27th Jul 2007 07:00
Interim results for the six months ended 30 June 2007
FIRST HALF EPS OF 25.6P ON TARGET; IN LINE FOR FULL YEAR
Strong profit performance by PR Newswire and events offset by biennial effect, adverse exchange rate movements and investment in new geographies & product development H1 2007 HEADLINE RESULTS Continuing revenue Up 5.2% to ‚£403.5m (‚£383.6m) Up 11.0% in constant currency Adjusted continuing group operating profit* Down 1.6% to ‚£81.0m (‚£82.3m) Up 4.0% in constant currency Fully diluted EPS (adjusted)** Up 10.3% to 25.6p (23.2p) Dividend per share Up 10.0% to 4.84p (4.4p)
Adjusted EPS growth of over 10%, equating to 16% in constant currency terms
PR Newswire operating profits up by 14.7%
Events underlying revenue up by 13.2%¢â‚¬
US$ decline against Sterling reduced revenue by ‚£20.0m and profits by ‚£4.4m
Increased investment reduced profits by ‚£3m
Biennial events phasing between H1 and H2 reduced profits by ‚£3m
‚£69.0m invested in twelve acquisitions in the year to date
Net debt of ‚£79.3m at 30 June; capital structure review in H2
* Adjusted continuing group operating profit is group operating profit beforeamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates.
** Adjusted EPS is before amortisation of intangible assets arising on acquisitions, exceptional items, deferred tax on intangible assets and net finance costs other than interest
¢â‚¬ Underlying: adjusted for the effects of acquisitions, discontinued businesses and products, foreign exchange and biennial events
STATUTORY RESULTS Revenue ‚£403.5m (‚£383.6m) Group operating profit ‚£60.4m (‚£74.8m) Profit before tax ‚£65.0m (‚£64.0m) EPS (diluted) 18.8p (19.7p)
David Levin, Chief Executive of United Business Media plc said:
"United Business Media has achieved satisfactory results for the first half of2007 despite a mixed performance across the business. We have delivered fullydiluted adjusted EPS growth in excess of 10%, equating to 16% in constantcurrency terms. PR Newswire continues to perform well, as does our events portfolio. In thefirst half of the year PR Newswire achieved underlying¢â‚¬ profits growth of 15%and our events portfolio returned double digit revenue growth. We anticipatethat these businesses will contribute around 70% of our profits in the currentyear. During the first half of the year our online revenues grew 10% and CMPTechnology made further progress in improving its online profitability, withprofit margins continuing to expand.These strong performances have been offset by a number of factors which reducedoperating profit in the first half by more than ‚£10m. The 18 cent decline inthe US dollar against Sterling from $1.79 in H1 2006 to $1.97 in H1 2007together with other currency movements had a significant impact on our firsthalf results, reducing revenues by ‚£20.0m and operating profit by ‚£4.4m. Inconstant currency terms, continuing revenues rose by 11.0%, adjusted groupoperating profit grew by 4.0% and adjusted profit before tax grew by 3.1%. Because of the timing of our biennial events in 2007 compared to 2006, our fullyear earnings will be weighted towards the second half of 2007. The biennialeffect reduced our first half operating profit by ‚£3m in comparison with 2006and is anticipated to increase operating profit in the second half by the sameamount.
Through the first half of the year we continued to invest in new product development and in building our businesses in new geographies. This investment had the effect of reducing operating profits by approximately ‚£3m.
During the first half of 2007 a number of our print titles have continued toexperience difficult trading environments. We continue to take decisive actionto reshape our businesses to enable them to better meet changing customerrequirements, to position them in growth markets and to improve theirprofitability. The most significant actions taken during the first half werethe restructuring of CMP Technology and the initiation of a similar process atCMPMedica. The reorganisation of CMP Technology's business and therationalisation of its print portfolio have progressed well and are nowsubstantially complete. CMPMedica has made good initial progress inrebalancing and reorganising its business although the process is approximatelyeighteen months behind that at CMP Technology.In the year to date we have invested a total of ‚£69m in twelve acquisitions,predominantly of 'bolt-on' businesses that are complementary to existing UBMbusinesses. Our acquisitions continue to deliver results ahead of UBM's 8%post tax cost of capital.
The Board has declared an interim dividend of 4.84p, a 10% increase on the interim dividend of 2006.
OutlookWe remain on track to achieve full year adjusted earnings per share growth inline with expectations. Bookings for our major events in the second half ofthe year are in line with plan and we continue to anticipate full yearunderlying¢â‚¬ revenue growth of more than 5%. The balance sheet remains strong with substantial capital available foracquisitions and for capital returns. The availability of potentialacquisitions is increasing although pricing variability is high. In March ofthis year we returned ‚£200m of capital to shareholders by way of a specialdividend, taking the total capital returned to shareholders to ‚£360m, well inexcess of the ‚£300m figure originally announced in February 2006. We havestated our intention to move to a more leveraged balance sheet and we willreview our capital structure during the second half of the year."
¢â‚¬ Underlying: adjusted for the effects of acquisitions, discontinued businesses and products, foreign exchange and biennial events.
CONTACTSMedia 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/Investors Email [email protected] Direct telephone +44 20 7921 5095 Nigel Wilson +44 20 7921 5019 Andrew Crow +44 20 7921 5940 NOTES TO EDITORS
About United Business Media plc
United Business Media plc is a leading global business media company. Weinform markets and bring the world's buyers and sellers together at events,online, in print, and with the information they need to do businesssuccessfully. We focus on serving professional commercial communities, fromdoctors to game developers, from journalists to jewellery dealers, from farmersto pharmacists around the world. Our 5,000 staff in more than 30 countries areorganised into specialist teams that serve these communities, helping them todo business and their markets to work effectively and efficiently.
For more information, go to www.unitedbusinessmedia.com
SUMMARY GROUP INCOME STATEMENT
The 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. Period Ended 30 June 2007 2006 ‚£m ‚£m % Revenue 403.5 383.6 5.2
Adjusted continuing group operating profit* 81.0 82.3 (1.6)
Discontinued operating profit - 0.8 Net interest income 2.5 5.4
Other financing income - pension schemes 2.4 -
Adjusted profit before tax** 85.9 88.5 (2.9)
Net financing cost - other than interest (0.3) (20.5) Amortisation of intangible assets (9.0) (7.2)
Exceptional items (11.6) 13.3 Profit before tax 65.0 74.1 Taxation (12.0) (15.7) Profit after tax 53.0 58.4 Minority interest (2.4) (2.3)
Retained profit for the period 50.6 56.1
Proposed dividend (pence) 4.84 4.40 Adjusted EPS ** (pence) 26.2 24.5 6.9
Fully diluted adjusted EPS (pence)** 25.6 23.2 10.3 * Adjusted continuing group operating profit is group operating profit beforeamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates. ** Adjusted profit before tax and earnings per share is before amortisation ofintangible assets arising on acquisitions, exceptional items, deferred tax onintangible assets and net finance costs other than interest. SUMMARY OF INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Revenue Adjusted Operating Profit1 Six months to 30 June Six months to 30 June 2007 2006 Change Underlying2 2007 2006 Change Underlying2 ‚£m ‚£m (%) (%) ‚£m ‚£m (%) (%) PR Newswire 69.8 69.1 1.0 3.1 23.6 20.6 14.7 15.2 CMP Asia 26.9 27.2 (1.1) 8.4 6.4 7.2 (10.3) (5.5) CMP Information 94.1 92.2 2.1 6.6 19.1 22.3 (14.3) (8.3) CMP Technology 92.1 102.6 (10.2) (0.4) 17.2 17.3 (0.8) 7.7 CMPMedica 86.0 92.5 (7.0) (3.1) 12.0 14.9 (19.7) (15.4) Commonwealth 28.8 - - - 2.7 - - - 397.7 383.6 3.7 2.0 81.0 82.3 (1.6) (0.3) Corporate3 5.8 - - - - - - - 403.5 383.6 5.2 2.0 81.0 82.3 (1.6) (0.3)
(1) Adjusted Operating Profit: before amortisation of intangible assets arising on acquisitions, exceptional items, share of taxation on profit from joint ventures and associates.
(2) Underlying: adjusted for the effects of acquisitions, discontinued businesses and products, foreign exchange and biennial events.
(3) Corporate operations comprise net central operating costs, together withthose operations and equity accounted investments which do not form part of oneof the group's operating divisions.
Revenue from 2006 and 2007 acquisitions was ‚£62.1m (H1 2006 - ‚£19.7m) and underlying revenue was up 2.0% - after adjusting for the effects of acquisitions, discontinued businesses and products, biennials and foreign exchange. Operating profit from acquisitions was ‚£13.2m (H1 2006 - ‚£7.1m).
The movement in the US dollar and the Euro has a direct translation impact -with approximately two thirds of UBM's revenue reported locally in US dollarsor Euros, the impact of foreign exchange movements was to decrease UBM'srevenue in H1 2006 by ‚£20.0m. The average rate of ‚£:$ exchange for the firsthalf was $1.97 (2006 H1 - $1.79), together with the effects of other currencymovements, this reduced operating profit by ‚£4.4m. A 1 cent movement in the USdollar against Sterling is approximately equivalent to a move in profit ofaround ‚£400,000 to ‚£500,000 over the full year. DIVISIONAL COMMENTARYPR NewswirePR Newswire delivered another strong profit performance in the first half of2007. Underlying operating profit rose by 15.2% and underlying revenues grewby 3.1%. As a result the business's operating margin grew from 29.8% to33.9%. The US business continued to see strong growth in yield as demand forhigher value products grew, with good growth in non-wire products, particularlyMultiVu which grew 17.6%. PR Newswire operations in the Rest of the World alsoregistered good underlying revenue and operating profit growth at 12.9% and15.9% respectively. PR Newswire's acquisitions - Vintage Filings and USNewswire - each performed ahead of its respective acquisition business case. PR Newswire continues to drive its expansion outside its core US markets. Revenues and profits from PR Newswire's business in China more than doubled inthe first half. We have today also announced the acquisition of Notilog, aleading central and South American news monitoring business. The profit trendshighlighted in the first half of the year are anticipated to continue throughthe remainder of the year. CMP Asia
CMP Asia reported another good performance with underlying revenue growing8.4%, driven by successful events in mainland China and Hong Kong as well as byimproved contribution from events launched since 2004. Revenues generated inChina grew by more than 20% in the first half. However underlying profits fellby 5.5%, principally as a result of investment in new product development andin building CMP Asia's business in new geographies such as India, Macau and itsfurther expansion in China. During the half we completed the acquisition ofthe Guangzhou Beauty Fair to further bolster our position in this attractivesector and geography. Bookings for CMP Asia's key second half shows,including the Hong Kong Jewellery & Watch Fair, Marintec and Cosmoprof Asia areall strong and in line with plan.
CMP Information
CMP Information's ("CMPi") first half revenues grew by 6.6% on an underlyingbasis, reflecting strong performances by the business's events and its keyprint titles. However underlying profit in the half fell 8.3%, primarilybecause of an additional investment of ‚£2m in new product development. Thephasing of CMPi's biennial events also had a negative impact on H1 profits of ‚£2m: this impact will be reversed in the second half of the year. In theimportant Built Environment market, Property Week and Building Design grew by16% and 10% year on year respectively, data business ABI grew its revenues by11% and the Sheds show (launched in 2006) grew by 68%. Launches of further newshows are planned for the second half and for 2008. CMPi won a total of fiveawards at this year's Professional Publishers' Association Magazine Awards,including those for the top weekly, monthly and online titles. CMPi augmented its events portfolio during the first half with the acquisitionof Quest Media and will expand its conference business in the second half ofthe year. CMPi has continued to further internationalise its business,building a presence in Abu Dhabi, launching the Food Ingredients South Americaevent in Sao Paulo in June, and with the signing in July 2007 of an agreementto acquire Intermodal South America, the region's leading logistics andtransportation tradeshow held annually in Brazil. Bookings for CMPi's secondhalf events - including CPhI Worldwide in Milan and Food Ingredients in London- are showing growth in line with plan.
CMP Technology
CMP Technology continues to reshape both its product portfolio and itsorganisational structure to meet the changing needs of its audiences and itscustomers, and to position the business to take advantage of growthopportunities in events, online and data markets. The restructuring announcedin June is the next step in CMP Technology's longer term development andfollows the investment of almost $150m over the course of more than two yearsin acquiring online and events businesses to rebalance CMP Technology's productportfolio. CMP Technology has closed certain titles and merged a number ofother titles to focus its print portfolio on its principal market-leadingbrands and is now structured to ensure that the business operates in a fullyintegrated manner across all its media. The restructuring program is nowlargely complete and is expected to reduce CMP Technology's annual revenues byaround $15m, with headcount falling by more than 200 and annual salary costs bymore than $20m. After several years of decline, CMP Technology's overall revenues for the firsthalf were flat. The 15% underlying decline in the business's print revenueswas offset by underlying growth in online and event revenues of 9% and 11%respectively, with excellent revenue growth at Interop Las Vegas and GameDeveloper Conference. As a result CMP Technology grew overall profits by 7.7%on an underlying basis, with margins improving from 16.9% to 18.6%. CMPTechnology also made further progress in improving the profitability of itsonline activities. Today we have announced the acquisition of SemiconductorInsights Inc, a leading provider of workflow products and analysis for thesemiconductor and electronics industries. The key second half events,including Web 2.0 Summit, Interop New York and Black Hat are in line withplan. CMP Technology anticipates that the financial benefits of itsrestructuring will improve its results in the second half.
CMPMedica
Our key drug information businesses, in particular Vidal France and MIMS Asia/Pacific, continue to grow. However disappointing results in our US ContinuingMedical Education business and at some of our print titles, coupled with anincrease in investment in new product development combined to reduceCMPMedica's revenues and operating profit on an underlying basis by 3.1% and15.4% respectively. There was also a negative biennial effect on profits of ‚£1m. The process of rebalancing CMPMedica's media mix and reorganising itsbusiness is under way, with significant cost restructuring in progress atCMPMedica's US, UK and Belgian businesses. In April we acquired the US-basedPhysicians Practice business for $18m and in July we signed an agreement toacquire the Australian Prescription Products Guide, a key drug informationbrand for the Australian pharmacy market, for ‚£0.4m. Bookings for CMPMedica'skey second half event, the US Psychiatric and Mental Health Congress, are inline with plan. CMPMedica's H2 profitability is anticipated to be marginallyahead of the equivalent period in 2006.
Commonwealth
Following its acquisition in July 2006, Commonwealth has grown its businesssubstantially with the acquisition in December 2006 of OAG Holdings Ltd andAviation Industry Group Ltd. The integration of these businesses intoCommonwealth is progressing to plan; OAG is anticipated to be profitable in thesecond half. Revenues and operating profit for the first half were ‚£28.8m and‚£2.7m respectively. Commonwealth has seen revenue growth of around 28% fromits (relatively small) events business and 12% revenue growth from its dataproduct business. We anticipate that Commonwealth will continue its goodgrowth through the second half of the year, taking full year revenue to morethan the $110m previously indicated.
CORPORATE OPERATIONS
Corporate operations includes the results of operations and equity investmentsthat do not fall under the other divisions, together with central expenses netof central profits. Revenue in H1 2007 of ‚£5.8m represents revenue of RISI, apaper and pulp data business in which we took a controlling interest inJanuary. DIVIDENDAn interim dividend of 4.84p (2006 - 4.4p) per share will be paid - an increaseof 10 per cent. The interim dividend on the ordinary shares will be paid on18 October 2007 to shareholders on the register on 31 August 2007.
CASH AND CASH CONVERSION
Our balance sheet remains strong with net debt at the end of June of ‚£(79.3)m. Continuing operating cash conversion was 80.8%. (H1 2006 - 82.1%)
PENSIONS
At 30 June 2007, under IAS 19, our pension surplus of ‚£31.8m represents an improvement of ‚£38.7m from a deficit of ‚£6.9m at 31 December 2006. This reflects an increase in bond yields together with asset returns. On a funding basis the schemes show an estimated aggregate surplus of ‚£50m.
TAX
The effective tax rate in the first half of 2007 was 17%. As disclosed in our2006 results, UBM is in dispute with HMRC with regards to a technical matterarising in relation to the sale of our Regional Newspapers business in 1998.The tax in dispute is estimated at ‚£80m. The hearing with the Court of Appealis expected to take place in November 2007. We do not expect the matter to beresolved until 2008 at the earliest.
INTEREST AND FINANCING
Net interest income for the six months was ‚£2.5m (2006 - ‚£5.4m). In H1 2006the net financing cost other than interest of ‚£20.5m reflected the movement infair value of the option element of the convertible bond which was repurchasedor converted in H1 2006. Other financing income relating to the pensionschemes of ‚£2.4m represent the financing credit on the pensions surpluscalculated in accordance with IAS 19.
RETURN OF CAPITAL
In March we returned ‚£200m by way of a special dividend. Since February 2006we have returned a capital totalling ‚£360m to shareholders, well in excess ofour original ‚£300m guidance. We have stated our intention to move to a moreleveraged balance sheet and will review our capital structure in the second
half. EXCEPTIONAL ITEMS
In June 2007 CMP Technology announced a restructuring program to align itsproduct portfolio and organisational structure to the changing needs of itscustomers, and to better position the business to take advantage of growthopportunities in events, online and data. This involved the closure andmerging of some print titles and a headcount reduction of over 200 people. Anexceptional restructuring charge of ‚£6.2m relates primarily to redundancy andvacant property and relocation costs. The redundancy and relocation costs willbe substantially incurred by 31 December 2007. The amount relating to vacantproperty will be incurred over the remainder of the lease terms. Following the acquisition of the Official Airlines Guide (OAG) in December2006, UBM announced that integration and restructuring costs of ‚£5 to ‚£8m wouldbe incurred during 2007. During the first half of the year an exceptionalexpense of ‚£5.4m arising from redundancy and vacant property costs has beenincurred. Further costs are expected to be incurred in the period to 31December 2007. ACQUISITIONSIn the year to date we have invested ‚£69m in twelve acquisitions. Seven ofthese acquisitions for a total investment of ‚£44m were completed prior to 30June 2007 and relevant periods post-acquisition have been consolidated in UBM'sresults for that period. The remaining acquisitions were undertaken in July2007 and have been disclosed as post balance sheet events, see note 16 in thefollowing accounts. Consolidated income statement
for the six months ended 30 June
Before As restated As restated As Exceptional Exceptional Before Exceptional restated items items Total exceptional items Total 30 June 30 June 30 June items 30 June 30 JuneSix months ended 2007 2007 2007 30 June 2006 2006 2006 Notes ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Continuing operations Revenue 3 403.5 - 403.5 383.6 - 383.6 Other operating income 2.6 - 2.6 5.0 - 5.0 Operating expenses (334.8) - (334.8) (315.5) - (315.5) Exceptional reorganisation and restructuring costs 4 - (11.6) (11.6) - - - Share of profit in joint ventures and associates (after tax) 3 0.7 - 0.7 1.7 - 1.7 Group operating profit 72.0 (11.6) 60.4 74.8 - 74.8 Exceptional items Profit on disposal of property, plant and equipment 4 - - - - 4.3 4.3 Earnings before interest and taxes ("EBIT") 72.0 (11.6) 60.4 74.8 4.3 79.1 Finance income/ (cost) Interest income 5 5.0 - 5.0 8.5 - 8.5 Interest cost 5 (2.5) - (2.5) (3.1) - (3.1) Financing income 5 - other than interest - - - 1.0 0.4 1.4 Financing cost - 5 other than interest (0.3) - (0.3) (1.2) (20.7) (21.9) Financing income 5 - pension schemes 2.4 - 2.4 - - - Profit before tax 76.6 (11.6) 65.0 80.0 (16.0) 64.0 Taxation on UK earnings (6.7) - (6.7) (7.9) - (7.9) Overseas taxation (5.3) - (5.3) (7.3) - (7.3) Profit for the period from continuing operations 64.6 (11.6) 53.0 64.8 (16.0) 48.8 Discontinued operations Profit for the period from discontinued operations (after tax) 11 - - - - 9.6 9.6 Profit for the period 64.6 (11.6) 53.0 64.8 (6.4) 58.4 Attributable to: Equity 50.4 55.9 shareholders - ordinary shares Equity 0.2 0.2 shareholders - B shares Minority 2.4 2.3 interests 53.0 58.4 Earnings per share - from continuing operations Basic 6 19.3p 16.6p Diluted 6 18.8p 16.3p Earnings per share - from
continuing and discontinued
operations Basic 6 19.3p 20.0p Diluted 6 18.8p 19.7p ‚£m ‚£m Adjusted group 81.0 83.1 operating profit* 3
Amortisation of intangible assets (9.0)
(7.2) arising on acquisitions
Exceptional reorganisation and
restructuring costs (11.6) -
Share of taxation on profit in joint ventures and associates -
(0.3)
Operating profit from discontinued
operations (before tax) - (0.8) Group operating profit from continuing operations 3 60.4 74.8 ‚£m ‚£m Dividends 7 - Special 200.3 - dividend of 72.0p - Final dividend of 13.6p (2006: 11.0p) 34.1 31.9 - Proposed interim dividend of 4.84p (2006: 12.1
12.3 4.4p) *Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional items,share of taxation on profit in joint ventures and associates, and includingoperating profit from discontinued operations.
Consolidated income statement
for the year ended 31 December
Before Exceptional Exceptional items items Total 31 December 31 December 31 DecemberYear ended 2006 2006 2006 Notes ‚£m ‚£m ‚£m Continuing operations Revenue 3 739.1 - 739.1 Other operating income 12.5 - 12.5 Operating expenses (622.0) - (622.0)
Exceptional reorganisation and - (14.9)
(14.9) restructuring costs 4
Share of profit in joint ventures and 3.7 -
3.7 associates (after tax) 3 Income from investments - - - Group operating profit 133.3 (14.9) 118.4 Exceptional items
Profit on disposal of property, plant
and equipment 4 - 4.3 4.3 - 4.3 4.3
Earnings before interest and taxes 133.3 (10.6)
122.7 ("EBIT") Finance income/(cost) Interest income 5 14.9 - 14.9 Interest cost 5 (6.6) - (6.6)
Financing income - other than interest 5 1.0 0.4
1.4
Financing cost - other than interest 5 (0.7) (20.7) (21.4)
Financing income - pension schemes 5 2.5 -
2.5 Profit before tax 144.4 (30.9) 113.5 Taxation on UK earnings (18.7) 35.9 17.2 Overseas taxation (5.3) - (5.3)
Profit for the year from continuing 120.4 5.0
125.4 operations Discontinued operations
Profit for the year from discontinued - 21.0
21.0 operations (after tax) 11 Profit for the year 120.4 26.0 146.4 Attributable to:
Equity shareholders - ordinary shares
141.5
Equity shareholders - B shares
0.4 Minority interests 4.5 146.4
Earnings per share - from continuing
operations Basic 6 43.2p Diluted 6 42.4p
Earnings per share - from continuing and
discontinued operations Basic 6 50.7p Diluted 6 49.8p ‚£m Adjusted group operating profit* 3
149.7
Amortisation of intangible assets (15.0) arising on acquisitions Exceptional reorganisation and (14.9) restructuring costs Share of taxation on profit in joint (0.7) ventures and associates Operating profit from discontinued (0.7) operations (before tax) Group operating profit from continuing 118.4 operations 3 ‚£m Dividends 7 - Interim dividend of 4.4p 12.3 - Proposed special dividend of 72.0p 200.3 - Proposed year end dividend of 13.6p 34.1 *Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional items,share of taxation on profit in joint ventures and associates, and includingoperating profit from discontinued operations Consolidated balance sheet As restated 31 December 30 June 30 June 2006 2007 2006 ‚£m Notes ‚£m ‚£m Assets Non-current assets Goodwill 721.6 610.9 692.6 Intangible assets 109.5 85.9 106.5
Property, plant and equipment 26.4 27.2
30.2
Investments in joint ventures and associates 23.4 22.1
23.9 Retirement benefit surplus 31.8 - - Other investments 2.7 2.8 2.7 915.4 748.9 855.9 Current assets Inventories 5.4 7.8 6.7 Trade and other receivables 182.8 215.0 171.9 Derivative financial assets 5.3 6.2 5.8 Cash and cash equivalents 110.0 346.1 316.2 303.5 575.1 500.6
Assets classified as held for sale - -
3.4 Total assets 1,218.9 1,324.0 1,359.9 Liabilities Current liabilities Trade and other payables 549.0 570.2 537.5 Borrowings 12 191.8 153.2 188.0
Derivative financial liabilities - -
0.2 Provisions 27.7 23.5 24.8 768.5 746.9 750.5 Non-current liabilities Borrowings 12 2.8 3.1 2.9
Derivative financial liabilities - 0.4
- Retirement benefit obligation - 25.3 6.9 Trade and other payables 3.6 4.9 4.0 Provisions 25.9 24.7 28.5 Deferred tax liabilities 36.9 22.1 29.4 69.2 80.5 71.7 Total liabilities 837.7 827.4 822.2 Shareholders' equity Share capital 8 86.2 86.3 85.9 Share premium 360.6 349.9 354.6 Other reserves 9 200.2 232.4 205.8 Retained earnings 9 (270.9) (176.2) (113.4) Total shareholders' equity 376.1 492.4 532.9 Minority interest in equity 5.1 4.2 4.8 Total equity 381.2 496.6 537.7 Total equity and liabilities 1,218.9 1,324.0 1,359.9
Consolidated cash flow statement
Six Six Year months months ended 31 ended 30 ended 30 December June June 2006 2007 2006 ‚£m ‚£m ‚£m
Cash flows from operating activities Reconciliation of profit to operating cash flows Profit for the period 53.0 58.4 146.4 Add back: Taxation 12.0 15.4 (11.0) Depreciation 5.0 3.9 8.6 Amortisation 9.0 7.2 15.0 Interest income (5.0) (8.5) (14.9) Interest expense 2.5 3.1 6.6 Financing income - pension schemes (2.4) - (2.5) Net financing costs - other than interest 0.3 20.5 20.0 Share in profits from associates and joint ventures (0.7) (1.7) (4.4) Profit on disposals - (13.3) (24.8) Exceptional reorganisation and restructuring 11.6 - 14.9charges Other non-cash items 3.8 3.5 5.7 89.1 88.5 159.6
Payments against provisions (11.2) (20.2) (27.9) Additional pension contributions - (6.1)
(7.3)
Decrease/(increase) in inventories 1.3 1.3
(0.7)
(Increase)/decrease in trade and other receivables (6.5) (41.4)
0.9
(Decrease)/increase in trade and other payables (17.6) 17.7
(32.0)
Cash generated from operations 55.1 39.8
92.6 Interest received 5.5 8.3 15.1 Interest paid (1.8) (9.5) (4.9) Taxation received/(paid) 1.2 (3.0) (6.2)
Dividend received from joint ventures and associates 0.2 0.7
5.1
Net cash flows from operating activities 60.2 36.3
101.7
Cash flows from investing activities Acquisition of interests in subsidiaries, net of cash
acquired (38.7) (51.6) (155.8)
Cash acquired with entity previously equity accounted 1.6 -
-
Sale of discontinued operations 7 - 16.7
44.4
Purchase of property, plant and equipment (5.2) (5.2)
(13.1)
Proceeds from the sale of property, plant and
equipment 6.7 15.8 16.9
Purchase of interests in joint ventures and
associates (2.5) - (4.1)
Purchase of other investments - (0.6)
(0.6)
Proceeds from sale of investments - -
0.3
Net cash flows from investing activities (38.1) (24.9)
(112.0)
Cash flows from financing activities
Proceeds from the issuance of ordinary share capital 6.4 23.9
29.1
Return of capital to shareholders (including costs) (1.8) (74.5)
(95.4)
Dividends paid to shareholders (234.7) (32.2)
(44.6)
Dividends paid to minority interests (1.3) (0.8)
(4.5)
Investment in own shares - ESOP - (11.0)
(13.9) Increase in borrowings 7.7 - 45.8 Repurchase of bonds - (68.1) (68.1)
Net cash flows from financing activities (223.7) (162.7)
(151.6)
Net decrease in cash and cash equivalents (201.6) (151.3)
(161.9)
Net foreign exchange difference (1.5) 0.7
(7.9)
Cash and cash equivalents at beginning of period 312.8 482.6
482.6
Cash and cash equivalents at end of period 109.7 332.0
312.8 Cash at bank and in hand 86.5 313.7
56.3
Short-term liquid funds 23.5 32.4 259.9 Bank overdrafts (0.3) (14.1) (3.4) Cash and cash equivalents at end of period 109.7 332.0 312.8
Consolidated statement of recognised income and expense
for the six months ended 30 June
Six Six Year months months ended ended 30 ended 30 31 June June December 2007 2006 2006 Notes ‚£m ‚£m ‚£m Profit for the period 53.0 58.4 146.4
Currency translation differences on foreign
operations: Group (7.5) (12.3) (38.1) Associates and Joint ventures (0.1) (0.5) (0.7) Minority interests 0.2 (0.2) (0.5)
Actuarial gain recognised in the pension 36.2 19.2
32.5schemes
Deferred tax recognised on the pension surplus (9.7) -
-
Other recognised gains/(losses) for the year 19.1 6.2
(6.8) Total recognised income 9 72.1 64.6 139.6 Attributable to:
Equity shareholders - ordinary shares 69.3 62.3
135.2
Equity shareholders - B shares 0.2 0.2
0.4 Minority interests 2.6 2.1 4.0 72.1 64.6 139.6
Notes to the interim financial report
for the six months ended 30 June 2007
1. General information
The information for the year ended 31 December 2006 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 in accordance with section235 of the companies Act 1985 was unqualified and did not contain an emphasisof matter reference nor a statement under section 237 (2) or (3) of theCompanies Act 1985.
The interim financial information was approved by a duly appointed and authorised committee of the board of directors on 27 July 2007.
The interim financial information is unaudited but has been reviewed by the auditors as set out in their report.
The comparative information for 30 June 2006 has been restated as follows:
The results of operations discontinued in the second half of 2006 have been reclassified in accordance with accounting standards (see note 11).
The comparative information for 31 December 2006 has been restated as follows:
Acquisition accounting adjustments have been finalised in relation to certainacquisitions which were made in 2006.The comparative information has beenrestated in accordance with IFRS 3 'Business Combinations'. The impact of thisrestatement is to increase goodwill, intangible assets, provisions and deferredtax liabilities by ‚£1.1 million, ‚£0.7 million, ‚£1.1 million and ‚£0.5 millionrespectively with a corresponding reduction to trade and other receivables
of ‚£0.2 million.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 2006, except for the adoption of the following amendments which areeither mandatory for annual periods beginning on or after 1 January 2007 orhave been adopted early from 1 January 2007:
The following IFRS and IFRIC interpretations have been adopted but do not relate to the group's operations, as such have no impact on the group's interim results of operations or financial position:
IFRS 7 - Financial Instruments: Disclosures - which requires disclosures thatenable users to evaluate the significance of the group's financial instrumentsand extent of risks arising from those financial instruments;IFRIC 7 - Applying the Restatement Approach under IAS Financial Reporting inHyperinflationary Economies - which requires the application of IAS 29 in thereporting period in which an entity first identifies the existence ofhyperinflation in the economy of its functional currency as if the economy hadalways been hyperinflationary;IFRIC 9 - Re-assessment of embedded derivatives - which establishes that theexistence of an embedded derivative should be determined at the date an entityfirst becomes party to the contract, with reassessment only if there is achange to the contract that significantly modifies the cash flows;IFRIC 10 - Interim Financial Reporting and Impairment - which requires that anyimpairment loss recognised for goodwill or equity instrument classified as heldfor sale in an interim period may not be reversed in subsequent interimperiods;
IFRIC 12 - Service Concession Arrangements - which outlines an approach to account for contractual arrangements arising from entities providing public services.
The following IFRIC interpretations relate to the group's operations, however have no impact on the group's interim results of operations or financial position:
IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions - which requiresarrangements whereby an employee is granted rights to an entity's equityinstruments to be accounted for as an equity-settled scheme by the entity evenif the entity chooses or is required to buy those equity instruments fromanother party or the shareholders of the entity provide the equity instrumentsneeded;
IFRIC 13 - Customer Loyalty Programmes - which sets out accounting by entities granting award credits to its customers;
IFRIC 14 - The Limit on a Defined Benefit Asset, Minimum Funding Requirementsand their Interaction - which sets out when refunds or reductions in futurecontributions should be regarded as available in accordance with IAS 19,'Employee Benefits', how a minimum funding requirement might affect theavailability of reductions in future contributions and when a minimum fundingrequirement might give rise to a liability. 3. Business segmentsAt 30 June 2007, the group is organised into six main business segments - NewsDistribution, CMP Asia, CMP Information, CMP Technology, CMPMedica andCommonwealth Business Media (acquired 19 July 2006). These segments are thebasis on which the group reports its primary segment information.The News Distribution segment operates in the distribution, targeting andevaluation of company information. The main activities of CMP Asia, CMPInformation, CMP Technology, CMPMedica and Commonwealth Business Media are theproduction of magazines, trade press, business information, directories, eventsand websites.During 2006, UBM disposed of a number of its UK classified titles within CMPInformation and its US entertainment titles within CMP Technology. These titlesare included in discontinued operations (refer to note 11).
The following tables set out the revenue and profit information for the group's business segments.
Six months ended 30 June 2007
Profit / Share of Revenue Revenue (loss)results from from from from equity external other Total operating accounted Segment customers segments revenue activities investments result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News distribution 69.8 - 69.8 23.1 0.2 23.3 CMP Asia 26.9 0.1 27.0 6.3 - 6.3 CMP Information 94.1 - 94.1 17.7 - 17.7 CMP Technology 92.1 - 92.1 9.2 0.6 9.8 CMPMedica 86.0 - 86.0 7.6 - 7.6 Commonwealth - - (4.3)Business Media 28.8 28.8 (4.3) Corporate - (0.1) - operations 2 5.8 5.8 0.1 403.5 0.1 403.6 59.7 0.7 60.4 Share of Exceptional tax Items Adjusted on profit charged group from equity to Amortisation operating accounted operating of Segment profit1 investments profit intangibles result ‚£m ‚£m ‚£m ‚£m ‚£m Segments
Continuing operations
News distribution 23.6 - - (0.3) 23.3 CMP Asia 6.4 - - (0.1) 6.3 CMP Information 19.1 - - (1.4) 17.7 CMP Technology 17.2 - (6.2) (1.2) 9.8 CMPMedica 12.0 - - (4.4) 7.6
Commonwealth Business Media 2.7 - (5.4) (1.6)
(4.3) Corporate operations 2 - - - - - 81.0 - (11.6) (9.0) 60.4 1 Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional items,share of taxation on profit in joint ventures and associates, and adjusted foroperating profit from discontinued operations.
2 Corporate operations comprises net central operating costs, together with those operations and equity accounted investments which do not form part of one of the group's operating divisions.
Six months ended 30 June 2006 (as restated)
Share of results Revenue Revenue Profit from from from from equity external other Total Operating accounted Segment customers segments revenue activities investments result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News distribution 69.1 - 69.1 20.3 0.3 20.6 CMP Asia 27.2 - 27.2 6.9 - 6.9 CMP Information 92.2 - 92.2 21.0 - 21.0 CMP Technology 102.6 - 102.6 15.1 0.9 16.0 CMPMedica 92.5 - 92.5 10.6 - 10.6 Commonwealth Business - - - - -Media - Corporate operations 2 - - - (0.8) 0.5 (0.3) 383.6 - 383.6 73.1 1.7 74.8 Exceptional items 3 - - - - - 4.3 - - - - - 79.1 Discontinued operations 4 CMP Information 5.1 - 5.1 0.8 - 0.8 CMP Technology 10.7 - 10.7 - - - 399.4 - 399.4 73.9 1.7 79.9 Share of tax on profit Exceptional Adjusted from Items Group equity charged to Amortisation operating accounted operating of Segment profit1 investments 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 Commonwealth Business - - - - - Media
Corporate operations 2 - (0.3) - - (0.3) 82.3 (0.3) - (7.2) 74.8 Exceptional items 3 - - - - 4.3 - - - - 79.1 Discontinued operations 4 CMP Information 0.8 - - - 0.8 CMP Technology - - - - - 83.1 (0.3) - (7.2) 79.9 1 Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional items,share of taxation on profit in joint ventures and associates, and adjusted foroperating profit from discontinued operations.
2 Corporate operations comprises net central operating costs, together with those operations and equity accounted investments which do not form part of one of the group's operating divisions.
3 Exceptional items include the profit on sale of property.
4 The results of discontinued operations have been reclassified in accordance with accounting standards (see note 11).
For the year ended 31 December 2006
Profit/ Share of Revenue Revenue (loss) results from from From from equity external other Total Operating accounted Segment customers segments revenue activities investments result ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continuing operations News distribution 129.9 - 129.9 41.2 0.6 41.8 CMP Asia 66.8 - 66.8 18.2 - 18.2 CMP Information 169.8 - 169.8 38.3 - 38.3 CMP Technology 186.2 - 186.2 3.7 1.6 5.3 CMPMedica 169.5 - 169.5 14.1 - 14.1 Commonwealth Business - - 2.2 Media 16.9 16.9 2.2 Corporate operations 2 - - - (3.0) 1.5 (1.5) 739.1 - 739.1 114.7 3.7 118.4 Exceptional items 3 - - - - - 4.3 - - - - - 122.7 Discontinued operations (see note 11) CMP Technology 14.7 - 14.7 - - - CMP Information 5.1 - 5.1 0.7 - 0.7 19.8 - 19.8 0.7 - 0.7 758.9 - 758.9 115.4 3.7 123.4 Share of tax Exceptional Adjusted on profit Items Group from equity charged to Amortisation Operating accounted operating of Segment profit1 investments profit intangibles result ‚£m ‚£m ‚£m ‚£m ‚£m Segments Continued operations News distribution 41.9 - - (0.1) 41.8 CMP Asia 18.5 - - (0.3) 18.2 CMP Information 40.8 - - (2.5) 38.3 CMP Technology 22.4 - (14.9) (2.2) 5.3 CMPMedica 22.8 - - (8.7) 14.1
Commonwealth Business Media 3.4 - - (1.2)
2.2 Corporate operations 2 (0.8) (0.7) - - (1.5) 149.0 (0.7) (14.9) (15.0) 118.4 Exceptional items 3 - - - - 4.3 - - - - 122.7 Discontinued operations (see note 11) CMP Technology - - - - - CMP Information 0.7 - - - 0.7 0.7 - - - 0.7 149.7 (0.7) (14.9) (15.0) 123.4 1 Adjusted group operating profit represents group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional items,share of taxation on profit in joint ventures and associates, and adjusted foroperating profit from discontinued operations.
2 Corporate operations comprises net central operating costs, together with those operations and equity accounted investments which do not form part of one of the group's operating divisions.
3 Exceptional items include the profit on sale of property.
4 Exceptional items Six Year Six month months ended ended 30 ended 30 31 June June December 2007 2006 2006 ‚£m ‚£m ‚£m
(Charged)/credited to operating profit
Vacant property costs (3.4) - (13.7) Redundancy (7.8) - (1.2)
Restructuring and business reorganisation costs (0.4) - -
Total charged to operating profit (11.6) - (14.9) Credited to EBIT
Profit on disposal of property, plant and equipment - 4.3 4.3
Total (charged)/credited to EBIT (11.6) 4.3 (10.6) Charged to profit before tax Bond buybacks - (20.3) (20.3) Total (charged)/credited to profit before tax (11.6) (16.0) (30.9)
(Charged)/credited to profit after tax
Exceptional taxation credit - - 35.9 Total (charged)/credited to profit after tax from (11.6) (16.0) 5.0 continuing operations
Credited to discontinued operations (see note 11) Profit on disposal of discontinued operations after - 9.0 20.5 tax Profit from discontinued operations after tax - 0.6 0.5 (Loss)/profit for the year after discontinued (11.6) (6.4) 26.0 operations
Restructuring and business reorganisation costs
In June 2007, CMP Technology announced a restructuring to align its productportfolio and organisational structure to the changing needs of its customers,and to better position the business to take advantage of growth opportunitiesin events, online and data. This involved the closure and merging of someprint titles and a headcount reduction of over 200 people. The exceptional of‚£6.2 million includes ‚£3.3 million relating to redundancy and ‚£2.9 millionrelating to vacant property and relocation costs. The redundancy andrelocation costs will be substantially incurred by 31 December 2007. Theamount relating to vacant property will be incurred over the remainder of thelease terms. In 2006, CMP Technology downsized its existing operations based inLong Island, New York, together with the offshoring of certain functions. Thecosts of ‚£14.9 million represent the expected vacant property costs arising,together with certain related redundancies already incurred. Following the acquisition in December 2006 of the Official Airlines Guide(OAG), the group announced that integration and restructuring costs of ‚£5-8million would be incurred during 2007. An exceptional expense of ‚£5.4 millionhas been incurred during the period comprising ‚£4.5 million of redundancy andrelated costs, with the remainder relating mainly to vacant property. Furthercosts are expected to be incurred in the period to 31 December 2007. Taxation
In 2006, the group resolved a number of outstanding items as a consequence of which there is a net exceptional tax credit of ‚£35.9 million.
Disposals
During the period ended 30 June 2006 UBM announced the sale of a portfolio ofUK consumer titles for an aggregate amount of ‚£16.7 million. A profit of ‚£9.0million arose on the sale of these publications in the period ended 30 June2006, although additional direct costs of the disposal were incurredsubsequently which resulted in a reduced profit of ‚£8.0 million being reportedin the year ended 31 December 2006. In the year ended 31 December 2006 UBM alsoannounced the sale of a portfolio of US entertainment titles for considerationof $51.3 million. A profit of ‚£12.5 million arose on the sale of thesepublications. The results of these publications are disclosed as discontinuedoperations (refer to note 11).
On 10 April 2006 UBM announced the sale of its Culverhouse Cross property for ‚£ 15.8 million. A profit of ‚£4.3 million arose on the sale of this property.
5 Finance income/(cost) 30 June 2007 30 June 2006 Before Before Exceptional Exceptional Exceptional Exceptional items items Total items Items Total 2007 2007 2007 2006 2006 2006 ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m Interest Interest income 5.0 - 5.0 8.5 - 8.5 Interest costs (2.5) - (2.5) (3.1) - (3.1) 2.5 - 2.5 5.4 - 5.4 Financing income - other than interest Net foreign exchange - - - 1.0 - 1.0 gain (a) Buyback of bonds (b) - - - - 0.4 0.4 - - - 1.0 0.4 1.4 Financing cost - other than interest Convertible bond (c) - - - (0.8) - (0.8) Fair value loss on embedded derivative in convertible bond - - - - (20.7) (20.7)(d) Other fair value (0.3) - (0.3) (0.4) - (0.4) adjustments (0.3) - (0.3) (1.2) (20.7) (21.9) Financing income - 2.4 - 2.4 - - - pension schemes Net finance income/ 4.6 - 4.6 5.2 (20.3) (15.1)(cost) 31 December 2006 Before Exceptional Exceptional items items Total 2006 2006 2006 ‚£m ‚£m ‚£m Interest Interest income 14.9 - 14.9 Interest costs (6.6) - (6.6) 8.3 - 8.3
Financing income - other than interest Net foreign exchange gain (a) 1.0 -
1.0 Buyback of bonds (b) - 0.4 0.4 1.0 0.4 1.4
Financing cost - other than interest
Convertible bond (c) (0.7) - (0.7)
Fair value loss on embedded derivative in - (20.7)
(20.7)convertible bond (d) Other fair value adjustments - - - (0.7) (20.7) (21.4)
Financing income - pension schemes 2.5 -
2.5 Net finance income/(cost) 11.1 (20.3) (9.2) (a) Foreign exchange gain in 2006 related to US Dollar
denominated
balances held in UK accounts.
(b) In 2006, UBM repurchased the majority of its US Dollar
convertible bond. This charge reflects the debt settlement gain/(loss), premium paid and fees relating to these repurchases, and unamortised costs being written off.
(c) The convertible bond is separated into fixed rate debt and an
equity derivative. This charge reflects the accretion of the debt to the value at maturity.
(d) Under IAS 32 and IAS 39, UBM's US Dollar convertible bond
contains an embedded derivative (the option to convert USD denominated debt into GBP equity), which is measured at fair value with changes in fair value included in the income statement until conversion or repurchase. The fair value loss in 2006 of ‚£20.7 million reported as exceptional relates to the portion of the bond that was repurchased / converted during the year.
6 Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity shareholders by the weighted 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 deducting/(adding) interest andother expenses relating to the convertible bond) by the weighted average numberof ordinary shares outstanding during the year (adjusted for the effects ofdilutive options and dilutive convertible bond).
The weighted average number of ordinary shares for the period were 261,953,781 (30 June 2006: 278,856,165; 31 December 2006: 278,706,381).
Adjusted earnings per share is calculated on the net profit for the yearattributable to ordinary equity shareholders before amortisation of intangibleassets arising on acquisitions, certain exceptional items, deferred tax onamortisation of intangible assets, taxation relating to exceptional items andnet financing cost - other than interest, divided by the weighted averagenumber of ordinary shares outstanding during the year. Certain exceptionalitems, net financing costs - other than interest, taxation related toexceptional items and deferred tax on amortisation of intangible assets areexcluded from this calculation, as due to their nature and the infrequency ofthe events giving rise to them, separate presentation allows shareholders tounderstand better the elements of financial performance for the year, so as tofacilitate comparison with prior periods and to assess better the trends offinancial performance. The group has two categories of dilutive potentialordinary shares: those share options granted to employees where the exerciseprice is less than the average market price of the company's ordinary sharesduring the year and shares attributable to convertible debt. The impact ofdilutive securities in 2007 would be to increase the profit by nil (30 June2006: nil; 31 December 2006: nil) for convertible debt and to increase weightedaverage shares by 6.4 million shares (30 June 2006: 5.5 million shares; 31December 2006: 5.2 million shares) for employee share options and nil millionshares (30 June 2006: 11.4 million shares; 31 December 2006: 6.0 millionshares) for convertible debt.
The following reflects the income and share data used in basic and diluted earnings per share computations:
Six months ended Six months ended Year ended 30 June 2007 30 June 2006 31 December 2006 Earnings Earnings Earnings per per per Earnings share Earnings share Earnings share ‚£m pence ‚£m pence ‚£m pence From continuing and discontinued operations Adjusted group operating 81.0 83.1 149.7 profit Net interest income 2.5 5.4 8.3 Financing income - 2.4 - 2.5 pension schemes Adjusted profit before 85.9 88.5 160.5 tax Taxation (14.6) (17.7) (28.9) Minority interests (2.4) (2.3) (4.5) B share dividend (0.2) (0.2) (0.4) Adjusted earnings per 68.7 26.2 68.3 24.5 126.7 45.5 share Adjustments Amortisation of intangible assets (9.0) (3.4) (7.2) (2.6) (15.0) (5.4) Deferred tax on amortisation of intangible assets 2.6 1.0 2.0 0.7 4.0 1.4 Certain exceptional items (11.6) (4.4) 13.3 4.8 45.8 16.4 Net financing costs - other than interest (0.3) (0.1) (20.5) (7.4) (20.0) (7.2) Basic earnings per share 50.4 19.3 55.9 20.0 141.5 50.7 Dilution Options - (0.5) - (0.3) - (0.9) Convertible bond - - - - - - Diluted earnings per 50.4 18.8 55.9 19.7 141.5 49.8 share Adjusted earnings per 68.7 26.2 68.3 24.5 126.7 45.5 share (as above) Options - (0.6) - (0.4) - (0.8) Convertible bond - - 0.2 (0.9) 0.2 (0.9) Diluted adjusted 68.7 25.6 68.5 23.2 126.9 43.8 earnings per share
The convertible bond is earnings enhancing in 2006 and therefore its impact has been excluded from the diluted earnings per share calculation.
Six months ended Six months ended Year ended 30 June 2007 30 June 2006 31 December 2006 Earnings Earnings Earnings per per per Earnings share Earnings share Earnings share ‚£m pence ‚£m pence ‚£m pence From continuing operations Adjusted group operating 81.0 83.1 149.7 profit Operating profit from - (0.8) (0.7) discontinued operations Net interest income 2.5 5.4 8.3 Financing income - 2.4 - 2.5 pension schemes Adjusted profit before 85.9 87.7 159.8 tax Taxation (14.6) (17.5) (28.7) Minority interests (2.4) (2.3) (4.5) B share dividend (0.2) (0.2) (0.4) Adjusted earnings per 68.7 26.2 67.7 24.3 126.2 45.3 share Adjustments Amortisation of intangible assets (9.0) (3.4) (7.2) (2.6) (15.0) (5.4) Deferred tax on amortisation of intangible assets 2.6 1.0 2.0 0.7 4.0 1.4 Certain exceptional items (11.6) (4.4) 4.3 1.6 25.3 9.1 Net financing costs - other than interest (0.3) (0.1) (20.5) (7.4) (20.0) (7.2) Basic earnings per share 50.4 19.3 46.3 16.6 120.5 43.2 Dilution Options - (0.5) - (0.3) - (0.8) Convertible bond - - - - - - Diluted earnings per 50.4 18.8 46.3 16.3 120.5 42.4 share Adjusted earnings per 68.7 26.2 67.7 24.3 126.2 45.3 share (as above) Options - (0.6) - (0.5) - (0.8) Convertible bond - - 0.2 (0.9) 0.2 (0.9) Diluted adjusted earnings 68.7 25.6 67.9 22.9 126.4 43.6 per share
The convertible bond is earnings enhancing in 2006 and therefore its impact has been excluded from the diluted earnings per share calculation.
7 Dividends Six Six Year months months ended ended 30 ended 30 31 June June December 2007 2006 2006 ‚£m ‚£m ‚£m
Declared and paid during the period Equity dividends on ordinary shares Final dividend for 2005 of 11.0p - 31.9
31.9
Interim dividend for 2006 of 4.4p - -
12.3
Special dividend of 72.0p (paid March 2007) 200.3 - - Final dividend for 2006 of 13.6p 34.1 - -
Equity dividends - B shares 0.3 0.4
0.4 Dividends 234.7 32.3 44.6
Proposed but not yet paid (not recognised as a liability at the
end of the period)
Equity dividends on ordinary shares
Interim dividend for 2006 of 4.4p - 12.3 - Final dividend for 2006 of 13.6p - -
34.1
Special dividend of 72.0p - -
200.3
Interim dividend for 2007 of 4.84p 12.1 - - 8. Share capital 30 30 31 June June December 2007 2006 2006 ‚£m ‚£m ‚£m Authorised
360,024,734 ordinary shares of 33 and 71/88 pence each (June 2006: 400,936,636 ordinary shares of 30 and 5/14 pence each; December 2006: 400,936,636 ordinary shares of 30 and 5/14
pence each) 121.7 121.7 121.7
375,417,690 B shares of 8 and 23/44 pence each (June 2006: 375,417,690; December 2006: 375,417,690) 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 2007 85.5 0.4 85.9 Allocated in respect of share option schemes and other entitlements 0.4 - 0.4 Shares repurchased and cancelled (0.1) -
(0.1)
Actual issued and fully paid shares at 30 June 2007 85.8 0.4
86.2 As at 30 June 2007, there were 253,838,560 issued and fully paid ordinaryshares, and 4,133,770 issued and fully paid B shares (30 June 2006: 282,893,351issued and fully paid ordinary shares, and 4,830,923 issued and fully paid Bshares; 31 December 2006: 281,542,883 issued and fully paid ordinary shares,and 4,133,770 issued and fully paid B shares).
As at 30 June 2007, the holdings of the United ESOP are 3,212,242 ordinary shares, and nil B shares (30 June 2006: 3,096,580 ordinary shares and 34,918 B shares; 31 December 2006: 3,452,210 ordinary shares and nil B shares).
The group repurchased and cancelled 260,000 ordinary shares during the periodat an average price of 700.0p (30 June 2006: 11,130,000 ordinary shares for666.0p; 31 December 2006: 14,055,000 ordinary shares for 663.3p). The totalamount paid to acquire the ordinary shares was ‚£1.8 million (30 June 2006:
‚£
74.1 million; 31 December 2006: ‚£93.2 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. Following the completion of the conversion and repurchase ofthe convertible bonds on 26 June 2006, there are no convertible bondsoutstanding. On 27 March 2007, in conjunction with the special dividend of 72.0 pence pershare, a share consolidation was carried out to convert 49 existing ordinaryshares to 44 new ordinary shares. The share consolidation converted the281,591,877 existing issued and fully paid ordinary shares into 252,858,012 newissued and fully paid ordinary shares. 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 1 January 2007 101.1 48.1 (40.6) (27.8) 125.0 205.8 (113.4) 4.8 Total recognised income and expense for the year - - (7.6) - - (7.6) 77.1 2.6 Shares repurchased and cancelled by the company - 0.1 - - - 0.1 (1.8) - Share-based payment - - - - - - 1.9 - Special dividend - - - - - - (200.3) - Equity dividend - - - - - - (34.4) - Minority interest dividend - - - - - - - (1.3) Consolidation of entity previously equity accounted - - - - - - - (1.0) Shares awarded by ESOP - - - 1.9 - 1.9 - - Balance at 30 June 2007 101.1 48.2 (48.2) (25.9) 125.0 200.2 (270.9) 5.1 10 Acquisitions
UBM has completed seven acquisitions in the six months ending 30 June 2007.
On 11 January 2007, UBM announced the acquisition of Quest Media Limited forcash consideration of up to ‚£5 million. The transaction adds six award events,three conferences and an associated magazine. On 19 January 2007, UBM announced the acquisition of an additional 2% of thevoting rights of RISI, Inc. ('RISI') for cash consideration of $1 million. Thisequity purchase brings UBM's total shareholding in RISI to 52%, giving UBM acontrolling interest in the company.
On 12 March 2007, UBM announced the acquisition of a 25% equity holding in eXalt Solutions Inc ('eXalt'), a leading provider of on-demand web-based services for IT solution sales, for cash consideration of $2 million. UBM also has an option to purchase an additional 15% equity holding in eXalt. UBM accounts for eXalt Solutions Inc as an associate.
On 26 March 2007, UBM announced that its majority-owned subsidiary, RISI, had acquired EU Consulting for cash consideration of ¢â€š¬0.4 million.
On 18 April 2007, UBM announced the acquisition of Vintage Filings, LLC, a leading US Edgar filing business, for initial cash consideration of $38 million. A further performance-dependent consideration of up to $15 million will be payable over the next four years.
On 30 April 2007, UBM announced the acquisition of Physicians Practice, LLC for cash consideration of $17.5 million, with a further performance-dependent consideration of $0.5 million.
On 25 May 2007, UBM along with its joint venture partner, BolognaFiere, completed the acquisition of a 55% interest in the Guangzhou Beauty Fair. UBM's share of the purchase consideration was $3 million and UBM has a 27.5% effective holding in the fair, which it accounts for as an associate.
The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the group in respect of the acquisition of businesses during the year:
2007 2007 Fair Acquiree's value carrying to group value ‚£m ‚£m Intangible assets 12.3 - Other non-current assets 0.5 0.6 Current assets 4.7 4.9 17.5 5.5 Creditors and other current liabilities (3.5) (3.3) Deferred tax liability (0.4) - (3.9) 2.2 Fair value of net assets 13.6
Goodwill arising on acquisition 35.5
49.1 2007 ‚£m Consideration:
Cash paid to acquire subsidiaries
34.9
Cash paid to acquire interests in associates
2.5 Deferred consideration 11.7 Total consideration 49.1
The aggregate cash flow effect of the acquisitions was as follows:
2007 ‚£m
Net cash acquired with the subsidiaries
(0.8)
Cash paid to acquire subsidiaries
34.9
Cash paid to acquire interests in associates
2.5
Net cash outflow on 2007 acquisitions
36.6
Payment of deferred consideration on prior year acquisitions
4.6
Total cash outflow on acquisitions 41.2 11. Discontinued operations
The results of the discontinued operations which have been included in the consolidated income statement were as follows:
As restated Six months Six months Year ended ended 30 ended 30 31 June June December 2007 2006 2006 ‚£m ‚£m ‚£m Revenue - 15.8 19.8 Operating expenses - (15.0) (19.1) Profit before tax - 0.8 0.7 Attributable taxation - (0.2) (0.2)
Profit from discontinued operations after - 0.6 0.5
tax
Profit from disposal of discontinued - 9.0 20.5
operations Attributable tax expense - - -
Net profit attributable to discontinued - 9.6 21.0
operations
Discontinued operations relate to the following:
A portfolio of UK classified titles which were sold on 15 May 2006 for a profit of ‚£8.0 million;
A portfolio of US entertainment titles which were sold on 14 September 2006 for a profit of ‚£12.5 million.
12 Borrowings
In the six months ended 30 June 2006 the group repurchased a further $80.1 million 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. 13 Share-based paymentsThe group's management awards share options to directors and employees, fromtime to time, on a discretionary basis. During the six months ended 30 June2007, the Group awarded 1,289,542 (six months ended 30 June 2006: 1,554,115;year ended 31 December 2006: 2,558,517) shares under the group's shareincentive plans.
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 liabilitiesThe company acts as guarantor over a net overdraft facility of ‚£60.0 million(30 June 2006: ‚£60.0 million; 31 December 2006: ‚£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 3 July 2007, UBM acquired How Machines Work Corporation for an initial cashconsideration of $1.2 million and a further performance-dependent considerationpayable of up to $0.6 million.
On 27 July 2007, UBM announced the following acquisitions:
Semiconductor Insights Inc for an initial cash consideration of $26 million and a further performance-dependent consideration of up to $8 million will be payable over the next three years;
Intermodal South America Trade Show for a total cash consideration of ‚£3.4 million;
Notilog, a leading Latin American news monitoring service, for an initial cashconsideration of $4 million and a further performance-dependent considerationof up to $5 million will be payable over the next two years;
Australia Prescription Products Guide for a total cash consideration of A$1 million.
Independent review report to United Business Media plc
Introduction
We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 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' responsibilities
The 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.
Review work performed
We 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 and presentation have beenconsistently applied, unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilitiesand transactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2007.
Ernst & Young LLPLondon27 July 2007 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. - Ends -
UNITED BUSINESS MEDIA PLCRelated Shares:
UBM