21st Sep 2007 07:01
Centaur Media PLC21 September 2007 21 September 2007 Centaur Media plc Preliminary results for the year ended 30 June 2007 Centaur Media plc ("Centaur" or "the Company"), the specialist businesspublishing and information group, announces results for the year ended 30 June2007. Centaur's premier brands include Marketing Week, Design Week, Creative Review,Money Marketing, The Lawyer, The Engineer, New Media Age, Homebuilding &Renovating, Business Travel and the online service Perfect Information. Highlights •Revenue up 12% to £90.3m (4 year CAGR 11%) •Adjusted EBITDA(1) margin up 2 percentage points to 22% •Adjusted PBT(2) up 28% to £16.9m (unadjusted PBT £16.9m) •Adjusted basic EPS(3) up 32% to 8.2p (unadjusted basic EPS 8.2p) •Cash conversion(4) of 94% •Net cash of £9m (FY2006 £6.2m) •Dividend up 17% at 3.5p Commenting on the preliminary results, Graham Sherren, Chairman of Centaur said: "I am pleased to announce that Centaur is again reporting record profits up 28%to £16.9million (FY2006: £13.2million) ahead of market forecasts. We have seenstrong growth in advertising in most of our markets, particularly in onlinemedia, continued growth in our events business and from the results of new andrecently launched products. Revenue growth of 12% was supplemented by bolt-onacquisitions with underlying organic revenue growth of 8% in the year. "The new financial year has started well. Revenues in our Legal and Financialsegment are trading ahead of last year despite the impact of recent marketvolatility. Total group revenues in the first quarter are anticipated to beahead of the same period last year. The outlook is positive and we expect FY2008results to demonstrate further good progress.Given this, we are now proposing toimplement an on-market share buy-back programme within our existing authority ofup to 10% of the Company's share capital." Notes: 1. One of Centaur's key measures of profit, which is used to measure therelative performance of divisional units of the Group, is earnings beforeinterest, tax, depreciation and amortisation, excluding exceptional items andother significant non-cash items including share based payments (AdjustedEBITDA), as detailed in the business review. 2. Adjusted PBT is profit before tax, excluding the impact of amortisationof acquired intangibles and of exceptional items and excluding the profit ondisposal of associated undertakings, as detailed in the business review. 3. Adjusted EPS is based on the basic EPS but after making adjustments foramortisation on acquired intangibles and exceptional items and excluding theprofit on disposal of associated undertakings, as detailed in note 3 to thefinancial statements. 4. Cash conversion rate is free cash flow expressed as a percentage ofadjusted operating profit. Free cash flow is defined as cash generated fromoperations, less capital expenditure on property, plant and equipment andsoftware. Adjusted operating profit is operating profit after making adjustmentsfor amortisation on acquired intangibles and exceptional items, as detailed inthe business review. 5. All comparatives have been restated to exclude discontinued operations Enquiries: Centaur Media plc Geoff Wilmot, CEO Tel: 020 7970 4000 Mike Lally, GFD Gavin Anderson & Company Robert Speed Tel: 020 7554 1400 Charlotte Stone Centaur Media plc Chairman's Statement I am pleased to announce that Centaur is again reporting record profits in the12 months to 30 June 2007, with adjusted PBT ahead of consensus marketexpectations, up 28% to £16.9million (FY2006: £13.2million), and adjusted basicearnings per share 32% up at 8.2p (FY2006: 6.2p). Revenues, which grew 12% inthe year, benefited from strong growth in advertising in most of our markets,particularly in online media, continued growth in our events business and fromthe results of new and recently launched products. Revenue growth wassupplemented by the bolt-on acquisitions in FY2007 and the previous year, withunderlying revenues excluding acquisitions growing 8% in the year. Adjusted EBITDA increased by 25% to £19.7million (FY2006: £15.7million),delivering a further strong improvement in margin to 22% from 20% in theprevious year representing further good progress towards our target margin of25%. In light of this performance, the Board is recommending a final dividend of 2.5pper share, giving a full year dividend of 3.5p, representing an increase of 17%over the prior year. The final dividend will be paid to shareholders on theregister as at 9 November 2007. It is proposed that the dividend will be paid on7 December 2007. These excellent results reflect the success of our strategy of buildingmarket-leading positions across a number of vertical markets through a blend ofcomplementary media - print, online and events. The recovery in the advertisingcycle that started towards the end of 2003 has continued through the year toJune 2007 in most of our served markets. The marketing and creative sectors havecontinued to experience well-publicised difficulties, reflecting challenges inthe media, retail and consumer goods sectors in particular, although we sawevidence of some improvement in this sector in the second half of the year. Against a backdrop of generally favourable market conditions, total advertisingturnover during the year increased by 16% over the prior year. Acquisitions madeduring the year contributed to this growth, but underlying advertising revenuesalso grew strongly, thanks in particular to buoyant trading conditions in thelegal and financial markets. The fastest pace of revenue growth was derived from online products, which grewby 23% over the prior year. This reflects the success of our principal strategyin the past few years, which has been to extend our major print publishingbrands across multiple media, but with a particular focus on onlineopportunities. Online now accounts for 17% of total revenues against 16% inFY2006. Centaur has developed most of its business organically and in FY2007,12% of revenues were generated by products launched within the previous threeyears (FY2006: 12%). We continued to maintain a steady pace of new productdevelopment during the year, with the launch of two new magazines, five newwebsites and eleven new events. In the past year we have also completed two small bolt-on acquisitions and twojoint initiatives. These were in line with our established acquisition strategy,which is to make selective investments in businesses that enable Centaur toexpand existing market positions and to establish market-leading positions innew markets. The key developments and initiatives in the year are outlined inthe Business Review. The new financial year has started well. Our growth prospects continue to besupported by our pipeline of new and recently launched or acquired products.Revenues in our Legal and Financial segment are trading ahead of last yeardespite the impact of recent market volatility. Total group revenues in thefirst quarter are anticipated to be ahead of the same period last year. Theoutlook is positive and we expect FY2008 results to demonstrate further goodprogress. Given this, we are now proposing to implement an on-market share buy-back programme within our existing authority of up to 10% of the Company's share capital. Centaur is above all an entrepreneurial Company. It depends for its success onthe talent, commitment, energy and creativity of its staff, who have performedmagnificently once again. My thanks and appreciation goes to all of them. Centaur Media plc Business Review Analysis of results Restated Restated 2007 2007 2006(1) 2006(1) £m £m £m £mBy Segment Revenue Adjusted Revenue Adjusted EBITDA EBITDALegal and Financial 30.3 9.0 24.5 7.1Marketing and Creative 23.6 3.6 23.5 3.3Construction and Engineering 19.4 4.1 16.5 3.4Perfect Information 6.0 1.5 6.4 1.4General Business Services 11.0 1.5 9.6 0.5 --------------------------------------------------------------------------Total 90.3 19.7 80.5 15.7-------------------------------------------------------------------------- By SourceRecruitment advertising 15.0 - 12.8 -Other advertising 34.3 - 29.8 -Circulation revenue 6.3 - 5.4 -Online subscriptions 7.3 - 7.6 -Events 25.9 - 23.8 -Other 1.5 - 1.1 ---------------------------------------------------------------------------Total 90.3 - 80.5 ---------------------------------------------------------------------------By Client TypeAudiences 20.5 - 18.8 -Marketers 69.8 - 61.7 ---------------------------------------------------------------------------Total 90.3 - 80.5 ---------------------------------------------------------------------------By Product typeMagazines 47.7 10.9 42.1 7.6 Events 25.9 5.9 23.8 5.1Online products 15.8 2.9 12.8 2.1Other 0.9 - 1.8 0.9--------------------------------------------------------------------------Total 90.3 19.7 80.5 15.7--------------------------------------------------------------------------UnderlyingUnderlying 82.5 18.1 76.6 15.3Acquisitions(2) 7.8 1.6 3.9 0.4--------------------------------------------------------------------------Total 90.3 19.7 80.5 15.7--------------------------------------------------------------------------By MaturityNew (3) 10.9 (0.3) 9.4 (0.3)Existing and acquired 79.4 20.0 71.1 16.0--------------------------------------------------------------------------Total 90.3 19.7 80.5 15.7-------------------------------------------------------------------------- Notes 1.2006 comparatives have been restated to reflect activitiesdiscontinued during 2007 2.Acquisitions are defined as those made within the current orpreceding financial year 3.New products are defined as any product launched in the currentor two preceding financial years Strategic Overview During the year we undertook a strategic review of the business, and as a resultwe have identified the following key strategic objectives: - To achieve critical mass in high value growth markets Our primary focus is on expanding our presence in existing high value markets inwhich we can see opportunities for significant growth. We do not wish to entermarkets unless we can realistically expect to achieve market leadership and aminimum profit contribution of £1 million within 3 years. During the past year,we have sold or discontinued three publications serving discrete specialistcommunities which did not match these criteria. - To deliver double digit growth in revenues across the cycle 12% growth in revenues in the year to June 2007 equates to a 11% compound annualgrowth in revenues since 2003. - To balance portfolio revenues across print, online and events Print remains the dominant medium in Centaur's portfolio, representing 53% ofrevenues in FY2007, but online revenues grew by 23% in the past year andrepresent 17% of group revenues in FY2007 (FY2006: 16%). - To expand audience share of revenues Advertising revenues grew strongly in the year, up 16%. Nevertheless, revenuesfrom audiences retained their 23% share of total revenues. Initiatives such asthe recent joint venture with YouGov are expected to help increase theproportion of revenues derived from our audiences in the future. - To increase adjusted EBITDA margins to 25% Adjusted EBITDA margins increased to 22% in the year (FY2006: 20%), representinggood progress towards our target. Trading Review Revenues grew 12% in the year to 30 June 2007, led by 16% growth in revenuesfrom advertising. Advertising growth was particularly strong in our onlinemedia, which grew total revenues by 23%. Overall productivity also improved,with total revenues per employee increasing 7% to £121k. This revenue andproductivity growth, combined with other initiatives, resulted in adjustedEBITDA margins improving to 22% (FY2006: 20%) and in adjusted basic earnings pershare rising by 32% to 8.2p (FY2006: 6.2p). Centaur's rapid growth in the year continued to be supported by its pipeline ofnew and recently launched products and record results were achieved despitecontinuing investment in future growth. Overall, approximately 12% of revenuesgenerated in the last financial year were from products or events launchedwithin the past three years. The bulk of the new product launches have been inexisting communities, enhancing and extending established leading brands. We also completed two small bolt-on acquisitions during the past year and twojoint initiatives. In total, the acquisitions made during the year and duringthe course of FY2006 contributed 9% of revenues in FY2007 and an adjusted EBITDAmargin of 21%. Legal & Financial This was our most successful market segment in the year, reflecting the strengthof the underlying communities served. Revenue grew 24% year on year, driven inlarge part by investment in new products, in particular summits. Adjusted EBITDAmargins improved slightly to 30% (FY2006: 29%). The three leading titles, Money Marketing, Mortgage Strategy and The Lawyer,each ended the year well. Money Marketing and its sister title, Fund Strategy,both benefited from strong demand for retail investment products in the secondhalf, whilst Mortgage Strategy's consistent growth throughout the year reflectedthe high levels of activity in that sector. In addition, two new monthlymagazines were launched during the year, Mortgage Distributor in January 2007and Loan Distributor in June 2007. Both publications made a small profitcontribution in their first year. The Lawyer, meanwhile, delivered furthergrowth in revenues and profits, despite stronger comparatives, continuing tobenefit in particular from the impact of the record levels of underlying M&Aactivity on the legal profession. The fastest pace of growth was derived from events, led by the launch of fournew Summit events during the year. These included the Mortgage Packager Summit(launched alongside the new monthly Mortgage Distributor) and Secured LendingSummit (launched alongside Loan Distributor). Margins on financial events wererestrained by the costs of establishing a new infrastructure for financialSummits, but are expected to improve in the coming year. The Lawyer launched anew awards event in January 2007, The Lawyer HR Awards, which was well receivedand made a positive contribution. Online revenues in this segment also recorded strong growth in revenues andprofits from the three major internet businesses, Money Marketing Online(principally banner advertising), TheLawyer.com (recruitment and directoryadvertising) and Headlinemoney (subscriptions income) each grew strongly andthese business units are now delivering attractive profit margins. Marketing & Creative Overall revenues in this market segment returned to growth in the year as awhole, after a 4% decline in the first half year, reflecting improved conditionsin the underlying advertising market from early 2007. The overall results havebeen held back by ongoing weakness in traditional marketing activities, such asabove the line media and direct marketing, offset by strong growth in otherareas, notably online marketing. The weakest sector was the direct marketingportfolio (Precision Marketing and the DM Show) where revenues fell 15% or £0.3million in the year. This was offset by growth in online marketing activity,represented principally by New Media Age, the Online Marketing Show and theInteractive Marketing Summit, where revenues grew by more than 20%. Overallgrowth in this segment was led by online recruitment revenues in our newlylaunched magazine websites, MarketingWeek.co.uk and DesignWeek.co.uk, which madea small positive profit contribution before central overheads in their firstyear of operation. With revenue growth for the year as a whole at 0.4%, adjustedEBITDA recorded only a modest increase with margins improving slightly to 15%(FY2006: 14%). Since launch less than 12 months ago, MarketingWeek.co.uk and DesignWeek.co.ukhave established themselves rapidly as sources of news and jobs in theirrespective markets and each is already independently generating traffic levelssimilar to those achieved by mad.co.uk. Both sites are making a positive profitcontribution and are expected to generate strong growth in revenues in thefuture. Events in this segment experienced a decline in revenues. The DM Show (directmarketing) and the Total Motivation Show (incentives) which ran in the firsthalf of the financial year, both underperformed significantly in weak marketconditions and have been discontinued. However this was partly offset by goodresults from the Insight Show (market research), the Online Marketing Show andthe newly launched Interactive Marketing Summit, each occupying strong positionsin growing sectors of the market. Construction & Engineering Led by the full year impact of prior year acquisitions of Period Living andPro-Talk and of the recently launched magazine Move or Improve, revenues in thissegment grew 18% in the year. Margins for these new, maturing products, whichrepresent a significant portion of total segment revenues, are still belowaverage and as a result adjusted EBITDA margins remained essentially level at21% overall. Following two years of double digit revenue growth, The Engineer magazinedelivered further modest revenue growth, complementing more dramatic increasesonline, with revenues of theengineer.co.uk rising by over 60% on prior year.This was offset by a decline in revenues from the monthly magazine,MetalworkingProduction, due largely to the non-occurrence of a biennial tradeexhibition which ran in the previous financial year. Our largest magazine in theconstruction portfolio is the leading monthly self-build publicationHomebuilding & Renovating, which experienced a return to modest growth, afterflat revenues in the previous year, reflecting renewed buoyancy in the housingmarket during the period. The strength of the self-build market was also reflected in double digit growthin revenues from the associated Homebuilding exhibitions, which benefited from asuccessful launch of a new regional show in Newbury in June 2007. Online revenues in this segment are driven principally by The Engineer Online(mainly recruitment advertising), homebuilding.co.uk (mainly banneradvertising), plotfinder.co.uk (revenues from subscriptions) and the recentlyacquired Pro-Talk (online response driven search-advertising model). Inaggregate, online products delivered strong revenue growth and satisfactoryimprovement in profits. Perfect Information PI increased adjusted EBITDA to £1.5 million (FY2006: £1.4 million), despite adecline in revenues to £6.0 million (FY2006: £6.4 million) resulting in animproved adjusted EBITDA margin of 25% (FY2006: 22%). During the year, PI completed the development of its analytical and chartingtool, PA with the release of the PA Excel add-in in February 2007. This has beenwell received by prospective clients, but aggressive pricing by establishedcompetitors has resulted in minimal levels of new business for PA in the pastyear. PI is now directing its development and sales focus to its core filingsbusiness, where growth opportunities are more attractive. In particular, we arelooking to integrate the analytical functionality of PA with its extensivefilings database to allow original source documents to be more easily andeffectively incorporated into client workflow. The decline in PI revenues during the year was due principally to a continuingloss of non-core revenues from clients acquired at the time of the acquisitionof the Synergy Software Group, including revenues from products no longersupported by PI, notably a private investor analytical tool. Underlying revenuesfrom filings were approximately level with prior year, following a period ofweaker than expected renewals in early 2007, but the refocused sales effort hasled to an improved performance in the last quarter of the year and the annualvalue of filings subscriptions contracts at June 2007 was 2% higher than 12months previously. PI has more than offset the decline in PA revenues in the past year with costreductions, leading to the significant improvement in margin. General Business Services This segment comprises products serving a number of distinct businesscommunities. These include human resources (HR), the recruitment sector, supplychain and logistics, and business travel. In aggregate, revenues grew 15%, with most of the growth arising in the recentlyacquired sectors, logistics and recruitment. Adjusted EBITDA grew £1.0 millionto £1.5 million, resulting in margins of 14% (FY2006: 5%) Revenue and profits growth in this segment were driven by the logistics andrecruitment portfolios. In both cases, the underlying served markets areenjoying buoyant trading conditions and our investment in redeveloping theserecently acquired products is delivering promising results. The Recruiter alsobenefited from a full year's results. Revenues in the Employee Benefitsportfolio were adversely affected by loss of advertising resulting from theremoval, in the 2006 Finance Act, of the tax benefit, the Home ComputingInitiative, but growth was resumed in the final quarter of FY2007. The BusinessTravel shows portfolio (excluding the regional show discontinued in October2005) also delivered growth in revenues and profit contribution. Discontinued Operations As previously reported, we sold Televisual in August 2006. In July 2007, we alsosold the Hali portfolio to its publisher. Hali is a strong brand that enjoys anexceptional position in the market for antique carpets and textiles. However,the market it serves is small and we do not believe that it offers the potentialto justify Centaur's continued investment. Neither of these portfolios made apositive contribution to Centaur profits in their last year of ownership. New Business Development Initiatives During the year we continued to focus on new product development opportunitiesand to search for suitable acquisitions. The key development initiatives in theperiod are outlined below. New Magazines In January we launched Mortgage Distributor, a monthly magazine covering thechanging nature of how mortgages are sold, with a particular focus on mortgagepackagers, the intermediary distributors serving this market. In June 2007, welaunched the monthly magazine Loan Distributor, which caters for the providersof secured loans and the advisers who recommend them. These magazines were bornout of the success of Mortgage Strategy and our strength in that market wasconfirmed by the fact that both titles generated a positive profit contributionfrom launch. New Online Products The Internet is now firmly established as an essential advertising andinformation medium, which continues to offer significant business opportunitiesto Centaur. We have invested steadily in enhancing the performance,functionality and reach of our established internet operations and many of themare now delivering high rates of revenue growth and profitability. Total onlinerevenues grew 23% on prior year (despite the decline in PI revenues) andadjusted EBITDA margins increased to 18% against 16% in FY2006. Apart from the launch of vertical websites to complement Marketing Week andDesign Week, as reported above, our most significant new online product activityduring the year was linked to an extension of the successful news alertingservice for personal finance journalists, Headline Money (HM). We acquired ourjoint venture partner's 50% share of HM in FY2006, with a view to launching themodel into new verticals. In FY2007 we have launched Headline Property (aservice for residential property journalists) and Headline Auto (for motoringcorrespondents). Both sites are becoming firmly established as authoritative andcomprehensive sources of news stories for journalists in each sector and weexpect revenues to build steadily in the coming year, with both sites expectedto break even by the end of FY2008. This year also saw two new online initiatives that we believe will deliver animportant contribution in the future. Firstly, three Centaur websites havecommenced web TV services, providing news analysis and the ability to showcasenew products. Secondly, we have launched our first vertical search engine -madsearch - to service the marketing and creative sector. Revenues from theseinitiatives are still immaterial, but we believe they offer significantpotential for future growth. Perfect Information (PI) remains our largest single online business. As notedabove, we are now directing the development focus of PI towards its core filingsproduct suite. Our principal focus is on the following: to establish a newenterprise solution tailored to specific categories of end user needs; to expandour existing EDGAR search service to establish it as the leading US filingsproduct to complement our market-leading non-US service; to provideworkflow-related search products linking financial information directly withsource documents. Each of these projects is underway and we expect them to belaunched to market during the course of FY2008. New Events We organised one new exhibition, two new awards events, seven new sponsoredSummits and a number of training courses during the year. The new exhibition wasa regional Homebuilding Show, which ran successfully in Newbury in June 2007 andgenerated a useful profit contribution. The Homebuilding & Renovating portfolionow comprises seven exhibitions attracting in excess of 100,000 visitors perannum. Centaur launched its Summit business in FY2006, with the organisation of threenew events in that year. Summits typically comprise meetings/workshop-basedevents, bringing together relatively small numbers of senior decision-makerswithin particular vertical markets. We give these events a strong independent"editorial" base, but revenues are normally derived from sponsorship. In FY2007, we created a further seven Summit events, four of which were in thefinancial services sector, one in recruitment, one in HR and one in marketing.Each of these was profitable and well received by delegates and sponsors,providing a good base for future growth. Two of these events were launched inconjunction with new magazines - the Mortgage Packager Summit in January 2007 atthe same time as the first issue of Mortgage Distributor and the Secured LendingSummit, alongside Loan Distributor in June 2007. In January 2007, we launched The Lawyer HR Awards, the first event to recognisethe key role of HR specialists in the recruitment and retention of staff in lawfirms. The event was a great success, helping to reinforce our relationship withthese key decision-makers and we expect it to deliver significant growth inFY2008. In June 2007, we launched the inaugural Shopfitting & Display Awards inassociation with Centaur's monthly magazine InStore. Training is a natural extension of the services we offer to our various marketcommunities and in the past year we have commenced in a small way to develop aseries of training programmes, initially covering interactive marketing skills,using the New Media Age brand. These have been well received and we aim toexpand on this initiative in the financial year ahead. Finally, we have continued to rebalance the focus of the Conferences division,reducing its traditional, relative exposure to the marketing sector, bylaunching more events in other Centaur verticals such as legal and engineering.In doing so, the division delivered 7% revenue growth and a dramatic improvementin adjusted EBITDA margins. Acquisitions and Joint Ventures Our acquisition strategy is typically to identify targets that meet thefollowing criteria: a. The business is operating in a market with high growth potential and high value; b. There is an identifiable high information need on which to base a range of products; c. The business is a market-leader in its respective sector or capable of achieving market leadership quickly; and d. Its key people fit comfortably into Centaur's culture. Having identified suitable targets, we seek to apply the following financialcriteria in assessing valuations: e. It should be earnings enhancing and deliver a minimum 10% post-tax ROI in its first full year of Centaur ownership; and f. It should deliver a minimum post-tax IRR of 5 percentage points above Centaur's weighted average cost of capital (currently 10%). In the past year we have completed two bolt-on acquisitions which we believemeet these criteria. In March 2007 we strengthened our position in the logisticsmarket with the acquisition of The Awareness Group (AG). AG's principal productis the Extended Supply Chain, a two day thought leadership event launched in2003 for senior supply chain and logistics specialists from across Europe. Thebusiness is highly complementary with Centaur's market-leading publishingpresence in this sector and we believe it will form a good platform for thelaunch of additional events. In May 2007 we acquired from Reed Elsevier plc the Creative Handbook, along-established and respected annual directory for the creative servicescommunity. The Handbook fits ideally with our Creative Review and Design Weektitles and associated websites and its acquisition will serve to reinforce ourposition in this sector. During the year, we also entered into two important joint arrangements. InFebruary 2007, we launched a 50:50 joint venture with the leading onlineresearch business, YouGov plc. The joint venture company, YouGovCentaur Ltd(YGC), has been established in order to build specialist online research panelswithin our major vertical markets and use them to create valuable and uniquecontent for our publications and customised and syndicated research products forour markets. We have recruited two senior, experienced staff to work full-timeon this initiative, coordinating and leveraging the extensive resources ofYouGov and Centaur respectively to deliver new products. The first new productsare expected to be launched in the autumn of 2007. Also in February 2007, we announced a joint initiative with Dnata World ofEvents, a part of the Emirates Group and a leading event organiser based inDubai, the fastest growing business hub in the Middle East. The first project isto organise the Business Travel Show Dubai, which is scheduled to take place inOctober 2007 and is on schedule to deliver a small profit contribution in itsfirst year. Following that, it is planned to identify other event opportunitiesfor this market. Overall, our new and recently acquired businesses have contributed revenues inFY2007 of £7.8 million (FY2006: £3.9 million) on which they earned an adjustedEBITDA margin of 21% (FY2006: 10%). Current Development Activity Innovation is central to Centaur's culture and is an almost constant activityacross the whole portfolio. In the new financial year, we are continuing todevelop new products at a steady pace. Our current development effort isfocussed on extending our established brands into new media and enhancing ourrecent acquisitions. In addition to the ongoing development and maturing of initiatives mentionedabove, we are currently in the process of developing a number of new projectsacross the business. These include several new events, further development ofYGC research-based projects, expansion of our web TV and vertical searchactivities, expansion of established websites to provide improved functionalityand productivity and the further development of training programmes for our corecommunities. Notes 1. One of Centaur's key measures of profit is earnings before interest, tax, depreciation and amortisation, excluding exceptional items and other significant non-cash items including share based payments (adjusted EBITDA). In addition, we report adjusted PBT (PBTA) which is profit before tax excluding the impact of amortisation of acquired intangibles and of exceptional items, and excluding ofthe profit on disposal of associated undertakings. 2. Centaur's product portfolio currently comprises 7 weekly magazines, 3 fortnightly magazines, 14 monthly magazines, 7 magazines of a quarterly or bi-monthly frequency, 33 online products or services, 30 awards or other sponsored events, 26 exhibitions and approximately 90 conferences. 3. Centaur reports its results within 5 distinct segments, namely Legal and Financial, Marketing and Creative, Engineering and Construction, Perfect Information and General Business Services. The first 3 segments comprise principally the following vertical business communities in which Centaur publishes market-leading magazine titles: Marketing Services, Creative Services, New Media, Retail Financial Products, Legal Services, Engineering and Special Interest Residential Property. Centaur also enjoys strong positions in a number of other specialist communities, namely HR, Recruitment, Logistics, Business travel, Construction and Public/Private Finance. The different measures of profit described above are summarised in the followingtables: Continuing operations 2007 2006 £m £m Revenue 90.3 80.5------------------------------------------------------------------------------- Adjusted EBITDA 19.7 15.7 Depreciation of property, plant and equipment (0.8) (0.7)Amortisation of software (1.9) (1.8)Share based payments (0.4) (0.4)Interest receivable 0.2 0.3Share of post-tax profit from associate 0.1 0.1-------------------------------------------------------------------------------Adjusted PBT 16.9 13.2 Amortisation of acquired intangibles (0.7) (0.3)Exceptional administrative credit - 2.2Profit on sale of associate 0.7 -------------------------------------------------------------------------------- Profit before taxation 16.9 15.1------------------------------------------------------------------------------- Operating profit from continuing operations 15.9 14.7 Amortisation of acquired intangibles 0.7 0.3Exceptional (credit)/ costs - (2.2)------------------------------------------------------------------------------- Adjusted operating profit 16.6 12.8------------------------------------------------------------------------------- Centaur Media plcConsolidated Income Statement for the year ended 30 June 2007 Restated 2007 2006 Note £m £m Continuing operations Revenue 1 90.3 80.5 Cost of sales (45.7) (41.5)-------------------------------------------------------------------------------Gross profit 44.6 39.0 Distribution costs (4.6) (4.4)Administrative expenses (24.1) (19.9) -------------------------------------------------------------------------------Adjusted EBITDA 1 19.7 15.7 Depreciation of property, plant and equipment (0.8) (0.7)Amortisation of software (1.9) (1.8)Amortisation of acquired intangibles (0.7) (0.3)Share based payments (0.4) (0.4)Exceptional administrative credit - 2.2------------------------------------------------------------------------------- Operating profit from continuing operations 15.9 14.7 Interest receivable 0.2 0.3Share of post-tax profit from associate 0.1 0.1Profit on sale of associate 0.7 -------------------------------------------------------------------------------- Profit from continuing operations before taxation 16.9 15.1 Taxation 2 (4.6) (3.7)------------------------------------------------------------------------------- Profit for the year from continuing operations 12.3 11.4 Discontinued operationsProfit for the year from discontinued operations - -------------------------------------------------------------------------------- Profit for the year attributable to equity shareholders 12.3 11.4------------------------------------------------------------------------------- Earnings per share 3Basic 8.2p 7.6pFully diluted 8.1p 7.6p Earnings per share from continuing operationsBasic 8.2p 7.6pFully diluted 8.1p 7.6p The accompanying accounting policies and notes form an integral part of thesefinancial statements. Centaur Media plcConsolidated Balance Sheet at 30 June 2007 2007 2006 Note £m £mNon-current assetsGoodwill 140.1 142.0Other intangible assets 16.5 13.1Property, plant and equipment 2.1 2.5Investments accounted for using the equitymethod - 0.3Deferred tax assets 1.5 1.6------------------------------------------------------------------------------- 160.2 159.5------------------------------------------------------------------------------- Current assetsInventories 1.1 1.5Trade and other receivables 18.4 18.7Cash and cash equivalents 10.1 7.8------------------------------------------------------------------------------- 29.6 28.0------------------------------------------------------------------------------- Assets held in disposal group for sale 0.4 - Current liabilitiesFinancial liabilities - borrowings 1.1 1.6Trade and other payables 11.4 11.3Deferred income 9.6 10.5Current tax liabilities 2.3 2.6Provisions - 0.6------------------------------------------------------------------------------- 24.4 26.6------------------------------------------------------------------------------- Liabilities held in disposal group for sale 0.2 - -------------------------------------------------------------------------------Net current assets 5.4 1.4------------------------------------------------------------------------------- Non-current liabilitiesProvisions - 1.9Deferred tax liabilities 1.1 1.1------------------------------------------------------------------------------- 1.1 3.0------------------------------------------------------------------------------- Net assets 164.5 157.9------------------------------------------------------------------------------- Capital and reservesShare capital 15.0 14.9Treasury shares (1.0) -Share premium 0.3 0.3Other reserves 2.8 2.4Retained earnings 147.4 140.3------------------------------------------------------------------------------- Total shareholders' equity 164.5 157.9------------------------------------------------------------------------------- The financial statements were approved by the Board of Directors on 20 September2007 and were signed on its behalf by: MJ LallyDirector Centaur Media plcConsolidated Cash Flow Statement for the year ended 30 June 2007 2007 2006 Note £m £m Cash flows from operating activitiesCash generated from operations 18.2 14.4Tax paid (4.9) (1.8)-------------------------------------------------------------------------------Cash flows from operating activities 13.3 12.6------------------------------------------------------------------------------- Cash flows from investing activitiesInterest received 0.2 0.3Acquisition of subsidiaries (net of cash 0.1 (4.8)acquired)Proceeds from the disposal of businesses 0.8 0.4Purchase of property, plant and equipment (0.5) (1.0)Purchase of software (2.1) (2.0)Purchase of other intangible assets (3.0) (6.6)-------------------------------------------------------------------------------Cash flows from investing activities (4.5) (13.7)------------------------------------------------------------------------------- Cash flows from financing activitiesNet proceeds from issue of ordinary share 0.1 -capitalTreasury shares purchased (1.0) -Repayment of loan notes (0.5) (0.9)Dividends paid (5.1) (2.7)-------------------------------------------------------------------------------Cash flows from financing activities (6.5) (3.6)------------------------------------------------------------------------------- -------------------------------------------------------------------------------Net increase / (decrease) in cash and cashequivalents 2.3 (4.7)------------------------------------------------------------------------------- -------------------------------------------------------------------------------Cash and cash equivalents at 1 July 7.8 12.5------------------------------------------------------------------------------- -------------------------------------------------------------------------------Cash and cash equivalents 30 June 10.1 7.8------------------------------------------------------------------------------- Centaur Media plcStatement of accounting policies The principal accounting policies adopted in the preparation of these financialstatements are set out below. These policies have been consistently applied toall the years presented, unless otherwise stated. Basis of preparation The consolidated and Company financial statements have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adopted bythe European Union and International Financial Reporting InterpretationsCommittee (IFRIC) applicable at 30 June 2007 and with those parts of theCompanies Act, 1985 applicable to companies reporting under IFRS. The financialstatements have been prepared on the historical cost basis. The Company has taken advantage of the exemption available under section 230 ofthe Companies Act 1985 and has not presented its own income statement in thesefinancial statements. At the date of authorisation of these financial statements, the followingstandards and interpretations which have not been applied in these financialstatements were in issue but have not yet come into effect: IFRS 7 Financial Instruments: Disclosures and the related amendment to IAS 1 oncapital disclosures IFRS 8 Operating segments Revised IAS 23 Borrowing costs IFRIC 10 Interims and impairment IFRIC 11 IFRS 2 - Group and treasury share transactions IFRIC 13 Customer loyalty programmes relating to IAS 18, Revenue The Directors anticipate that the adoption of these standards andinterpretations in future periods will have no material impact on the financialstatements of the Group. The following new standards and interpretations which were in issue but have notyet come into effect are not considered to be relevant to Centaur's activities: Revised guidance on implementing IFRS 4, 'Insurance contracts' Amendment to IAS 21 Net investment in a foreign operation IFRIC 12 Service concession arrangements IFRIC 14, IAS 19 The limit on a defined benefit asset, minimum fundingrequirements and their interaction These financial statements are presented in pounds sterling (GBP) as that is thecurrency of the primary economic environment in which the group operates. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, events or actions, the actual results may ultimatelydiffer from those estimates. Additional presentation within the consolidated income statement The Group has presented separately on the face of the consolidated incomestatement an additional profit measure of adjusted EBITDA. Adjusted EBITDA isearnings before interest, tax, depreciation, amortisation and excludingexceptional and other significant non-cash items. This presentation has beenprovided as the Directors believe that this measure reflects more clearly theongoing operations of the Group. In 2007 and 2006, share based payment costshave been treated as a significant non-cash item. Centaur Media plcNotes to the financial statements 1 Segmental reporting Primary reporting format - business segments The group is currently organised into five main business segments. Corporatecosts are allocated to business segments on an appropriate basis depending onthe nature of the cost. Inter-segment pricing is determined on an arm's lengthbasis. Segment assets consist primarily of property, plant and equipment,intangible assets including goodwill, inventories, trade receivables and cashand cash equivalents. Segment liabilities comprise trade payables, accruals anddeferred income. Corporate assets and liabilities comprise current and deferredtax balances, cash and cash equivalents and borrowings. Capital expenditurecomprises additions to property, plant and equipment, intangible assets andgoodwill and includes additions resulting from acquisitions through businesscombinations. Secondary reporting format - geographical segments Substantially all of Centaur's net assets are located and all revenue and profitare generated in the United Kingdom. The Directors consider that the groupoperates in a single geographical segment, being the United Kingdom, andtherefore secondary format segmental reporting is not required. Year ended Legal and Marketing Construction Perfect General Unallocated Group30 June 2007 Financial and Creative and Information Business Engineering Services ------------------------------------------------------------------------------------------------------------- £m £m £m £m £m £m £mContinuingoperations Revenue 30.3 23.6 19.4 6.0 11.0 - 90.3 Adjusted EBITDA 9.0 3.6 4.1 1.5 1.5 - 19.7Depreciation ofproperty, plantand equipment (0.2) (0.2) (0.1) (0.1) (0.2) - (0.8)Amortisation of software (0.3) (0.3) (0.2) (1.0) (0.1) - (1.9)Amortisation of acquired intangibles (0.1) - (0.4) - (0.2) - (0.7)Share based payments - - - - - (0.4) (0.4) Exceptional administrativecredit - - - - - - --------------------------------------------------------------------------------------------------------------Segment result 8.4 3.1 3.4 0.4 1.0 (0.4) 15.9-------------------------------------------------------------------------------------------------------------Interest receivable - - - - - 0.2 0.2Share of post tax profit ofassociates 0.1 - - - - - 0.1Profit on sale of associate 0.7 - - - - - 0.7-------------------------------------------------------------------------------------------------------------Profit before tax 9.2 3.1 3.4 0.4 1.0 (0.2) 16.9Taxation - - - - - (4.6) (4.6)-------------------------------------------------------------------------------------------------------------Profit for theyear fromcontinuing operations 9.2 3.1 3.4 0.4 1.0 (4.8) 12.3-------------------------------------------------------------------------------------------------------------Discontinuedoperations-------------------------------------------------------------------------------------------------------------Revenue - - - - 1.1 - 1.1Segment result - - - - (0.1) - (0.1)Profit on disposal of operation - - - - 0.1 - 0.1-------------------------------------------------------------------------------------------------------------Profit for theyear fromdiscontinued operations - - - - - - -------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Profit for theyear attributableto equity shareholders 9.2 3.1 3.4 0.4 1.0 (4.8) 12.3------------------------------------------------------------------------------------------------------------- Segment assets 60.4 47.4 39.7 12.0 18.7 - 178.2Corporate assets - - - - - 12.0 12.0-------------------------------------------------------------------------------------------------------------Consolidated total assets 60.4 47.4 39.7 12.0 18.7 12.0 190.2-------------------------------------------------------------------------------------------------------------Segment liabilities 4.2 5.3 5.5 2.9 2.5 - 20.4Corporate liabilities - - - - - 5.3 5.3-------------------------------------------------------------------------------------------------------------Consolidated total liabilities 4.2 5.3 5.5 2.9 2.5 5.3 25.7------------------------------------------------------------------------------------------------------------- Other items:Capital expenditure 0.3 1.0 0.2 1.0 4.7 - 7.2Impairment of trade receivables 0.1 0.2 0.2 (0.1) 0.2 - 0.6 1 Segmental reporting (continued) Year ended Legal and Marketing Construction Perfect General Unallocated Group30 June 2006 Financial and Creative and Information Business Engineering Services------------------------------------------------------------------------------------------------------------- £m £m £m £m £m £m £mContinuingoperations Revenue 24.5 23.5 16.5 6.4 9.6 - 80.5 Adjusted EBITDA 7.1 3.3 3.4 1.4 0.5 - 15.7Depreciation ofproperty, plantand equipment (0.1) (0.2) (0.2) (0.1) (0.1) - (0.7)Amortisation of software (0.4) (0.3) (0.2) (0.8) (0.1) (1.8)Amortisation of acquiredintangibles - - (0.1) - (0.2) - (0.3)Share based payments - - - - (0.4) (0.4)Exceptional administrativecredit - - - 2.2 - - 2.2--------------------------------------------------------------------------------------------------------------Segment result 6.6 2.8 2.9 2.7 0.1 (0.4) 14.7--------------------------------------------------------------------------------------------------------------Interest receivable - - - - - 0.3 0.3Share of post tax profit ofassociates 0.1 - - - - - 0.1-------------------------------------------------------------------------------------------------------------Profit before tax 6.7 2.8 2.9 2.7 0.1 (0.1) 15.1Taxation - - - - - (3.7) (3.7)-------------------------------------------------------------------------------------------------------------Profit for theyear fromcontinuing operations 6.7 2.8 2.9 2.7 0.1 (3.8) 11.4--------------------------------------------------------------------------------------------------------------Discontinuedoperations-------------------------------------------------------------------------------------------------------------Revenue - - - - 1.8 - 1.8Segment result - - - - - - -Profit on disposal of operation - - - - - - ---------------------------------------------------------------------------------------------------------------Profit for theyear fromdiscontinued operations - - - - - - ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------Profit for theyear attributableto equity shareholders 6.7 2.8 2.9 2.7 0.1 (3.8) 11.4--------------------------------------------------------------------------------------------------------------- Segment assets 68.6 51.9 40.7 15.1 11.2 - 187.5--------------------------------------------------------------------------------------------------------------- Consolidated total assets 68.6 51.9 40.7 15.1 11.2 - 187.5---------------------------------------------------------------------------------------------------------------Segment liabilities 4.7 5.5 6.9 2.8 3.7 - 23.6 Corporate liabilities - - - - - 6.0 6.0---------------------------------------------------------------------------------------------------------------Consolidated total liabilities 4.7 5.5 6.9 2.8 3.7 6.0 29.6---------------------------------------------------------------------------------------------------------------Other items:Capital expenditure 1.6 0.5 7.9 1.2 4.9 - 16.1Impairment of trade receivables 0.2 0.2 0.1 - 0.1 - 0.6--------------------------------------------------------------------------------------------------------------- 2 Taxation (a) Analysis of charge in year 2007 2006 £m £mCurrent tax- Current year 4.6 3.3- Adjustment in respect of prior year - 0.6 ---------------- 4.6 3.9 ---------------- Deferred tax- Current year (0.1) 0.5- Adjustment in respect of prior year 0.1 (0.7) ----------------- - (0.2) -----------------Taxation 4.6 3.7 ----------------- (b) Tax on items charged to equity Deferred tax charge/(credit) on share based payments 0.1 (0.2) ----------------- (c) Factors affecting tax charge for the year The tax assessed for the year is lower (2006: lower) than the standard rateof corporation tax in the UK (30%). The differences are explained below: 2007 2006 £m £mProfit before tax 16.9 15.1 ----------------- Profit before tax multiplied by standard rate of corporation tax in the UK of 30% (2006: 30%) 5.1 4.5 Effects of: Non taxable release of deferred consideration provision - (0.8)Expenses not deductible for tax purposes 0.2 0.2Non-taxable gain on sale of associate (0.2) -Current tax deduction on share options exercised (0.2) -Deferred tax credit on share based payments taken toincome statement (0.5) (0.1)Losses not recognised 0.1 -Adjustments to tax charge in respect of previous years 0.1 (0.1) -----------------Total taxation 4.6 3.7 ----------------- There was no tax arising on discontinued operations during the current orprevious year. A number of changes to the UK Corporation tax system were announced in the March2007 Budget Statement and have been enacted in the 2007 Finance Act. The changeshad been substantively enacted at the balance sheet date and, therefore, areincluded in these financial statements. These changes have not had a significantimpact on the tax balances of the Group 3 Earnings per share Basic earnings per share (EPS) is calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number of sharesin issue during the year. Shares held in the employee benefit trust have beenexcluded in arriving at the weighted average number of shares. For diluted earnings per share the weighted average number of ordinary shares inissue is adjusted to assume conversion of all dilutive potential ordinaryshares. The Company has two classes of dilutive potential ordinary shares: shareoptions granted to Directors and employees where the exercise price is less thanthe average market price of the Company's ordinary shares during the year; andthe contingently issuable shares under the Company's long term incentive plan tothe extent that the conditions are met at the period end. An alternative measure of adjusted earnings per share has been provided as theDirectors believe that this measure is more reflective of the ongoing trading ofthe Group. 2007 2006 Earnings Weighted Per Earnings Weighted Per average share average share number amount number amount of of shares shares £m millions Pence £m millions Pence--------------------------------------------------------------------------------Basic EPS 12.3 149.1 8.2 11.4 149.3 7.6--------------------------------------------------------------------------------Effect of dilutivesecuritiesOptions - 1.8 - - 0.7 -Contingently issuableshares - 0.4 - - 0.1 ---------------------------------------------------------------------------------Diluted basic EPS 12.3 151.3 8.1 11.4 150.1 7.6-------------------------------------------------------------------------------- Adjusted EPSEarnings attributable to ordinary shareholders 12.3 149.1 8.2 11.4 149.3 7.6 Amortisation of acquired intangibles 0.7 - 0.5 0.3 - 0.2Profit on disposal of associated undertakings (0.7) - (0.5) - - -Exceptional administrative credit - - - (2.2) - (1.5)Tax effect of above adjustments (0.1) (0.2) - (0.1)-------------------------------------------------------------------------------- Adjusted EPS 12.2 149.1 8.2 9.3 149.3 6.2-------------------------------------------------------------------------------- Effect of dilutivesecuritiesOptions - 1.8 - - 0.7 -Contingently issuable shares - 0.4 - - 0.1 --------------------------------------------------------------------------------- Diluted adjusted EPS 12.2 151.3 8.1 9.3 150.1 6.2-------------------------------------------------------------------------------- There is no difference between EPS for the financial year and EPS for continuingoperations. 4 Nature of the financial information The foregoing financial information does not amount to full accounts within themeaning of Section 240 of Companies Act 1985. The financial information has beenextracted from the Group's Annual Report and Accounts for the year ended 30 June2007 on which the auditors have not yet expressed an opinion, but for which anunqualified report is expected. Copies of the Annual Report and Accounts will beposted to shareholders shortly and will be available from the Company'sregistered office at 50 Poland Street, London, W1F7AX. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Centaur