26th Sep 2006 07:04
Informa PLC26 September 2006 26 September 2006 Informa plc Interim Results 2006 Strong Performance across Informa Powered by Organic Growth Unaudited, six months ended 30 June 2006 2005 Increase Organic(1) £m £m % %Revenue 533.7 259.7 105 11Operating profit / (loss) 60.4 (50.3)Adjusted(2) operating profit 105.1 48.1 118 21Profit / (loss) before tax 39.1 (58.9)Adjusted(2) profit before tax 83.8 39.6 112Profit for period 29.5 48.8 (40)Adjusted(3) profit for period 61.2 27.6 122Basic earnings per share (p) 7.0 14.6 (52)Diluted earnings per share (p) 7.0 14.5 (52)Adjusted(3)diluted earnings per share (p) 14.4 8.2 76Dividend per share (p) 3.3 2.7 22Cash conversion(4) 67% 26% 1. Adjusted for acquisitions and effects of changes in foreign currency exchange rates. 2. Excludes restructuring and reorganisation costs of £2.9m (2005: £2.5m) and intangible asset amortisation of £41.8m (2005: £7.9m). 2005 also excludes goodwill write off of £86.5m and discontinued operations of £1.5m. 3. Excludes restructuring and reorganisation costs of £2.9m (2005: £2.5m) and intangible asset amortisation of £41.8m (2005: £7.9m) and related tax of £13.0m (2005: £3.1m). 2005 also excludes goodwill write off of £86.5m, discontinued operations of £1.5m and a deferred tax credit of £116.6m. 4. Adjusted cash generated by operations (note 10 of the interim statements) divided by adjusted operating profit. Highlights of 2006 • Organic revenue up 11%, organic adjusted operating profit up 21% • Strong trading across all three divisions and business areas • Adjusted operating margin increased 1.2 percentage points to 19.7% • Academic book sales recover with 10% organic growth • IIR acquisition returns 9% pre-tax in its first 12 months of ownership • Interim dividend increased by 22% • Confident of second half outlook Commenting on the Group's performance, Peter Rigby, CEO of Informa said: "We have had an excellent start to the year. These results underline the corestrengths of Informa. The three arms of the business - publishing, performanceimprovement and events - are all performing well and demonstrating their uniquecombination of dynamic growth capture and resilience. The acquisition of IIR hasproved a signal success, strengthening many of Informa's sector and geographicpositions and helping drive revenue and cost synergy across the group. This ishaving its effect both in stimulating turnover growth and margin improvement. Welook forward with confidence to completing another successful year for Informa." Enquiries: Informa plc Tel: 020 7017 5000Peter Rigby, Chief ExecutiveDavid Gilbertson, Group Managing DirectorTony Foye, Finance DirectorSusanna Kempe, Chief Marketing Officer Financial Dynamics Tel: 020 7831 3113Tim Spratt / Charles Palmer / Darrel Connell Our interim results presentation will be webcast live today at 09.30 (GMT) andis available at www.informa.com Business and Financial Review Informa has enjoyed a strong start to 2006, reflected in an excellent set offinancial results for the six months ended June 30. Informa's revenue in the period was £533.7m, more than double its prior yearlevel, and adjusted operating profit increased by 118% to £105.1m. These results reflect the increased scale of the group following the acquisitionof IIR in July 2005 but they also include strong organic revenue growth of 11%.This is almost twice the organic growth rate achieved in the same 2005 periodand underlines the greater leverage within the enlarged business. Organicrevenue growth was accelerated by increasing collaboration between the threedivisions of the business which are now bringing their format expertise to bearon a wider range of market opportunities. Adjusted operating profit on an organic basis grew by 21% on the same period ayear earlier, demonstrating the effect of operational gearing and greater costefficiency. Adjusted operating margin, at 19.7%, was 1.2 percentage pointshigher than a year ago. Recent acquisitions traded strongly and contributed well to the half yearresults, particularly IIR which has achieved a pre-tax return on capitalemployed of 9% in its first twelve months of ownership. In each instance,either by sector or geography, where legacy IIR and Informa businesses have beenco-located or merged to take advantage of management expertise and marketleadership, profits have been enhanced. For example, the combined UK LifeSciences events business produced a 57% profit contribution increase on aproforma basis for the first half year. Similarly, the combined Australianevents business achieved 29% growth. Informa's three revenue streams: publishing, performance improvement and events,are all performing well. Each demonstrated significant growth within its coremarket sectors and benefited in addition from both revenue and cost synergiesacross the enlarged Informa group. Publishing which constituted 36% of revenue within the period continues to enjoygood operating margins. On a proforma basis revenue was up 11%((1)). Theresilient subscription based products again delivered robust results,underpinned by high academic journal renewal rates of over 95%. Journalproductivity was strong in terms of both new journal launches and increasedfrequency of publication, reflecting particularly the continuing high volume ofresearch in Humanities and Social Sciences. The new electronic delivery andpricing models have been well received and market uptake is expected to continuegrowing in the 2007 renewal cycle. Academic book sales rebounded well and were 10% higher on an organic basis aftera rather flat 2005. All key subject areas are performing strongly: socialsciences, reference, science and engineering were the largest contributors.Critically acclaimed new books released include: The War for Children's Minds,Urban Design Futures, Genocide: A Comprehensive Introduction, Introduction toGeopolitics and The English Legal System. Performance Improvement ("PI") which constituted 21% of revenue within theperiod, achieved proforma revenue growth of 16%(1), confirming and expandingits market leadership position. Adjusted operating profit rose by 21%(1),reflecting both the operational gearing that is a feature of this part of thebusiness as well as the benefit of cost savings garnered from being part ofInforma. Execution of Informa's global PI expansion plan has continued with thefoundation of an Asian PI hub designed to fast track opportunities within thismarket. The first half year confirmed again the competitive advantage Informaenjoys from its international reach to meet client demands for global delivery.AchieveGlobal, for example, launched a large international engagement with StateStreet Bank to enable its global expansion plans: initiatives have already takenplace in the US, Canada, UK, France, Germany, Benelux, Italy, EMEA, Australia,Japan, Singapore and Hong Kong. Events which constituted 43% of revenue within this period, saw dynamic growthacross a wide range of geographies and vertical sectors, taking advantage ofgood market trading conditions, enlarged group synergies and enhancedoperational expertise. Events revenue grew by 28% on a proforma basis(1). All events sectors performed well with notable proforma(1) operating profitgrowth in Telecoms of 36%, Maritime of 57% and Life Sciences of 60%.Geographically, Dubai profit grew by an impressive 52%, while among the smallerbusinesses the Czech Republic rose by 39% and Italy by 34%. The acquisition ofthe quadrennial print exhibition business, IPEX also contributed £17m inrevenue. Benefiting significantly from increasing spend from clients seeking moretargeted marketing opportunities, events' ancillary revenue from sponsorship andexhibition presence increased by 28% organically. Divisional Review Informa's three divisions: Academic & Scientific, Professional and Commercial,each of which combine growth capturing and resilient business models, allreported robust growth in the six months. Academic and Scientific Academic and Scientific 2006 2005 Increase Organic £'m £'m % %RevenueSTM 86.1 66.3 30 7HSS 52.7 45.9 15 11 138.8 112.2 24 8 Adjusted Operating ProfitSTM 21.2 15.1 40 17HSS 8.7 7.0 24 17 29.9 22.1 35 17 Adjusted Operating Margin 21.5 19.7 Academic & Scientific divisional revenue increased by 24%, comprising an organicincrease of 8% and contributions from acquisitions. Adjusted operating profitwas 35% higher at £29.9m, which included organic growth of 17%. IIR contributed£10.5m to revenue and £2.8m to adjusted operating profit (2005 £8.2m and £2.0mrespectively prior to acquisition and therefore not included in the 2005comparative above). The adjusted operating margin rose to 21.5% from 19.7%, benefiting from the 10%organic increase in books sales as well as the impact of cost savings andefficiencies associated with the integration of the IIR businesses. The STM segment saw revenue grow 7% organically with solid journal growthsupported by the rebound in book sales and good increases from life scienceevents and associated publications. The combined Informa-IIR Life Science conference businesses in both the UK andUS benefited from the integration to post a revenue increase of 32% and anoperating profit increase of 60% on a proforma basis(1) from 2005, reversingtrends experienced over the last two years. This result was driven by costsynergies from combining these legacy businesses and revenue increasesassociated with focusing on Large Scale Events which have an inherently highermargin. For example, the Large Scale Events, Partnerships with CROS, NationalManaged Health Care Congress and Drug Discovery Technologies together grewrevenue in excess of 42% on a proforma basis(1). The PJB pharmaceutical information business strengthened its high margin revenuebase by the addition of product from the M2M and Ashley acquisitions in 2005.Ashley saw particularly strong sales in its expert opinion information service. The division also saw excellent revenue growth in HSS revenues which were up 11%in organic terms with subscription renewals at or above the levels of recentyears and a similar rebound in books to that reported by the STM business. HSSjournals continue to see good growth in article submission levels, reflectingthe rising volume of research in these disciplines. As reported last year, in response to the increase in demand from academicinstitutions for electronic delivery of journal content, the Academic &Scientific division announced new on-line information products and pricingmodels for 2006. These were well received by the library community and we willbe expanding these initiatives during 2007. InformaWorld, our new group electronic content platform allows our customerscomprehensive electronic access to our Academic and Scientific journal and bookcontent. The new platform will be rolled out across the group over the next fewyears and incorporate progressively more of Informa's products and services. InformaWorld will also facilitate the introduction of our new open access modelfor journals called "i-open". This will be a hybrid offering for researchjournals initially in Chemistry, Physics, Mathematics and Statistics. The modelallows us to offer full electronic open access to certain journal articles forwhich authors opt to pay an open access fee of $3,000. Journals operating thei-open model will therefore contain some subscriber-only articles alongside openaccess articles which can be web accessed via InformaWorld. All publishedarticles, whether subscriber-only or open access, will continue to be subject tothe same peer review process before acceptance. Professional Professional 2006 2005 Increase Organic £'m £'m % %TurnoverPerformance Improvement 109.9 - - -Financial Data Analysis 32.6 30.1 8 -3Finance Insurance Law and tax 40.3 15.3 163 5 182.8 45.4 303 - Adjusted Operating ProfitPerformance Improvement 15.6 - - -Financial Data Analysis 9.1 7.6 20 8Finance Insurance Law and tax 9.4 1.7 467 71 34.1 9.3 268 19 Adjusted Operating Margin 18.7 20.4 The Professional division's overall revenue increased by 303% and adjustedoperating profits rose by 268%, driven by a strong contribution from PerformanceImprovement and good organic growth from Finance, Insurance, Law and Tax. IIRbusinesses, which now account for almost three quarters of the division's sales,contributed £135.5m to revenue and £22.2m to adjusted operating profit (2005£116.3m and £19.0m respectively prior to acquisition and therefore not includedin the 2005 comparative above). Performance Improvement ("PI") revenue grew 16% on a proforma basis to £109.9mfrom £94.9m in 2005 and profits were 21%(1) higher. Solid profit growth wasreported by six of the seven PI businesses, led by Forum and Achieve Globalwhich each recorded year on year profit rises of more than 25%. OnlyCommunispond, the smallest of the PI companies accounting for 2% of PI revenue,did not contribute to growth, recording a flat performance for the first sixmonths. Financial Data and Analysis saw high renewals and increased margins contributingto an increase of 8% in revenue and 20% rise in adjusted operating profits. Theunit saw a slight decline in organic revenues as a result of some attrition inthe Informa Global Markets business. This attrition reflects the morechallenging and competitive market conditions for real-time trading-relatedinformation for the banking community. The other businesses in the unit allproduced good growth and to this end M Solutions was acquired in February to addwealth management solutions to the Informa Investment Solutions productoffering. The Finance, Insurance, Law and Tax businesses revenue grew 5% organically ledby a strong performance from legal subscription publishing which was up 31% withstrong electronic sales, and a continued improvement in the advertising incomeof the Insurance information portfolio. Financial events under IIR's ICBI brandtraded strongly in the period with good performances from large scale events inthe funds and private equity fields. This unit also benefited from theintegration of IIR and Informa output in Europe which resulted in reduced staffcosts and higher margins from growth in the larger events and the elimination ofthe weaker elements of the combined portfolio. Adjusted operating profit growthin this unit was particularly strong due to these reduced overheads andincreased yields, growing by £7.7m to £9.4m with an organic profit rise of£1.2m. IIR contributed £6.5m profit compared with £6.1m in 2005 (prior toacquisition by Informa). Commercial Commercial 2006 2005 Increase Organic £'m £'m % %RevenueRegional events 134.3 44.2 204 7 Telecoms & Media 45.5 28.7 59 46 Maritime & Commodities 32.3 29.2 10 10 212.1 102.1 108 19 Adjusted Operating ProfitRegional events 25.5 6.1 320 5 Telecoms & Media 12.1 7.7 57 49 Maritime & Commodities 3.5 2.9 19 19 41.1 16.7 146 27 Adjusted Operating Margin 19.3 16.3 Commercial division revenue increased 108% (£109.9m) and adjusted operatingprofit 146% (£24.3m). Organic revenue growth of 19% translated into a 27%improvement in organic operating profit, again reflecting the cost synergies ofthe enlarged group. IIR businesses contributed £73.2m to the division's revenueand £15.5m to its adjusted operating profit (2005 £63.8m and £11.2m respectivelyprior to acquisition and therefore are not included in the 2005 comparativesabove). Regional Events, which includes a wide range of conferences, exhibitions andcourses in a number of European, Middle East, Asian, Australian and LatinAmerican markets, had a strong first half year despite the impact in June of theFIFA World Cup which caused the postponement of a number of events in Germany.The legacy Informa business which has a relatively higher proportion of itsrevenue in Germany, still recorded organic growth of 7%, while the IIR RegionalEvents showed a proforma organic revenue growth of 16%(1) (£9.4m). Informa's market-leading Telecoms & Media unit continues to find goodopportunities in the growing strength and diversity of the mobile communicationssector. The 3GSM World Congress was moved to Barcelona from Cannes and sawanother healthy growth in visitors, exhibitors and delegates with overallattendance rising to some 50,000 from 39,000 a year earlier. The relocation ofthe event unlocked pent-up demand for exhibition space which had been limited bythe physical constraints of the previous Cannes location. This, together withstrong growth in the first half contribution from Informa's nine other largescale telecoms events in the GSM to 3G World Series, combined to help record anorganic increase of 46% in revenue and 49% rise in adjusted operating profits. The Maritime unit grew revenue by 10% and adjusted operating profit by 19%,capturing growth from the strong trading conditions in the internationalmaritime markets and continuing high energy prices. Events saw a good increasein delegate revenues and sponsorship income with profits up 57% as a result.Lloyd's List, Informa's flagship daily newspaper, contributed strongly to theunit's profit improvement after driving a 28% increase in advertising revenuesin the period. Commodities revenue also saw good growth, up 9% over 2005. Thesegains were offset by a weaker performance in Freight Publishing. This came bothfrom publishing and from conference income. There has also been a welcomerebound in the consultancy side of the business which has exposure to the USagriculture sector. Financial Results Informa plc for the six months ended June 30, 2006 recorded revenue of £533.7m,up 105% from £259.7m in the same period a year earlier. IIR Holdings, which wasacquired on July 6, 2005, contributed £218.1m to revenue and a further £20.0mwas contributed by other acquisitions in the period (mainly from IPEX, thequadrennial print exhibition, which contributed £17.0m). Organic revenue growthyear on year was 11%. The translation impact of currency movements on theresults was minimal despite some US dollar to sterling exchange rate volatilityduring the period. Operating profit increased by £110.7m to £60.4m from a loss of £50.3m in 2005.The latter included a one-off non cash related goodwill write off of £86.6mwhich depressed last year's interim operating profit and profit before tax. Thisyear amortisation of intangibles has increased by £35.0m, reflecting principallythe charge in respect of intangible assets acquired with the IIR acquisition. EPS Basic and diluted EPS were down 52% compared with 2005 due principally to thenet benefit in 2005 of the one off £116.6m deferred tax credit, offset by the£86.6m goodwill write-off. Adjusted Results Adjusted operating profit, which is shown in note 4 of the interim results, iscalculated after removing certain items not relating to the underlying tradingoperations of the group. This adjusted operating profit increased by 118% to£105.1m from £48.1m. Adjusted profit before tax increased 112% to £83.8m from £39.6m and adjustedprofit for the period increased 122% to £61.2m from £27.6m. Adjusted Diluted EPS after deducting tax at 27% (2005: 30%) was up 76% to 14.4pfrom 8.2p, reflecting higher profit after tax offset by a partial dilution fromthe additional shares issued to help finance the acquisition of IIR. The board believes these adjusted operational figures provide additionalinformation to explain the underlying performance and associated trends of thegroup. Further details are given in note 4 of the interim results. Finance Costs Finance costs, which consist predominantly of interest payable net of interestreceivable and other income, increased from £8.6m in 2005 to £21.3m due to theextra debt incurred in financing acquisitions, principally IIR. Taxation The 2005 comparative interim results include a one off £116.6m deferred taxcredit resulting from the reorganisation of Informa's UK businesses in 2005. Other tax which is provided at 25% (2005: 30%) was £9.6m, up £0.7m from £8.9m in2005. The tax rate is lower than in 2005 due principally to the lower tax ratesapplicable to some IIR profit streams. Dividend In recognition of the enhanced trading prospects, Informa has declared aninterim dividend of 3.3p per share. This represents an increase of 22% on the2005 equivalent. The dividend will be payable on November 6, 2006 to ordinaryshareholders registered as of the close of business on October 6, 2006. Balance sheet Goodwill decreased from £1,123.4m to £1,122.5m with additions from theacquisitions made during the period being offset by currency movements. Other intangible assets decreased from £935.7m to £900.4m due to the normalamortisation charge which came to £43.7m and exchange rate effects on US dollardenominated assets, offset by additions from acquisitions in the period. Net debt rose £6.9m from £735.4m to £742.3m compared with December 31, 2005,reflecting inter alia the seasonal nature of Informa's cash flows, capitalexpenditure of £10.1m and £29.8m spent on acquisitions in the first six monthsof 2006, offset by favourable exchange impacts of £15.8m. Cash conversion (expressed as adjusted cash generated by operations as apercentage of adjusted operating profit, note 10 of the interim results) was upon the same period last year at 67% (2005: 26%) partly due a change in mix inbusiness resulting from the acquisition of IIR but also due to a one off pensioncontribution of £10.0m in the 2005 period. Informa's gross defined pension liabilities disclosed under "retirement benefitobligations" have reduced by £6.5m compared with December 31, 2005 to £11.2m duemainly to actuarial gains of £6.7m. Deferred income, which represents income receivable in advance, was up £58.5m(55%) on the same period in 2005 to £165.6m from £107.1m, reflecting theincreased scale of the business and the strong momentum into the second half ofthe year. This balance represents revenue still to be recognised in the incomestatement as it is earned in future periods. Current trading and outlook Informa had an excellent first half and trading conditions remain positive,providing a solid base for future organic growth. Informa generates revenue fromthree main areas which serve specific markets and specialist sectors:Publishing, Performance Improvement and Events with relatively little exposureto more volatile advertising which now accounts for just 3% of Informa'srevenue. Informa is seeing steadily growing interest from subscriptions and copy salescustomers in e-based product offerings and continues to develop new products tomeet this demand. For example the new eCollections offering allows access toInforma's academic e book collection by subject area for an annual subscription.Informa is now increasingly exploiting this interest in digital content,providing an accelerator of organic growth. With the IIR integration now complete, Informa looks forward to taking advantageof the enlarged scope of products, opportunities and synergies that now presentthemselves. Informa is well placed to continue to grow organically and, whereappropriate, through further selective acquisitions at a time when many of ourclient markets are developing positively. As a result, the Board remainsconfident of a successful outcome for 2006 and of the prospects for the future. Over the past two years Informa staff have wholeheartedly contributed to thesuccessful fusion of Informa, Taylor & Francis and IIR. This has been a keyfactor in building a creative and energetic group with strong prospects andincreased opportunities. We wish to take this opportunity to thank the staff fortheir professionalism and enthusiasm in seizing the opportunities that we nowenjoy. INDEPENDENT REVIEW REPORT TO INFORMA PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated incomestatement, the consolidated statement of recognised income and expenses, theconsolidated balance sheet, the consolidated cash flow statement and relatednotes 1 to 14. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave 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 are consistent withthose 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 the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. Deloitte & Touche LLP Chartered Accountants Reading 26 September 2006 Notes: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but no controlprocedures can provide absolute assurance in this area. Legislation in theUnited Kingdom governing the preparation and dissemination of financialinformation differs from legislation in other jurisdictions. Consolidated Income StatementFor the Six Months Ended 30 June 2006 - Unaudited 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000Continuing operationsRevenue 3 533,740 259,742 729,280Change in inventories of finished goods and work 4,231 4,128 3,091in progressRaw materials and consumables used (193,401) (74,640) (239,360)Employee benefit expense (150,910) (78,974) (210,710)Depreciation expense (4,258) (3,452) (8,175)Amortisation of intangible fixed assets (43,690) (8,680) (49,755)Goodwill written off 5 - (86,562) -Other expenses (85,348) (61,906) (132,953)Operating profit / (loss) 3 60,364 (50,344) 91,418Non-operating income and expense 88 - (28)Finance costs (22,984) (9,772) (36,247)Investment income 1,675 1,210 5,902 Profit / (loss) before tax 39,143 (58,906) 61,045Deferred tax adjustment recognised/(released) on 5 - 116,557 (35,224)UK restructuringOther tax (9,638) (8,882) (15,054)Tax 5 (9,638) 107,675 (50,278)Profit for the period from continuing operations 29,505 48,769 10,767Discontinued OperationsLoss for the period from discontinued operations - - (1,885)Profit for the period 29,505 48,769 8,882Attributable to:- Equity holders of the parent 29,439 48,758 8,825- Minority interests 66 11 57Earnings per share 8From continuing operations:- Basic (p) 6.99 14.55 2.76- Diluted (p) 6.96 14.48 2.75From continuing and discontinued operations:- Basic (p) 6.99 14.55 2.27- Diluted (p) 6.96 14.48 2.26 Consolidated Statement of Recognised Income and Expense For the Six Months Ended 30 June 2006 - Unaudited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000Gains / (losses) on cash flow hedges 7,114 (1,762) 3,373Exchange differences on translation of foreign operations (17,781) 2,624 4,367Actuarial gains / (losses) on defined benefit pension schemes 6,718 (2,130) (3,766)Tax on items taken directly to equity (3,475) - (3,752)Net (loss) / income recognised directly in equity (7,424) (1,268) 222Transferred to profit or loss on cash flow hedges (621) 190 416Profit for the period 29,505 48,769 8,882Total recognised income and expense for the period 21,460 47,691 9,520 Attributable to:- Equity holders of the parent 9 21,394 47,680 9,463- Minority interests 66 11 57 Consolidated Balance SheetAs at 30 June 2006 - Unaudited 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000Assets Non-current assets Goodwill 1,122,458 545,786 1,123,418Other intangible assets 900,388 488,095 935,687Property and equipment 25,274 18,495 22,868Available for sale investments 6,566 10,285 10,279Deferred tax assets 8,479 68,352 13,106 2,063,165 1,131,013 2,105,358Current assetsTrade and other receivables 192,825 101,048 187,699Inventory 35,849 36,455 31,138Cash and cash equivalents 6,672 948 20,654 235,346 138,451 239,491Non-current assets classified as held for sale 4,574 5,924 4,574Total assets 2,303,085 1,275,388 2,349,423 Equity and liabilitiesCapital and reserves Called up share capital 42,236 30,074 42,152Share premium account 499,026 195,870 496,826Reserve for shares to be issued 1,903 1,893 1,124Merger reserve 496,400 496,400 496,400Other reserve 37,398 37,398 37,398ESOP trust shares (3,334) (3,641) (3,334)Hedging and translation reserve (12,340) (6,696) 408Retained losses (136,229) (88,430) (145,096)Equity attributable to equity holders of the parent 9 925,060 662,868 925,878Minority interests 176 64 110Total equity 925,236 662,932 925,988Non-current liabilitiesLong-term borrowings 689,147 356,326 692,500Deferred tax liabilities 233,626 15,339 240,431Retirement benefit obligation 11,186 15,287 17,729Provisions 2,212 390 1,847Other payables 3,858 519 4,852 940,029 387,861 957,359Current liabilitiesShort-term borrowings 59,770 9,725 63,521 Current tax liabilities 64,267 19,108 58,620 Provisions 3,467 - 2,014 Trade payables and other payables 144,712 88,676 154,476 Deferred income 165,604 107,086 187,445 437,820 224,595 466,076 Total liabilities 1,377,849 612,456 1,423,435 Total equity and liabilities 2,303,085 1,275,388 2,349,423 The Board of Directors approved this Interim Report on 26 September 2006. Consolidated Cash Flow Statement For the Six Months Ended 30 June 2006 - Unaudited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000Operating activitiesCash generated by operations 10 67,187 4,647 160,929Income taxes paid (9,095) (7,558) (12,231)Interest element of finance lease payments (2) (2) (1)Interest paid (19,069) (11,850) (32,921)Net cash from / (used in) operating activities 39,021 (14,763) 115,776Investing activitiesInvestment income 1,675 1,210 4,708Proceeds on disposal of property and equipment 49 176 200Purchases of intangible software assets (2,704) (3,810) (5,605)Purchases of property and equipment (7,351) (1,505) (9,511)Purchases of available for sale investments - - (89)Acquisition of subsidiaries and businesses 14 (29,784) (27,516) (812,787)Net cash used in investing activities (38,115) (31,445) (823,084)Financing activitiesDividends paid 7 (25,275) (15,926) (27,271)Repayments of borrowings (146,615) (77,884) (617,287)New bank loans raised 157,590 121,244 1,035,914Repayments of obligations under finance leases (28) (19) (23)Proceeds from the issue of share capital 2,284 3,901 316,935Net cash (used in) / from financing activities (12,044) 31,316 708,268Net (decrease) / increase in cash and cash equivalents 11 (11,138) (14,892) 960Cash and cash equivalents at beginning of period 16,085 15,125 15,125Cash and cash equivalents at end of period 12 4,947 233 16,085 Notes to the Unaudited Interim Statements For the Six Months Ended 30 June 2006 1 General information Informa plc is a company incorporated in the United Kingdom. The unauditedconsolidated interim financial statements as at 30 June 2006 and for the sixmonths then ended comprise those of the Company and its subsidaries and itsinterests in associates and jointly controlled entities(together referred to asthe "Group"). The information for the year ended 31 December 2005 does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. A copyof the statutory accounts for that year has been delivered to the Registrar ofCompanies. The auditors' report on those accounts was not qualified and did notcontain statements under section 237(2) or (3) of the Companies Act 1985. Theconsolidated financial statements of the Group as at and for the year ended 31December 2005 are available upon request from the Company's registered office atMortimer House, 37-41 Mortimer Street, London, W1T 3JH or at www.informa.com. 2 Accounting policies and estimates The consolidated interim financial statements have been prepared in accordancewith International Financial Reporting Standards (IFRS). The Group has chosennot to apply IAS 34 "Interim Financial Reporting" in the preparation of theseconsolidated interim financial statements. The accounting policies applied by the Group in the consolidated interimfinancial statements are the same as those applied by the Group in itsconsolidated financial statements for the year ended 31 December 2005. The preparation of consolidated interim financial statetments requiresmanagement to make judgements, estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets andliabilities, income and expense. Actual results may differ from these estimates. In preparing these consolidated interim financial statements, the significantjudgements made by management in applying the Group's accounting policies andthe key sources of estimation uncertainty were the same as those that applied tothe consolidated financial statements as at and for the year ended 31 December2005. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 3 Business Segments For management purposes, the Group is currently organised into three operatingdivisions, Academic & Scientific, Professional and Commercial. These divisionsare the basis on which the Group reports its primary segment information. Analysis by market sector Revenue 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Academic & Scientific DivisionScientific, Technical & Medical 86,112 66,257 161,747Humanities & Social Sciences 52,737 45,940 98,790 138,849 112,197 260,537Professional DivisionFinancial Data Analysis 32,617 30,129 60,767Finance, Insurance, Law & Tax 40,276 15,270 50,813Performance Improvement 109,925 - 106,179 182,818 45,399 217,759Commercial DivisionRegional Events 134,262 44,184 143,066Telecoms & Media 45,528 28,696 48,441Maritime & Commodities 32,283 29,266 59,477 212,073 102,146 250,984Goodwill written off (Note 5) - - 533,740 259,742 729,280 Operating profit / (loss) 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000 Academic & Scientific DivisionScientific, Technical & Medical 13,085 9,213 28,059Humanities & Social Sciences 5,430 4,108 14,889 18,515 13,321 42,948Professional DivisionFinancial Data Analysis 7,326 7,065 17,074Finance, Insurance, Law & Tax 4,789 1,559 5,085Performance Improvement 4,414 - 5,508 16,529 8,624 27,667Commercial DivisionRegional Events 11,144 4,243 12,845Telecoms & Media 10,942 7,291 2,352Maritime & Commodities 3,234 2,739 5,606 25,320 14,273 20,803Goodwill written off (Note 5) (86,562) - 60,364 (50,344) 91,418 Adjusted operating profit 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Academic & Scientific DivisionScientific, Technical & Medical 21,164 15,130 42,997Humanities & Social Sciences 8,708 7,047 22,466 29,872 22,177 65,463Professional DivisionFinancial Data Analysis 9,128 7,600 17,938Finance, Insurance, Law & Tax 9,382 1,653 9,860Performance Improvement 15,631 - 17,613 34,141 9,253 45,411Commercial DivisionRegional Events 25,532 6,077 18,622Telecoms & Media 12,106 7,733 12,011Maritime & Commodities 3,418 2,873 5,822 41,056 16,683 36,455Adjusted operating profit (Note 4) 105,069 48,113 147,329 Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 4 Adjusted figures - continuing operations 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Reconciliation of operating profit to adjustedoperating profit: Operating profit / (loss) 60,364 (50,344) 91,418Adjusting operating profit itemsDiscontinuing operations - 1,511 -Restructuring and re-organisation costs 2,863 2,496 8,277Intangible asset amortisation(1) 41,842 7,888 47,634Goodwill written off - 86,562 -Adjusting operating profit items 44,705 98,457 55,911Adjusted operating profit from continuing operations 105,069 48,113 147,329 Reconciliation of profit before tax to adjusted profitbefore tax: Profit / (loss) before tax 39,143 (58,906) 61,045 Adjusting operating profit items 44,705 98,457 55,911 Finance (income) / costsGain on exchange contract - - (3,426)Bank facility fees written off on acquisition of - - 1,827business - - (1,599)Adjusting profit before tax items 44,705 98,457 54,312Adjusted profit before tax from continuing operations 83,848 39,551 115,357 Reconciliation of profit for the period to adjustedprofit for the period from continuing operations: Profit for the period from continuing operations 29,505 48,769 10,767 Adjusted profit before tax items from continuing 44,705 98,457 54,312operationsDeferred tax adjustment (released) / recognised on - (116,557) 35,224restructuringAttributable tax expense on adjusting items (13,034) (3,115) (13,802) (13,034) (119,672) 21,422Adjusting profit items for the period 31,671 (21,215) 75,734Adjusted profit for the period from continuing 61,176 27,554 86,501operations (1)Excludes software amortisation. Restructuring and re-organisation costs for the six months ended 30 June 2006 of£2,863,000 relate to acquisition integration. Restructuring and re-organisationcosts of £2,496,000 in the six months ended 30 June 2005 consist of £1,200,000Board level changes, £400,000 fees relating to acquisition integration and£896,000 costs of merging the UK back offices of Taylor & Francis Group plc andInforma Group plc post combination. Restructuring and re-organisation costs of£8,277,000 in the 12 months ended 31 December 2005 consist of re-organisationcosts of £3,436,000, redundancies of £2,126,000, vacant property provisions of£1,515,000 and Board level changes of £1,200,000. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 5 Tax 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Current tax:United Kingdom corporation tax 9,922 5,201 18,912Foreign tax 5,922 2,223 4,871 15,844 7,424 23,783Deferred tax:Current year (6,206) 1,458 (8,729)Deferred tax adjustment (released) / recognised on UK - (116,557) 35,224restructuring 9,638 (107,675) 50,278 UK corporation tax is calculated at 30 per cent (2005: 30 per cent) of theestimated assessable profit for the year. Taxation for other jurisdictions iscalculated at the rates prevailing in the relevant jurisdictions. On 1 January 2005 a deferred tax credit of £116,557,000 was booked in respect ofthe transfer of the UK trade and assets of the Taylor & Francis Group businessesto Informa UK Limited. Goodwill was also written down by £86,562,000 inrelation to the UK deferred tax liability originally provided on the combinationwith Taylor & Francis Group plc. Both of these entries were then reversed inthe Income Statement for the year to 31 December 2005. On the transfer of the trade and assets of PJB Publications Limited to T&FInforma UK Limited on 1 September 2004, a deferred tax credit of £35,386,000 wasbooked. The balance left on this credit of £35,224,000 was reversed through theIncome Statement during the second half of 2005. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 6 Joint ventures The Group has a 50% interest in two joint ventures (2005: three) and includesresults from these as follows: 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Revenue 770 1,098 1,803Expenses (739) (1,158) (2,121)Profit / (loss) for the period from continuing operations 31 (60) (318) 7 Dividends 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Amounts recognised as distributions to equity holders in theperiod:Final dividend for the year ended 31 December 2004 of 5.33p per - 15,926 15,926share (ex-Rights Issue 4.76p) Interim dividend for the year ended 31 December 2005 of 2.70p per - - 11,345share Final dividend for the year ended 31 December 2005 of 6.00p per 25,275 - -share 25,275 15,926 27,271 The proposed interim dividend for the six months ended 30 June 2006 of 3.3pence per share was approved by the Board on 26 September 2006 and has not beenincluded as a liability as at 30 June 2006. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 8 Earnings per share Basic The basic earnings per share calculation is based on a profit attributable toequity shareholders of the parent of £29,439,000 (2005 profit: £48,758,000 sixmonths and £8,825,000 twelve months). This profit on ordinary activities aftertaxation is divided by the weighted average number of shares in issue (lessthose non-vested shares held by employee share ownership trusts) which is421,235,000 (2005: 335,255,000 six months and 388,231,000 twelve months). Diluted The diluted earnings per share calculation is based on the basic earnings pershare calculation above except that the weighted average number of sharesincludes all potentially dilutive options granted by the Balance Sheet date asif those options had been exercised on the first day of the accounting period orthe date of the grant, if later, giving a weighted average of 423,270,000 (2005:336,820,000 six months and 390,004,000 twelve months). The table below sets out the adjustment in respect of diluted potential ordinaryshares: 6 months 6 months 12 months 2006 2005* 2005Weighted average number of shares used in basic earnings per 421,235,091 335,254,980 388,230,732share calculationEffect of dilutive share options 2,035,370 1,230,032 1,772,953Shares potentially to be issued or allotted - 334,734 -Weighted average number of shares used in diluted earnings per 423,270,461 336,819,746 390,003,685share calculation * The weighted average number of shares at 30 June 2005 has been adjusted forthe effects of the Rights Issue at 25 July 2005. Adjusted earnings per share The basic and diluted adjusted earnings per share calculations have been made toallow shareholders to gain a further understanding of the trading performance ofthe Group. They are based on the basic and diluted earnings per sharecalculations above except profits are based on continuing operations only,before minority interests, and are adjusted for items that are not perceived bymanagement to be part of the underlying trends in the business and the taxeffect on those adjusting items as follows: 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Profit for the period from continuing operations attributable to 29,439 48,758 10,710Equity holders of the parentAdjusting items net of attributable taxation (Note 4) 31,671 (21,215) 75,734Adjusted profit for the period from continuing operations 61,110 27,543 86,444attributable to Equity holders of the parent Earnings per share:From continuing operations- Adjusted basic (p) 14.51 8.22 22.27- Adjusted diluted (p) 14.44 8.18 22.16 Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 9 Statement of changes in equity Called up Share Reserve for share premium shares to be Merger capital issued reserve £'000 £'000 £'000 £'000 At 31 December 2004 29,946 192,097 1,647 496,400Implementation of IAS 39 - - - -At 1 January 2005 29,946 192,097 1,647 496,400Profit for the period attributable to equityholders of the parent - - - - Actuarial loss on defined benefit pension - - - -schemeExchange differences on translation offoreign operations - - - -Decrease in fair value of hedging derivatives - - - -Transfer to income - - - -Dividends to shareholders - - - -Share award expense - - 246 -Options exercised 128 - - -Premium arising on options exercised during - 3,773 - -periodAt 30 June 2005 30,074 195,870 1,893 496,400Loss for the period attributable to equityholders of the parent - - - -Actuarial loss on defined benefit pension - - - -schemeTax on items taken directly to equity - - - -Exchange differences on translation offoreign operations - - - -Increase in fair value of hedging derivatives - - - -Transfer to income - - - -Issue of share capital (net of £7,095,000transaction costs) 12,030 299,657 - -Dividends to shareholders - - - -Share award expense - - 498 -Options exercised 48 - - -Premium arising on options exercised during - 1,299 - -periodSettlement of deferred consideration - - (1,267) -At 31 December 2005 42,152 496,826 1,124 496,400Profit for the period attributable to equityholders of the parent - - - -Actuarial gain on defined benefit pension - - - -schemeTax on items taken directly to equity - - - -Exchange differences on translation offoreign operations - - - -Increase in fair value of hedging derivatives - - - -Transfer to income - - - -Dividends to shareholders - - - -Share award expense - - 779 -Options exercised 84 - - -Premium arising on options exercised during - 2,200 - -periodAt 30 June 2006 42,236 499,026 1,903 496,400 Hedging and Other ESOP trust translation Retained reserve shares reserve losses £'000 £'000 £'000 £'000 At 31 December 2004 37,398 (4,731) (6,800) (114,132)Implementation of IAS 39 - - (948) (5,000)At 1 January 2005 37,398 (4,731) (7,748) (119,132)Profit for the period attributable to equityholders of the parent - - - 48,758Actuarial loss on defined benefit pension - - - (2,130)schemeExchange differences on translation of foreignoperations - - 2,624 -Decrease in fair value of hedging derivatives - - (1,762) -Transfer to income - - 190 -Dividends to shareholders - - - (15,926)Share award expense - 1,090 - -Options exercised - - - -Premium arising on options exercised during - - - -periodAt 30 June 2005 37,398 (3,641) (6,696) (88,430)Loss for the period attributable to equityholders of the parent - - - (39,933)Actuarial loss on defined benefit pension - - - (1,636)schemeTax on items taken directly to equity - - - (3,752)Exchange differences on translation of foreignoperations - - 1,743 -Increase in fair value of hedging derivatives - - 5,135 -Transfer to income - - 226 -Issue of share capital (net of £7,095,000transaction costs) - - - -Dividends to shareholders - - - (11,345)Share award expense - 307 - -Options exercised - - - -Premium arising on options exercised during - - - -periodSettlement of deferred consideration - - - -At 31 December 2005 37,398 (3,334) 408 (145,096)Profit for the period attributable to equityholders of the parent - - - 29,439Actuarial gain on defined benefit pension - - - 6,718schemeTax on items taken directly to equity - - (1,460) (2,015)Exchange differences on translation of foreignoperations - - (17,781) -Increase in fair value of hedging derivatives - - 7,114 -Transfer to income - - (621) -Dividends to shareholders - - - (25,275)Share award expense - - - -Options exercised - - - -Premium arising on options exercised during - - - -periodAt 30 June 2006 37,398 (3,334) (12,340) (136,229) As at 30 June 2006 the Informa Employee Share Trust held 632,775 (2005: 632,775at 30 June 2005 and at 31 December 2005) ordinary shares in the Company at acost of £3,641,000 (2005: £3,641,000 at 30 June 2005 and at 31 December 2005)(market value £2,729,000). Informa Quest Ltd held 111,455 (2005: 114,419 at 30June 2005, 2,842 at 31 December 2005) ordinary shares at a book cost of £nil(2005: £nil at 30 June 2005 and at 31 December 2005) (market value £480,650).These shares have not yet been allocated to individuals and accordingly,dividends on these shares have been waived. At 30 June 2006 the Group held0.18% (2005: 0.25% at 30 June 2005, 0.15% at 31 December 2005) of its own calledup share capital. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 10 Reconciliation of operating profit to net cash inflow from operatingactivities 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Operating profit / (loss) - continuing operations 60,364 (48,833) 91,418Discontinuing / discontinued operations - (1,511) (1,885)Operating profit / (loss) 60,364 (50,344) 89,533Goodwill written off - 86,562 -Profit from operations 60,364 36,218 89,533 Adjustments for:Depreciation of property and equipment 4,258 3,452 8,175Amortisation of intangible assets 43,690 8,680 49,755Gain on disposal of property and equipment 10 3 100Operating cash flows before movements in working capital 108,322 48,353 147,563 Increase in inventories (4,437) (1,755) (2,421)Decrease / (increase) in receivables 11,868 (9,310) (5,637)(Decrease) / increase in payables (49,684) (36,134) 19,451Movement in other operating items 1,118 3,493 1,973Cash generated by operations 67,187 4,647 160,929 Adjusted cash generated by operations 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000Adjusted operating profit (Note 4) 105,069 48,113 147,329 Cash generated by operations 67,187 4,647 160,929Discontinuing operations - 1,511 -Restructuring and re-organisation costs 2,863 2,496 8,277Adjusting items on a cash flow basis 70,050 8,654 169,206Accrued in prior period 4,426 2,500 2,500Accrued at period end (4,056) (948) (4,426)Prepaid for future periods - 2,095 -Adjusted cash generated by operations 70,420 12,301 167,280 6 months 6 months 12 months 2006 2005 2005 % % %Percentage of adjusted operating profit converted to adjusted 67 26 113cash generated by operations 11 Reconciliation of net cash flow to movement in net debt 6 months 6 months 12 months 2006 2005 2005 £'000 £'000 £'000(Decrease)/increase in cash and cash equivalents (11,138) (14,892) 960Decrease in debt financing (10,947) (43,341) (418,605)Change in net debt resulting from cash flows (22,085) (58,233) (417,645)Foreign exchange translation difference 15,818 (4,660) (13,160)Non-cash movements (583) (250) (2,618)Movement in net debt during the period (6,850) (63,143) (433,423)Opening net debt (735,410) (301,987) (301,987)Closing net debt (742,260) (365,130) (735,410) Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 12 Analysis of changes in net debt At 1 January 2006 Non-cash Cash flow Exchange At 30 June movements movements 2006 £'000 £'000 £'000 £'000 £'000Cash at bank and in hand 20,654 - (13,982) - 6,672Overdrafts (4,569) - 2,844 - (1,725)Cash and cash equivalents 16,085 - (11,138) - 4,947 Bank loans due in less than (58,659) 1,003 (91) (11) (57,758)one yearLoan notes due in less than (293) - 6 - (287)one yearBank loans due after more (692,500) (1,586) (10,890) 15,829 (689,147)than one yearFinance leases due in less (23) - 17 - (6)than one yearFinance leases due after more (20) - 11 - (9)than one year (751,495) (583) (10,947) 15,818 (747,207)Total (735,410) (583) (22,085) 15,818 (742,260) Cash and cash equivalents (which are presented as a single class of assets onthe face of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. 13 Post Balance Sheet events The Group has sold one of its properties held for sale. The proceeds were£2,500,000 which has resulted in a profit of £233,000 less costs. The following acquisitions were made subsequent to the period end. The cashconsideration amounts disclosed are based on completion accounts and are subjectto change. Librapharm Limited On 6 July 2006, the Group acquired 100% of the issued share capital ofLibrapharm Limited, a pharmaceutical journals publisher with an online journalplatform, the Scientific World, for a cash consideration of £21,500,000 pluscosts and a GBP for GBP net assets adjustment based on the draft final balancesheet which is due to be prepared by 90 days after closing. Abu Dhabi Wedding Show On 16 July 2006, the Group acquired the trading assets of the Abu Dhabi WeddingShow, an annual consumer exhibition in Dubai, for a cash consideration of£546,000 plus costs. Integrated Cultures Inc. On 31 July 2006, the Group acquired 100% of the issued share capital ofIntegrated Cultures Inc., a performance improvement franchise of AchieveGlobal,Inc., for a cash consideration of £1,582,000 plus costs and a US$ for US$working capital adjustment between the estimated closing balance sheet and thedraft final balance sheet which is due to be prepared by 60 days after closing. IPSA, Inc. On 31 July 2006, the Group acquired 100% of the issued share capital of IPSA,Inc., performance improvement franchises of AchieveGlobal, Inc. and ESIInternational, Inc., for a cash consideration of £3,546,000 plus costs and a US$for US$ working capital adjustment between the estimated closing balance sheetand the draft final balance sheet which is due to be prepared by 60 days afterclosing. David Fulton Publishers Limited On 15 August 2006, the Group acquired 100% of the issued share capital of DavidFulton Publishers Limited, an educational book publisher, for a cashconsideration of £4,642,000 plus costs and a working capital adjustment whichwill be agreed within 100 days of closing. FAB4 On 16 August 2006, the Group acquired the trading assets of FAB4, anagricultural trade show in Dubai, for a cash consideration of £300,000 pluscosts. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 14 Businesses acquired Cash paid on acquisition net of cash acquired 2006 2005 2005 6 months 6 months 12 months £'000 £'000 £'000Current-year acquisitionsCavendish Publishing Limited 6,055M-Solutions 10,194IPEX 7,344Other 6,110Prior-year acquisitions2005 acquisitions:Medic-to-Medic 6,270 6,491Ashley Publications Limited 16,298 16,415IIR Holdings Limited - 777,951Other 81 4,948 6,5172004 acquisitions:Other - 5,413 29,784 27,516 812,787 The combined impact on the Group's profit after tax from the newly acquiredbusinesses for the first half of 2006 amounted to £3,823,000 on revenues of£20,018,000. The total liabilities of newly acquired businesses amounted to£1,545,000 as at 30 June 2006. All acquisitions were paid for in cash and in all acquisitions full control overthe business has been acquired, either by acquiring 100% of the outstandingshares or by means of an asset purchase deal. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 Cavendish Publishing Limited On 4 January 2006, the Group acquired 100% of the issued share capital ofCavendish Publishing Limited, a legal book publishing business, for a cashconsideration of £6,056,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000Intangible assets 186 (186) -Property and equipment 26 (26) -Inventory 321 (47) 274Trade and other receivables 323 (86) 237Cash and cash equivalents 1 - 1Trade and other payables (399) (35) (434)Deferred tax liability - (1,160) (1,160)Net assets 458 (1,540) (1,082)Intangible assets 3,867Provisional goodwill 3,271Total consideration 6,056 Satisfied by:Cash 6,056 Net cash outflow arising on acquisitionCash consideration 6,056Cash and cash equivalents acquired (1) 6,055 Goodwill of £3,271,000 represents the excess of the purchase price over the fairvalue of the net tangible and intangible assets acquired, and is not deductiblefor tax purposes. The goodwill amount is provisional and subject to changefollowing completion of a fair value exercise. The goodwill arising on theacquisition is attributable to the anticipated profitability of products asincluded into the existing list of legal publications. Cavendish Publishing Limited generated revenues of £659,000 and net income(based on estimated tax rate of 30%) of £22,000 in the post acquisition periodfrom 4 January 2006 to 30 June 2006. The results of Cavendish PublishingLimited are included in the Humanities & Social Science market sector. If the acquisition of Cavendish Publishing Limited had taken place on the firstday of the financial year, Group revenues and profit after tax attributable toEquity shareholders would not have been materially affected. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 M-Solutions On 6 February 2006, the Group acquired the trading assets of M-Solutions, aprovider of data and information solutions to the global financial servicesindustry, for a cash consideration of £10,194,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000Intangible assets 4,804 (4,804) -Property and equipment 201 - 201Trade and other receivables 641 - 641Trade and other payables (2,633) 272 (2,361)Net assets 3,013 (4,532) (1,519)Intangible assets 6,834Provisional goodwill 4,879Total consideration 10,194 Satisfied by:Cash 10,194 Net cash outflow arising on acquisitionCash consideration 10,194Cash and cash equivalents acquired - 10,194 Goodwill of £4,879,000 represents the excess of the purchase price over the fairvalue of the net tangible and intangible assets acquired, and is not deductiblefor tax purposes. The goodwill amount is provisional and subject to changefollowing completion of a fair value exercise. The goodwill arising on theacquisition is attributable to the anticipated profitability of products asincluded into the existing financial data analysis portfolio. M-Solutions generated revenues of £1,720,000 and net income (based on assumedtax rate of 30%) of £328,000 in the post acquisition period from 6 February 2006to 30 June 2006. The results of M-Solutions are included in the Financial DataAnalysis market sector. If the acquisition of M-Solutions had taken place on the first day of thefinancial year, Group revenues for the first half of 2006 would have been£344,000 higher and the Group profit after tax attributable to Equityshareholders would have been £92,000 higher. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 IPEX On 31 March 2006 the Group acquired the trade and assets of IPEX, an exhibitionbusiness, for cash consideration of £12,634,000. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000Trade and other receivables 5,766 - 5,766Cash and cash equivalents 5,290 - 5,290Trade and other payables (11,436) - (11,436)Net assets (380) - (380)Intangible assets 13,014Provisional goodwill -Total consideration 12,634 Satisfied by:Cash 12,634 Net cash outflow arising on acquisitionCash consideration 12,634Cash and cash equivalents acquired (5,290) 7,344 IPEX takes place once every four years and in 2006 was held post-acquisition.IPEX generated revenues of £20,871,000 and net income (based on assumed tax rateof 30%) of £4,379,000 in the post acquisition period from 31 March 2006 to 30June 2006. Under the terms of an existing agreement with the previous owners tomanage the event the Group would have recognised revenues and profits so theincremental impact was revenue of £17,000,000 and net income (based on assumedtax rate of 30%) of £3,150,000. The results of IPEX are included in theRegional Events market sector. Notes to the Unaudited Interim Statements - continued For the Six Months Ended 30 June 2006 Other Business Combinations The Group acquired the trading assets or 100% of the issued share capital ofCordial Events Limited, Parks & Company LLC, Maritime Quarterly, the 50% of the3G Russia event not already owned and intellectual property. Net assets acquired Book value Fair value Fair value adjustments £'000 £'000 £'000Trade and other receivables 656 - 656Trade and other payables (379) - (379)Net assets 277 - 277Intangible assets 1,505Provisional goodwill 5,430Total consideration 7,212 Satisfied by:Cash 6,110Deferred consideration 557Contingent consideration 545 7,212 Net cash outflow arising on acquisitionCash consideration 6,110 6,110 Other acquisitions generated revenues of £639,000 and net income (based on anassumed tax rate of 30%) of £323,000 Goodwill of £5,430,000 represents the excess of the purchase price over the fairvalue of the net tangible and intangible assets acquired and is not deductiblefor tax purposes. The goodwill amount is provisional and subject to changefollowing completion of a fair value exercise. The goodwill arising on theseacquisitions is attributable to anticipated profitability as they are integratedinto the Group. Directors and Advisers Directors Registered OfficeRichard Hooper (Non-executive Chairman) Informa plcPeter Rigby (Chief Executive) Mortimer HouseDavid Gilbertson (Managing Director) 37-41 Mortimer StreetAnthony Foye (Finance Director) London W1T 3JHDerek Mapp (Senior Non-executive Director)Sean Watson (Non-executive Director)Dr Pamela Kirby (Non-executive Director)John Davis (Non-executive Director) Secretary RegistrationJohn Burton Registered in England and Wales Number 3099067 Public Relations AuditorsFinancial Dynamics Deloitte & Touche LLPHolborn Gate Chartered Accountants26 Southampton Buildings Abbots House, Abbey StreetLondon WC2A 1PB Reading, Berkshire, RG1 3BD Principal LawyersCMS Cameron McKenna AshurstMitre House Broadwalk House160 Aldersgate Street 5 Appold StreetLondon EC1A 4DD London EC2A 2HA StockbrokersHoare Govett Limited Merrill Lynch International250 Bishopsgate Merrill Lynch Financial CentreLondon EC2M 4AA 2 King Edward Street London EC1A 1HQRegistrarsLloyds TSB RegistrarsThe CausewayWorthingWest Sussex BN99 6DA Pro Forma ResultsThese results include IIR as if it was part of the Group from 1st January 2005.IIR was acquired on 6 July 2005 2006 2005 Total Total Increase Increase £'m £'m £'m % Turnover 533.7 448.0 85.7 19 PI 109.9 94.9 15.0 16Subscriptions 116.7 105.7 11.0 10Copy sales 59.4 51.9 7.5 14Advertising 15.6 14.7 0.9 6Delegates & Conferences 232.1 180.8 51.3 28 533.7 448.0 2006 2005 Total Total Increase £'m £'m % UK 88.9 62.6 42US 211.7 178.4 19CE 152.6 133.0 15RoW 80.5 74.0 9 533.7 448.0 Turnover by Division 2006 2005 Total Total Increase £'m £'m % Academic 138.8 120.3 15 Professional 182.8 161.7 13 Commercial 212.1 166.0 28 533.7 448.0 Turnover by Business 2006 2005 Total Total Increase £'m £'m % AcademicSTM 86.1 74.4 16HSS 52.7 45.9 15 138.8 120.3 ProfessionalFDA 32.6 30.1 8FILT 40.3 36.7 10PI 109.9 94.9 16 182.8 161.7 CommercialTelecoms 45.5 32.3 41MTT & Commodities 32.3 29.3 10Regional events 134.3 104.4 29 212.1 166.0 Total 533.7 448.0 19 Adjusted Operating Profit 2006 2005 Increase Total Total £'m Increase £'m £'m % 105.1 80.3 24.8 31 Adjusted OP by Division 2006 2005 Total Total Increase £'m £'m % Academic 29.9 24.1 24 Professional 34.1 28.3 20 Commercial 41.1 27.9 47 105.1 80.3 2006 2005 Total Total Increase £'m £'m % AcademicSTM 21.2 17.1 24HSS 8.7 7.0 24 29.9 24.1 ProfessionalFDA 9.1 7.6 20FILT 9.4 7.8 21PI 15.6 12.9 21 34.1 28.3 CommercialTelecoms 12.1 8.6 41MTT & Commodities 3.5 2.9 21Regional events 25.5 16.4 55 41.1 27.9 Total 105.1 80.3 31 -------------------------- ((1))Proforma: assumes that IIR was part of the group from 1st January 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Informa