1st Mar 2007 07:03
Tarsus Group PLC01 March 2007 1 March 2007Tarsus Group plc Preliminary results for the year ended 31 December 2006 Record Results Tarsus Group plc ("Tarsus" or "the Group"), the international media group withinterests in exhibitions, conferences, publishing and online media is pleasedto announce record results for 2006. Financial Highlights • Profit before tax up 27% to £7.0 million (2005: £5.5 million)• Adjusted profit before tax* up by 21% to £7.3 million (2005: £6.0 million)• Basic EPS up 10% to 9.9p (2005: 9.0p)• Adjusted EPS* up 10% to 10.3p (2005: 9.4p)• Adjusted operating cash conversion* of 110% (2005: 101%)• Year end net debt of £15.8 million, lower than expected at time of MCII acquisition• Proposed full year dividend increased by 23% to 4.0p (2005: 3.25p) Operational Highlights • Strong organic revenue growth of 15% led by two of the Group's largest events, Labelexpo Americas and Heavent• Further good progress in the scaled-up French portfolio• Acquisition of MCII in November• Chinese business gathers pace• Our online-led business, Caroo, achieved critical mass Neville Buch, Chairman of Tarsus, commented: "We laid the foundations for Tarsus's strong performance in 2006 by increasednew product development supplemented by complementary acquisitions. We alsotook the opportunity to broaden the base of the Group with the acquisition ofMCII, a global medical events business. Our focus this year is on driving the organic growth potential of the business,which continues to be very second-half weighted. We will benefit from thereturn of Labelexpo to Europe in 2007, which is our largest exhibition, and thiswill reduce our exposure to the US dollar. In addition, we will have a full yearof profit contribution from MCII. Your Directors remain confident that 2007will be another year of strong progress for Tarsus." Glossary *Adjusted profit before tax:Calculated using profit before tax adjusted for share option charges,amortisation charges, minority interests' share of losses, tax on profit fromjoint ventures and excludes profit on disposal of intangible assets. Adjusted EPS:Calculated using profit after tax attributable to equity shareholders adjustedfor share option charges, amortisation charges, minority interests' share oflosses and excludes profit on disposal of intangible assets. Adjusted operating cash conversion:Cash generated from operations adjusted for working capital acquired/disposed ofin the period divided by operating profit adjusted to exclude results fromacquisitions and disposals made during the period. FOR FURTHER INFORMATION, PLEASE CONTACT: Tarsus Group plc:Douglas Emslie, Group Managing Director: 020 8846 2700 Media:Matthew Moth, Madano Partnership: 020 7593 4000 Investors/Analysts:Neville Harris, IRfocus: 020 7593 4215 CHAIRMAN'S AND MANAGING DIRECTOR'S STATEMENT RESULTS We are pleased to report that 2006 continued the trend of strong progress atTarsus despite a significantly weaker US dollar affecting the majority of ourrevenues in the year. This record performance resulted from the strength of our established brands and the growing maturity of the revenue streams from ournewer products. The Group's largest event in the year, Labelexpo Americas,achieved revenues 15% higher than the equivalent 2004 show. There was furthergood progress in France where this division's largest show, Heavent, grewrevenues by 22%. Revenues from emerging markets doubled on a like-for-likebasis to £1.0 million and our online-led business, Caroo, achieved revenues of£1.5 million with organic growth of 63%. Group revenue was £26.3 million (2005: £23.2 million), an increase of 14% withunderlying organic growth of 15% (excluding acquisitions that impacted for thefirst time in 2006). Profit before tax was £7.0 million compared with £5.5 million in 2005. Adjustedprofit before tax was up 21% to £7.3 million (2005: £6.0 million). Basic earnings per share were 9.9p (2005: 9.0p) and adjusted earnings per share rose by 10% to 10.3p (2005: 9.4p). Adjusted operating cash conversion continued to be strong, representing 110% ofadjusted operating profit (101% in 2005). The continued good conversion ratereflects our strong focus on managing working capital as the business expands. Your Directors are proposing a final dividend of 2.75p per share, bringing thetotal for the year to 4.0p per share - an increase of 23% over 2005. The finaldividend, which is subject to Shareholder approval, is proposed to be paid on 27 April 2007 to Shareholders on the Register of Members of the Company on 9March 2007. We will continue to offer a scrip alternative. OPERATING REVIEW US Overall, US revenues were up 12% on a like-for-like basis. Labelexpo returned to the US in 2006 and the exhibition in September performedextremely well, with revenues 15% ahead of the equivalent event in 2004.Following strong attendance figures, re-bookings for the 2008 event were very encouraging. Our Off-Price clothing division performed well in a difficultretail trading environment, with revenues up 2%. This division continues tobenefit from the growth of value based retailing. The Packaging Summit in May, launched in 2005, significantly increased both revenues and buyer attendance. In November, the Group added a fifth major division with the purchase of 80% ofMedical Conferences International Inc. ("MCII"). The acquisition wasaccompanied by a vendor placing of 5.3 million new ordinary shares at 207p,raising approximately £10.5 million after expenses. MCII is the leading globalanti-ageing and regenerative medical events business with its largest annualevents in Las Vegas, Chicago and Orlando. It is a strong brand, but an immatureone, and the scope for further development is substantial. December saw thefirst contribution from the MCII acquisition, with the Las Vegas event takingplace. Revenues and attendees were up by 55% and 34% respectively compared with2005, both slightly ahead of our expectations at the time of acquisition. Europe The French exhibition market is the second largest in Europe after Germany andcultural and language differences dictate that it is an important market in itsown right. The French business has been progressively developed by the Groupover the last two years with a view to increasing its scale and broadening itssector coverage. To this end, Proseg, the leading annual facilities managementexhibition, was acquired in October and earlier in the year we bought out oneof the minority interests in our Direct Marketing show. As part of the sametransaction we sold a small software exhibition, Progilog, to the vendors. In France, organic revenues grew by 11% driven by Heavent, where revenues increased by 22%, and our IT portfolio launches. Following the purchase of Proseg, Tarsus has the market leading exhibitions infour sectors - IT, Marketing, Education and Facilities Management. Proseg willnow be the second largest exhibition in the French portfolio. The outlook for the French economy is improving and with the business benefiting from increasedscale, the prospects for our French division are encouraging. In the UK, our Labels & Labelling magazine had another good year with revenues up by 10% to £1.5 million. In January 2006, the Group purchased DH Publishing Ltd. for an initialconsideration of £350,000. This business, which is focused on the b2b globalonline recruitment industry, has been incorporated into our online-led business,Caroo, which made excellent progress in 2006 with organic revenue growth of63%. Caroo is focused on the b2b marketplace and now operates in three areas - gifts,events and online recruitment and its growth is benefiting from the migrationof marketing spend to the internet. While the business is small, within the context of the overall Group, the prospects for future growth remain excellent. Emerging Markets On a like-for-like basis, emerging market revenues doubled to £1.0 million in2006, aided by the launches of Label Summits in India, Japan, Bangkok and SouthChina. Our Chinese outbound travel exhibition COT(TM)(formerly BITTM) made goodprogress with a doubling of visitor numbers. In July, the Group entered into a strategic partnership with Shanghai ModernInternational Exhibition Company, a subsidiary of the Shanghai World ExpoGroup. Shanghai Modern is a market leader in China in the advertising, packagingand printing sectors. This partnership formed part of a continuing developmentof our Chinese portfolio, which has taken another material step forwardfollowing the recently announced partnership with Intex Shanghai Company Ltd. We are focused on developing our presence in China and we plan to run ten eventsin 2007 compared with two in 2006. In addition, we are continuing to build ourtwo global brands, Labelexpo and the Anti-Ageing Congress, in other emerging markets. Outlook We laid the foundations for Tarsus's strong performance in 2006 by increased newproduct development supplemented by complementary acquisitions. We also tookthe opportunity to broaden the base of the Group with the acquisition of MCII, a global medical events business. Our focus this year is on driving the organic growth potential of the businesswhich continues to be very second-half weighted. We will benefit from thereturn of Labelexpo to Europe in 2007, which is our largest exhibition, and thiswill reduce our exposure to the US dollar. In addition, we will have a full yearof profit contribution from MCII. Your Directors remain confident that 2007will be another year of strong progress for Tarsus. Neville Buch, Douglas Emslie,Chairman Group Managing Director 1 March 2007 1 March 2007 FINANCIAL REVIEW REVENUE AND PROFIT A detailed analysis of the Group's revenues and profits is set out in theChairman's and Managing Director's statement. EARNINGS PER SHARE Basic earnings per share improved to 9.9p from 9.0p in 2005. The Group achievedadjusted earnings per share of 10.3p compared with 9.4p in 2005. Adjustedearnings per share is based on profit after tax attributable to equity shareholders, adjusted for share option charges, amortisation charges, minorityinterests' share of losses, and excludes profit on disposal of intangibleassets. On a fully diluted basis earnings per share improved to 9.5p compared with 8.6p in 2005. ACQUISITIONS & DISPOSALS The Group made four acquisitions during the year, the largest being MedicalConference International Inc., a leading global medical events organiser. Thisacquisition was completed in November 2006 at a total cost including contingent consideration of £23.1 million. The other significant acquisition during theperiod was the French facilities management event, Proseg, which was completedin October 2006 at a total cost of £3.5 million. In addition, the Group completed two smaller acquisitions for our online-leddivision, Caroo. In January, Tarsus purchased DH Publishing Ltd. which isfocused on the b2b global online recruitment industry principally through its portal www.onrec.com. With effect from January 2006, the Group purchased TSNN,the leading online resource for the exhibition industry in the US. Acquisitions have contributed £1.0 million to Group profit before taxationduring the year. In March, we sold the Progilog event in France for £0.7 million, generating anet profit of £0.2 million. TAX CHARGE The tax charge of £1.5 million (including the Group's share of tax on the jointventures' results) (2005: £1.2 million) represents 21% of profit before tax(2005: 21%). The Group anticipates that, in the medium term, the tax charge willremain approximately at this level, as it continues to benefit from existing taxassets and taxation structures. CASH & CASH CONVERSION During the year Tarsus generated £5.9 million of cash from operations (2005:£5.5 million). Adjusting for the effect of acquisitions and disposals madeduring the year, the Group generated £6.9 million (2005: £5.4 million) of cashfrom underlying operations, which represents a 110% conversion of underlyingoperating profit to cash (2005: 101%). The major cash movements during the year were: • Acquisition of subsidiaries (net of cash acquired) £21.2 million • Dividends paid £1.7 million • Cash raised through a share placing £11.1million • Net cash from additional borrowings £11.1million FACILITIES At 31 December 2006, the Group had net debt of £15.8 million (2005: £8.1 million) which was denominated in US dollars (2006: US$24.3million; 2005: US$2.9 million) and euros (2006: €5.8 million; 2005: €10.0 million). As at 31 December 2006, the Group's total facilities were £24.6 million (2005: £12.2 million). FOREIGN CURRENCY RISK The Group is exposed to movements in foreign exchange rates against sterling fortrading transactions and the translation of net assets and the income statementsof overseas operations. The principal exposure is to the US dollar and euroexchange rates which form the basis of pricing for customers. Tarsus has anelement of natural hedge within its costs and revenues and its policy is not toenter into any external hedging arrangements for its foreign currency tradingexposures. LIQUIDITY RISK Our policy is to ensure continuity of funding for operational needs through cashdeposits and debt facilities as appropriate. The key requirement for thebusiness is to maintain flexibility to allow it to take advantage of opportunities that could arise over the short term. The needs of the businessare determined on a rolling cash flow forecast basis, covering short, mediumand long term requirements. Neil Jones Group Finance Director 1 March 2007 CONSOLIDATED INCOME STATEMENT Notes Year to Year to 31 December 31 December 2006 2005 £000 £000 Group revenue 2 26,347 23,171 Operating costs (19,050) (17,436) Group operating profit 7,297 5,735 Share of profit from joint ventures 132 83(post tax)Interest receivable 12 52Interest payable and other financial (427) (363)expenses Profit before taxation 7,014 5,507 Taxation expense 5 (1,433) (1,115) Profit for the financial year 5,581 4,392 Profit for the financial yearattributable to equity shareholders ofthe parent company 8 5,375 4,630Profit/(loss) for the financial yearattributable to minority interests 8 206 (238) 5,581 4,392 Notes Year to Year to 31 December 31 December 2006 2005Earnings per share (pence) 7 - basic 9.9 9.0- diluted 9.5 8.6 Dividends 6 £000 £000Equity - ordinaryFinal dividend paid (2.25 p/2.5p per 1,204 1,236share) Interim dividend paid (1.25p/1p per 670 531share) 1,874 1,767 CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Year to Year to 31 December 31 December 2006 2005 £000 £000Foreign exchange translation differences (961) (396)Net loss on hedge of net investment in - (187)foreign subsidiary Net deficit recognised directly in equity (961) (583) Profit for the financial year 5,581 4,392 Total recognised income and expense for the 4,620 3,809year Attributable to:Equity holders of the parent 4,414 4,047Minority interest 206 (238) Total recognised income and expense for the 4,620 3,809year CONSOLIDATED BALANCE SHEET Notes 31 December 31 December 2006 2005 £000 £000 restated (see note 1)NON-CURRENT ASSETSProperty, plant and equipment 556 350Intangible assets 57,124 27,760Investments in joint ventures 437 305Other investments 65 -Deferred tax assets 2,525 2,259 60,707 30,674 CURRENT ASSETSTrade and other receivables 10,271 8,160Prepaid taxes - 87Cash and cash equivalents 907 664 11,178 8,911CURRENT LIABILITIESTrade and other payables (9,501) (8,827)Deferred income (9,370) (6,615)Provisions (43) (131)Bank overdrafts (402) (3,011)Other interest bearing loans and (2,858) (1,350)borrowingsLiabilities for current tax (2,656) (2,007) (24,830) (21,941) NET CURRENT LIABILITIES (13,652) (13,030) TOTAL ASSETS LESS CURRENT LIABILITIES 47,055 17,644 NON-CURRENT LIABILITIESOther payables (2,980) -Deferred tax liability (3,327) (696)Interest bearing loans and borrowings (13,457) (4,416) (19,764) (5,112) NET ASSETS 27,291 12,532 EQUITYShare capital 8 2,945 2,663Share premium account 8 44,348 33,707Reserves 8 (2,331) (1,370)Retained earnings 8 (17,897) (22,190)Issued capital and reservesattributable to equity holders of theparent 27,065 12,810 MINORITY INTEREST 8 226 (278) TOTAL EQUITY 8 27,291 12,532 CONSOLIDATED CASH FLOW STATEMENT Year to Year to 31 December 31 December 2006 2005 £000 £000Cash flows from operating activitiesProfit for the year 5,581 4,392Adjustments for:Depreciation 163 130Amortisation 192 22Profit on disposal of intangible assets (242) -Share option charge 310 216Share of operating profit in joint (179) (130)venturesTaxation charge - joint ventures 47 47Taxation charge - other 1,433 1,115Net interest 415 311Operating profit before changes inworking capital and provisions 7,720 6,103 (Increase)/decrease in trade and other (1,627) 354receivablesDecrease in current trade and other (71) (582)payablesDecrease in provisions (88) (382)Cash generated from operations 5,934 5,493 Interest paid (291) (267)Income taxes paid (552) (45) Net cash from operating activities 5,091 5,181 Cash flows from investing activitiesInterest received 12 52Proceeds from sale of property, plant - 11and equipmentProceeds from sale of intangible fixed 651 -assetsAcquisition of property, plant and (370) (283)equipmentAcquisition of subsidiaries, net of (21,197) (2,986)cash acquiredAcquisition of intangible fixed assets (275) (429)Acquisition of other investments (65) -Deferred and contingent consideration (744) (145)paidNet cash outflow from investing (21,988) (3,780)activities Cash flows from financing activitiesNet drawdown/(repayment) of borrowings 11,088 (3,504)Proceeds from the issue of share 11,102 75capitalCost of share issue (362) (17)Dividends paid (1,690) (1,214)Net cash inflow/(outflow) from 20,138 (4,660)financing activities Net increase/(decrease) in cash and 3,241 (3,259)cash equivalentsOpening cash and cash equivalents (2,347) 932Effect of exchange rate fluctuations on (389) (20)cash heldClosing cash and cash equivalents 505 (2,347) 1. BASIS OF PREPARATION The preliminary results for the year ended 31 December 2006 have been preparedin accordance with International Financial Reporting Standards (IFRS) as adoptedby the EU and are in line with the Group's accounting policies, as stated in theGroup's 2005 Annual Report and Accounts. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2006 or 2005 but is derivedfrom those accounts. Statutory accounts for 2005 have been delivered to theRegistrar of Companies. Those for the year ended 31 December 2006 will bedelivered following the Company's Annual General Meeting. The auditors havereported on those accounts; their reports were unqualified and did not containstatements under section 237 (2) or (3) of the Companies Act 1985. During the year ended 31 December 2006, management reassessed its estimates inrespect of the allocation of intangible assets and the deferred tax thereon,between goodwill and trademarks and lists in relation to two acquisitions madein 2005. As a result of the above change to the estimates, the Group's opening balancesheet has been restated, in accordance with IAS12, to reflect the impact ofdeferred taxation. The restatement has had no effect on the Group's net assetsas at 31 December 2005. 2. SEGMENTAL ANALYSIS Primary segment As at 31 December 2006, the Group was organised into three main geographicalsegments - Europe, US and Emerging markets. These segments are the basis onwhich the Group reports its primary segment information. The main activities of all segments are the production of exhibitions supportedby other media activities related to those exhibitions. The following table sets out the revenue and profit information and certainasset and liability information for the Group's business segments: 31 December 2006 Emerging Central Europe US markets costs Group £000 £000 £000 £000 £000Group revenue 14,686 10,674 987 - 26,347Profit/(loss) from operating 2,161 5,847 159 (870) 7,297activitiesNet financing costs - - - (415) (415)Share of profit from jointventures (post tax) 132 - - - 132Profit/(loss) before taxation 2,293 5,847 159 (1,285) 7,014Profit on disposal of (242) - - - (242)intangible assetAmortisation of intangible 166 26 - - 192assetsCost of share options - - - 310 310Tax on share of joint venture 47 - - - 47profitAdjusted profit/(loss) before 2,264 5,873 159 (975) 7,321tax* Segment assets 28,855 38,481 1,442 - 68,778Share of joint venture assets 437 - - - 437Unallocated assets - - - 145 145Total assets 29,292 38,481 1,442 145 69,360Deferred tax assets 2,525Total assets 71,885 Segment liabilities (17,031) (20,090) (495) - (37,616)Unallocated liabilities - - - (995) (995)Total liabilities (17,031) (20,090) (495) (995) (38,611)Liabilities for current tax (2,656)Deferred tax liabilities (3,327)Total liabilities (44,594) Capital expenditure 355 15 - - 370 Depreciation charge (152) (11) - - (163)Amortisation charge (166) (26) - - (192)Total significant non-cash (318) (37) - - (355)expenses * The adjusted profit before tax excludes share option charges, amortisation charges, minority interests' share of losses, tax on profit from joint ventures and profit on disposal of intangible assets. 31 December 2005 Emerging Central Europe US markets costs Group £000 £000 £000 £000 £000 Group revenue 17,625 4,225 1,321 - 23,171Profit/(loss) from operating 5,182 1,298 199 (944) 5,735activitiesNet financing costs - - - (311) (311)Share of profit from joint 83 - - - 83ventures (post tax)Profit/(loss) before taxation 5,265 1,298 199 (1,255) 5,507Add back minority interest 76 162 - - 238lossesProfit/(loss) before tax after 5,341 1,460 199 (1,255) 5,745minority interest Amortisation of intangible 22 - - - 22assetsCost of share options - - - 216 216Tax on share of joint venture 47 - - - 47profitAdjusted profit before tax* 5,410 1,460 199 (1,039) 6,030 Segment assets 25,779 8,924 1,208 - 35,911Share of joint venture assets 305 - - - 305Unallocated assets - - - 1,110 1,110Total assets 26,084 8,924 1,208 1,110 37,326Deferred tax assets 2,259Total assets 39,585 Segment liabilities (11,442) (4,771) (420) - (16,633)Unallocated liabilities - - - (7,717) (7,717)Total liabilities (11,442) (4,771) (420) (7,717)) (24,350)Liabilities for current tax (2,007)Deferred tax liabilities (696)Total liabilities (27,053) Capital expenditure 244 24 15 - 283 Depreciation charge (105) (25) - - (130)Amortisation charge (22) - - - (22)Total significant non-cash (127) (25) - - (152)expenses * The adjusted profit before tax excludes share option charges, amortisation charges, minority interests' share of losses, tax on profit from joint ventures and profit on disposal of intangible assets. 3. PROFIT AND LOSS ANALYSIS The following analysis illustrates the performance of Tarsus's activities andreconciles the Group's statutory profit to adjusted profits. Adjusted resultsare presented to provide a better indication of overall financial performanceand to reflect how the business is managed and measured on a day-to-day basis.The adjusted profit before tax excludes share option charges, amortisationcharges, minority interests' share of losses, tax on profit from joint venturesand profit on disposal of intangible assets. 2006 2005 £000 £000 Group revenue 26,347 23,171Cost of sales (11,101) (10,647) Gross profit 15,246 12,524 Administrative expenses (7,949) (6,789) Group operating profit 7,297 5,735 Share of profit from joint ventures (post tax) 132 83 Net interest (415) (311) Profit before taxation 7,014 5,507 Add back: Share option charge 310 216Amortisation charge 192 22Minority's share of losses - 238Tax on share of profit from joint ventures 47 47Profit on disposal of intangible asset (242) - Adjusted profit before tax 7,321 6,030 Impact of acquisitions (1,014) (686) Underlying adjusted profit 6,307 5,344 Cash generated from underlying operations 6,925 5,386 Adjusted operating cash conversion 110% 101% 4. ACQUISITIONS AND DISPOSALS (i) ACQUISITIONS The Group completed four acquisitions during 2006. These are as follows: Effective Name Type of business Percentagedate acquired1 January Trade Show News Internet based event resource 50.1%* Network Inc.11 January DH Publishing Ltd. Global b2b online recruitment 100%2 October Proseg SARL Facilities management event 97.14% in France17 November Medical Conferences Global Anti-Ageing medical 80% International Inc. events * This acquisition took the Group's total effective holding to 70% The following table sets out the book values of the identifiable assets andliabilities acquired, and their fair value to the Group, in respect of theacquisitions made during 2006: MCII Proseg Other Total Carrying Fair Carrying Fair Carrying Fair Carrying Fair value value value value value value value value £000's £000's £000's £000's £000's £000's £000's £000's Property, plant and 7 7 8 - 4 4 19 11equipmentOther intangibles on - 7,404 - 943 - 555 - 8,902acquisitionDeferred taxation - (2,218) - (283) - (167) - (2,668)Trade and other 185 185 492 492 169 137 846 814debtorsCash and cash 1,717 1,717 1,499 1,499 6 6 3,222 3,222equivalentsTrade and other (1,695) (1,695) (1,445) (1,445) (310) (310) (3,450) (3,450)payablesNet identifiable 214 5,400 554 1,206 (131) 225 637 6,831assetsGoodwill on 17,713 2,339 1,321 21,373acquisition 23,113 3,545 1,546 28,204 Consideration paid andcosts incurred:Satisfied in cash 20,719 3,181 519 24,419Contingent 2,565 - 950 3,515considerationDeferred consideration - - 77 77Current (assets)/ (171) 364 - 193liabilitiesTotal consideration 1,546 28,204and costs incurred 23,113 3,545Consideration paid in 519 24,419cash 20,719 3,181Cash acquired (1,717) (1,499) (6) (3,222)Total net cash outflow 19,002 1,682 513 21,197 Deferred consideration relates to agreed payments to vendors that are payableafter completion. Contingent consideration relates to payments to vendors, payable aftercompletion, that are dependent on the outcome of future events. The contingentconsideration within the Group is dependent on the future financial performancesof various exhibitions, conferences and publications acquired during 2006. From the date of acquisition to 31 December 2006, acquisitions have contributed£1.0 million to the Group profit before taxation. If the acquisitions had takenplace at the beginning of the year, they would have contributed £1.3 million tothe Group profit before taxation and £6.2 million to revenue. Goodwill of £21.4 million, recognised on these acquisitions, relates to certainassets that cannot be separated and reliably measured. These items includesector knowledge, customer loyalty and the anticipated future profitability thatthe Group can bring to the businesses acquired. (ii) DISPOSALS On 14 March 2006, Tarsus completed the sale of the Progilog event in France for£0.7 million. A profit of £0.2 million arose on this disposal, being theproceeds less the carrying value of the event's net assets and cost of disposal. 5. INCOME TAX EXPENSE 2006 2005 £000 £000Corporation tax:UK tax on profits for the year 688 966Overseas tax on profits for the year 1,029 437Adjustments to UK corporation tax in respectof previous periods 37 (302)Tax on joint ventures (47) (47)Adjustments to overseas corporation tax inrespect of previous periods (454) (262)Total current tax 1,253 792 Deferred tax:Origination and reversal of temporary 319 546differencesAdjustment in respect of previous periods(benefit of tax losses recognised) (184) (185)Adjustments in respect of previous periods(benefit of temporary difference recognised) 45 (38)Total deferred tax 180 323 Tax charge for the year 1,433 1,115 The tax charge for the year is lower than the standard rate of corporation taxin the UK. The differences are explained below: 2006 2005 £000 £000Profit before taxation 7,014 5,507 Tax at the standard rate of corporation tax in 2,104 1,652UK of 30%Effects of:Expenses not deductible 281 296Income not chargeable to tax (87) (78)Deductions for tax purposes - (256)Overseas current period losses unrecognised - 184Utilisation of unrecognised losses (49) (785)Effect of tax rates in overseas jurisdictions 179 141Over provision in respect of prior periods (556) (602)Current period (credit)/charge for historic (233) 502exposuresOther temporary differences (173) 94Impact of tax on joint ventures (33) (33)Tax on profit on ordinary activities 1,433 1,115 6. DIVIDENDS 2006 2005 £000 £000Dividend paid 2005/2004 final dividend (2.25p/2.5p per 1,204 1,236share) 2006/2005 interim dividend (1.25p/1.00p per 670 531share) 1,874 1,767 Dividend proposed Dividend proposed in the period (2.75p/2.25p 1,325 1,199per share) The Directors announced the proposed final dividend for 2006, of 2.75p pershare, on 1 March 2007. Subject to Shareholders' approval, the proposed date ofpayment is 27 April 2007 to Shareholders on the Register of Members on 9 March2007. Dividends are recognised as a liability in the period in which they areappropriately authorised and are no longer at the discretion of the company. 7. EARNINGS PER SHARE 2006 2005 pence penceBasic earnings per share 9.9 9.0Diluted earnings per share 9.5 8.6Adjusted earnings per share 10.3 9.4Adjusted diluted earnings per share 9.8 9.1 Basic earnings per shareBasic earnings per share has been calculated on profits after tax attributableto ordinary shareholders for the year of £5,375,945 (2005: £4,629,673) and54,159,937 (2005: 51,533,755) ordinary shares, being the weighted average numberof shares in issue during the year. Diluted earnings per shareDiluted earnings per share has been calculated on profits after tax attributableto ordinary shareholders for the year of £5,375,945 (2005: £4,629,673) and56,761,446 (2005: 53,616,193) ordinary shares, being the weighted average numberof shares in issue during the year calculated as follows: Weighted average number of ordinary shares (diluted): 2006 2005Weighted average number of ordinary shares 54,159,937 51,533,755Effect of share options 2,601,509 2,082,438Weighted average number of ordinary shares 56,761,446 53,616,193(diluted) Dilutive and anti-dilutive share options were determined using the averageclosing price for the period. The average share price used was 200 pence. Adjusted earnings per shareAdjusted earnings per share is calculated using profit after tax attributable to equity shareholders, adjusted for share option charges, amortisation charges, minority interests' share of losses and excludes profit on disposal of intangible assets, of £5,581,118 (2005: £4,868,206) and 54,159,937 (2005: 51,533,755) ordinary shares, being the weighted average number of shares in issue during the year. Adjusted diluted earnings per shareAdjusted diluted earnings per share is calculated using profit after taxattributable to equity shareholders, adjusted for share option charges,amortisation charges, minority interests' share of losses, and excludes profiton disposal of intangible assets, of £5,581,118 (2005: £4,868,206) and56,761,446 (2005: 53,616,193) ordinary shares, being the weighted average numberof shares in issue during the year. 8. RECONCILIATION OF MOVEMENT IN EQUITY Share Share Minority Capital Retained Foreign Total capital premium interest redemption earnings exchange account reserve reserves £000 £000 £000 £000 £000 £000 £000As at 31 December 2006:Profit attributable to - - - - 5,375 - 5,375shareholdersRecognised foreign exchange - - - - - (961) (961)losses for the periodScrip dividend 5 178 - - - 183New share capital 277 10,825 - - - - 11,102subscribedCost of shares issued - (362) - - - - (362)Share option charge - - - - 310 - 310Movement in deferred tax - - - - 482 - 482Dividend paid - - - - (1,874) - (1,874)Disposal of minority's - - 278 - - - 278share of subsidiaryMinority interests on - - 20 - - - 20acquisitionsMinority interest profit - - 206 - - - 206for the periodNet change in shareholders' 282 10,641 504 - 4,293 (961) 14,759fundsOpening equity 2,663 33,707 (278) (443) (22,190) (927) 12,532shareholders' fundsClosing equity 2,945 44,348 226 (443) (17,897) (1,888) 27,291shareholders' funds Share Share Minority Capital Retained Foreign Total capital premium interest redemption earnings exchange account reserve reserves £000 £000 £000 £000 £000 £000 £000As at 31 December 2005:Profit attributable to - - - - 4,630 - 4,630shareholdersRecognised foreign exchange - - - - - (396) (396)losses for the periodRecognised foreign exchange - - - - - (187) (187)loss on the hedge in theperiod - - - - 4,630 (583) 4,047Scrip dividend 19 535 - - - 554New share capital 171 3,785 - - - - 3,956subscribedCost of shares issued - (17) - - - - (17)Share option charge - - - - 216 - 216Movement in deferred tax - - - - 786 - 786Dividend paid - - - - (1,767) - (1,767)Minority interests on - - 309 - - - 309acquisitionsMinority interest loss for - - (238) - - - (238)the periodNet change in shareholders' 190 4,303 71 - 3,865 (583) 7,846deficitOpening equity 2,473 29,404 (349) (443) (26,055) (344) 4,686shareholders' deficitClosing equity 2,663 33,707 (278) (443) (22,190) (927) 12,532shareholders' funds 9. POST BALANCE SHEET EVENT On 9 February 2007, Tarsus entered into an agreement with Intex Shanghai CompanyLtd. ("Intex") establishing a long term partnership agreement. Intex owns and manages the Shanghai International Exhibition Centre and venuesin Ningbo (in partnership with Shanghai World Expo Group) and Zhengzhou (in ajoint venture with the Hong Kong Convention and Exhibition Centre). HughScrimgeour, a non-executive director of Tarsus, is also Vice-Chairman of Intexas the representative and controller of the Peninsular and Orient SteamNavigation Company's 30% shareholding in Intex. Three of Intex's exhibitions will be managed by the partnership for an initialperiod of twenty years. Two of these are medical exhibitions, Oral Care Chinaand China Aid (disability equipment). The partnership will also be the localChinese organiser of Tarsus's new Anti-Ageing events in China, of which it isplanned to hold three in 2007. These Anti-Ageing events will be owned 80% byMCII (a Group subsidiary) and 20% by Intex. The Annual General Meeting will be held at Fourth Floor, Metro Building, 1Butterwick, London W6 8DL on 18 April, 2007 at 10.00 am. A copy of this report will also be available on the Group's website atwww.tarsus-group.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Tarsus