14th Mar 2005 07:01
Centaur Holdings PLC14 March 2005 Centaur Holdings plc Interim Report 6 months ended 31 December 2004 Centaur Holdings plc ("Centaur"), the specialist business publishing andinformation company, announces results for the six months ended 31 December2004. Centaur operates in 14 distinct vertical business communities. Thesemainly comprise Centaur's reported divisions Marketing, Creative & New Media,Legal & Financial, Engineering & Construction and Perfect Information, whosecore market is the Corporate Financial Advisor community. Centaur'smarket-leading brands include Marketing Week, Design Week, Creative Review,Money Marketing, The Lawyer, The Engineer, New Media Age and Homebuilding &Renovating. Highlights • Turnover up 12% to £31.6m (2003: £28.3m) • EBITDA (* see below) more than doubles to £2.4m (2003: £1.1m) • EBITDA margin ahead at 8% (2003: 4%) • Underlying EBITDA (** see below) at £3.6m, giving a margin of 12% (2003: £1.3m; 5%) • The Company incurred a loss before tax in the period of £2.7m (2003: loss of £0.6m) as a result of goodwill amortisation of £3.6m (2003: £0.2m) arising from purchase of Centaur Communications Ltd Group in March 2004 • Basic loss per share of 2.1 pence (2003: loss of 0.23p) • Adjusted earnings per share of 0.63p (2003: 0.07p) • Strong first half advertising growth with overall advertising revenues up 11%, led by 21% increase in recruitment advertising • 20% growth in events revenues, including two new trade shows launched during the period - Business Travel Dusseldorf and the Total Motivation Show • Major new magazine launch - Finance Week, the first weekly news magazine published exclusively for senior corporate accountants • Recent announcement of acquisition of monthly magazine Logistics Manager and two related shows takes the Company into an important new community - Logistics and Transport • Moved from AIM to the Official List in December 2004 • High Court approval obtained in January 2005 to create additional distributable reserves of £127m, as a result of cancellation of share premium account • Maiden interim dividend of 0.5p per share Graham Sherren, Chairman and Chief Executive Officer of Centaur Holdings plc,said: "The results in the first half show strong year-on-year growth. Theoutlook for the second half, which is traditionally our most profitable period,is encouraging and we expect further year on year growth in revenues and profitsin the six months to June 2005. With a strong pipeline of new products and acontinuing recovery in the advertising cycle, we remain on track to deliver ourplanned growth in ebitda margins." (*)Centaur's key measure of profit is earnings before interest, tax,depreciation and amortisation and excluding exceptional administrative costs(EBITDA). (**)Underlying results of continuing operations are presented to provide aclearer indication of the financial performance of the Company's establishedactivities. The "underlying" results exclude the impact of acquisitions ordisposals within the three years preceding the reporting date and the results ofnew products in new communities during the same period. Enquiries: Centaur Holdings plc Graham Sherren Tel: 020 7970 4000 Geoff Wilmot Gavin Anderson & Company Richard Constant Tel: 020 7554 1400 Laura Hickman Janine Brewis www.centaur.co.uk Chairman's Interim Statement Introduction I am pleased to announce that Centaur achieved further strong growth in bothturnover and profits in the six months to 31 December 2004, in line with marketexpectations. In what is traditionally Centaur's weakest half (due to the lowlevels of publishing and event activity in August and December) turnover grew12% to £31.6m and ebitda more than doubled to £2.4m (against £1.1m in the sixmonths to 31 December 2003). The interim 2004 result included a charge of £3.6m (2003: £0.2m) in respect ofamortisation of goodwill arising on the purchase of the Centaur CommunicationsGroup (CCL) in March 2004 and exceptional costs of £0.5m arising from theCompany's admission to the Official List from AIM in December 2004. As a result,the Company recorded a loss before tax of £2.7m in the six months ended 31December 2004 (2003: loss of £0.6m) In January 2005 the Company obtained approval from the High Court to cancel theshare premium account, which was created on the purchase of CCL. This hasresulted in the creation of additional distributable reserves of £127m. TheBoard is recommending a maiden interim dividend of 0.5p per share, which will bepaid to shareholders on the register as at 24th March 2005. Business Overview Centaur is at an exciting stage in its development: • Its portfolio of established, market-leading products is ideally positioned to take advantage of the recovery in the advertising cycle, which commenced around the beginning of 2004. This is clearly reflected in the rate of profits growth we have recently achieved. • It has a pipeline of new and recently launched products that offers great potential for organic growth. I believe that this is particularly true of Centaur's stable of online products. A key element of our strategy has been to establish market-leading internet portals to support our major weekly magazines. This has been a long and relatively expensive exercise, but we are now beginning to see the early fruits of success from this investment. • Finally, Centaur's strong balance sheet (with net cash balances of £6m at 31 December 2004), robust infrastructure and experienced management are expected to facilitate opportunities for bolt-on acquisitions. To illustrate this, in the last six months we have recorded growth in totaladvertising revenues of 11% over the same period last year. This was led byrecruitment advertising revenues, which grew 21% in the period, continuing thepace of recovery experienced in the previous six months to June 2004. Displayadvertising revenues in magazines also grew strongly in the period, particularlyin the first quarter. Excluding the effect of the newly launched Finance Week,most of this revenue growth was converted to profit. The second major source of turnover growth in the period was from events, whererevenues increased 20% over the prior year period. This included revenues fromtwo new exhibitions, the Total Motivation Show and Business Travel Dusseldorf,both launched in September 2004 and a new event, the Interactive Marketing andAdvertising Awards, held in November 2004. Meanwhile, our internet products(electronic products excluding Perfect Information) also increased theirrevenues by about 20% and, with over 80% of this revenue growth converted toprofit, these products traded close to break-even at the ebitda level, comparedwith a £0.4m loss in the prior year period. In addition, we have recently announced a small but important acquisition. InFebruary 2005 we acquired the monthly magazine Logistics Manager and two relatedshows. The purchase price for the assets was £500,000. The impact on profits inthe current financial year will be negligible, due to the timing of the shows,which are next scheduled for September 2005 and February 2006. However, in ournext financial year we expect a positive profit contribution from these assets. Logistics and Transport is a new community for Centaur, but one which we believeis becoming increasingly significant as the development of internet marketingcreates additional demand for effective fulfilment solutions. Review of underlying results During the six month period, Centaur incurred significant operating losses fromtwo major new product development initiatives, which are unusual in their sizeand significance to the Company. These were the new equity research tool,Perfect Analysis, which incurred operating losses of £0.49m in the period andthe weekly magazine Finance Week, launched in November 2004, which incurredstart up and operating losses of £0.69m in the six month period. The development of Perfect Analysis (PA) in the last six months has been slowerthan expected, with the product's complexity resulting in much longer saleslead-times than for the core product, Perfect Filings. However, the extent ofclient interest in PA during this period has reinforced our views regarding themarket opportunity for this evolving product. The recent sales focus has been onsmaller clients where we have enjoyed some success. During what has been aperiod of extensive client feedback, we have also identified opportunities todevelop further distinctive improvements to the product. In the meantime, we have also taken steps to reduce the fixed cost base ofPerfect Information (PI). Had these cost saving initiatives, (some of which haveoccurred in February 2005), taken effect from 1st July 2004, PA's operatinglosses in the six months to 31 December 2004 would have been lower byapproximately £0.2 million. We have also, during this period, completeddevelopment of two new products within the PI portfolio - Perfect Debt (a fullytext and clause-searchable tool for the debt professional) and Perfect Search (anew web-based interface for the US market) which are beginning to generate newsales opportunities for PI. Finance Week is still at an early stage in its development, but the fundamentalsfor the magazine's future are encouraging. The response from readers has beenexceptional and has confirmed our view that the magazine is filling an importantgap in this significant business community. Advertising revenues are buildingand we are launching our first Finance Week conference in London in April thisyear. Excluding these two major initiatives, which are expected to generatesignificant profits in the long term, underlying ebitda grew by £2.3m to £3.6mon turnover up by £3.0m or 11%. This profit growth represents 75% of the relatedturnover growth, illustrating the high level of operational gearing that existsin the company's core magazine business and in its internet operations inparticular. This result reflected principally the broad-based advertising improvement in thebusiness, particularly led by the established magazines in the Legal andFinancial division, which were reporting against a relatively weak comparativeperiod in 2003. Growth in the Marketing, Creative and New Media division wasmore modest. The advertising recovery in this sector is patchy and the directmarketing community continued to experience year on year reductions in revenues,reflected in the results of the weekly magazine Precision Marketing and the DMShow, held in October 2004. By contrast, New Media Age, the leading interactivemarketing weekly, experienced further strong growth in the period, albeit from arelative low point in 2003. Costs were tightly controlled across all themagazines, resulting in strong profits growth. Our events business, which is also traditionally more second-half focused,continues to perform well and we expect to run two new exhibitions in the secondhalf, the Smart Homes Show in April and the Online Marketing Show in June. Underlying ebitda margins grew to 12% (2003: 5%) as a result of the high levelsof gearing referred to above. This margin improvement was supported by furtherfine-tuning of costs across the business. Certain products, which incurred losses during the period of £0.2m, were eitherdiscontinued or merged into other products and, as previously reported, theConferences Division was reorganized to deliver significant cost savings, whichcontributed to the improved margin from events in the period. Current Trading and Outlook The outlook for the second half, which is traditionally our most profitableperiod, is encouraging and we expect further year on year growth in revenues andprofits in the six months to June 2005. With a strong pipeline of new productsand a continuing recovery in the advertising cycle, we remain on track todeliver our planned growth in ebitda margins. Consolidated profit and loss account for the 6 months ended 31 December 2004 Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ---------- ---------- -------- Note £'000 £'000 £'000 Turnover 2 31,602 28,345 68,254 Cost of sales (18,317) (16,183) (38,017)-------------------------- ----- -------- ---------- --------Gross profit 13,285 12,162 30,237 Distribution costs (1,994) (1,999) (4,287)Administrative expenses(including amortisation ofgoodwill) 3 (14,145) (10,605) (22,468)-------------------------- ----- -------- ---------- --------EBITDA before exceptionalcosts 2 2,406 1,128 8,823 Depreciation of tangiblefixed assets (1,215) (1,400) (2,676)Amortisation of goodwill (3,560) (170) (2,437)Exceptional administrativecosts 4 (485) - (228)-------------------------- ----- -------- ---------- -------- Total operating (loss) /profit (2,854) (442) 3,482 Share of associates' profits 39 - --------------------------- ----- -------- ---------- --------(Loss) / profit on ordinaryactivities before interest (2,815) (442) 3,482 Interest receivable andsimilar income 127 151 196Amounts written offinvestments - (274) (274)Interest payable and similarcharges (5) (43) (7)-------------------------- ----- -------- ---------- --------(Loss) / profit on ordinaryactivities before taxation (2,693) (608) 3,397 Tax on (loss) / profit onordinary activities 5 (414) 262 1,222-------------------------- ----- -------- ---------- -------- (Loss) / profit on ordinaryactivities after taxation (3,107) (346) 4,619 Dividends 13 (740) - (1,480)-------------------------- ----- -------- ---------- --------Retained (loss) / profit forthe period (3,847) (346) 3,139-------------------------- ----- -------- ---------- -------- Earnings per share 6Basic (loss) / earnings pershare (pence) (2.10) (0.23) 3.12Fully diluted (loss) /earnings per share (pence) (2.00) (0.22) 2.98Adjusted earnings per share(pence) 0.63 0.07 3.04Fully diluted adjustedearnings per share (pence) 0.60 0.06 2.90-------------------------- ----- -------- ---------- -------- The Group has no recognised gains and losses for the period other then theprofits stated above. Consolidated balance sheet at 31 December 2004 Actual Pro forma Actual 31 December 31 December 30 June Note 2004 2003 2004 --------- --------- -------- £'000 £'000 £'000 Fixed assetsIntangible fixed assets 135,049 7,217 138,701Tangible fixed assets 5,180 5,875 5,311Investments 7 224 185 185---------------------------- ----- --------- --------- -------- 140,453 13,277 144,197 Current assetsStocks 1,529 2,089 1,185Debtors 8 14,790 12,930 14,771Cash at bank and in hand 9,167 4,886 9,132---------------------------- ----- --------- --------- -------- 25,486 19,905 25,088Creditors: amountsfalling due within one 9 (24,268) (21,873) (23,426)---------------------------- ----- --------- --------- -------- Net current assets / (liabilities) 1,218 (1,968) 1,662---------------------------- ----- --------- --------- -------- Total assets less currentliabilities 141,671 11,309 145,859 Provisions forliabilities and charges 10 (3,046) (4,040) (3,387)---------------------------- ----- --------- --------- --------- 138,625 7,269 142,472---------------------------- ----- --------- --------- ---------- Capital and reservesCalled up share capital 14,879 1,554 14,879Share premium account 14 127,047 13,576 127,047Other reserves 1,486 483 1,486Profit and loss account (4,787) (8,344) (940)------------------------- ----- --------- --------- --------Equity shareholders'funds 138,625 7,269 142,472------------------------- ----- --------- --------- -------- The interim financial information was approved by the Board of Directors on 14March 2005 and signed on its behalf by G.T.D.WilmotDirector Group cash flow statement for the 6 months ended 31 December 2004 Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ---------- ---------- -------- Note £'000 £'000 £'000 Net cash inflow from operatingactivities 11 2,627 2,309 7,153---------------------------- ---- ------ ---------- -------- Returns on investments andservicing of financeInterest received 119 151 196Interest paid (51) (43) (174)---------------------------- ---- ------ ---------- -------- Net cash inflow from returns oninvestments and servicing of finance 68 108 22 Taxation 54 (316) (671)---------------------------- ---- ------ ---------- -------- Capital expenditure and financialinvestmentPurchase of tangible fixed assets (1,086) (1,135) (2,166)Sale of tangible fixed assets 18 11 24Purchase of intangible fixedassets - (6) (195)---------------------------- ---- ------ ---------- -------- Net cash outflow for capitalexpenditure and financialinvestment (1,068) (1,130) (2,337) Acquisitions and disposalsProceeds from the disposal ofsubsidiary undertakings 417 617 617Acquisition expenses paid - (86) (2,921)Cash at bank and in handacquired with subsidiaryundertakings - 58 58Purchase of investment insubsidiary undertakings - (1,102) (128,736)---------------------------- ---- ------ ---------- --------Net cash inflow / (outflow)from acquisitions and disposals 417 (513) (130,982) Equity dividends paid toshareholders (1,480) - ----------------------------- ---- ------ ---------- -------- Net cash inflow / (outflow)before financing 618 458 (126,815) Financing Issue of ordinary share capital - 50 134,445Cash (repaid) / received inrespect of loan notes (583) - 3,429Share capital issue costs - - (5,968)---------------------------- ---- ------ ---------- -------- Net cash (outflow) / inflowfrom financing (583) 50 131,906---------------------------- ---- ------ ---------- --------Increase in cash 35 508 5,091---------------------------- ---- ------ ---------- -------- Other primary Statements for the 6 months ended 31 December 2004 Reconciliation of movements in equity shareholders' funds Actual Pro forma Actual 31 December 31 December 30 June 2004 2003 2004 --------- --------- -------- £'000 £'000 £'000 New share capital issued - 50 147,894Issue costs - - (5,968)Fair value of "rolled over" shareoptions - - 1,486(Loss) / profit for the period (3,107) (346) 540Dividends (740) - (1,480)---------------------------- --------- --------- --------Net (decrease) / increase inshareholders' funds (3,847) (296) 142,472 Opening shareholders' funds 142,472 7,565 ----------------------------- --------- --------- --------Closing shareholders' funds 138,625 7,269 142,472---------------------------- --------- --------- -------- Notes to the financial statements 1 Accounting policies and basis of preparation The Interim financial statements have been prepared on the basis of theaccounting policies set out in the Group's Annual Report for the financial yearended 30 June 2004. These statements were approved by a duly appointed and authorised committee ofthe Board of Directors and are unaudited. The auditors have carried out a reviewand their report is set out on page 8. Basis of preparation Actual The company was incorporated on 30 October 2003 as a private limited company anddid not trade until 10 March 2004 when it acquired Centaur Communications Ltdand its subsidiaries. ("the Centaur Communications Group") An actual comparativeprofit and loss account for the period 30 October 2003 to 31 December 2003 istherefore not reported. The actual comparative consolidated balance sheet at 31 December 2003 was asfollows: Actual 31 December 2003 ---------- £Cash at bank and in hand 2----------------------------------------- ---------- Called up share capital 2----------------------------------------- ---------- Pro forma The Pro forma results for the six months ended 31 December 2003 are based on theinterim financial statements of the Centaur Communications Group that becamepart of Centaur Holdings plc on 10 March 2004. The Pro forma results for the year ended 30 June 2004 were reported in theAnnual Report of Centaur Holdings plc for the financial year ended 30 June 2004.They are based on the trading results of the Centaur Communications Group forthe period 1 July 2003 to 9 March 2004 and the trading results of CentaurHoldings plc for the period to 30 June 2004, following its acquisition of theCentaur Communications Group. 2 Segmental analysis The Group is involved in the single activity of the creation and disseminationof business and professional information in the UK. There is therefore nosegmental reporting required. However, set out below are business analyses ofGroup turnover and EBITDA before exceptional costs ("EBITDA"). Analysis by Division Actual 6 months ended Pro forma 6 months ended 31 December 31 December 2004 2003 ------------------- ------------------ Turnover EBITDA Turnover EBITDA £'000 £'000 £'000 £'000 Marketing, Creative and New Media 12,036 1,406 11,394 286Legal and Financial 1 0,364 1,152 8,322 407Construction and Engineering 5,413 278 5,077 (61)Perfect Information 2,733 (107) 2,773 425Other 1,056 (323) 779 71--------------------------------- ----------- ----------- ---------- ---------- 31,602 2,406 28,345 1,128--------------------------------- ----------- ----------- ---------- ---------- Analysis by source Actual 6 months ended Pro forma 6 months ended 31 December 31 December 2004 2003 ------------------- ------------------ Turnover from Turnover from continuing continuing activities activities £'000 £'000 Recruitment advertising 5,145 4,265Other advertising 12,310 11,448Circulation revenue 2,843 2,694Electronic subscriptions 3,169 3,099Events 8,063 6,706Other 72 133------------------------------ ---------------------- ---------------------- 31,602 28,345------------------------------ ---------------------- ---------------------- Analysis by product type Actual 6 months ended Pro forma 6 months ended 31 December 31 December 2004 2003 -------------------------- --------------------------- Turnover EBITDA Turnover EBITDA £'000 £'000 £'000 £'000 Magazines 17,836 1,989 16,434 1,295Events 8,063 451 6,706 (195)Electronic products 4,955 (184) 4,627 47Other 748 150 578 (19)------------------------------ ----------- ----------- ---------- ---------- 31,602 2,406 28,345 1,128---------------------------- ----------- ---------- ---------- ---------- 2 Segmental analysis (continued) Analysis by maturity Actual 6 months ended Pro forma 6 months ended 31 December 31 December 2004 2003 ----------------------- ------------------------- Turnover EBITDA Turnover EBITDA £'000 £'000 £'000 £'000 Existing communities-Established products 26,035 3,680 23,413 1,854-New products 5,118 (100) 4,738 (539) ------------------------ ---------------------------Underlying turnover and EBITDA 31,153 3,580 28,151 1,315 Acquisitions 405 (488) 194 (187)New communities - new products 44 (686) - ----------------------------- ----------- ---------- ---------- ------------ 31,602 2,406 28,345 1,128---------------------------- ----------- ---------- ---------- ------------ New product development is defined as any product launched in the last threeyears and is reported by reference to the three years preceding each reportingdate. A community is defined by reference to the consumers of the relevantproducts. A new community is defined as any group of consumers not previously served byany products in the three years preceding each reporting date.Acquisitions are also reported by reference to the three years preceding eachreporting date. Substantially all net assets are located and all turnover and EBITDA aregenerated in the United Kingdom. 3 Administrative Expenses ------------ ------------- ----------- Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ------------ ------------- ----------- £'000 £'000 £'000 Depreciation of tangible fixedassets 1,215 1,400 2,676Amortisation of goodwill 3,560 170 2,437Listing expenses 485 - 228Other Administrative Expenses 8,885 9,035 17,127-------------------- ------------ ------------- ----------- 14,145 10,605 22,468 -------------------- ------------ ------------- ----------- 4 Exceptional items The exceptional costs of £485,000 relate to fees in respect of the admission ofCentaur Holdings plc to the official list of the London Stock Exchange on 17December 2004. 5 Taxation The tax charge for the period has been calculated by allocating the amortisationand estimated disallowable expenses on a pro rata time basis as follows: £'000Loss on ordinary activities before taxation (2,693) Add back:Amortisation 3,560Disallowed expenses - allocation 512----------------------- ---------------------------- Taxable profits 1,379----------------------- ---------------------------- Tax at 30% 414----------------------- ---------------------------- 6 Earnings per share The calculations of earnings per share are based on the following profits andnumbers of shares: Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ----------- ----------- ---------- £'000 £'000 £'000 (Loss) / profit on ordinaryactivities after taxation (3,107) (346) 4,619Amortisation of goodwill 3,560 170 2,437Amount written off investment - 274 274Exceptional deferred tax credit - - (3,057)Exceptional administrativecosts 485 - 228 -------- ----------- ----------Adjusted profit for the period 938 98 4,501 Weighted average number ofordinary shares 147,994,118 147,994,118 147,994,118Dilutive effect of shareoptions 7,127,579 7,127,579 7,127,579 -------- ----------- ----------Weighted average number ofshares in issue taking accountof applicable outstanding shareoptions 155,121,697 155,121,697 155,121,697 Basic (loss) / earnings pershare (pence) (2.10) (0.23) 3.12Diluted (loss) / earnings pershare (pence) (2.00) (0.22) 2.98Earnings per share (pence)using adjusted profit for theperiod 0.63 0.07 3.04Diluted earnings per share(pence) using adjusted profitfor the period 0.60 0.06 2.90 7 Investments Associated Trade Total Company Investment ----------- --------- -------------- --------- Share of associated company net assets Goodwill ---------- --------- ------------ --------- £'000 £'000 £'000 At 1 July 2004 - - 185 185 Transfer of investment to associated company 171 14 (185) - Share of associated company profits for the six months ended31 December 2004 39 - - 39----------------------- --------- ------ -------- --------At 31 December 2004 210 14 - 224----------------------- --------- ------ -------- -------- The Group holds, 34% of the ordinary share capital of IPE InternationalPublishers Limited. ("IPE") It was agreed in July 2004 that GV Sherren (Chairman and Chief Executive Officerof Centaur Holdings plc) would be appointed to the board of IPE. As a result the investing company now exerts a significant influence on theoperations and decisions of IPE and is now accounted for as an associatecompany. The share of profits of IPE for the six months ended 31 December 2004was £39,000. 8 Debtors Actual Pro forma Actual 31 December 31 December 30 June 2004 2003 2004 ----------- ----------- ---------- £'000 £'000 £'000Amounts falling due within one year: Trade debtors 11,695 9,970 10,333Other debtors 703 1,171 1,243Deferred tax asset 581 - 995Corporation tax 208 38 262Prepayments and accrued income 1,603 1,751 1,938------------------------ ----------- ----------- ---------- 14,790 12,930 14,771------------------------ ----------- ----------- ---------- 9 Creditors: amounts falling due within one year Actual Pro forma Actual 31 December 31 December 30 June 2004 2003 2004 ------------ ----------- --------- £'000 £'000 £'000 Bank and other borrowings - 337 -Trade creditors 2,517 3,622 3,536Social security andother taxes 2,249 2,160 1,788Other creditors 265 625 370Accruals anddeferred income 15,651 15,129 12,823Loan Notes 2,846 - 3,429Proposed dividend 740 - 1,480----------------------- ------------ ----------- --------- 24,268 21,873 23,426----------------------- ------------ ----------- --------- 10 Provisions for liabilities and charges Group Onerous Interest Deferred Restructuring actual rate swap consideration provisions 2004 ----------- ----------- ----------- --------- £'000 £'000 £'000 £'000 At 1 July 2004 46 2,500 841 3,387 Utilised in period (46) - (295) (341)-------------------------- ----------- ----------- ----------- ---------At 31 December 2004 - 2,500 546 3,046-------------------------- ----------- ----------- ----------- --------- a. Deferred Consideration In October 2003 the Centaur Communications Group acquired 100% of the sharecapital of the Synergy Software Group ("Synergy") for a total consideration of£3,742,000. The total consideration includes a deferred element that is payablebased on profits of Synergy up to 30 June 2007. At 31 December 2004 a provisionof £2,500,000 is held as the directors' best estimate of the deferred payment. b. Restructuring provision In August 2002, the Centaur Communications Group disposed of its subsidiarycompanies Lawtel Limited and Consultancy Europe Associates Limited, the onlinelegal reporting business, to Thomson Legal and Regulatory Europe Limited. Theresulting profit on disposal was £15,385,000. As a result of the above disposals, the Group was left with a substantial amountof idle property. This resulted in an exceptional charge to the Group of£1,777,000 in the year ended 30 June 2003 of which £546,000 remained provided at31 December 2004. 11 Net cash inflow from operating activities Reconciliation of operating (loss) / profit to net cash inflow from operatingactivities: Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ----------- ----------- --------- £'000 £'000 £'000 Operating (loss) / profit (2,854) (442) 3,482Depreciation of tangible fixedassets 1,215 1,400 2,676Amortisation of goodwill 3,560 170 2,437Profit / (loss) on disposal offixed assets (16) (4) (4)(Increase) / decrease in stocks (344) (829) 75(Increase) / decrease indebtors (904) 126 (192)Increase / (decrease) increditors 2,265 2,163 (626)(Decrease) in provisions (295) (275) (695)------------------------ ----------- ----------- --------- Net cash inflow from operatingactivities 2,627 2,309 7,153------------------------ ----------- ----------- --------- 12 Reconciliation of net cash flows to movements in net funds Actual Pro forma Pro forma 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 ----------- ----------- --------- £'000 £'000 £'000 Increase in cash in the period 35 508 5,091 Net opening funds 9,132 4,041 4,041------------------------ ----------- ----------- --------- Net closing funds 9,167 4,549 9,132------------------------ ----------- ----------- --------- 13 Dividends A dividend of 0.5p per 10p ordinary share is proposed. This amounts to £740,000and will be paid to all shareholders on the register as at 29 March 2005. Adividend of 1p per 10p ordinary shares, amounting to £1,480,000 was paid toshare holders on the register as at 5 November 2004. 14 Post Balance Sheet Events a. Cancellation of Share Premium Account The Company has a share premium account of £127,047,000. A share premium accountis an undistributable reserve. In order to create flexibility in the Company'sbalance sheet and to unlock this undistributable reserve the directors proposed,by way of a special resolution at the Annual General Meeting held on 25 November2004, to cancel the share premium account. The resolution was duly approved bythe shareholders. On 12 January 2005 the Company received High Court confirmation of thecancellation of its share premium account subject to certain undertakings givenby the Company for the protection of the company's creditors. The order of theCourt was registered at Companies House on 12 January 2005. b. Acquisition On 23 February 2005 the Group acquired the magazine title Logistics Manager andtwo associated trade exhibitions for a total consideration of £500,000. Independent review report to Centaur Holdings plc Introduction We have been instructed by the company to review the financial information,which comprises the profit and loss account, balance sheet, cash flow,reconciliation of movements in equity shareholders' funds and the related notes.We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible 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. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and, basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with United Kingdom Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. This report, including the conclusion, has beenprepared for and only for the company for the purpose of the Listing Rules ofthe Financial Services Authority and for no other purpose. We do not, inproducing this report, accept or assume responsibility for any other purpose orto any other person to whom this report is shown or into whose hands it may comesave where expressly agreed by our prior consent in writing. Review conclusion On 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 31 December 2004. PricewaterhouseCoopers LLPChartered AccountantsLondon14 March 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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