Half Yearly Report

31 July 2013

Tarsus Group plc

Record results in first half

Interim results for the six months ended 30 June 2013

Tarsus Group plc ('Tarsus', the 'Group' or 'Company'), the international business-to-business media group, announces its results for the six months ended 30 June 2013.

Financial highlights

·; Record results for first half of year

·; Like-for-like revenue up 8% on 2012 as adjusted for biennials and acquisitions

·; Strong underlying revenue growth driving profitability

·; Adjusted* profit and EPS up significantly

·; Operating cash inflow of £8.9m in period

·; Interim dividend up 5% to 2.3p (2012: 2.2p)

Operational highlights

·; Quality portfolio driving strong Group performance

·; Very strong performance from Emerging Markets with 13% like-for-like revenue growth

o Turkey like-for-like revenues +13%

o China like-for-like revenues +20%

o Dubai like-for-like revenues +6%

·; Further brand replications

·; Acquisition of 51% of PT Infrastructure Asia completed, providing an important base in Indonesia

Outlook

·; Forward bookings currently 12% ahead of 2012

·; Labelexpo Europe and the Dubai Airshow both tracking well ahead of previous events

·; Focus on accelerating earnings growth

Douglas Emslie, Group Managing Director, said:

"Tarsus has delivered record results for the first six months of the year with good like-for-like revenue growth.

"We are focused on delivering our "Quickening the Pace" strategy and we have got off to a fast start. We continue to add value to our portfolio of market leading events by replicating these brands both domestically and internationally. The pace of brand replications has quickened during the period.

"We have good visibility for the full year, especially from our two largest events - the Dubai Airshow and Labelexpo Europe - and we are confident of a positive full year outcome".

For further information contact:

Tarsus Group plc:

Douglas Emslie, Group Managing Director 020 8846 2700

Dan O'Brien, Group Finance Director

College Hill

Adrian Duffield / Kay Larsen 020 7457 2020

The Group will be hosting a presentation to analysts at 11.30am today at the offices of Investec, 2 Gresham Street, London, EC2V 7QP. A webcast of the presentation will be available on Tarsus's website (www.tarsus.com) from 9.30am on 1 August 2013.

Notes

*Reconciliation between reported profits and adjusted profits is included in note 6.

Like-for-like revenues are after adjusting for the impact of acquisitions, disposals, biennials and on a constant currency basis.

Overview

At the start of 2013 Tarsus launched its "Quickening the Pace" strategy. The core focus of Quickening the Pace is to accelerate earnings per share growth. This is being driven by a combination of geographical replications of major brands into fast growth economies; organic growth from the existing portfolio; tight cost control and selective bolt-on acquisitions in the US and Emerging Markets.

The first half of 2013 has seen good progress in a number of areas. Tarsus has successfully driven organic growth in its existing portfolio, led by businesses in Turkey and China. Tarsus has also announced the replication of a number of events and completed the acquisition of a business in Indonesia.

The Group's financial performance continues to benefit from the exposure of its portfolio to the Emerging Markets. Strong underlying revenue growth across the business together with tight cost control continues to drive improving margins.

The Group's Emerging Markets portfolio showed strong like-for-like revenue growth of 13% in the first half of the year with impressive performances from the Chinese and Turkish businesses.

In February 2013 Tarsus acquired 51% of Indonesian exhibition organiser PT Infrastructure Asia ("PTIA"). This acquisition has provided the Group with an important base in the fast growing Indonesian exhibition market.

Financial review

Group revenue for the period was £26.0 million (2012: £19.2 million). Adjusting for acquisitions and biennial shows, the Group achieved underlying like-for-like revenue growth of 8% in the quieter half of the year.

Adjusted profit before tax was £3.9 million (2012: £1.8 million), which reflects strong revenue growth in the portfolio together with improved operational gearing as a result of the move towards higher growth markets. The Group incurred exceptional costs of £0.4 million in respect of completed and pending acquisitions. Profit before tax was £0.8 million (2012: loss £0.2 million).*

Adjusted earnings per share were 2.6p (2012: 1.0p). Basic loss per share was 0.9p (2012: 1.0p).

An interim dividend of 2.3p per share (2012: 2.2p) has been declared and will be paid on 16 January 2014 to Shareholders on the Register on 6 December 2013. The Group will continue to offer a scrip alternative.

Operating cash inflow was £8.9 million (2012: outflow £0.8 million). Net debt at 30 June 2013 was £29.2 million (2012: £19.6 million). The strong operating cash performance was helped by the difference in timing between cash collections and payments for the large biennial events. The main driver of the increase in net debt across the first six months of 2013 was the payment of £18.6 million in respect of recent acquisitions and deferred consideration.

On 28 February 2013 Tarsus announced the acquisition of 51% of PTIA in Indonesia for a total estimated consideration of up to £1.8 million payable in cash, financed from existing cash and bank facilities.

Note

\* The reconciliation of adjusted profit before tax is shown in note 6.

Operating review

Geographic Analysis

Emerging Markets - strong performance from China and Turkey

USA - continued growth

Europe - stable first half in France with outlook remaining cautious

Emerging markets

The Group's Emerging Markets portfolio saw strong growth with like-for-like growth of 13% across the division.

The Chinese operations saw a 20% like-for-like revenue increase including a notable performance from the Hope joint venture, continuing its strong growth. Tarsus' position in China was further strengthened by the strong performance of the first event held by the Group's 50% joint venture, GZ Auto, since that acquisition was completed in December 2012.

The Group's Dubai portfolio achieved like-for-like revenue growth of 6%. Tarsus' education event GESS performed very well with excellent visitor attendance and revenues up strongly. Gulf Pack and Print performed well in a difficult local commercial print market.

In Turkey, the Group's portfolio continued its impressive performance with revenues increasing 13% overall. The largest show in the period was Asansor (Elevator event) - the first edition under Tarsus' ownership. This performed excellently with revenues up significantly on its previous edition. Ideal Home (Housewares and Gift event) recorded revenue in line with expectations, its growth limited by venue constraints. Yapi Dekor, the decorative construction show in Ankara had its first edition under Tarsus' ownership, and performed slightly ahead of pre-acquisition expectations.

The most recent exhibition in Turkey was REW (the Recycling, Environment Technologies and Waste Management International Fair) - the third edition under Tarsus' ownership, which again achieved revenue growth in line with management's expectations.

The Group has launched a number of replications of GZ Auto and Zuchex into new territories, drawing on its international experience and geographical expertise, following the acquisitions of these events in recent years.

PTIA, the recently acquired Indonesian exhibition organiser, recorded revenue of £0.1 million in the first half of 2013. PTIA's main exhibition, IIICE (Infrastructure event), will be held in November and bookings for the show are tracking in line with expectations.

USA

Revenues across the Group's US operations increased by 6% on a like-for-like basis.

Sales in the Medical division were at record levels with educational products, including those delivered online, continuing to show good growth. Work continues to broaden the market offering of this division's educational products. The medical event held in Orlando in April performed in line with management expectations and this division is seeing a trend for the weighting of its revenues to shift toward the second half of the year.

The February Off Price show in Las Vegas was another record event. Bookings for the August edition of the exhibition are ahead of its comparable 2012 iteration.

Europe

Like-for-like sales in France were largely flat in the quieter first half of the year, with continued softness in IT events being partially offset by a strong performance from event shows. With the largest exhibitions taking place in the second half of the year, the Group remains cautious for the full year outlook for France.

Outlook

The Group's "Quickening the Pace" strategy has got off to a fast start. Tarsus is already seeing the benefits with improved financial performance and this is expected to increase as the strategic momentum grows.

Whilst trading is heavily weighted towards the second half, the Group's first half performance augurs well for the full year. The outlook for the second half of 2013 is good with bookings for the Group's two largest shows, the Dubai Airshow and Labelexpo Europe, both well ahead of previous editions. Forward bookings across the portfolio are strong and are currently 12% ahead of 2012 on a like-for-like basis adjusting for acquisitions and biennial events. Management remain confident of an excellent result for 2013.

Neville Buch Douglas Emslie

31 July 2013

INDEPENDENT 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 2013 which comprises the Condensed Consolidated Interim Income Statement, Condensed Consolidated Interim statement of Comprehensive Income the Condensed Consolidated Interim Statement of Financial Position, the Condensed Consolidated Interim Statement of Cash Flows, Condensed Consolidated InterimStatement of Changes in Equity and related notes. 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 Auditing Practices Board. 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 2013 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

Chartered Accountants and Statutory Auditor

London, United Kingdom

31 July 2013  

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and authorised for issue on 31 July 2013 and signed on its behalf by:

J D Emslie D P O'Brien

Group Managing Director Group Finance Director

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

\* The reorganisation reserve was created as a result of the Scheme of Arrangement effective from 26 November 2008. Tarsus Group Limited, previously Tarsus Group plc, registered in England and Wales under company number 2000544, entered into a "Share for Share" exchange on a one-for-one basis with Tarsus Group plc, registered in Jersey under company number 101579.

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 2013 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 2012 are available upon request from the Company Secretary at 17 Upper Pembroke 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 2012 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 interim financial statements were approved by a duly appointed and authorised committee of the Board of Directors on 29 July 2013. The interim financial statements are unaudited but have been reviewed by the auditors as set out in their report.

3. SIGNIFICANT ACCOUNTING POLICIES

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 2012.

4. ESTIMATES

The preparation of consolidation 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 2012.

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 2012.

6. PROFIT AND LOSS ANALYSIS

The following analysis illustrates the performance of the Group's activities, and reconciles the Group's profit as show in the condensed consolidated interim income statement, to adjusted profits. 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 and unwinding of discount charges.

*In 2013, the Group incurred exceptional one-off costs resulting from acquisition costs or potential acquisition costs.

7. SEGMENTAL ANALYSIS

As at 30 June 2013, the Group is organised into three main operating segments - Europe, USA and Emerging Markets. These segments are the basis on which the Group reports its segments are the basis on which the Group reports its segment information for management purposes.

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:

7. SEGMENT ANALYSIS (CONTINUED)

Non- current assets within Emerging Markets have significantly increased due to the acquisition of PTIA on 28 February 2013. The segmental analysis of non-current assets excluding deferred tax, is as follows:

8. TAXATION CHARGE

The taxation charge for the six months ended 30 June 2013 is based upon the estimated effective tax rate of 15% on adjusted profit before tax (2012: 15%) for the year ending 31 December 2013.

9. EARNINGS PER SHARE

9. EARNINGS PER SHARE (CONTINUED)

Basic earnings per share

Basic earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months of £833,000 (June 2012 profit: £865,000) and 94,539,919 (June 2012: 90,127,025) ordinary shares, being the weighted average number of shares in issue during the period.

Diluted earnings per share

Diluted earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months of £833,000 (June 2012 profit: £865,000) and 95,776,435 (June 2012: 91,475,798) ordinary shares, being the diluted weighted average number of shares in issue during the period.

Adjusted earnings per share

Adjusted earnings per share is calculated using loss after tax attributable to equity shareholders, adjusted for exceptional costs, share option charges, amortisation charges, impairment of tangibles, profit and loss on disposal of tangible and intangible assets, of £2,416,000 (June 2012: £858,000) and 94,539,919 (June 2012: 90,127,025) ordinary shares, being the weighted average number of shares in issue during the period.

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated using loss after tax attributable to equity shareholders, adjusted for exceptional costs, share option charges, amortisation charges, impairment of tangibles, profit and loss on disposal of tangible and intangible assets, of £2,416,000 (June 2012: £858,000) and 95,776,435 (June 2012: 91,475,798) ordinary shares, being the diluted weighted average number of shares in issue during the period.

Weighted average number of ordinary shares (diluted):

10. INTANGIBLE FIXED ASSETS

11. ACQUISITIONS

The Group completed one acquisition during the first half of 2013, in line with the Group's "Project 50/13" strategy of expansion into Emerging Markets and specifically the fast-growing Indonesian economy.

The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group, in respect of the acquisition made during 2013:

11. ACQUISITIONS (CONTINUED)