25th Jul 2006 07:00
Interim results for the six months ended 30 June 2006 Strong first half performance; unchanged for full year PR Newswire, events and acquisitions performing well; print and online media in line with expectations; accelerating investment in new product development H1 2006 headline resultsRevenue Up 25.1% to ‚£394.3m (‚£315.2m) Continuing operating profit* Up 25.1% to ‚£82.3m (‚£65.8m) Profit before tax** Up 8.9% to ‚£88.5m (‚£81.3m) EPS** (diluted) Up 24.1% to 23.2p (18.7p) Dividend per share Up 10% to 4.4p (4.0p) - EPS growth driven by strong trading performance and enhanced by share buybacks- On track to meet plans for acquisitions (‚£150m-‚£250m pa) and capital returns (> ‚£300m by end 2007)- ‚£135m invested in acquisitions in the year to date; acquisitions performing ahead of 8% post tax hurdle rate- ‚£142.2m of capital returned through convertible and share buybacks- Net cash of ‚£181.5m at 30 June * Before amortisation of intangible assets, non-recurring items and share oftaxation on profit from joint ventures and associates** Before amortisation of intangible assets, non-recurring items, share oftaxation on profit from joint ventures and associates, net financing cost -other than interest, and including profits from discontinued operations. EPSalso excludes deferred tax on the amortisation of intangible assets Statutory resultsRevenue ‚£394.3m (‚£315.2m) Group operating profit ‚£74.8m (‚£64.8m) Profit before tax ‚£64.0m (‚£118.5m) EPS (diluted) 26.1p (88.5p) David Levin, Chief Executive of United Business Media plc said:"We have achieved strong operating and financial results in the first half of2006 despite a tough trading environment. Revenue grew by 25.1% to ‚£394.3m,continuing operating profit* by 25.1% to ‚£82.3m, and we achieved EPS** growthof 24.1% on a fully diluted basis. We have continued to reshape UBM throughacquisitions, disposals and investment in new product development.""On 19 July we completed the acquisition of Commonwealth Business Media, Inc.for $152m. The acquisition provides us with a leading position in a new market,the global trade and transportation business intelligence market. At ourPreliminary results in February we indicated our intention to increaseacquisition expenditure from the ‚£105m achieved last year to between ‚£150m and‚£250m for the current year. Including Commonwealth, in the year to date we haveinvested a total of ‚£135m in eight small and medium-sized acquisitions, all ofwhich provide opportunities to build our business while meeting our strictfinancial acquisition criteria.""In February we also indicated our intention to move towards a prudent,leveraged balance sheet over the course of the next two years, and to returnmore than ‚£300m of capital over that period. Since February we have returned ‚£142.2m through convertible and ordinary share buybacks.""The outlook for the full year is unchanged. After taking into account thefirst half weighting of CMPMedica and the MediaLive events, we anticipate thatthe second half will be broadly in line with the trading patterns reported forthe first half of the year. We continue to invest in new product developmentand plan to spend an additional ‚£5m to ‚£8m in the second half, particularly inevents and online activities."Contacts Media Peter Bancroft Director of Communications E-mail [email protected] Direct telephone +44 20 7921 5961 Chris Barrie Citigate Dewe Rogerson E-mail [email protected] Direct telephone +44 20 7282 2943 Mobile +44 796 872 72 89 Analysts Catherine Southgate Head of Investor Relations Email [email protected] Direct telephone +44 20 7921 5031 Mobile +44 7710 468 996 Interim results for the six months ended 30 June 2006Contents 1. Summary group income statement 2. Summary of interim financial results for the six months ended 30 June 2006 3. Divisional commentary 4. Dividend 5. Cash and cash conversion 6. Pensions 7. Tax 8. Interest and financing 9. Return of capital 10. Non-recurring items - Disposals Interim financial report Appendix 1 - Segmental analysis Notes to editors 1. Summary group income statementThe income statement set out below re-presents the group's full incomestatement (which accompanies this summary) in order to show more clearly theresults from operations. Six Months Ended 30 June 2006 2005 ‚£m ‚£m % Revenue 394.3 315.2 25.1 Operating profit* - continuing businesses 82.3 65.8 25.1 Operating profit* - investments sold in - 3.9 2005 - Operating profit* - discontinued 0.8 6.4 - 83.1 76.1 9.2 Net interest income 5.4 6.5 (16.9) Other financing costs - pension schemes - (1.3) - Profit before tax** 88.5 81.3 8.9 Net financing (cost)/income - other than (20.5) 23.5 interest - Amortisation of intangible assets (7.2) (4.6) - Non-recurring items 13.3 262.2 - Profit before tax*** 74.1 362.4 - Taxation (15.4) (13.6) (13.2) Share of taxation of JV's and associates (0.3) 4.9 - Taxation relating to non-recurring items - (1.2) - Profit after tax - Continuing activities 48.8 105.0 - Profit after tax from discontinued 9.6 247.5 activities - Profit after tax 58.4 352.5 - Minority interest (2.3) (0.9) - Retained profit for the period 56.1 351.6 - Dividends paid in period - Ordinary**** (‚£ 32.2 28.3 m) - Dividends paid in period - Special (‚£m) - 298.3 - EPS ** (pence) 24.5 21.2 15.6 Diluted EPS** (pence) 23.2 18.7 24.1 EPS (fully diluted) (pence) 26.1 88.5 - * Before amortisation of intangible assets, non-recurring items and share oftaxation on profit from joint ventures and associates** Before amortisation of intangible assets, non-recurring items, share oftaxation on profit from joint ventures and associates, net financing cost - other than interest, and including profits from discontinued operations. EPSalso excludes deferred tax on the amortisation of intangible assets*** Before share of taxation of joint ventures and associates and includingdiscontinued operations before related taxation**** Including B Share dividend 2. Summary of interim financial results for the six months ended 30 June 2006The results presented below reflect continuing businesses under the newmanagement structure.Note: As previously notified the amounts shown against CMP Technology (formerlyCMP Media), CMP Information and CMPMedica in the table below have been restatedto reflect the intra-group transfer of the US Healthcare titles and CME eventsfrom CMP Media to CMPMedica, the transfer of the Healthcare titles of CMPInformation in the UK to CMPMedica and the transfer of CMP Princeton from CMPMedia to CMP Information. The amounts transferred are stated in detail in thebusiness segments section of the accompanying financial statements (refer topage 15). Revenue Operating Profit(2) Six months to 30 June Six months to 30 June 2006 2005 Change Underlying(1) 2006 2005 Change Underlying1 ‚£m ‚£m (%) (%) ‚£m ‚£m (%) (%) PR Newswire(3) 69.1 51.3 34.7 6.2 20.6 14.3 44.1 24.2 CMP Asia 26.5 24.3 9.1 8.3 7.2 6.3 14.3 8.8 CMP Information 92.9 77.8 19.4 5.6 22.3 18.8 18.6 (1.3) CMP Technology 113.3 87.6 29.3 (3.6) 17.3 12.5 38.4 (32.7) CMPMedica 92.5 74.2 24.7 5.0 14.9 14.1 5.7 (8.1) 394.3 315.2 25.1 3.2 82.3 66.0 24.7 (2.2) Corporate(4) - - - - - 3.7 - - 394.3 315.2 25.1 - 82.3 69.7 18.1 - (1) Underlying: adjusted for the estimated effects of acquisitions,discontinued operations, foreign exchange and biennial events(2) Before amortisation of intangible assets, non-recurring items, share oftaxation on profit from joint ventures and associates(3) Our 50% share of Canada Newswire has been consolidated in H1 2006increasing reported revenues by ‚£13.2m and operating profit by ‚£2.0m.(4) Corporate operations comprises net central operating costs, together withthose equity accounted investments which do not form part of one of the group'soperating divisions. The 2005 Corporate costs included profit of ‚£3.9m inrelation to equity accounted investments that have subsequently been disposedof e.g. five, SIS, SDN.Underlying revenue was up 3.2% - after adjusting for the effects ofacquisitions, discontinued operations, biennials and foreign exchange. Revenuefrom 2005 and 2006 acquisitions was ‚£68.8m (2006 acquisitions: ‚£19.7m). Operating profit from acquisitions was ‚£17.8m (2006 acquisitions: ‚£7.1m). The movement in the US dollar and the Euro has a direct translation impact -with approximately two thirds of UBM revenue reported locally in US dollars orEuros, group revenue increased by ‚£7.8m as a result of foreign exchange. Theaverage rate of ‚£:$ exchange for the first half was $1.79 (2005 H1: $1.87),together with the effects of other currency movements, this increased operatingprofit by ‚£1.5m. A 1 cent movement in the US dollar against Sterling isapproximately equivalent to a move in profit of around ‚£250,000 to ‚£350,000over the full year. 3. Divisional commentaryPR NewswirePR Newswire delivered another very strong performance in all areas ofoperation. Underlying revenue was up 6.2% and underlying operating profit wasup 24.2%, with operating margin up from 27.9% to 29.8%. The US experiencedstrong profit growth driven by yield, improving mix and continued costreduction. PR Newswire Europe grew profits and achieved a margin of 34.8% inthe first half. China increased revenue by 32.5% and moved into profit in thefirst half. CMP AsiaCMP Asia's strong performance continued. Underlying revenue was up 8.3%,driven principally by the growth of the exhibitions in Hong Kong, China andJapan. We are investing in China, India and in new online media products toincrease our presence in higher growth markets. We have opened an office inMumbai, India and are launching new events. We continue to seek expansionopportunities and in the first half announced our intention to acquire amajority share in the Guangzhou Beauty Fair (China). Underlying operatingprofits were up 8.8% and operating margins increased to 27.2% from 25.9%. CMP InformationCMP Information ("CMPi") increased revenue by 19.4% and profit by 18.6% to ‚£22.3m and remains our largest profit contributor. Its strong exhibitions andacquisition performance has been partially offset by investment in new productdevelopment. The margin in the first half was 24%. Underlying revenue,excluding disposed titles was up 5.6% while underlying operating profit wasdown 1.3%, reflecting the investment in new product development. In order todrive additional efficiencies in the business, CMPi is undergoing furtherreorganisation including office rationalisation, outsourcing and off-shoring. The performance of exhibitions has been strong, particularly in the Chemicaland Food Ingredients, Furniture and Security markets. CMPi seek to expand bothby making acquisitions (like Informex, the National Venue Show and ThamesGateway Forum) and by extending our events internationally into new geographiessuch as China, India and Eastern Europe.In the first half we continued to rationalise the portfolio and have realised ‚£16.7m from the disposal of a number of smaller titles. CMP TechnologyCMP Technology revenue rose in the first half by 29.3% with operating profitrising by 38.4%, largely due to acquisitions. CMP Technology is performing inline with expectations with a good performance from acquired businesses, withall round strength in events and strong revenue growth in online. We continueto see some customers allocating more of their spend towards online and events.Print performance is in line with established trends, with volumes trendingdown. CMP Technology's underlying revenue fell 3.6% in the first half whilediminished print profitability and investment in online reduced underlyingprofit by 32.7%. Events performed strongly in the half with revenuesincreasing by over 150% from $27.6m to $69.9m. The performance reflects theacquisition of a number of successful events which take place during the firsthalf of the year, particularly those from MediaLive such as Interop Las Vegasand Interop Japan. CMP Technology's online business grew rapidly bothorganically and through acquisition; revenues increasing by 70% to $31.8m from$18.7m. CMPMedicaCMPMedica is performing in line with expectations. Revenue increased by 24.7%to EUR134.0m and operating profit increased by 5.7% to EUR21.6m. CMPMedica'sperformance reflects a strong seasonal weighting towards the first half of theyear. Our important French business including Vidal and the French MedicalPress business performed well. All healthcare activities have been consolidated into CMPMedica, includingcertain events and publications in the US and UK which were previously managedby CMP Media and CMP Information respectively. CorporateCorporate operations comprises net central operating costs, together with thoseequity accounted investments which do not form part of one of the group'soperating divisions. The 2005 profit includes ‚£3.9m operating profit fromequity investments disposed of in 2005 including five, SIS and SDN. 4. DividendAn interim dividend of 4.4p (2005: 4.0p) per share will be paid - an increaseof 10 per cent. The interim dividend on the ordinary shares will be paid on20 October to shareholders on the register on 1 September. 5. Cash and cash conversionOur balance sheet remains strong with net cash at the end of June of ‚£181.5m. Continuing operating cash conversion was 82.1%. After the end of half year weacquired Commonwealth for ‚£83m. 6. PensionsAt 30 June 2006 the aggregate deficit under IAS 19 had decreased to ‚£25.3m from‚£52.3m at 31 December 2005. This reflects additional contributions of ‚£6.1mmade by the group, together with an increase in bond yields. On a fundingbasis the schemes show an aggregate surplus of ‚£11m (2005: deficit ‚£10m). TheIAS 19 interest charge was ‚£nil (2005: ‚£1.3m).7. TaxThe effective tax rate in the first half of 2006 was 20%.As disclosed in our 2005 results, UBM is in dispute with HMRC with regards to atechnical matter arising in relation to the sale of our Regional Newspapersbusiness in 1998. The tax in dispute is estimated at ‚£80m. The hearing withthe Special Commissioners took place on 21 July 2006. We do not expect thematter to be resolved until 2007 at the earliest. 8. Interest and financingNet interest income for the six months was ‚£5.4m (‚£6.5m). Net interest incomeincluded ‚£8.5m of interest on surplus cash balances, reduced by ‚£3.1m interestpayments on the group's notes and facilities. In H1 2005 the income of ‚£23.5m reflected a credit of ‚£13.3m for the movementin fair value of the option element of the convertible bond and a one offexchange gain of ‚£10.2m. Net financing costs other than interest in H1 2006 of‚£(20.5)m includes the accounting charge for the movement in fair value of theoption element of the convertible bond prior to buyback or conversion. Other financing costs relating to the pension schemes of ‚£nil (2005: ‚£1.3m)represent the financing charges on the pensions deficit calculated inaccordance with IAS 19. 9. Return of capitalWe indicated in February that we intended to return more than ‚£300m of capitalto shareholders by the end of 2007. We remain committed to that goal and are working towards a more leveraged balance sheet in the medium term. SinceFebruary we have returned ‚£142.2m through convertible and ordinary sharebuybacks. In the first six months of the year we have spent ‚£68.1m on buyingback our convertible bond. The balance was converted into 10.2m ordinaryshares. There are no convertible bonds outstanding. We also purchased forcancellation 11.1m ordinary shares at an average price of 666 pence per sharei.e. a return of ‚£74.1m this year.10. Non-recurring items - DisposalsIn the first half we realised ‚£16.7m from the disposal of a number of smallertitles including Printing World and Packaging Magazine, Industrial EquipmentMart, The Trader, Trade-It, The Knowledge and Benn's Media from the CMPInformation portfolio. Revenue (‚£5.1m) (2005: ‚£7.5m) and operating profits (‚£0.8m) (2005: ‚£1.5m) from these titles are accounted for as "Discontinued". Proceeds from property disposals were ‚£15.8m. The profit on disposals was ‚£13.3m.Consolidated Income Statementfor the six months ended 30 June As restated As Before Before restated non- Non- non- Non- As recurring recurring recurring recurring restated items items Total items items Total 30 June 30 June 30 June 30 June 30 June 30 JuneSix months ended 2006 2006 2006 2005 2005 2005 Notes ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Continuing operations Revenue 3 394.3 - 394.3 315.2 - 315.2 Other operating income 5.0 - 5.0 4.4 - 4.4 Operating expenses (326.2) (326.2) (260.8) - (260.8) Non-recurring reorganisation and restructuring costs 4 - - - - (5.2) (5.2) Share of profit in joint ventures and associates (after tax) 3 1.7 - 1.7 2.2 8.5 10.7 Income from investments - - - 0.5 - 0.5 Group operating profit 74.8 - 74.8 61.5 3.3 64.8 Profit on disposal of property, plant and equipment 4 - 4.3 4.3 - - - Profit on disposal of associates 4 - - - - 25.0 25.0 - 4.3 4.3 - 25.0 25.0 Earnings before interest and taxes ("EBIT") 74.8 4.3 79.1 61.5 28.3 89.8 Finance income/(cost) Interest income 5 8.5 - 8.5 16.0 - 16.0 Interest cost 5 (3.1) - (3.1) (9.5) - (9.5) Financing income - other than interest 5 1.0 0.4 1.4 26.1 - 26.1 Financing cost - other than interest 5 (1.2) (20.7) (21.9) (2.6) - (2.6) Financing cost - pension schemes 5 - - - (1.3) - (1.3) Profit before tax 80.0 (16.0) 64.0 90.2 28.3 118.5 Taxation on UK earnings (7.9) - (7.9) (8.2) (1.2) (9.4) Overseas taxation (7.3) (7.3) (4.1) - (4.1) Profit for the period from continuing operations 64.8 (16.0) 48.8 77.9 27.1 105.0 Discontinued operations Profit for the period from discontinued operations (after tax) 11 - 9.6 9.6 - 247.5 247.5 Profit for the period 64.8 (6.4) 58.4 77.9 274.6 352.5 Attributable to: Equity shareholders - ordinary 55.9 351.4 Equity shareholders - B shares 0.2 0.2 Minority interests 2.3 0.9 58.4 352.5 Earnings per share - from continuing operations (pence) basic 6 16.6p 31.3p diluted 6 22.8p 24.1p Earnings per share - from continuing and discontinued operations (pence) basic 6 20.0p 106.2p diluted 6 26.1p 88.5p Adjusted group operating profit* 3 83.1 76.1 Amortisation of intangible assets (7.2) (4.6) Non-recurring reorganisation and restructuring costs - (5.2) Share of taxation on profit in joint ventures and associates (0.3) 4.9 Operating profit from discontinued operations (before tax) (0.8) (6.4) Group operating profit from continuing operations 3 74.8 64.8 Dividends 7 - Special dividend of nil (89.0p) - 298.3 - Proposed interim dividend of 4.4p (4.0p) 12.4 11.0 *Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets, non-recurring items, share of taxation onprofit in joint ventures and associates, and including operating profit fromdiscontinued operations.Consolidated income statementfor the year ended 31 December As restated Before non- As recurring As restated restated items Non-recurring Total 31 items 31 December 31 December DecemberYear ended 2005 2005 2005 Notes ‚£m ‚£m ‚£m Continuing operations Revenue 3 660.7 - 660.7 Other operating income 11.9 - 11.9 Operating expenses (563.3) - (563.3) Non-recurring reorganisation and 4 - (37.2) (37.2)restructuring costs Share of profit in joint ventures and 3 4.2 8.5 12.7associates (after tax) Income from investments 3.0 - 3.0 Group operating profit 116.5 (28.7) 87.8 Profit on disposal of associates 4 - 150.7 150.7 - 150.7 150.7 Earnings before interest and taxes 116.5 122.0 238.5("EBIT") Finance income/(costs) Interest income 5 28.2 - 28.2 Interest cost 5 (15.5) - (15.5) Financing income - other than interest 5 8.4 - 8.4 Financing cost - other than interest 5 (13.8) (13.7) (27.5) Financing cost - pension schemes 5 (2.5) - (2.5) Profit before tax 121.3 108.3 229.6 Taxation on UK earnings (16.8) (1.2) (18.0) Overseas taxation (6.3) - (6.3) Profit for the year from continuing 98.2 107.1 205.3operations Discontinued operations Profit for the period from discontinued 11 - 272.2 272.2operations (after tax) Profit for the year 98.2 379.3 477.5 Attributable to: Equity shareholders - ordinary 475.2 Equity shareholders - B shares 0.4 Minority interests 1.9 477.5 Earnings per share - from continuing operations (pence) basic 6 67.1p diluted 6 64.0p Earnings per share - from continuing and discontinued operations (pence) basic 6 157.1p diluted 6 142.8p Adjusted group operating profit* 3 141.9 Amortisation of intangible assets (11.4) Non-recurring reorganisation and (37.2)restructuring costs Share of taxation on profit in joint 1.9ventures and associates Operating profit from discontinued (7.4)operations (before tax) Group operating profit from continuing 3 87.8operations Dividends 7 - Interim dividend of 4.0p 11.0 - Special dividend of 89.0p 298.3 - Proposed year end dividend of 11.0p 30.6 Consolidated balance sheet As 30 June restated 31 Notes 2006 30 June December ‚£m 2005 2005 ‚£m ‚£m Assets Non-current assets Goodwill 610.9 554.8 590.6 Intangible assets 85.9 65.1 79.9 Property, plant and equipment 27.2 39.2 36.7 Investments in joint ventures and 22.1 61.5 22.2associates Other investments 2.8 5.9 5.0 748.9 726.5 734.4 Current assets Inventories 7.8 7.7 9.4 Trade and other receivables 215.0 266.2 172.5 Derivative financial assets 6.2 1.0 2.9 Cash and cash equivalents 346.1 459.5 489.4 575.1 734.4 674.2 Non-current assets classified as held for - 10.3 -sale Total assets 1,324.0 1,471.2 1,408.6 Liabilities Current liabilities Trade and other payables 570.2 532.7 538.2 Borrowings 153.2 139.1 145.6 Convertible bond 12 - - 93.7 Derivative financial liabilities - - 31.5 Provisions 23.5 9.9 38.8 746.9 681.7 847.8 Non-current liabilities Borrowings 3.1 102.7 3.3 Convertible bond 12 - 213.6 - Derivative financial liabilities 0.4 34.5 - Retirement benefit obligation 25.3 90.4 52.3 Trade and other payables 4.9 4.6 5.6 Provisions 24.7 31.2 31.2 Deferred tax liabilities 22.1 21.7 24.0 80.5 498.7 116.4 Total liabilities 827.4 1,180.4 964.2 Shareholders' equity Share capital 8 86.3 84.2 84.9 Share premium 419.7 317.6 327.7 Other reserves 9 162.6 166.6 179.0 Retained earnings 9 (176.2) (280.2) (149.9) Total shareholders' equity 492.4 288.2 441.7 Minority interests 4.2 2.6 2.7 Total equity 496.6 290.8 444.4 Total equity and liabilities 1,324.0 1,471.2 1,408.6 Consolidated cash flow statement Six Six months months Year ended ended ended 30 30 31 June June December 2006 2005 2005 ‚£m ‚£m ‚£m Cash flows from operating activities Reconciliation of profit to operating cash flows Profit for the period 58.4 352.5 477.5 Add back: Taxation 15.4 14.8 25.8 Depreciation 3.9 6.0 10.4 Amortisation 7.2 4.6 11.4 Interest income (8.5) (16.0) (28.2) Interest expense 3.1 9.5 15.5 Financing costs - pension schemes - 1.3 2.5 Net financing costs - other than interest 20.5 (23.5) 19.1 Share in profits from joint ventures and associates (1.7) (11.0) (13.2) Income from other investments - (0.5) (3.0) Profit on disposals (13.3) (267.4) (417.0) Non-recurring reorganisation and restructuring charges - 5.2 37.2 Other non-cash items 3.5 1.2 4.1 88.5 76.7 142.1 Payments against provisions (20.2) (7.4) (19.9) Additional pension contributions (6.1) (9.3) (17.2) Decrease / (increase) in inventories 1.3 (9.1) (6.2) (Increase)/decrease in trade and other receivables (41.4) 10.1 (17.1) Increase/(decrease) in trade and other payables 17.7 (10.4) 18.4 Cash generated from operations 39.8 50.6 100.1 Interest received 8.3 14.6 19.9 Interest paid (9.5) (11.3) (16.4) Taxation paid (3.0) (7.4) (17.4) Dividends received from joint ventures and associates 0.7 2.8 2.8 Income from other investments - 0.5 3.0 Net cash flows from operating activities 36.3 49.8 92.0 Cash flows from investing activities Acquisition of interests in subsidiaries, net of cash acquired (51.6) (69.3) (115.6) Sale of subsidiary undertakings and businesses 7 16.7 432.9 437.4 Purchase of property and equipment (5.2) (4.7) (9.7) Proceeds from the sale of property and equipment 15.8 - 6.3 Sale/(purchase) of interests in associated companies and joint ventures - - 300.3 Purchase of other investments (0.6) - - Proceeds from sale of investments - 42.8 42.8 Net cash flows from investing activities (24.9) 401.7 661.5 Cash flows from financing activities Proceeds from the issuance of ordinary share capital 23.9 7.3 18.2 Return of capital to shareholders (including costs) (74.5) (6.6) (16.8) Dividends paid to shareholders (32.2) (326.6) (337.8) Dividends paid to minority interests (0.8) (0.9) (1.9) Investment in own shares - ESOP (11.0) (2.4) (7.4) Repurchase of bonds (68.1) - (273.2) Net cash flows from financing activities (162.7) (329.2) (618.9) Net (decrease) / increase in cash and cash equivalents (151.3) 122.3 134.6 Net foreign exchange difference 0.7 (4.6) 11.4 Cash and cash equivalents at beginning of period 482.6 336.6 336.6 Cash and cash equivalents at end of period 332.0 454.3 482.6 Cash at bank and in hand 313.7 412.8 99.0 Short-term liquid funds 32.4 46.7 390.4 Bank overdraft (14.1) (5.2) (6.8) Cash and cash equivalents at end of period 332.0 454.3 482.6 Consolidated statement of recognised income and expensefor the six months ended 30 June Year ended Six months 31 ended 30 June Six months ended December 2006 30 June 2005 2005 Notes ‚£m ‚£m ‚£m Profit for the period 58.4 352.5 477.5 Currency translation differences on foreign operations: Group (12.3) (21.0) (4.7) Joint ventures (0.5) (0.2) 0.8 Minority interests (0.2) - 0.3 Actuarial gain recognised in the pension schemes 19.2 5.4 25.0 Other recognised gains / (losses) for the year 6.2 (15.8) 21.4 Total recognised income 9 64.6 336.7 498.9 Attributable to: Equity shareholders - ordinary 62.1 335.6 496.3 Equity shareholders - B shares 0.2 0.2 0.4 Minority interests 2.3 0.9 2.2 64.6 336.7 498.9 Effects of changes in accounting policy Effect of adopting financial instruments standards IAS 32 & 39 - (41.0) (41.0) Equity shareholders - (41.0) (41.0) Minority shareholders - - - - (41.0) (41.0) Notes to the interim financial reportfor the six months ended 30 June 1. General informationThe information for the year ended 31 December 2005 does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. A copyof the statutory accounts for that year has been filed with the Registrar ofCompanies. The auditors' opinion on those accounts was unqualified and did notcontain a statement under section 237 of the Companies Act 1985.The interim financial information was approved by a duly appointed andauthorised committee of the board of directors on 25 July 2006. The interimfinancial information is unaudited but has been reviewed by the auditors asset out in their report on page 27.The comparative information for 30 June 2005 and 31 December 2005 has beenrestated as follows:- The results of discontinued operations have been reclassified in accordance with accounting standards (see note 11).- Following a reorganisation of certain operations announced in May 2006, the segmental results have been restated. The impact is disclosed in note 3. 2. Accounting policiesThe group accounting policies adopted in the preparation of the interimconsolidated financial statements are consistent with those followed in thepreparation of the group's annual financial statements for the year ended 31December 2005, except for the adoption of the following amendments which aremandatory for annual periods beginning on or after 1 January 2006:- IAS 39 - Financial Instruments: Recognition and Measurement ("IAS 39") - Amendment for financial guarantee contracts - which amended the scope of IAS 39 to include financial guarantee contracts issued. The amendment addresses the treatment of financial guarantee contracts by the issuer. Under IAS 39, as amended, financial guarantee contracts are recognised initially at fair value and generally remeasured at the higher of the amount determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with IAS 18 Revenue;- IAS 39 - Amendment for hedges of forecast intragroup transactions - which amended IAS 39 to permit the foreign currency risk of a highly probable intragroup transaction to qualify as a hedged item in a cash flow hedge, provided that the transaction is denominated in a currency other than the functional currency of the entity entering into the transaction and that the foreign currency risk will affect the financial statements; and- IAS 39 - Amendment for the fair value option - which restricted the use of the option to designate any financial asset or any financial liability to be measured at fair value through profit and loss. The adoption of these amendments did not affect the group results of operationsor financial position.Notes to the interim financial reportfor the six months ended 30 June 3. Business segmentsAt 30 June 2006, the group is organised into five main business segments - NewsDistribution, CMP Asia, CMP Information, CMP Technology and CMPMedica. Thesesegments are the basis on which the group reports its primary segmentinformation.The News Distribution segment operates in the distribution, targeting andevaluation of company information. The main activities of CMP Asia, CMPInformation, CMP Technology and CMPMedica are the production of magazines,trade press, directories, events and websites.The market research business is included in discontinued operations as it wasdisposed of on 1 June 2005. The main activities of this segment weresyndicated and custom market research. The motoring titles within CMPInformation, which were disposed of on 16 September 2005, as well as UKconsumer titles disposed of in the period to 30 June 2006 are also included indiscontinued operations (refer to note 11).The following tables set out the revenue and profit information for the group'sbusiness segments. Six months ended 30 June 2006 Profit / Revenue Revenue (loss) Share of from from from results from external other Total operating JVs and Segment customers segments revenue activities associates result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News Distribution 69.1 - 69.1 20.3 0.3 20.6 CMP Asia 26.5 - 26.5 6.9 - 6.9 CMP Information 92.9 - 92.9 21.0 - 21.0 CMP Technology 113.3 - 113.3 15.1 0.9 16.0 CMPMedica 92.5 - 92.5 10.6 - 10.6 Corporate - 0.5 (0.3)operations ** - - (0.8) 394.3 - 394.3 73.1 1.7 74.8 Discontinued operations CMP Information 5.1 - 5.1 0.8 - 0.8 399.4 - 399.4 73.9 1.7 75.6 Share of Non- tax recurring *Adjusted on profit items group from charged to Amortisation operating JVs and operating of Segment profit associates profit intangibles result ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News Distribution 20.6 - - - 20.6 CMP Asia 7.2 - - (0.3) 6.9 CMP Information 22.3 - - (1.3) 21.0 CMP Technology 17.3 - - (1.3) 16.0 CMPMedica 14.9 - - (4.3) 10.6 Corporate operations** - (0.3) - - (0.3) 82.3 (0.3) - (7.2) 74.8 Discontinued operations CMP Information 0.8 - - - 0.8 83.1 (0.3) - (7.2) 75.6 *Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets, non-recurring items, share of taxation onprofit in joint ventures and associates, and including operating profit fromdiscontinued operations.** Corporate operations comprises net central operating costs, together withthose equity accounted investments which do not form part of one of the group'soperating divisions. Notes to the interim financial reportfor the six months ended 30 June3. Business segments (continued) Six months ended 30 June 2005 (as restated) Share of Revenue Revenue Profit results from from from from JVs external other Total operating and Segment customers segments revenue activities associates result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News Distribution 51.3 - 51.3 12.4 1.3 13.7 CMP Asia 24.3 - 24.3 6.1 - 6.1 CMP Information 77.8 - 77.8 16.9 - 16.9 CMP Technology 87.6 - 87.6 9.3 0.7 10.0 CMPMedica 74.2 - 74.2 9.1 (0.1) 9.0 Corporate operations ** - - - 0.3 8.8 9.1 315.2 - 315.2 54.1 10.7 64.8 Non-recurring items *** - - - - - 25.0 Discontinued operations CMP Information 23.7 - 23.7 2.0 - 2.0 Market research 76.9 0.1 77.0 4.4 - 4.4 100.6 0.1 100.7 6.4 - 6.4 Eliminations - (0.1) (0.1) - - - 415.8 - 415.8 60.5 10.7 96.2 Six months ended 30 June 2005 (as restated) Share of tax *Adjusted on profit Non-recurring group from JVs items charged operating and to operating Amortisation Segment profit associates profit of intangibles result ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News Distribution 14.3 (0.5) (0.1) - 13.7 CMP Asia 6.3 - (0.2) - 6.1 CMP Information 18.8 - (1.4) (0.5) 16.9 CMP Technology 12.5 - (2.5) - 10.0 CMPMedica 14.1 - (1.0) (4.1) 9.0 Corporate operations** 3.7 5.4 - - 9.1 69.7 4.9 (5.2) (4.6) 64.8 Non-recurring items ** * - - - - 25.0 Discontinued operations CMP Information 2.0 - - - 2.0 Market research 4.4 - - - 4.4 6.4 - - - 6.4 76.1 4.9 (5.2) (4.6) 96.2 * Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets, non-recurring items, share of taxation onprofit in joint ventures and associates, and including operating profit fromdiscontinued operations.** Corporate operations comprises net central operating costs, together withthose equity accounted investments which do not form part of one of the group'soperating divisions.*** Non-recurring items include the profit on sale of equity accounted forinvestments during the year. Notes to the interim financial reportfor the six months ended 30 June 3. Business segments (continued) For the year ended 31 December 2005 (as restated) Revenue from other Revenue segments Share of from Profit/(loss) results from external Total from operating JVs and Segment customers revenue activities associates result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News - 104.1 2.4 16.6Distribution 104.1 14.2 CMP Asia 60.5 0.3 60.8 17.0 - 17.0 CMP - 158.2 - 23.7Information 158.2 23.7 CMP - 0.9 11.9Technology 183.6 183.6 11.0 CMPMedica 154.3 - 154.3 14.1 (0.3) 13.8 Corporate - - 9.7 4.8operations ** - (4.9) 660.7 0.3 661.0 75.1 12.7 87.8 Non-recurring - - - 150.7items *** - - Discontinued operations CMP - 36.7 - 3.0Information 36.7 3.0 Market 0.1 76.9 - 4.4research 76.8 4.4 113.5 0.1 113.6 7.4 - 7.4 Eliminations - (0.4) (0.4) - - - 774.2 - 774.2 82.5 12.7 245.9 Share of Non-recurring *Adjusted tax on items group profit from charged to Amortisation operating JVs and operating of Segment profit associates profit intangibles result ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continued operations News Distribution 29.2 (1.4) (11.2) - 16.6 CMP Asia 17.5 - (0.4) (0.1) 17.0 CMP Information 40.7 - (14.8) (2.2) 23.7 CMP Technology 19.9 - (7.2) (0.8) 11.9 CMPMedica 24.1 - (2.0) (8.3) 13.8 Corporate operations ** 3.1 3.3 (1.6) - 4.8 134.5 1.9 (37.2) (11.4) 87.8 Non-recurring items *** - - - - 150.7 Discontinued operations CMP Information 3.0 - - - 3.0 Market research 4.4 - - - 4.4 7.4 - - - 7.4 141.9 1.9 (37.2) (11.4) 245.9 *Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets, non-recurring items, share of taxation onprofit in joint ventures and associates, and including operating profit fromdiscontinued operations.** Corporate operations comprises net central operating costs, together withthose equity accounted investments which do not form part of one of the group'soperating divisions.*** Non-recurring items include the profit on sale of equity accounted forinvestments during the year. Notes to the interim financial reportfor the six months ended 30 June 3. Business segments (continued) The amounts shown for 30 June 2005 and 31 December 2005 have been restated toreflect the intra-group transfer of 'US Healthcare' from CMP Technology toCMPMedica; the UK Medical group from CMP Information to CMP Medica; and CMPPrinceton from CMP Technology to CMP Information. For the period ended 30 June 2005, ‚£13.7m of revenue and ‚£0.7m of operatingloss for 'US Healthcare' was transferred from CMP Technology to CMPMedica, ‚£3.0m of revenue and ‚£0.4m of operating profit for the UK Medical group wastransferred from CMPInformation to CMPMedica , and ‚£2.6m of revenue and ‚£1.1m of operating profit for CMP Princeton was transferred from CMP Technology to CMP Information. For the year ended 31 December 2005, ‚£37.0m of revenue and ‚£3.5m of operatingprofit for 'US Healthcare' was transferred from CMP Technology to CMPMedica, ‚£5.0m of revenue and ‚£0.5m of operating loss of the UK Medical group wastransferred from CMP Information to CMPMedica, and ‚£5.3m of revenue and ‚£1.5mof operating profit for CMP Princeton was transferred from CMP Technology toCMP Information. Effective from 1 January 2006 the group has equity accounted for its 17.01%share of Press Association Group Limited and has fully consolidated its 50%interest in Canada Newswire Inc, where the remaining 50% is held by the PressAssociation. These changes result from an increase in the levels of influenceand control exerted by the group. The impact of the consolidation of Canada Newswire Inc in the period to 30 June2006 is to increase News Distribution revenue by ‚£13.2 million and operatingprofit by ‚£2.0 million. The impact of equity accounting of the group's share ofPress Association Group Limited in the period to 30 June 2006 is to increasethe group operating profit by ‚£0.3 million. 4. Non-recurring items As restated Six months Six months Year ended ended ended 30 31 30 June June December 2006 2005 2005 ‚£m ‚£m ‚£m Credited / (charged) to operating profit Vacant property costs - - (8.8) Redundancy - (0.3) (8.6) Re-engineering of business processes - (1.5) (10.3) Restructuring and business reorganisation costs - (2.2) (7.8) Integration of acquired businesses - (1.2) (1.7) Total non-recurring reorganisation and restructuring costs - (5.2) (37.2) Share of results from associates disposed of during the year - 8.5 8.5 Total credited / (charged) to operating profit - 3.3 (28.7) Credited to EBIT Profit on disposal of property, plant and equipment 4.3 - - Profit on disposal of equity accounted investments - 25.0 150.7 Total credited to EBIT 4.3 28.3 122.0 Charged to profit before tax Bond buybacks (20.3) - (13.7) Total (charged) / credited to profit before tax (16.0) 28.3 108.3 (Charged)/credited to profit after tax Tax on disposal of equity accounted investments - (1.2) (1.2) Total (charged) /credited to profit after tax from continuing operations (16.0) 27.1 107.1 Credited to discontinued operations (note 11) Profit on disposal of discontinued operations after tax 9.0 242.4 266.3 Profit from discontinued operations after tax 0.6 5.1 5.9 (Loss) / profit for the year after discontinued operations (6.4) 274.6 379.3 Disposals During the period ended 30 June 2006 UBM announced the sale of a number of UKconsumer titles for an aggregate amount of ‚£16.7 million. A profit of ‚£9.0marose on the sale of these publications. The results of these publicationsare disclosed as discontinued operations (refer to note 11). On 10 April 2006 UBM announced the sale of its Culverhouse Cross property for ‚£15.8m. A profit of ‚£4.3m arose on the sale of the property. Notes to the interim financial reportfor the six months ended 30 June 5. Finance income /(cost) 30 June 30 June 2006 2005 Before Before non- Non- non- Non- recurring recurring recurring recurring items items Total items items Total 2006 2006 2006 2005 2005 2005 ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Interest Interest income 8.5 - 8.5 16.0 - 16.0 Interest costs (3.1) - (3.1) (9.5) - (9.5) 5.4 - 5.4 6.5 - 6.5 Financing income - other than interest Net foreign exchange gain (a) 1.0 - 1.0 10.2 - 10.2 Buyback of bonds 0.4 0.4 - - - Fair value gain on embedded derivative in convertible bond (c) - - - 15.9 - 15.9 1.0 0.4 1.4 26.1 - 26.1 Financing cost - other than interest Convertible bond (b) (0.8) - (0.8) (2.5) - (2.5) Fair value loss on embedded derivative in convertible bond (c) (20.7) (20.7) - - - Other fair value adjustments (0.4) - (0.4) (0.1) - (0.1) (1.2) (20.7) (21.9) (2.6) - (2.6) Financing cost - pension schemes - - - (1.3) - (1.3) Net finance income / (cost) 5.2 (20.3) (15.1) 28.7 - 28.7 31 December 2005 Before non-recurring items Non-recurring Total 2005 items 2005 2005 ‚£m ‚£m ‚£m Interest Interest income 28.2 - 28.2 Interest costs (15.5) - (15.5) 12.7 - 12.7 Financing income - other than interest Net foreign exchange gain (a) 8.4 - 8.4 Fair value gain on embedded derivative in convertible bond (c) - - - 8.4 - 8.4 Financing cost - other than interest Convertible bond (b) (4.8) - (4.8) Fair value loss on embedded derivative in convertible bond (c) (9.0) (2.2) (11.2) Buyback of bonds (d) - (11.5) (11.5) Other fair value adjustments - - - (13.8) (13.7) (27.5) Financing cost - pension schemes (2.5) - (2.5) Net finance income / (cost) 4.8 (13.7) (8.9) (a) Foreign exchange gain on US Dollar denominated balances held inUK accounts. The gain in 2005 arose from the unhedged US Dollar cash balancesand the strengthening of the US Dollar.(b) The convertible bond is separated into fixed rate debt and anequity derivative. This charge reflects the accretion of the debt to thevalue at maturity.(c) Accounting Standards determine that the group's US Dollarconvertible bond contains an embedded derivative, and this option is carried atfair value with changes taken to the income statement. This charge is a resultof the increase in the group's share price. The non-recurring fair value losson the embedded derivative of ‚£20.7 million (30 June 2005: ‚£nil; 31 December2005: ‚£2.2 million) relates to the portion of the bond that was repurchased /converted during the year.(d) In the second half of 2005, UBM repurchased $179.3 million of the principal ofthe US dollar fixed rate unsecured notes. This charge reflects the premiumpaid and the fees related to the repurchase and unamortised costs being writtenoff. Notes to the interim financial reportfor the six months ended 30 June 6. Earnings per share Basic earnings per share amounts are calculated by dividing net profit for theyear attributable to ordinary equity holders of the parent company by theweighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profitattributable to ordinary shareholders (after adding back interest on theconvertible bond) by the weighted average number of ordinary shares outstandingduring the year (adjusted for the effects of dilutive options and dilutiveconvertible bond). The weighted average number of ordinary shares for the period were 278,856,165(30 June 2005: 330,990,030; 31 December 2005: 302,537,497). Adjusted earnings per share is presented as the directors consider that this isa meaningful measure of the performance of the group. For diluted earnings pershare, the weighted average number of shares in issue is adjusted to assumeconversion of all dilutive potential ordinary shares. The group has twocategories of dilutive potential ordinary shares: those share options grantedto employees where the exercise price is less than the average market price ofthe company's ordinary shares during the year and shares attributable toconvertible debt. The impact of dilutive securities in 2006 would be toincrease the profit by ‚£21.3 million (30 June 2005: ‚£11.5 million charge; 31December 2005: ‚£19.1 million profit) for convertible debt and to increaseweighted average shares by 5.5 million shares (30 June 2005: 5.2 millionshares; 31 December 2005: 3.3 million shares) for employee share options and11.4 million shares (30 June 2005: 47.8 million shares; 31 December 2005: 40.4million shares) for convertible debt. The following reflects the income and share data used in basic and diluted earningsper share computations Six Six Year months months ended ended ended 31 30 June 30 June December 2006 2005 2005 Earnings Earnings Earnings Earnings per Earnings per Earnings per ‚£m share ‚£m share ‚£m share pence pence pence From continuing and discontinued operations Adjusted group 83.1 76.1 141.9 operating profit Net interest income 5.4 6.5 12.7 Financing cost - - (1.3) (2.5) pension schemes Adjusted profit 88.5 81.3 152.1 before tax Taxation (17.7) (10.1) (26.0) Minority interests (2.3) (0.9) (1.9) B share dividend (0.2) (0.2) (0.4) Adjusted earnings 68.3 24.5 70.1 21.2 123.8 40.9per share Adjustments Amortisation of (7.2) (2.6) (4.6) (1.4) (11.4) (3.8)Intangible assets Deferred tax on 2.0 0.7 1.4 0.4 3.3 1.1amortisation of intangible assets Non-recurring items 13.3 4.8 262.2 79.3 379.8 125.6 Taxation relating to - - (1.2) (0.4) (1.2) (0.4)non-recurring items Net financing income (20.5) (7.4) 23.5 7.1 (19.1) (6.3)- other than interest Basic earnings per share 55.9 20.0 351.4 106.2 475.2 157.1 Dilution Options - (0.3) - (1.6) - (1.6) Convertible bond 21.3 6.4 (11.5) (16.1) 19.1 (12.7) Diluted earnings 77.2 26.1 339.9 88.5 494.3 142.8per share Adjusted earnings 68.3 24.5 70.1 21.2 123.8 40.9per share (as above) Options - (0.4) - (0.2) - (0.4) Convertible bond 0.2 (0.9) 1.9 (2.3) 3.1 (4.7) Diluted adjusted 68.5 23.2 72.0 18.7 126.9 35.8earnings per share Notes to the interim financial reportfor the six months ended 30 June 2006 6. Earnings per share (continued) Six Six Year months months ended ended ended 31 30 June 30 June December 2006 2005 2005 Earnings Earnings Earnings per per per Earnings share Earnings share Earnings share ‚£m pence ‚£m pence ‚£m pence From continuing operations Adjusted group operating profit 83.1 76.1 141.9 Operating profit from discontinued operations (0.8) (6.4) (7.4) Net interest income 5.4 6.5 12.7 Financing cost - pension schemes - (1.3) (2.5) Adjusted profit before tax 87.7 74.9 144.7 Taxation (17.5) (8.8) (24.5) Minority interests (2.3) (0.9) (1.9) B share dividend (0.2) (0.2) (0.4) Adjusted earnings per share 67.7 24.3 65.0 19.6 117.9 39.0 Adjustments Amortisation of intangible assets (7.2) (2.6) (4.6) (1.4) (11.4) (3.8) Deferred tax on amortisation of intangible assets 2.0 0.7 1.4 0.4 3.3 1.1 Non-recurring items 4.3 1.6 19.8 6.0 113.5 37.5 Taxation relating to non-recurring items - - (1.2) (0.4) (1.2) (0.4) Net financing income - other than interest (20.5) (7.4) 23.5 7.1 (19.1) (6.3) Basic earnings per share 46.3 16.6 103.9 31.3 203.0 67.1 Dilution Options - (0.3) - (0.5) - (0.7) Convertible bond 21.3 6.5 (11.5) (6.7) 19.1 (2.4) Diluted earnings per share 67.6 22.8 92.4 24.1 222.1 64.0 Adjusted earnings per share (as above) 67.7 24.3 65.0 19.6 117.9 39.0 Options - (0.5) - (0.2) - (0.5) Convertible bond 0.2 (0.9) 1.9 (2.0) 3.1 (3.7) Diluted adjusted earnings per share 67.9 22.9 66.9 17.4 121.0 34.8 7. Dividends Six months Six months Year ended ended 30 June ended 30 June 31 December 2006 2005 2005 ‚£m ‚£m ‚£m Declared and paid during the period Equity dividends on ordinary shares Final dividend for 2004 of 8.37p - 28.1 28.1 Interim dividend for 2005 of 4.0p - - 11.0 Special dividend of 89.0p - 298.3 298.3 Final dividend for 2005 of 11.0p 31.8 - - Equity dividends - B shares 0.4 0.2 0.4 Dividends 32.2 326.6 337.8 Proposed but not yet paid (not recognized as a liability at the end of the period) Equity dividends on ordinary shares Interim dividend for 2005 of 4.0p - 11.5 - Final dividend for 2005 of 11.0p - - 30.6 Interim dividend for 2006 of 4.4p 12.4 - - On 28 June 2005, UBM paid a special dividend to shareholders of ‚£298.3 million(89.0p per share). Notes to the interim financial reportfor the six months ended 30 June 20068. Share capital 30 June 30 June 31 December 2006 2005 2005 ‚£m ‚£m ‚£m Authorised 400,936,636 (30 June 2005: 400,936,636; 31 December 2005: 400,936,636) ordinary shares of 30 and 5/14 pence each 121.7 121.7 121.7 375,417,690 (30 June 2005: 375,417,690; 31 December 2005: 375,417,690) B shares of 8 and 23/44 pence each 32.0 32.0 32.0 153.7 153.7 153.7 Ordinary Shares B Shares Total ‚£m ‚£m ‚£m Issued and fully paid At 1 January 2006 84.5 0.4 84.9 Allocated in respect of share option schemes and other entitlements 1.7 - 1.7 Own shares purchased by the company 3.1 - 3.1 Shares repurchased and cancelled (3.4) (3.4) Actual issued and fully paid shares at 30 June 2006 85.9 0.4 86.3 As at 30 June 2006, there were 282,893,351 issued and fully paid ordinaryshares, and 4,830,923 issued and fully paid B shares (30 June 2005: 275,929,219issued and fully paid ordinary shares, and 5,446,789 issued and fully paid Bshares; 31 December 2005: 278,222,120 issued and fully paid ordinary shares,and 4,830,923 issued and fully paid B shares). As at 30 June 2006, the holdings of the United ESOP are 3,096,580 ordinaryshares, and 34,918 B shares (30 June 2005: 2,566,589 ordinary shares and279,484 B shares; 31 December 2005: 1,925,921 ordinary shares and 34,918 Bshares). The group repurchased and cancelled 11,130,000 ordinary shares during the yearat an average price of 666.0p (30 June 2005: 2,650,000 ordinary shares for501.9p; 31 December 2005: 3,010,000 ordinary shares for 508.3p). The totalamount paid to acquire the ordinary shares was ‚£74.1 million (30 June 2005: ‚£13.3 million; 31 December 2005: ‚£15.3 million). In the six months ended 30 June 2006 convertible bond holders elected toconvert bonds with a principal value of $85.3m into 10,196,753 ordinary sharesin the company (2005: nil). Following the completion of the conversion andrepurchase of the convertible bonds on 26 June 2006, there are no convertiblebond amounts outstanding. On 20 June 2005, in conjunction with the special dividend of 89.0 pence pershare, a share consolidation was carried out to convert 17 existing ordinaryshares to 14 new ordinary shares. The share consolidation converted the337,932,001 existing issued and fully paid ordinary shares into 278,296,942 newissued and fully paid ordinary shares. Notes to the interim financial reportfor the six months ended 30 June 9. Reserves Foreign Capital currency Total Merger redemption translation ESOP Other other Retained Minority reserve reserve reserve reserve reserve reserves earnings interests ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Balance at 31 December 2005 31.3 43.8 (1.8) (19.3) 125.0 179.0 (149.9) 2.7 Total recognised income and expense for the year - - (13.0) - - (13.0) 75.3 2.3 Shares repurchased and cancelled by the company - 3.4 - - - 3.4 (74.5) - Share-based payment - - - - - - 5.1 - Special dividend - - - - - - - - Equity dividend - - - - - - (32.2) - Minority interest dividend - - - - - - - (0.8) Shares awarded by ESOP - - - 4.2 - 4.2 - - Own shares purchased by the company - - - (11.0) - (11.0) - - Balance at 30 June 2006 31.3 47.2 (14.8) (26.1) 125.0 162.6 (176.2) 4.2 10. AcquisitionsAcquisitionsUBM has completed seven acquisitions in the six months ending 30 June 2006. On 11 January 2006, UBM acquired the events assets of MediaLive International,Inc. for a cash consideration of US$65 million. The transaction adds more than20 IT and telecoms-related events in the US, Japan, and Europe.On 11 January 2006, UBM acquired Shorecliff Communications LLC, a US eventsbusiness, for a cash consideration of US$12.3 million plus contingentconsideration up to US$1.4 million. Shorecliff's four principal events focuson the high growth technology markets of radio frequency identification,broadband services, wireless infrastructure and telecoms television/internetprotocol television.On 13 March 2006 UBM acquired a set of assets from Mediworld Publications, anIndian medical publisher, for ‚£0.4 million plus contingent consideration up to‚£0.3 million.On 4 April 2006 UBM acquired the National Venue Show for ‚£1.5m.On 1 June 2006, UBM acquired Cable Digital News Inc, an online B2B mediabusiness providing news and analysis of the North American cable industry. Thepurchase price was $0.3 million.On 30 June 2006, UBM acquired MeXi Solutions, a secure communication and dataaccess solutions provider to the Belgian healthcare industry, for a total cashconsideration of EUR2.65 million. On 30 June 2006, UBM acquired the Thames Gateway Forum for ‚£3.05 million pluscontingent consideration up to ‚£0.25 milion. Notes to the interim financial reportfor the six months ended 30 June 10. Acquisitions (continued) The following table sets out the book values of the identifiable assets andliabilities acquired and their fair value to the group in respect of theacquisition of businesses during the year: 2006 2006 Fair Acquiree's Value Carrying to Group Value ‚£m ‚£m Intangible assets 15.7 - Other non-current assets 0.2 0.2 Current assets 7.9 7.9 23.8 8.1 Creditors and other current liabilities (8.4) (8.4) Creditors due after more than one year (0.4) - (8.8) (8.4) Fair value of net assets 15.0 Goodwill arising on acquisition 36.6 51.6 2006 ‚£m Consideration: Net cash paid 50.5 Deferred consideration 1.1 Total consideration 51.6 The aggregate cash flow effect of the acquisitions was as follows: 2006 ‚£m Cash paid 51.0 Net cash acquired (0.5) Net cash outflow on 2006 acquisitions 50.5 Payment of deferred consideration on prior year acquisitions 1.1 Total cash outflow on acquisitions 51.6 In addition to acquisitions made during the period, on 27 March 2006 UBMannounced that its CMP Asia division reached agreement to purchase a majoritystake in the Guangzhou Beauty Fair. The acquisition is being made jointly withBolognaFiere Group, CMP Asia's joint venture partner for its Asian beautyindustry events and is expected to be finalised in the second half of 2006 orearly 2007. Notes to the interim financial reportfor the six months ended 30 June 11. Discontinued operations The results of the discontinued operations which have been included in theconsolidated income statement were as follows: Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 ‚£m ‚£m ‚£m Revenue 5.1 100.6 113.6 Operating expenses (4.3) (94.2) (106.2) Profit before tax 0.8 6.4 7.4 Attributable taxation (0.2) (1.3) (1.5) Profit from discontinued operations after tax 0.6 5.1 5.9 Profit from disposal of discontinued 9.0 242.4 266.3 operations Attributable tax expense - - - Net profit attributable to discontinued 9.6 247.5 272.2 operations At date of disposal ‚£m Net assets attributable to discontinued operations - Goodwill 3.3 3.3 Discontinued operations relate to the following: - UBM's market research business, NOP World, which was disposed of on 1 June 2005 for a profit of ‚£235.8 million;- Exchange & Mart and Auto Exchange which were sold on 16 September 2005 for a profit of ‚£30.5 million; and- UK publications which were sold for a profit of ‚£9.0 million during the period ended 30 June 2006 (refer to note 4). Notes to the interim financial reportfor the six months ended 30 June12. Borrowings In the six months ended 30 June 2006 the group repurchased a further $80.1million of convertible bonds (30 June 2005: nil;31 December 2005: $234.6 million). Additionally, in the six months ended 30June 2006 convertible bond holders elected to convert $85.3 million of bondsinto ordinary shares in the company (2005: nil). There are no convertible bondamounts outstanding at30 June 2006. 13. Share-based payments The group's management awards share options to directors and employees, fromtime to time, on a discretionary basis. During the six months ended 30 June2006, the Group awarded 1,554,115 (six months ended 30 June 2005: 818,394; yearended 31 December 2005: 3,614,015) shares under the group's share incentiveplans. 14. Retirement benefit obligations The group operates a number of defined benefit and defined contribution pensionschemes in the UK and overseas. Actuarial valuations are carried out annuallyby independent qualified actuaries using the projected unit method. 15. Contingent liabilities The company acts as guarantor over a net overdraft facility of ‚£60.0 million(30 June 2005: ‚£60.0 million; 31 December 2005: ‚£60.0 million). The companyalso acts as guarantor over the fixed interest payable on interest rate swapstaken out by a subsidiary undertaking. 16. Events after balance sheet date On 19 July 2006, UBM acquired Commonwealth Business Media, Inc.("Commonwealth") for a cash consideration of $152m. Commonwealth is a leadingspecialist business intelligence provider to the international trade andtransportation industry with comprehensive proprietary data, news andanalytical content. Independent review report to United Business Media plc IntroductionWe have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprises the Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,Consolidated Statement of Recognised Income and Expense, and the related notes1 to 16. We have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information.This report is made solely to the company in accordance with guidance containedin Bulletin 1999/4 'Review of interim financial information' issued by theAuditing Practices Board. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than the company, for our work,for this report, or for the conclusions we have formed.Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed.The accounting policies are consistent with those that the directors intend touse in the next financial statements. Review work performedWe conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies have been consistently applied,unless otherwise disclosed. A review excludes audit procedures such as testsof controls and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance withInternational Standards on Auditing (UK and Ireland) and therefore provides alower level of assurance than an audit. Accordingly we do not express an auditopinion on the financial information.Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006.Ernst & Young LLPLondon25 July 2006 Appendix 1 Segmental analysis New Structure - 30 June The following table sets out the segmental analysis for revenue and operatingprofit* for the six months ended 30 June. Note: The table below is afteradjusting for the transfers of CMP Media's US Healthcare operations and CMPInformation's Healthcare operations to CMPMedica and the transfer of CMPPrinceton to CMP Information. Six months Operating to 30 June Revenue profit* Margins 2006 2005 2006 2005 2006 2005 ‚£m ‚£m ‚£m ‚£m % % Continuing operations PR Newswire 69.1 51.3 20.6 14.3 29.8 27.9 CMP Asia 26.5 24.3 7.2 6.3 27.2 25.9 CMP Information 92.9 77.8 22.3 18.8 24.0 24.2 CMP Technology 113.3 87.6 17.3 12.5 15.3 14.3 CMPMedica 92.5 74.2 14.9 14.1 16.1 19.0 Corporate operations - - - 3.7 - 100.0 394.3 315.2 82.3 69.7 20.9 22.1 Discontinued operations CMPi disposed titles 5.1 7.5 0.8 1.5 15.7 20.0 Market Research - 76.9 - 4.4 - 5.7 UAP Motoring Titles - 16.2 - 0.5 - 3.1 Total 399.4 415.8 83.1 76.1 20.8 18.3 Old structure - 30 June The following table sets out the segmental analysis for revenue and operatingprofit* under the 2005 divisional structure. Six months Operating to 30 June Revenue profit* Margins 2006 2005 2006 2005 2006 2005 ‚£m ‚£m ‚£m ‚£m % % Continuing operations PR Newswire 69.1 51.3 20.6 14.3 29.8 27.9 CMP Asia 26.5 24.3 7.2 6.3 27.2 25.9 CMP Information 94.9 80.9 21.3 19.0 22.4 23.5 CMP Media 132.5 103.9 17.7 12.9 13.4 12.4 CMPMedica 71.3 54.8 15.5 13.5 21.7 24.6 Corporate operations - - - 3.7 - 100.0 394.3 315.2 82.3 69.7 20.9 22.1 Discontinued operations CMPi disposed titles 5.1 7.5 0.8 1.5 15.7 20.0 Market Research - 76.9 - 4.4 - 5.7 UAP motoring titles - 16.2 - 0.5 - 3.1 Total 399.4 415.8 83.1 76.1 20.8 18.3 * Before amortisation of intangible assets, non-recurring items and share oftaxation on profit from joint ventures and associates New structure - December 2005 divisional restatement The following table sets out the segmental analysis for revenue and operatingprofit* for the year ended 31 December 2005 under the new divisional basis. Note: The table below is after adjusting for the transfers of CMP Media's USHealthcare operations and CMP Information's Healthcare operations to CMPMedicaand the transfer of CMP Princeton to CMP Information. Year ended 31 December Revenue Operating profit* Margins 2005 2005 2005 ‚£m ‚£m % Continuing operations PR Newswire 104.1 29.2 28.0 CMP Asia 60.5 17.5 28.9 CMP Information 158.2 40.7 25.7 CMP Technology 183.6 19.9 10.8 CMPMedica 154.3 24.1 15.6 Corporate operations - 3.1 100.0 660.7 134.5 20.4 Discontinued operations CMPi disposed titles 13.7 2.6 18.9 Market Research 76.8 4.4 5.7 UAP Motoring Titles 23.0 0.4 1.7 Total 774.2 141.9 18.3 * Before amortisation of intangible assets, non-recurring items and share oftaxation on profit from joint ventures and associates Notes to Editors About United Business Media plc - United Business Media is one of the world'sleading global business information companies. UBM brings together the world'sbuyers and sellers, helping their markets work effectively and efficientlythrough PR Newswire's news distribution network and UBM's portfolio of events,print and on-line publications. For more information, go to www.unitedbusinessmedia.com About PR Newswire - PR Newswire is the world's leading corporate newsdistribution service. Headquartered in New York, PR Newswire distributes newsglobally on behalf of over 28,000 customers, including many of the world's topcompanies and agencies, helping them take the latest news to the media, theinvestment community, and the general public. For more information, go to www.prnewswire.com About UBM's media portfolio - UBM's portfolio of more than 200 newspapers,magazines and directories, 200 websites and 300 events brings together buyersand sellers from a range of global sectors including technology, healthcare,the built environment, trade and transportation, lifestyle, fashion andingredients. UBM operates globally through five media businesses: CMP Asia: Headquartered in Hong Kong with offices throughout the region, CMPAsia is a leader in exhibitions, online and print business informationpublications for Asian markets. Working with partners from around the world,CMP Asia stages a range of leading events which includes the largestinternational jewellery, leather and fashion, beauty and furniture trade showsin Asia, as well as the definitive health show for the Japan market. For moreinformation, go to www.cmpasia.com CMP Information: Operating in the UK and internationally, CMPi providesprofessional media solutions to around 20 industry sectors. Its productsinclude magazines, exhibitions, conferences, awards programs, informationproducts and websites, targeted at business professionals across a range ofmarkets such as the built environment, travel, licensed trade, agriculture,security and ingredients. For more information, go to www.cmpi.biz CMP Technology: CMP Technology is the USA's leading high tech B2B mediacompany, providing marketing solutions for the global technology industry.Through its market-leading portfolio of trusted information brands, CMPTechnology has earned the confidence of more technology professionals than anyother media company. As a result, CMP Technology is the premier provider ofaccess, insight and actionable programs designed to connect sellers and buyersin ways that yield superior return on investment. For more information, go to www.cmp.com CMPMedica: CMPMedica provides information and education to healthcareprofessionals and patients around the world. It has a unique portfolio ofprofessional media products including newspapers, magazines, drug directories,electronic databases, websites and events. For more information, go to www.cmpmedica.com Commonwealth Business Media: Commonwealth Business Media, Inc. is the leadinginformation provider to the global trade and transportation market withcomprehensive proprietary data, news and analytical content. Its leading brandsinclude Port Import Export Reporting Service ("PIERS") Global IntelligenceSolutions, BACK Aviation Solutions ("BACK"), The Journal of Commerce and anumber of directory databases covering the international trade, railroad andtrucking markets. In addition to its information data businesses, Commonwealth publishes eightmagazines, one newsletter and a series of custom-published directories servingthe U.S. seaport market. Through the Journal of Commerce Conference division,Commonwealth also produces a number of industry-leading events includingTrans-Pacific Maritime and Breakbulk Conference and Exhibition. Commonwealth isheadquartered in East Windsor, New Jersey with offices around the US andinternationally. In the year to September 2005, more than 60% of Commonwealth's revenues werederived from data and online products, with 88% of revenues being earned in theUnited States. In the same period Commonwealth had revenues of $55.6m andEBITDA of $12.0m, with revenues and EBITDA being ahead of the prior year on apro forma basis by 6% and 14% respectively. For more information, go to www.cbizmedia.com DisclaimerThis press release includes statements which are not historical facts and areconsidered "forward-looking" within the meaning of Section 27 of the SecuritiesAct of 1933, as amended. These forward-looking statements reflect UBM'scurrent views about future events, business and growth strategy and financialperformance. These forward-looking statements are identified by their use ofterms and phrases such as "believe," "expect," "plan," "anticipate," "ontarget" and similar expressions identifying forward-looking statements.Investors should not rely on forward-looking statements because they aresubject to a variety of risks, uncertainties and other factors that could causeactual results to differ materially from UBM's expectations. UBM expresslydoes not undertake any duty to update forward-looking statements. Managementdoes not attempt to update forecasts unless conditions materially change. ENDUNITED BUSINESS MEDIA PLCRelated Shares:
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