Interim Results

Euromoney

Institutional

Investor PLC

Interim Financial Report 2014

Interim Results for the Six Months to March 31 2014

Chairman's Statement

· Revenues increased by 5% to £195.8m

· Underlying revenues excluding acquisitions up 3% at constant currency

· Adjusted profit before tax increased by 2% to £53.4m

· Adjusted operating margin down two percentage points reflecting investment in digital strategy

· Delphi content platform launched successfully in Q2, on time and on budget

· New long-term incentive plan (CAP 2014) approved by shareholders at the AGM

· Net debt increased by nearly £20m due to the acquisition of Infrastructure Journal, the purchase of own shares for CAP 2014 purposes and the timing of long-term incentive payments

· Unchanged interim dividend of 7p a share

· Strength of sterling against US dollar provides second half headwind

· Second half underlying trading in line with board's expectations

Commenting on the first half results, chairman Richard Ensor said:

"The half year results reflect the benefits of our strategy, with growth from an improved performance from subscription products as well as new events and successful acquisitions.

The group's performance continues in line with the board's expectations. No significant changes to the first half revenue trends are expected until more of the sectors in which we operate improve. Meanwhile, the group intends to maintain its strategy of investing in new products and digital publishing, particularly using the Delphi content platform, to drive organic growth, and to use its strong balance sheet and cash flows to fund further acquisitions."

Highlights

Euromoney Institutional Investor PLC, the international online information and events group, achieved an adjusted profit before tax of £53.4m for the six months to March 31 2014, against £52.4m for the same period in 2013. Adjusted diluted earnings a share were 32.0p (2013: 31.9p) and the board has approved an unchanged interim dividend of 7.0p a share to be paid to shareholders on June 19.

Total revenues increased by 5% to £195.8m, and by 7% at constant currency. Underlying revenues, after adjusting for acquisitions, increased by 3% at constant currency.  The underlying revenue trends reported for the first quarter for subscriptions and advertising largely continued into the second quarter, while event revenues benefitted from a combination of new events and favourable second quarter timing.

As expected, the first half adjusted operating margin fell from 30% to 28%, reflecting the group's continued strategic investment in digital publishing including the new Delphi content platform which was successfully launched in the second quarter.

Net debt at March 31 was £28.6m compared with £9.9m at year end. The increase reflects acquisition spend of £15.6m, including £12.5m for the purchase of Infrastructure Journal, cash payments of £7.0m under the group's long-term incentive plan, and £14.6m spent buying the company's own shares to satisfy future rewards under its new long-term incentive plan. Underlying cash flows remain strong and there is plenty of headroom for the group to pursue its selective acquisition strategy.

Trading conditions have remained challenging, particularly in the investment banking sector where both cyclical and structural pressures have caused sharp falls in fixed income trading revenues for leading global financial institutions, causing them to continue to cut costs and exit capital intensive businesses. In contrast, the group's businesses in the asset management industry have remained resilient and are starting to benefit from increased budgets for research and information services.

Strategy

The group's strategy remains the building of a robust and tightly focused global online information business with an emphasis on emerging markets. This strategy is being executed through increasing the proportion of revenues derived from electronic subscription products; investing in technology to drive the online migration of the group's products as well as developing new electronic information services; building large, must-attend annual events; maintaining products of the highest quality; eliminating products with a low margin or too high a dependence on print advertising; maintaining tight cost control; retaining and fostering an entrepreneurial culture; and using a healthy balance sheet and strong cash flows to fund selective acquisitions.

Acquisitions are a key part of the group's growth strategy. The group completed four transactions last year, all of which have been successfully integrated and are performing well. In October 2013 the group acquired Infrastructure Journal, a leading information source for the international infrastructure markets. The deals' database and news coverage of Infrastructure Journal has been combined with the deal analysis, awards and events of Euromoney's Project Finance to create the most comprehensive online source of news, analysis and data for the infrastructure market. After an initial integration period, in March the two products were combined and re-launched under the IJ Global brand.

As part of a regular portfolio review, in 2013 the group considered the strategy for its training division and concluded that MIS Training Institute, the Boston-based provider of internal audit, IT audit and information security training, offered limited synergies with the rest of Euromoney's financial training business and would require significant investment to drive future growth. Accordingly, the business was sold to a private equity buyer on April 1 (see Financial Review for terms).

The group has continued to invest in technology, particularly Delphi, its new platform for authoring, storing and delivering its content which is expected both to improve the quality of its existing subscription products and increase the speed to market of new digital information services. Phase one of the project was completed during the second quarter, on time and on budget. The first products launched on the Delphi platform include a fully integrated online research service from BCA, and a website for the new Euromoney Indices business. As part of the Delphi launch, the group has also combined its capital market content from EuroWeek, Asiamoney and a number of smaller newsletters under the new Global Capital brand to create an international capital markets news and data service on a single, device-neutral, state-of-the-art technology platform, including the launch of a new RMB service. In the second half Delphi's digital authoring workflow tool will continue to be rolled out to the group's other titles, while a full Delphi implementation for the group's main brands will be undertaken in 2015. There is also a good pipeline of new products for launch under Delphi.

Currency Movements

The group generates approximately two thirds of both its revenues, including approximately a third of its UK revenues, and profit before tax in US dollars. The exposure to US dollar revenues in its UK businesses is hedged using forward contracts to sell US dollars, which delays the impact of movements in exchange rates for at least a year. However, the group does not hedge the foreign exchange risk on the translation of overseas profits. While it endeavours to match foreign currency borrowings with investments, as debt levels have fallen the related foreign currency finance cost has been of only limited benefit as a hedge against the translation of overseas profits.

The recent strength of sterling against the US dollar started to have a negative impact on the translation of overseas profits towards the end of the first half and is expected to have a more significant impact in the second half. The average sterling-US dollar rate for the six months to March 31 was $1.64 (2013: $1.59). This reduced headline revenue growth rates for the period by approximately two percentage points and adjusted profit before tax by approximately £1.5m. The recent US dollar rate of nearly $1.70 compares with an average of $1.53 for the second half of financial year 2013, and each one cent variation from last year's rate will reduce profits on translation by approximately £0.6m on an annualised basis.

The revenue tables below show headline growth rates as well as those at constant currency. Underlying revenue growth rates exclude the impact of acquisitions and currency movements.

Trading Review

Total revenues for the six months to March 31 2014 increased by 5% to £195.8m. At constant currency total revenues increased by 7% and, if acquisitions are excluded, underlying revenues by 3%.

The challenging market conditions facing the banking industry in 2013 have continued into 2014. The global investment banks have suffered further declines in revenues, in particular from their fixed income, currency and commodity activities. Structural changes in the industry caused by increased regulation and tougher capital adequacy ratios, combined with a cyclical decline in fixed income trading revenues, have meant many US and European investment banks have continued to cut staff and exit non-core or unprofitable businesses. This in turn has delayed any increase in bank spending on marketing, training and information buying that might have been expected from an improving economic outlook. Conditions in the metals and mining sector also remain challenging.

In contrast, the asset management sector has proved more encouraging and improving demand for subscription services, particularly related to data and research products, is starting to benefit subscription revenues. Emerging markets, which account for more than a third of the group's revenues, have also proved resilient despite geopolitical problems in a number of countries.

The main driver of first half underlying revenue growth was a 10% increase in event sponsorship, largely from new financial market events in the second quarter, while underlying delegate revenues increased by 7% due to the favourable timing of events. Underlying subscription revenues have been increasing at a steady rate of 2% for the past 12 months from a combination of new products and a gradual return to growth in the asset management sector. As expected, the sudden improvement in advertising in the final quarter of financial year 2013 proved to be more indicative of product timing than any improvement in advertising markets, and underlying advertising revenues have continued to decline, albeit at a slower rate than in 2013.

The first half adjusted operating margin was two percentage points lower than last year due to the group's continued strategic investment in digital publishing including the new Delphi content platform which went live during the period. Permanent headcount has increased by 98 to 2,239 people since March 31 2013 (and by 97 since September 30 2013) reflecting acquisitions and the increased investment in technology and new products.

Business Review

Research and Data: underlying revenues, which are derived predominantly from subscriptions, fell by 1%. This reflects the delayed impact of a difficult 2013 when budgets for information buying were tightly controlled in the face of increasing compliance costs for the asset management industry. However, the strong performance of the sector, particularly in the US, has seen an improvement in the retention rates for both BCA and NDR over the past six months, while BCA's new sales have been particularly encouraging, the benefits from which should start to be seen in the second half. The adjusted operating margin was unchanged at 41%.

Financial Publishing: underlying revenues increased by 9% reflecting the group's newly combined infrastructure finance business, IJ Global, and good performances from Institutional Investor's research and rankings business, and LatinFinance. At the same time the adjusted operating margin fell reflecting the continued investment in the transition to a digital-first publishing model including the launch of Global Capital using the Delphi content platform.

Business Publishing: underlying revenues increased by 7% driven by a good performance from TelCap, the wholesale telecoms publishing and events business, while Metal Bulletin has faced tougher metals and commodities markets. As with Financial Publishing, the adjusted operating margin fell after investment in digital publishing including Metal Bulletin's new steel information service and a pricing database.

Conferences and Seminars: underlying event revenues increased by 9% from a combination of new financial market events in the US, the favourable timing of events, and the strength of the Institutional Investor's subscription-based memberships for the asset management industry. In contrast, markets for commodities-related events including metals and coal have been more challenging.

Training: revenues for the training division, which relies heavily on customers in the banking sector, fell by 4%, but the adjusted operating margin improved from 17% to 18% following a restructuring undertaken last year.

Financial Review

The adjusted profit before tax of £53.4m compares to a statutory profit before tax of £42.8m. The statutory profit before tax is usually lower than the adjusted profit before tax because of the impact of acquired intangible amortisation and non-cash movements in acquisition liabilities. A detailed reconciliation of the group's adjusted and statutory results is set out in the appendix to this statement.

A net exceptional charge of £1.3m (2013: £0.5m) was recognised in the period. This includes costs of £0.7m incurred on the acquisition of Infrastructure Journal and £0.6m on the disposal of MIS Training. The sale of MIS Training was completed on April 1 2014 for an initial consideration of £6.6m and a further deferred consideration of up to £2.4m receivable depending on future performance. The sale will give rise to an exceptional profit on disposal, after deducting disposal costs already incurred, of approximately £7.0m which will be recognised in the second half.

There was no long-term incentive expense in the first half (2013: £2.1 million) as options under CAP 2014 will not be granted until the second half. The charge in 2013 reflects the final cost of CAP 2010.

Interest payable on the group's committed borrowing facility fell by £0.9m to £0.6m, reflecting lower average debt levels. Headline net finance costs of £1.5m (2013: £3.3m) include a charge of £0.6m (2013: £2.2m) for increases in non-cash acquisition liabilities.

The adjusted effective tax rate for the first half was 23%, against 22% for the same period in 2013. The adjusted effective tax rate for the full year is also expected to be 23%. The tax rate in each period depends mainly on the geographic mix of profits and applicable tax rates. The group continues to benefit from reductions in the UK corporate tax rate but this is being offset by the impact of higher US taxes.

Net Debt, Cash Flow and Dividend

Net debt at March 31 was £28.6m compared with £9.9m at year end. The increase in net debt reflects acquisition spend of £15.6m, cash payments of £7.0m under the group's long-term incentive plan and £14.6m for the purchase of the company's own shares to satisfy future rewards under the CAP 2014 long-term incentive scheme. A further £2.6m was invested in Project Delphi, bringing the total project cost to date to £10.0m, of which £9.3m has been capitalised and is being amortised over a four year period.

The group's operating cash flows are traditionally weighted in favour of the second half due to the payment of annual profit shares and incentives in the first half. This means the cash conversion rate is usually less than 100% in the first half, and in excess of 100% in the second. In addition, the vesting of options under the CAP 2010 triggered a £7.0m cash outflow in the first half of both 2013 and 2014 for which the expense was accrued in previous years. This reduced further the first half operating cash conversion rate to 82% (2013: 76%). The underlying operating cash conversion rate, adjusting for the timing differences, was unchanged at 103%.

The group's debt is provided through a dedicated multi-currency borrowing facility from Daily Mail and General Trust plc (DMGT), the group's parent. In November 2013 the group replaced its US$300m (£180m) facility, which was due to expire in December 2013, with a new US$160m (£96m) facility which expires in April 2016.

The company's policy is normally to distribute a third of its after-tax earnings by way of dividends, with approximately one third of the total dividend paid as an interim. In 2011, the earlier than expected achievement of the CAP profit target triggered an accelerated CAP expense of £6.6m which was not charged against earnings for dividend purposes. As previously explained, this CAP expense is instead being charged against earnings for dividend purposes over the period to which it originally related. Accordingly, the adjusted diluted earnings a share figure used for setting future dividends will be reduced by £1.5m in 2014 and is reflected in the board's decision to approve an unchanged interim dividend of 7.0p a share, to be paid on June 19 to shareholders on the register on May 23.

Capital Appreciation Plan (CAP)

The CAP is the group's long-term incentive scheme designed to retain and reward those who drive profit growth and is an integral part of the group's successful growth and investment strategy.

The final tranche of awards under CAP 2010 vested in February 2014 and were satisfied by the issue of 1.7m new shares and a cash payment of £7.0m.

At the AGM in January 2014 shareholders approved the introduction of CAP 2014, which will have a similar structure to CAP 2010. Initial awards under CAP 2014 will be granted within 42 days of the announcement of these interim results to approximately 260 senior employees, including executive directors, who have direct and significant responsibility for the profits of the group.

The primary performance test under CAP 2014 requires the group to achieve an adjusted profit before tax (and CAP expense) of £173.6m by financial year 2017 from a base profit of £118.6m in 2013. This profit target will be adjusted for the profits of any significant acquisitions or disposals during the CAP performance period. CAP 2014 will vest in three roughly equal tranches in financial years 2018, 2019 and 2020, subject to additional performance tests.

The total cost of CAP 2014 will be no more than £41m. Amortisation of this cost will commence in the second half following the initial grant of options and will continue over the remaining six year life of the plan. The expected CAP charge for the second half is £4.3m. A maximum of 3.5m ordinary shares will be used to satisfy CAP 2014 awards, with the balance settled in cash. These shares will be acquired in the market under the authority granted by shareholders at the AGM, and 1.3m shares were acquired in the first half at a cost of £16.6m, of which £2.0m was paid in April.

Outlook

As highlighted in the pre-close trading update, market conditions in 2014 have remained challenging, particularly in the investment banking sector where both cyclical and structural pressures have caused sharp falls in fixed income trading revenues, leading global financial institutions to continue to cut costs and exit capital intensive businesses. Conditions in the metals and mining sector also remain challenging. The group's businesses serving the asset management industry have proved more resilient and are starting to benefit from increased budgets for research and information services, while emerging markets continue to present opportunities for growth.

While trading conditions remain challenging, the group's performance continues in line with the board's expectations. No significant changes to the first half revenue trends are expected until more of the sectors in which we operate improve. Meanwhile the recent strength of sterling against the US dollar is expected to have a more significant impact on headline revenues and the translation of overseas profits in the second half.

The group intends to maintain its strategy of investing in new products and digital publishing, particularly using the Delphi content platform, to drive organic growth, and to use its strong balance sheet and cash flows to fund further acquisitions.

Richard Ensor

Chairman

May 14 2014

END

For further information, please contact:

Euromoney Institutional Investor PLC

Richard Ensor, Chairman: +44 20 7779 8845; [email protected]

Christopher Fordham, Managing Director: +44 20 7779 8057; [email protected]

Colin Jones, Finance Director: +44 20 7779 8666; [email protected]

FTI Consulting

Charles Palmer: +44 20 7269 7180; [email protected]

CAUTIONARY STATEMENT

This Interim Financial Report (IFR) has been prepared solely to provide additional information to shareholders to assess the Euromoney group's results and strategy and the potential for that strategy to succeed. The IFR should not be relied on by any other party for any other purpose.

The IFR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

NOTE TO EDITORS

Euromoney Institutional Investor PLC (www.euromoneyplc.com) is listed on the London Stock Exchange and is a member of the FTSE 250 share index. It is a leading international business-to-business media group focused primarily on the international finance, metals and commodities sectors. It publishes more than 70 titles in both print and online format including Euromoney, Institutional Investor and Metal Bulletin, and is a leading electronic provider of research and data under the BCA Research and Ned Davis Research brands, and of emerging market information under the EMIS and CEIC brands. It also runs an extensive portfolio of conferences, seminars and training courses for financial markets. The group's main offices are in London, New York, Montreal and Hong Kong. More than a third of its revenues are derived from emerging markets, and approximately two thirds of its revenues and profits are generated in US dollars.

Appendix to Chairman's Statement

Reconciliation of Consolidated Income Statement to adjusted results for the six months ended March 31 2014

The reconciliation below sets out the adjusted results of the group and the related adjustments to the Condensed Consolidated Income Statement that the directors consider necessary in order to provide an indication of the adjusted trading performance.

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, databases and customer relationships), exceptional items, movements in acquisition deferred consideration, and net movements in acquisition option commitment values. In respect of earnings adjusted amounts reflect a tax rate that includes the current tax effect of the goodwill and intangible assets.

Further analysis of the adjusting items is presented in notes 4, 5, 6, 8, and 11 to the Consolidated Condensed Interim Financial Report.

Condensed Consolidated Income Statement

for the six months ended March 31 2014

A detailed reconciliation of the group's statutory results to the adjusted results is set out in the appendix to the Chairman's Statement .

Condensed Consolidated Statement of Comprehensive Income

for the six months ended March 31 2014

Condensed Consolidated Statement of Financial Position

as at March 31 2014

A reconciliation of net debt is set out in the note to the Condensed Consolidated Statement of Cash Flows.

Condensed Consolidated Statement of Changes in Equity

for the six months ended March 31 2014

The other reserve represents the share premium arising on the shares issued for the purchase of Metal Bulletin plc in October 2006.

Condensed Consolidated Statement of Cash Flows

for the six months ended March 31 2014

Cash and cash equivalents include bank overdrafts.

Note to the Condensed Consolidated Statement of Cash Flows

Net Debt

The group's debt is provided through a dedicated multi-currency borrowing facility from Daily Mail and General Trust plc group (DMGT). In November 2013 the group replaced the US$300 million (£180 million) facility with a new US$160 million (£96 million) facility which expires at the end of April 2016. Interest is payable on this new facility at a variable rate of between 1.35% and 2.35% above LIBOR dependent on the ratio of adjusted net debt to EBITDA. The facility's covenant requires the group's net debt to be no more than three times adjusted EBITDA on a rolling 12 month basis. Failure to do so would result in the group being in breach of the facility, potentially resulting in the facility being withdrawn or impediment of management decision making by the lender. Management regularly monitor the covenant and prepare detailed cash flow forecasts to ensure that sufficient headroom is available and that the covenants are not close or potentially close to breach. At March 31 2014, the group's net debt to adjusted EBITDA was 0.24 times (March 2013: 0.31 times, September 2013: 0.09 times) and the committed undrawn facility available to the group was £53.8 million (March 2013: £143.1 million, September 2013: £165.9 million).

In the absence of any significant acquisitions, the group has no pressing requirement to arrange new finance before the facility expires in April 2016. There is a risk that the undrawn portion of the facility, or that the additional funding, may be unavailable or withdrawn if DMGT experience funding difficulties themselves. However, if DMGT were unable to fulfil its funding commitment to the group, the directors are confident that the group would be in a position to secure adequate external borrowing facilities, although probably at a higher cost of funding.

The group's strategy is to use excess operating cash to pay down its debt. The group generally has an annual cash conversion rate (the percentage by which cash generated from operations covers operating profit before acquired intangible amortisation, long-term incentive expense and exceptional items) of 100% or more due to much of its subscription, sponsorship and delegate revenue being paid in advance. However, the group's operating cash flows are weighted in favour of the second half due to the payment of annual profit shares and incentives in the first half. This means the cash conversion rate is usually less than 100% in the first half, and in excess of 100% in the second. In addition a further reduction to the cash conversion rate is due to cash payments in respect of long-term incentive costs in 2014 and 2013, for which the expense was accrued in previous years, giving an operating cash conversion rate of 82% for the first half (March 2013: 76%).

Notes to the Condensed Consolidated Interim Financial Report

1 Basis of preparation

This Interim Financial Report was approved by the board of directors on May 14 2014.

These condensed consolidated financial statements have been prepared in accordance with the disclosure and transparency rules of the Financial Conduct Authority and using accounting policies consistent with International Financial Reporting Standards as adopted by the European Union and in accordance with International Accounting Standard (IAS) 34 'Interim Financial Reporting'.

The financial information for the year ended September 30 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.

Accounting policies

The Condensed Consolidated Interim Financial Report has been prepared under the historical cost convention, except for the revaluation of certain financial instruments.

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the group's latest annual audited financial statements, except as described below.

· IFRS 13, 'Fair Value Measurement' (effective for accounting periods beginning on or after January 1 2013). This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend to the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The adoption of IFRS 13 has no material impact on the financial statements of the group except for additional disclosures.

· IAS 19 (revised), 'Employee Benefits', issued in June 2011 (effective for accounting periods beginning on or after January 1 2013). The interest cost on pension plan liabilities and expected return on plan assets reported in previous years have been replaced with a net interest amount. The group have amended the presentation of prior-year comparative amounts to reflect these requirements. There is no material impact of adopting IAS 19 (amended) on the profit for any of the years presented.

Going concern, debt covenants and liquidity

The results of the group's business activities, together with the factors likely to affect its future development, performance and financial position, are set out in the Chairman's Statement.

The financial position of the group, its cash flows and liquidity position are set out in detail in this Condensed Consolidated Interim Financial Report. The group meets its day-to-day working capital requirements through a dedicated US$160 million multi-currency borrowing facility with Daily Mail and General Trust plc (DMGT). The facility's covenant requires the group's net debt to be no more than three times adjusted EBITDA on a rolling 12 month basis. At March 31 2014 the group's net debt to adjusted EBITDA covenant was 0.24 times and the committed undrawn facility available to the group was £53.8 million.

The group's forecasts and projections, looking out to September 2016 and taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level and covenants of its current and available borrowing facilities.

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing this Condensed Consolidated Interim Financial Report.

Principal Risks and Uncertainties

The principal risks and uncertainties that affect the group are described in detail on pages 22 to 28 of the 2013 annual report available at www.euromoneyplc.com. In summary, they include: 

- Downturn in economy or market sector;

- Travel risk;

- Compliance with laws and regulations;

- Data integrity, availability and cyber security;

- London, New York, Montreal or Hong Kong wide disaster;

- Published content risk;

- Incorrect circulation or audience claims;

- Loss of key staff;

- Failure of central back-office technology;

- Acquisition and disposal risk;

- Failure of online strategy;

- Treasury operations;

- Unforeseen tax liabilities.

These are still considered to be the most relevant risks and uncertainties at this time. A number of these risks and uncertainties could have an impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ from expected and historical results. Where a risk that was disclosed in the annual report is unchanged, or is not expected to have a specific impact in the remaining period, further disclosure in this report is considered unnecessary.

2 Segmental analysis

Segmental information is presented in respect of the group's business divisions and reflects the group's management and internal reporting structure. The group is organised into five business divisions: Financial publishing; Business publishing; Training; Conferences and seminars; and Research and data. Financial publishing and Business publishing consist primarily of advertising and subscription revenue. The Training division consists primarily of delegate revenue. Conferences and seminars consist of both sponsorship income and delegate revenue. Research and data consists of subscription revenue. A breakdown of the group's revenue by type is set out below.

Analysis of the group's three main geographical areas is also set out to provide additional information on the trading performance of the businesses.

Inter-segment sales are charged at prevailing market rates and shown in the eliminations columns below.