured using indicative market
valuations provided by banks for the identifiable asset of
liability.
Level 3 - fair values using inputs or liabilities that are not
based on observable market data. These are measured by using the
latest management forecasts and using a country specific WACC rate
to discount to the present value.
12. ACQUISITIONS
The Group completed the acquisition of 64% of eTourism, an
exhibition business during the first half of 2018, in line with the
Group's "Quickening The Pace 2" strategy.
Consideration paid for this transaction was GBP1.3 million of
which GBP0.4million is a current estimate of contingent
consideration.
Goodwill of GBP0.6m was recognised on this transaction.
The values used in accounting for the identifiable assets and
liabilities and related contingent consideration of this
acquisition are estimates and therefore provisional in nature at
the balance sheet date.
13. DIVIDENDS
The following dividends were paid and proposed by the Group:
2018 2017
GBP000 GBP000
Unaudited Unaudited
Dividend paid in current period in cash or scrip
2017 interim dividend (3.0p per share) 3,372 2,751
3,372 2,751
========== ==========
Dividend paid and proposed post period end
2017 final dividend paid 7.0p per share (2016: 6.4p per share) 7,904 7,201
Dividend proposed in the period 3.3p per share (2017: 3.0p per share) 3,729 3,380
11,633 10,581
========== ==========
14. FOREIGN EXCHANGE TRANSLATION DIFFERENCES
Other Comprehensive Income includes foreign exchange translation
losses of GBP0.2 million (June 2017: losses of GBP7.4 million)
relating to the retranslation of foreign currency denominated net
assets, including goodwill.
15. RELATED PARTIES
As at 30 June 2018, directors of the company controlled 9.8% (31
December 2017: 9.6%) of the voting shares of the company.
Executive officers also participate in the Group's share option
programme and share acquisition plan.
16. POST BALANCE SHEET EVENTS
There have been no significant post balance sheet events.
17. DEFINITIONS
Organic revenues are on a constant currency basis and after
adjusting for the impact of acquisitions, disposals and
biennials.
Forward bookings:
Committed orders for future events, adjusted for biennials.
Like-for-like revenue:
Constant exchange rates adjusted for biennial events, excluding
acquisitions impacting for the first time in 2018, prior year
disposals and non-recurring products and items.
Adjusted profit before tax:
Profit before tax adjusted for exceptional items, share option
charges / credits, movements in fair value measurement of
derivatives, unsettled 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. See note 6.
Adjusted EPS:
Profit after tax attributable to equity shareholders adjusted
for exceptional items, share option charges / credits, movements in
fair value measurement of unsettled derivatives, 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. See note
9.
Adjusted operating cash:
Cash from operations adjusted for non-operating items and
disposals.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
We confirm that to the best of our knowledge:
-- The condensed set of financial statements, which has been
prepared in accordance with the applicable set of accounting
standards, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group;
-- The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Principal risks and uncertainties
The Board consider the principal risks and uncertainties
relating to the Group for the next six months to be the same as
details in our last Annual Report and Accounts to 31 December 2017
and include:
-- Economic and financial uncertainties;
-- Events and exhibitions may be adversely affected by incidents which can curtail travel;
-- Expansion into new geographic regions subjects the group to new operating risks;
-- Fluctuation in exchange rates may affect the reported results;
-- The ability to implement and execute strategic plans depends
on the ability to attract and retain key management.
The impact of "Brexit" has been considered and has not resulted
in a change to these risks.
Full details of the risks and uncertainties are detailed in the
Directors' Report of the 2017 accounts.
Douglas Emslie Daniel O'Brien
Group Managing Director Group Finance Director
25 July 2018
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR RAMFTMBJTBFP
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