29th Jul 2011 07:00
Embargoed until 7am 29 July 2011 Revenue growth and margins on track Results for the half year ended 30 June 2011
- Headline revenue growth of 9.1% or 12.7% at constant currency ("CC")
- Underlying(a) revenue growth of 6.4%
- Adjusted operating profit(b) up 10.5% to £91.9m with margin(c) of 19.4% (H1 2010: 19.2%)
- Diluted adjusted EPS(d) of 25.1p per share (H1 2010: 24.7p)
- Interim dividend of 6.3p (H1 2010: 6.0p) up 5.0%
- Adjusted EBITDA up 10.4% to £100.6m (H1 2010: £91.1m) - cash conversion ratio(e) of 119.7%
- Four acquisitions completed in H1 for maximum consideration of £21.2m
- Further print disposals of 12 titles during the period generated £14.6m of proceeds
- Today announce acquisition of Ecobuild for £31.2m cash consideration and upto £20.0m earn outBusiness performance H1 2011 H1 2010 Change Change at Underlying CC Change(a) £m £m % % %Revenue 474.0 434.3 9.1 12.7 6.4Adjusted operating 91.9 83.2 10.5 14.6 -4.1profit(b)Adjusted operating profit 19.4% 19.2% 0.2%ptmargin(c)Adjusted EBITDA 100.6 91.1 10.4Adjusted PBT 79.8 76.1 4.9Diluted adjusted EPS(d) 25.1p 24.7p 1.6Dividend per share 6.3p 6.0p 5.0Cash generated from 112.4 76.9 46.2Operations IFRS Statutory results H1 2011 H1 2010 Change £m £m %Revenue 474.0 434.3 9.1Operating profit 72.6 67.0 8.4Profit after tax 55.8 49.6 12.5EPS 20.5 18.7 9.6Weighted av. no. of 243.4 243.5sharesNet Debt 482.2 302.8
David Levin, UBM's Chief Executive Officer, commented:
"We have had a good first half with the business trading in line with our guidance. We're pleased with the 6.4% underlying revenue growth, and particularly the 16% headline growth in Emerging Markets(f) where we now generate almost 20% of our total operating profit. These positive revenue trends have driven healthy 10.5% growth in adjusted operating profit, an increase in our Group margin to 19.4% and were accompanied by strong cash generation.
"We continue to build our platform for profitable growth, developingmarket-leading products for attractive business communities in growth markets.During the first half of the year, we acquired four events businesses andlaunched nine new and geo-adapted tradeshows. We've continued our targetedinvestment in online, social media and workflow products, particularly in ourData Services and Targeting, Distribution & Monitoring businesses, andcompleted the sale of a number of our legacy print activities.
"Today we've announced the acquisition of Ecobuild, the world's largest tradeshow for the fast-growing sustainable construction market. It complements our other businesses in the UK built environment sector and we see good opportunities to develop Ecobuild events in new geographies outside the UK, taking advantage of our worldwide events infrastructure and existing events portfolio.
"Overall our outlook for the full year has improved modestly since we now expect our events business to outperform the guidance we gave in March."
Operational Highlights
£m H1 H1 Change Change at Underlying CC Change(a) 2011 2010 % % %RevenueEvents 177.1 139.3 27.1 31.5 13.6Targeting, Distribution & 95.2 91.2 4.4 9.3 5.6MonitoringData Services 100.2 98.6 1.6 4.5
3.9
Online - Marketing Services 41.8 30.9 35.3 41.7 18.9Print - Magazines 59.7 74.3 -19.7 -18.8 -13.6Total Revenue 474.0 434.3 9.1 12.7 6.4 Adjusted Operating Profit(b)Events 57.7 40.7 41.8 47.6 9.9Targeting, Distribution & 20.1 23.4 -14.1 -9.9 -10.0MonitoringData Services 17.4 20.3 -14.3 -13.4 -14.6Online - Marketing Services 0.7 (0.5) n/m n/m 5.3Print - Magazines 3.1 3.7 -16.2 -16.2 -16.9Net Corporate costs (7.1) (4.4) 61.4 61.4 61.4Total Adjusted Operating 91.9 83.2 10.5 14.6 -4.1Profit(b) Adjusted Operating ProfitMargin(c)Events 32.6% 29.2% 3.4%ptTargeting, Distribution & 21.1% 25.7% -4.6%ptMonitoringData Services 17.4% 20.6% -3.2%pt
Online - Marketing Services 1.7% (1.6)% 3.3%pt Print - Magazines
5.2% 5.0% 0.2%pt
Total Adjusted Operating Profit 19.4% 19.2% 0.2%pt Margin(c)
Events
- Reported revenue growth of 27.1% partially reflects the positive contribution from acquired Canon events
- Underlying annual revenues up 13.6% Emerging Markets(f) events grew 24.5%, particularly in China (+17.4%) and India, and accounted for 30.2% of the H1 annual events revenues
- Forward bookings for 2010 Top 20 events up 12.9% - as expected, the distortion associated with the Hong Kong Jewellery show floor plan reorganisation is unwinding
- Biennial revenues of £9.4m (H1 2010: £10.8m) - underlying biennial revenues up 3.5% over their previous 2009 editions
- Strong margin(c) of 32.6% (H1 2010: 29.2%) reflects the high margin acquisitions, higher margin biennials and growth in our larger annual events partially offset by the launch costs
- Robust stand revenue performance combined with continued positive attendee and sponsorship trends, particularly in US technology events
- Nine new launches during the period - of which 7 are geo-adaptations - breakeven in aggregate
- Four acquisitions contributing £4.1m to H1 revenues - £8.6m LTM pro forma
- Market leading Ecobuild acquisition announced - generated revenues of £9.4m at the event in March 2011
Targeting, Distribution & Monitoring ("TD&M")
- Reported revenue growth of 4.4% or 9.3% at CC, with underlying revenues up 5.6%
- Resilient US wire performance (+2.5% at CC) with consistent strong margins, driven by growth in the volume
- US non-wire revenues up 10.1% at CC - including a good performance at Vintage (+7.1% at CC)
- International revenues up 18.3% at CC
- Margin(c) of 21.1% (H1 2010: 25.7%) reflecting, previously announced, stepup in IT infrastructure costs, sales force investment, dilution from growth inVintage and international expansion, partially offset by margin enhancementfrom US Wire and other US non-wire products
Data Services ("DS")
- Reported revenue growth of 1.6% or 4.5% at CC - underlying revenues up 3.9%
- Mix of revenues improving - continue to manage the migration from print to digital and services
- Underlying revenue growth of 30% in Technology & IP community was the key driver. A robust performance from the Health, Built Environment and Pulp & Paper sectors partially offset by continued weakness in Trade & Transport
- As anticipated the DS margin(c) was 17.4% (H1 2010: 20.6%) primarily reflecting the continued decline in advertising in our print directories but also targeted investment to develop the online and workflow products
Online & Print - Marketing Services
- Combined reported revenues declined 3.5% driven by continued print portfoliodisposals and continued organic print decline partly offset by good growth inOnline - Marketing Services.
- The combined margin(c) improved 0.7%pt to 3.7% (H1 2010: 3.0%)
Online - Marketing Services ("Online")
- Reported revenue growth of 35.3% driven by: contribution of acquired assets (most notably Canon), continued improvements in advertising trends and new product developments.
- Underlying growth of 18.9%
- Margin(c) of 1.7% (H1 2010: (1.6)%) helped by good performance in banner advertising partially offsetting investment in new products: 74 new virtual events hosted in H1 2011 (H1 2010: 29), nine Community-in-a-box ("CiaB") websites
- Investment of £5m during the period on virtual events and CiaB (H1 2010: £1m)
Print - Magazines ("Print")
- Underlying revenues remain weak - down 13.6%
- Reported revenues declined 19.7% - driven by the disposal of four print businesses (12 titles), closure of ten titles and continuing organic print decline.
- Slight margin(c) improvement to 5.2% (H1 2010: 5.0%)
- Systematic portfolio review continues
Outlook
Overall the outlook for our businesses remains in line with the guidance wehave previously provided, except that we now expect slightly higher revenuegrowth and profits in Events, as described in the detailed guidance below. Asa result, we now expect underlying consolidated revenue growth for 2011 ofaround 5.5-6%, broadly in line with 2010's rate. We anticipate continuedgrowth in consolidated operating profit largely driven by a full year ofcontribution from acquisitions and continued momentum in our Events business,tempered by the effects of print disposals, lower margins in Data Services andTD&M, and higher net corporate costs.
- Events: Following the excellent trading performance in H1 combined with positive forward booking trends we now expect full year underlying revenue growth similar to that enjoyed last year (about 12%), with full year margins in the range of 32-32.5%. We continue to expect good contribution from biennials, particularly in Q4. However their impact on the margin will be partially offset by the phasing impact of the acquired Canon and Ecobuild portfolios (which are margin dilutive to H2) and further investment in new launches and geo-adaptations
- TD&M: Our guidance is unchanged: we expect solid underlying revenue growthsimilar to 2010 (c 5.6%), with overall margins slightly ahead of the secondhalf of 2010 (H2 2010: 20.8%). TD&M revenues reflect seasonal variations withrelative weakness in the first and third quarters.- Data Services: We retain our guidance of revenue growth similar to 2010(c.3%), and we expect comparatives to become progressively more challenging asthe year continues. Our margin outlook of approximately 16% for the full yearremains the same- Online: Our guidance remains unchanged. We continue to expect good growth inrevenues, although there is likely to be some moderation in underlying ratesas the year progresses. As before, we do not currently anticipate marginsbeing much higher than 2010 (FY 2010: 1.9%)- Print: After taking into account all the announced disposals (whichcontributed £47.3m of revenues in 2010) and the £9.7m pro-forma 2010acquisitions, we continue to expect the underlying revenues of the outstandingportfolio to decline at about 12% p.a. with a margin similar to that of 2010(c7%)
- Net Corporate Costs for the full year are currently expected to be approximately £14m
- Net interest expense, taking into account the Ecobuild acquisition, is currently expected to be £29-30m
- Pension credit is expected to be £2.9m
- Tax: The corporate tax accrual rate of 14.8% reflects our expected tax charge for the full year
Throughout this announcement:
(a) Where quoted, underlying growth rates exclude currency movements, discontinued revenues, revenues from acquisitions, disposals and biennial events.
(b) Adjusted operating profit represents operating profit excluding amortisation of intangible assets arising on acquisitions, exceptional items and share of taxation on profit from joint ventures and associates.
(c) Adjusted operating margin relates to our adjusted operating profit. It is adjusted operating profit expressed as a percentage of revenues.
(d) Adjusted earnings per share is before amortisation of intangible assets arising on acquisitions, certain exceptional items, deferred tax on intangible assets, taxation relating to exceptional items and net financing expense - other.
(e) Cash conversion is the ratio of adjusted cash generated from operations toadjusted operating profit. Adjusted cash generated from operations representsadjusted operating profit, before depreciation and profit from associates andjoint ventures, after capital expenditure, movement in working capital,dividends from associates and joint ventures and non cash movements.
(f) Emerging Markets constituents are the non-G10 countries - most notably for UBM: China, Brazil, India, Thailand, Singapore, Indonesia, Malaysia, Philippines, Mexico and UAE.
ContactsMedia Investors
Peter Bancroft Director of Communications Kate Postans Head of Investor Relations E-mail
[email protected] E-mail
Direct telephone +44 20 7921 5961 Direct telephone +44 20 7921 5023 Chris Barrie Citigate Dewe RogersonE-mail [email protected] telephone +44 20 7282 2943Mobile +44 796 872 72 89
UBM will be hosting an analyst and investor presentation at 11am at the JPMorgan Auditorium, 20 Moorgate, EC2R 6DA. A live webcast of the resultspresentation will be made available from UBM's website. To access the webcastplease go to www.ubm.com. An on demand recording of the webcast will also beaccessible from UBM's website, www.ubm.com after 3pm.Notes to EditorsAbout UBMUBM plc is a leading global business media company. We inform markets andbring the world's buyers and sellers together at events, online, in print andprovide them with the information they need to do business successfully. Wefocus on serving professional commercial communities, from doctors to gamedevelopers, from journalists to jewellery traders, from farmers to pharmacistsaround the world. Our 6,500 staff in more than 30 countries are organised intospecialist teams that serve these communities, helping them to do business andtheir markets to work effectively and efficiently.
For more information, go to www.ubm.com
OPERATING REVIEWEVENTS£m H1 2011 H1 2010 Change Change at Underlying CC Change(a) % % %Annual Events Revenue 167.7 128.5 30.5 35.4 13.6Biennial Events Revenue 9.4 10.8* -13.0 -12.1 -Total Revenue 177.1 139.3 27.1 31.5 13.6Total Adjusted Operating 57.7 40.7 41.8 47.6 9.9Profit(b)
Total Adjusted Operating Profit 32.6% 29.2% 3.4%pt Margin(c)
*Restated to adjust for an Annual event previously designated as Biennial
We remain encouraged by the progress of our Events business which now accounts for 37.4% of UBM revenues (H1 2010: 32.1%) and 62.8% of total adjusted operating profit (H1 2010: 48.9%).
Total reported revenues grew by 27.1% over the period to £177.1m (H1 2010:£139.3m). Although, overall, odd years enjoy a beneficial biennialcontribution, in the first half this is lower than the prior year comparativewhile the second half is typically much stronger. During the period we hostednine biennial events (H1 2010: eight events) which contributed £9.4m ofrevenue (H1 2010: £10.8m - after adjustment for an annual event previouslydesignated as a biennial). The biennials this period, although lower than thecomparative 2010 period, exhibited 3.5% underlying revenue growth over their2009 editions.Annual event revenues grew 30.5% to £167.7m (H1 2010: £128.5m) with standrevenues up 34.6% to £117.0m (H1 2010: £86.9m), attendee revenues up 14.2% to£20.1m (H1 2010: £17.6m) and Sponsorship and other revenues increasing 27.5%to £30.6m (H1 2010: £24.0m). A total of 26,000 exhibitors attended our annualevents during the period (H1 2010: 18,000) with square meters for our annualportfolio rising 42.8% to 580,000 and overall visitor numbers of 892,000 being34.0% ahead of the first half 2010.During the period we hosted over 200 events, including: 140 tradeshows, 55conferences and 6 awards in 22 different countries (H1 2010: over 100tradeshows, 35 conferences and 10 awards in 15 countries). This included ninenew launches and geo-adaptation events in regions such as Brazil, India andNigeria. During the period we acquired four businesses in Turkey, India, ASEANand the US and, as part of the usual portfolio management, discontinuedcertain others (£4.1m of H1 2010 revenues have now been discontinued or sold).
We invested £10.4m of cash (excluding £7.5m of contingent and deferred consideration) buying outright or acquiring majority interests in the four businesses which contributed £4.1m to the 2011 reported events revenue. Had they all been owned since 1 January 2011, they would have contributed approximately a further £2.3m of revenue. In addition, last year's Canon Communications and CBME acquisitions contributed incremental revenues to H1 2011.
Reported results reflect currency headwinds, particularly for the US dollardenominated businesses. On an underlying basis, which excludes currencymovements, portfolio changes and biennial events, revenues grew 13.6% duringthe year.£m H1 2011 H1 2010 Change Change at CC Underlying Change(a) % % %Annual Events RevenueEmerging Markets(f) 52.9 42.3 25.1 31.6 28.8N. America 62.6 43.5 43.9 51.2 10.4UK 31.1 29.8 4.4 4.7 6.8Europe 17.0 8.4 102.4 104.8 8.8RoW 4.1 4.5 -8.9 -4.7 -19.5Annual Events Revenue 167.7 128.5 30.5 35.4 13.6The table above shows the annual event revenues split by geography. EmergingMarkets(f) now account for 31.5% of our annual event revenues, having risen25.1% compared to H1 2010. This increase was helped by particularly goodperformances in CPhI China, P-MEC China and the Hong Kong Jewellery show, withincremental contribution from our new SATTE acquisition. Underlying revenuesfor the region were up 28.8%.
Incremental revenues from the acquired Canon and DesignCon events, combined with a strong performance at Interop Las Vegas and other Technology events resulted in North American annual event revenues rising 43.9%. On an underlying basis, revenues rose 10.4% driven by the continued strength in attendee-paid events in the technology sector.
Reported revenues from UK annual events were up 4.4% with incrementalcontribution from UK Canon shows, robust performances at shows such asInteriors Birmingham and IFSEC mitigating slight softness from some of thesmaller shows. Underlying UK annual event revenues rose 6.8%. European annualrevenues rose 102.4% largely because of the incremental contribution from theRotaforte Turkish Jewellery Show, various Canon events and Routes Europe. Onan underlying basis, European annual revenues rose 8.8%. The rest of worldrevenues refer to Japan, which despite the tsunami, hosted eight out of thenine planned H1 annual events and reported revenue down only 8.9%.Adjusted operating profit rose 41.8% to £57.7m (H1 2010: £40.7m) with anoperating margin of 32.6% (H1 2010: 29.2%). The positive contribution from ouracquired events, particularly the largest Canon MD&M events, a higher marginbiennial portfolio, combined with some operational leverage from the growth ofthe largest shows offset the dilution of the nine new geo-adaptations andlaunches.
TARGETING, DISTRIBUTION & MONITORING
£m H1 2011 H1 2010 Change Change at Underlying CC Change(a) % % %RevenueUS wire products 37.5 38.9 -3.6 2.5 2.4US non-wire products 27.3 26.3 3.8 10.1 10.3PR Newswire Europe 9.4 6.3 49.2 49.2 18.9Canada Newswire 16.0 15.3 4.6 5.3 -0.8PR Newswire Asia & LatAm 5.0 4.4 13.6 19.0 6.0Total Revenue 95.2 91.2 4.4 9.3 5.6
Total Adjusted Operating Profit(b) 20.1 23.4 -14.1 -9.9
-10.0
Total Adjusted Operating Profit 21.1 25.7 -4.6%pt Margin(c)
PR Newswire has made good progress in the first half of 2011. Headline revenuegrowth of 4.4% to £95.2m (H1 2010: £91.2m) reflects the benefit of the 2010acquisitions, most notably Hors Antenne, DNA-13 and PR Newswire Brazil, offsetby currency headwinds, particularly from a weaker US dollar. Revenues grew9.3% on a constant currency basis and 5.6% on an underlying basis.The US wire business was resilient with revenues increasing 2.4% on anunderlying basis. Our market share performance was improved: the number oftext wire releases we distributed in the US (on behalf of US and internationalcustomers) grew 4.0% to 101,361, which was only slightly behind the overallmarket growth of 4.4%, and our share relative to our largest competitorimproved slightly. Volumes continue to shift to PR and marketing-relatedcontent rather than IR/disclosure-related releases, and consequently revenueper release fell reflecting this mix change.
Our non-wire US products grew 10.3% on an underlying basis to deliver revenues of £27.3m, representing 28.7% of overall TD&M revenues. This increase was driven by particularly positive performances in our enhanced targeting offering, Multimedia News Releases, MultiVu Broadcast services and Vintage (our financial filing and printing service).
We continued to diversify our geographic revenue base. Our internationalrevenues rose 16.9% to £30.4m and now account for 31.9% of total TD&M revenues(H1 2010: 28.5%). PR Newswire Europe revenues rose 49.2% to £9.4m, principallydriven by the incremental revenues from the Hors Antenne acquisition. On anunderlying basis, excluding these acquisitions and the effect of currency,revenues rose 18.9% largely driven by strong wire revenues in Germany, the UKand the Nordic region. Revenues generated at Canada Newswire rose 4.6% to£16.0m reflecting the incremental contribution of DNA-13, while our PRNewswire Asia and Latin American businesses increased 13.6% to £5.0m. Thislargely reflects the consolidation of PR Newswire Brazil and Argentinafollowing the purchase of the outstanding equity stake last year.
Adjusted operating profit for TD&M was £20.1m with a margin of 21.1% (H1 2010: 25.7%). This decline is due to a number of factors. The US wire and US non-wire products (excluding Vintage) saw good operational leverage and enhanced the margin by 1.6%pts. However we estimate -2.5%pt of the margin decline reflects incremental year-on-year IT expense, -1.7%pt higher sales force expenditure, -1.0%pt the lower margin Vintage business and -1.0%pt increased International (including full consolidation of the LatAm operation).
DATA SERVICES£m H1 2011 H1 2010 Change Change at Underlying CC Change(a) % % %RevenueSubscription & listing fees 68.3 68.0 0.4 1.5Consulting, content & training 25.4 22.7 11.9 22.7Advertising 6.5 7.9 -17.7 -17.7Total Revenue 100.2 98.6 1.6 4.5 3.9Total Adjusted Operating 17.4 20.3 -14.3 -13.4 -14.6Profit(b)
Total Adjusted Operating Profit 17.4 20.6 -3.2%pt Margin(c)
Data Services revenues were up 1.6% to £100.2m (H1 2010: £98.6m). After adjusting for currency headwinds, discontinued business and the small incremental revenue contributions from the 2010 acquisitions, underlying revenue growth was 3.9%. Our core products and services are performing well, and the mix of revenues is improving as we continue to manage the migration from print to online data and service revenues.
Subscription and listing fees grew 1.5% on a constant currency basis, with theincremental contribution of our SharedVue acquisition and growth in digitalsubscription products such as Medica digital, IAmetrics and RISI analytics,offsetting declines in the print data products overall. Print-related productsnow account for 37.1% of total DS revenues, 3.8 percentage points lower thanH1 2010. Consulting, content and training revenues rose 22.7% on a constantcurrency basis. As in 2010, this uplift was principally driven by significantgrowth in UBM TechInsights which is not only benefiting from positive marketconditions but also an expanded IP client service model. Constant currencyadvertising revenues fell 17.7% with continued declines in print advertisingparticularly in the Health and Trade & Transport communities.£m H1 2011 H1 2010 Change Change at CC Underlying Change(a) % % %RevenueHealth 44.2 43.8 0.9 0.2 0.2Technology & IP 23.5 20.1 16.9 25.0 29.8Trade & Transport 18.9 21.4 -11.7 -6.9 -11.9Paper 7.2 6.8 5.9 12.5 11.3Built Environment 6.4 6.2 3.2 3.2 6.5Other - 0.3 n/m n/m -59.3Total DS Revenue 100.2 98.6 1.6 4.5 3.9
The table above highlights revenue growth by community. Underlying revenuesfrom Health rose 0.2% reflecting solid Vidal listing with the uplift fromonline data products being broadly offset by the declines in the printdirectory businesses, particularly those in Europe. Our Technology &IP-related revenues grew 29.8% on an underlying basis with all of the growthattributable to UBM TechInsights where there is high demand for our customtechnical intelligence services and IP sales. The Trade & Transport communityremains weak with underlying revenues down 11.9%, reflecting declining printproduct revenues in Aviation and continued competitive pressure in bothcommunities. Revenues from Paper rose 11.3% on an underlying basis largelydriven by good growth in our pulp & paper forecast/analytics and costbenchmarking products. Revenues derived from products serving the BuiltEnvironment in the UK rose 6.5% on an underlying basis with good double digitgrowth in ABI data service.Adjusted operating profit for Data Services fell 14.3% to £17.4m (H1 2010:£20.3m) with a corresponding decline in the margin to 17.4% (H1 2010: 20.6%).This decline is a result of the shift in mix from high margin mature printproducts to digital products, as well as some targeted investment to enhancethe product offering and geographical reach.
ONLINE & PRINT - MARKETING SERVICES
£m H1 2011 H1 2010 Change Change at Underlying CC Change(a) % % %Total Revenue 101.5 105.2 -3.5 -1.5 -1.5Total Adjusted Operating 3.8 3.2 18.8 22.6 -14.3Profit(b)
Total Adjusted Operating Profit 3.7% 3.0% 0.7%pt Margin(c)
With the continued rationalisation of our portfolio of titles during theperiod we believe it is relevant to consider the performance of our Online andPrint Marketing Services on a combined basis. The combined revenues declined3.5% during the period while combined margin improved to 3.7% (H1 2010: 3.0%).ONLINE - MARKETING SERVICES£m H1 2011 H1 2010 Change Change at CC Underlying Change(a) % % %RevenueAdvertising 26.9 20.5 31.2 38.7Lead Generation & other 13.6 9.7 40.2 44.7Subscriptions 1.3 0.7 85.7 85.7Total Revenue 41.8 30.9 35.3 41.7 18.9
Total Adjusted Operating Profit(b) 0.7 (0.5) nm nm -5.3 Total Adjusted Operating Profit 1.7% (1.6)% 3.3%pt Margin(c)
Our Online businesses have seen very good growth with revenues up 35.3% to £41.8m. The movement in the US dollar exchange rate has created some currency headwind and on a constant currency basis revenues rose 41.7%. Much of this increase can be attributed to the incremental revenue contribution from the Canon and Routes online assets, acquired in H2 2010. Excluding these, underlying revenues grew 18.9%.
We saw good growth in all revenue streams during the period. Advertisingrevenues have increased 31.2% to £26.9m, driven largely by the contribution ofthe Canon online assets, although some of the existing brands, such asInformation Week have delivered good growth particularly through banneradvertising. Our "Lead generation & other" revenues have increased to £13.6m,up 40.2%, with our customised "community-in-a-box" offering growing inpopularity. The subscription element of the business grew 85.7% albeit off asmall base of £0.7m in H1 2010, largely thanks to good growth in UK BuiltEnvironment online subscription products.There is still a high degree of experimentation in the online environment. Wemonitor these trends closely in order to explore new revenue opportunities. Wehave continued to increase the number of virtual events we deliver, hosting 74in H1 2011 (H1 2010: 29) and are seeing our new customised products, whichdeliver higher audience engagement, become increasingly popular. A gradualtrend of "Marketing-as-a-service" continues to grow, shifting from project orcampaign-led work towards ongoing marketing around building, creating andsustaining a specific, targeted audience or community. H1 2011 H1 2010 Change Change at CC Underlying Change(a)£m % % %RevenueTechnology 32.9 24.2 36.0 44.3 16.1Health 4.5 3.1 45.2 45.2 40.1Built Environment 1.6 1.0 60.0 60.0 64.9Trade & Transport 0.7 0.4 75.0 75.0 9.0Other 2.1 2.2 -4.5 -4.5 4.5Total Online Revenue 41.8 30.9 35.3 41.7 18.9As shown in the table above the main driver has been the Technology communitywhere revenues rose £8.7m to £32.9m. This was largely thanks to theincremental contribution of the Canon online assets plus good underlyinggrowth of 16.1%. This underlying growth reflects continued strength in thetrading environment for technology companies coupled with good take-up ofUBM's innovations. The growth in Health revenues, up 45.2%, is derived from agood performance in the US health websites. Although modest in absolute terms,the 60% growth in Built Environment is owing to good performance in UK onlinesubscriptions. The Trade & Transport performance is flattered by the onlinerevenues from the Routes acquisition. Excluding these, underlying revenuesrose 9.0%.Adjusted operating profit for Online was £0.7m (compared to a loss of £0.5m inH1 2010) with a margin of 1.7% (H1 2010: (1.6)%). The good performance inbanner advertising more than offset the c.£2m investment in virtual events andc.£3m in custom built websites.PRINT - MAGAZINES H1 2011 H1 2010 Change Change at Underlying CC Change(a)£m % % %Total Revenue 59.7 74.3 -19.7 -18.8 -13.6Total Adjusted Operating 3.1 3.7 -16.2 -16.2 -16.9Profit(b)
Total Adjusted Operating Profit 5.2% 5.0% 0.2%pt Margin(c)
The significance of Print within the overall UBM business revenue mix continues to diminish and now accounts for 12.6% of total revenues (H1 2010: 17.1%) and 3.4% of total adjusted operating profit (H1 2010: 4.4%).
Revenues for the year fell by 19.7% to £59.7m. We have continued to manage theportfolio actively and during H1 2011 disposed of the France Presse, Publicanand Consultant print assets, and transferred the EDN Asia assets to the eMediaAsia JV. The timing of these disposals mean that whereas in H1 2010 thesetitles contributed £21.3m of revenue, in H1 2011 they only contributed £6.7m.We also closed or exited ten titles, which added to the decline in revenues,although this was offset by the Canon print titles which contributedincremental revenue to the portfolio. On an underlying basis, excluding thesedisposed and discontinued titles and adjusting for currency and theincremental Canon contribution, revenues fell 13.6% over the prior year.
The disposal of assets resulted in decline in profit to £3.1m (H1 2010: £3.7m) although margins rose 0.2%pt to 5.2%.
FINANCIAL REVIEW
Summary Group Income Statement
The table below presents selected items from UBM's consolidated incomestatement (which accompanies this summary), together with a reconciliation tonon-GAAP measures. IFRS Measures As adjusted1£m H1 2011 H1 2010 %Change H1 2011 H1 2010 %ChangeRevenue 474.0 434.3 9.1 474.0 434.3 9.1Operating expenses (excluding (a) lineitems below) (382.1) (351.1) 8.8 (382.1) (351.1) 8.8Share of tax on profit in JV &associates (a) (0.4) (0.2) (b)
(b)
Exceptional reorganisation andrestructuring costs (a) - (3.1) (b) (b)Other exceptional items (a) (0.3) (0.7) (b) (b)EBITA 91.2 79.2 15.2 91.9 83.2 10.5Amortisation - intangible assets arisingon acquisition (a) (18.6) (12.2) (b) (b)Operating profit 72.6 67.0 8.4 91.9 83.2 10.5Net interest expense (13.4) (8.6) (13.4) (8.6)
Financing income - pension schemes 1.3 1.4 1.3
1.4
Financing income - FX gain on forwardcontracts - 0.1 - 0.1Financing income - other 2.0 1.9 (b) (b)Financing expense - other (0.3) (3.7) (b) (b)PBT 62.2 58.1 7.1 79.8 76.1 4.9Taxation (6.4) (8.5) (11.8) (11.4)PAT 55.8 49.6 12.5 68.0 64.7 5.1Non-controlling interests (5.8) (4.1) (5.8) (4.1)Attributable profit 50.0 45.5 62.2 60.6 EBITDA 100.6 91.1 10.4
Weighted average no. of shares (million) 243.4 243.5 243.4
243.5
Fully diluted weighted average no. ofshares (million) 248.2 245.0 248.2
245.0
Earning per share (pence) 20.5 18.7 9.6 25.6 24.9 2.8Earnings per share (diluted) (pence) 20.1 18.6 8.1 25.1 24.7 1.6Dividend per share (pence) 6.3 6.0 5.0 6.3
6.0 5.0
(a) Expenses not included within Operating expenses figure
(b) All non-IFRS measures and business performance measures have been designated with a 1 and additional information on these measures has been provided at the end of this section.
Corporate Costs
Total corporate costs for H1 2011 were £10.2m (H1 2010: £8.2m). These corporate costs are partially offset by internal cost recoveries from UBM's operating businesses and by sundry income which is not attributable to any reporting segments' operations, resulting in a net corporate cost figure of £7.1m (H1 2010: £4.4m).
Exceptional items
Exceptional items relating to acquisitions
Following the adoption of IFRS 3 (revised) from 1 January 2010, acquisitioncosts of £1.4m were expensed as exceptional items, rather than being includedin the calculation of goodwill on acquisition as previously required underIFRS. An exceptional credit of £1.1m was recognised in relation to therevision of the estimates of contingent consideration for acquisitions made in2010. Details of the acquisitions made in the six months ended 30 June 2011are given in Note 13 of the Interim Financial Report.
Financing and interest expense
Net interest expense represents interest costs on UBM's bonds and bank loans,net of interest receipts on our cash and cash equivalents. Net interestexpense in H1 2011 was £13.4m, compared with £8.6m in H1 2010. This is mainlya result of a higher average debt for the year and higher costs fromlengthening debt maturity.
Financing income includes an IAS 19 pension interest credit of £1.3m (H1 2010: £1.4m).
Net financing expense - other includes a credit of £2.0m (H1 2010: net charge£1.8m) taken in respect of ineffective fair value hedges and net investmenthedges and a charge of £0.3m (H1 2010: £nil) in respect of foreign exchangelosses on forward contracts and other fair value adjustments. H1 2011 H1 2011 H1 2010 H1 2010Interest income - Cash and cash 0.5 0.2equivalentsInterest expense (13.9) (8.8) Financing income: 1.3 1.5Pension schemes 1.3 1.4Foreign exchange gain on forward 0.0 0.1contractsFinancing income - other 2.0 1.9Financing expense - other (0.3) (3.7) Net finance expense (10.4) (8.9)
UBM's effective rate of taxation1 for the first half of 2011 was 14.8% (31 December 2010: 15.0%). As at 30 June 2011, UBM's tax creditor stood at £70.2m (31 December 2010: £69.6m). We have necessarily made judgements as to the outcome of tax matters not concluded. This creditor has been consistently classified as short term, in line with our accounting policy.
Foreign Currency
Our income statement exposure to foreign currency risk is shown (by way ofsensitivity to changes in exchange rates) in the foreign currency risk tablebelow.30 June 2011 Effect on adjusted Effect on operating Average revenue profit1 exchange rate Currency value + / - + / - in H1 2011 rises/ falls by £m £mUS dollar 1.621 1 cent 1.5 0.3Euro 1.149 1 cent 0.5 0.1
The table below outlines the currency profile of our revenues and adjusted operating profits for H1 2011.
2011 Revenue % Adjusted operating profit1 %US Dollar 50.9 59.7UK Pound Sterling 17.8 5.8Euro 12.7 15.9Renminbi 5.8 11.3Canadian Dollar 4.2 1.3Japanese Yen 2.6 4.1Brazilian Real 0.9 1.0Other 5.1 0.9Total 100.0 100.0Capital StructureCapital managementUBM maintains conservative capital ratios in order to support its businessesand maximise shareholder value. At 30 June 2011, the net debt to adjustedearnings before interest, taxation, depreciation and amortisation was 2.4times as shown below:£m 2011 2010Financial liabilities 604.2 610.5Financial assets (122.0) (125.9)Net debt1 482.2 484.6LTM EBITDA1 197.7 188.2Net debt to EBITDA ratio 1 2.4 times 2.6 times
1Refer to the Explanation of UBM's business measures section below for additional information on these non-IFRS financial measures.
Debt and Liquidity
In May 2011, we entered into a five year £300m variable rate multi-currencycredit facility to replace the £325m variable rate multi-currency facility dueto expire on 27 July 2012. Details of the new facility are given in Note 10 ofthe Interim Financial Report. At 30 June 2011 UBM had drawn £10.0m under thefacility, leaving £290.0m available. Cash and cash equivalents totalled£122.0m at 30 June 2010.£m Facility Drawn Undrawn Maturity LIBOR Fair value + Margin % hedgesPuttable Bond 75.0 75.0 - Sept-11* 0.68Bilateral Loan 48.0 48.0 - Mar-12* 1.8Syndicated Bank Facility 300.0 10.0 290.0 May-16 1.0£250m fixed rate sterling bond 250.0 250.0 - Nov-16 6.5% fixed Floating rate swap for £150m GBP LIBOR + 2.9%$350m fixed rate dollar bond 217.8 217.8 - Nov-20 5.75% fixed Floating rate swap for $150m US$ LIBOR + 2.63%Total 890.8 600.8 290.0
* Minimum maturity, can be extended at option of bondholder
Note: Amounts drawn exclude fair value movements on the debt instruments
UBM has issued two debt instruments which include put and call options:
- In September 2008, we raised £75.0m through the issue of 20-year FloatingRate Reset Bonds which bear interest for the first three years at six monthLIBOR plus 0.68% (currently 1.8%). Under their terms, the holder of the bondshas the option to put them back to UBM at par (£75m) in September 2011 andevery three years thereafter until maturity in September 2028.- In March 2009, UBM raised €53.1m through two Floating Rate Reset Loans. Theloans bear interest for the first three years at six month EURIBOR plus 1.80%(currently 3.29%). Under the terms, the lender has the option to put them backto UBM at par (€53.1m) in March 2012 and every three years thereafter untilmaturity in March 2024.
If the instruments are not put then one of two events will occur:
1. The interest rate on the Floating Rate Reset Bonds and Floating Rate ResetLoans are reset to 4.70% and 4.16%, respectively, plus UBM's three year creditspread until the next put date;
2. UBM exercises its call option and pays the fair value of the instruments at date of exercise to the current holders.
Since the issue of these instruments, long term swap rates have fallen belowthe reset interest rates of 4.70% and 4.16%. This, combined with an increasein market volatility, has increased the fair value of the instruments as at 30June 2011 to approximately £85.4m and €57.4m respectively. If UBM exercisesits call options and repays the instrument, the early unwind at the currentvaluation would result in a mark-to-market payment obligation of £10.4m on theFloating Rate Reset Bonds and €4.3m crystallising on the Floating Rate ResetLoans. Under IAS 39 the losses would be recognised as a financing expense inthe income statement.PensionsAt 30 June 2011, the aggregate surplus under IAS 19 was £3.1m, an improvementof £15.8m on a deficit of £12.7m at 31 December 2010. The IAS 19 interestcredit was £1.3m, representing the excess of expected asset growth during 2011over the interest accretion on the scheme liabilities.
Cash flow
Cash generated from operations rose to £112.4m from £76.9m in H1 2010,reflecting higher operating profit and lower restructuring payments. Cashconversion1 was 119.7% of adjusted operating profit1 (H1 2010: 100.1%). Freecash flow prior to cash invested in acquisitions was £77.7m, up £71.6m on H12010, reflecting the tax settlement made to HMRC of £46.5m in 2010, partiallyoffset by an increase in interest payments of £6.6m to £14.7m.We expect to continue to generate significant free cash flow in H2 2011because of our business model and believe that our cash on hand, cash from ouroperations and available credit facilities will be sufficient to fund our cashdividends, debt service and acquisitions in the normal course of business.
Acquisitions
We invested £17.9m (including estimated contingent consideration of £5.7m) inthe acquisition of four events-related businesses in H1 2011. Theseacquisitions were closely aligned to our strategic priorities and provide uswith exposure to attractive communities and geographies.Our investment comprised cash of £10.4m (net of cash acquired) and expectedcontingent and deferred consideration of £7.5m. We also made payments inrespect of earnouts relating to acquisitions made in prior years totalling£17.4m. Initial Expected consideration contingent Estimated net of cash and deferred totalH1 2011 Acquisitions acquired consideration consideration £m £m £mEventsRotaforte International Trade Fairs &Media 1.0 3.5 4.5SATTE 2.5 0.6 3.1AMB Exhibitions Sdn Bhd 4.1 3.1 7.2UBM Catersouce LLC 2.8 0.3 3.1Total 10.4 7.5 17.9
Contingent and deferred consideration Contingent Deferred Total
£m £m £mAt 1 January 2011 39.7 1.3 41.0Change in estimate - goodwill 0.1 - 0.1
Change in estimate - exceptional items (1.1) -
(1.1)relating to acquisitionsAcquisitions during the year 5.7 1.8 7.5Consideration paid (16.3) (1.1) (17.4)Foreign exchange gain (0.7) - (0.7)At 30 June 2011 27.4 2.0 29.4The 2011 acquisitions contributed adjusted operating profit1 of £1.3m sinceacquisition and are expected to achieve a pre-tax return on investment1 of17.2 % on a pro forma basis for the full year. The following table shows theperformance of our acquisitions since 2009 relative to our target pre-tax costof capital threshold of 10%: Consideration Return on Investment1£m 2009 2010 20112009 acquisitions 26.5 14.8% 4.5% 10.2%2010 acquisitions 256.9 - 10.6% 12.6%2011 acquisitions2 17.9 - - 17.2%Total 301.3 12.8%
1 Refer to the Explanation of UBM's business measures section below for additional information on these non-IFRS financial measures.
22011 Return on investment pro forma for full year 2011 results.
Disposals
During the first half we completed the sale of a number of our legacy print businesses, including France Presse. Total consideration (net of cash disposed) was £14.6m.
Completed Segment Consideration ** (£m)France Presse Print 6.3Publican Print 1.7France Optique Data Services 0.5EDN China/Asia* Print & Online 1.9Consultant Print 1.4Surplus URLs Corporate 2.8Total 14.6\* Transferred to eMedia JV**Net of cash disposedDividends
The Board has declared an interim dividend of 6.30 pence per share (H1 2010: 6.00 pence). The interim dividend on ordinary shares will be paid on 13 October 2011 to Shareholders on the register on 26 August 2011.
Related party transactions
Details of related party transactions in the six months ended 30 June 2011 are given in Note 18 of the Interim Financial Report.
Explanation of UBM's business measures
Financial Measure How we define it Why we use itUnderlying revenue and Underlying measures are The Group believesunderlying operating adjusted for the estimated underlying revenueprofit effects of acquisitions, and underlying discontinued products, operating profit foreign exchange and assists investors in biennial events. their assessment and understanding of our underlying business trends, without distortion from the effect of acquisitions, discontinued products, biennial events and foreign currency movements during the period.Adjusted operating profit Operating profit excluding The Group believesand adjusted EBITDA amortisation of intangible adjusted operating assets arising on profit, adjusted acquisitions, exceptional operating margin and items and share of taxation adjusted EBITDA on joint ventures and assists investors in associates. their assessment and understanding of our Adjusted EBITDA is adjusted earnings and is also group operating profit a measure commonly before depreciation. used by shareholders to measure ourMargin Margin relates to our performance. adjusted operating margin. It is adjusted operating profit expressed as a percentage of revenuesAdjusted profit before tax Before amortisation of The Group believesand EPS intangible assets on adjusted profit acquisitions, exceptional before tax and items, share of taxation on adjusted EPS assists profit from joint ventures investors in their and associates, net assessment and financing expense - other. understanding of our EPS also excludes deferred earnings and is also tax on the amortisation of a measure commonly intangible assets. Diluted used by shareholders EPS includes the impact of to measure our share options. performance.Net debt Net debt is current and Provides a measure of non-current borrowings less indebtedness in cash and cash equivalents. excess of the current cash available to pay down debt.Net debt to adjusted Net debt divided by Provides a measure ofEBITDA adjusted EBITDA. financial leverage. Net debt to LTM adjusted EBITDA adjusted to includeEBITDA a full year of pro forma operating profit from acquisitions made during 2010.Free cash flow Net cash provided by Helps assess our operating activities after ability, over the meeting obligations for long term, to create interest, tax, dividends value for our paid to non controlling shareholders as it interests, capital represents cash expenditures and other available to repay investing activities. debt, pay dividends and fund future acquisitions.Adjusted operating cash Adjusted to exclude The Group believesflow non-operating movements in adjusted operating working-capital, such as cash flow assists expenditure against investors in their reorganisation and assessment and restructuring provisions. understanding of our operating cash flows.Pre-tax return on Attributable adjusted Helps us assess theInvestment operating profit divided by performance of our the cost of acquisitions. acquisitions relative Calculated on a pro forma to our target pre-tax basis, as if the acquired cost of capital business were owned threshold of 10%. throughout the year.Estimated total Estimated total Provides a measure ofconsideration consideration includes total consideration initial consideration (net for businesses of cash acquired), the acquired. latest estimate of expected earnouts and deferred consideration. Return on average capital ROACE is operating profit Provides a measure ofemployed (ROACE) before exceptional items the efficiency of divided by average capital profitability of our employed. Average capital capital investment. employed is the average of opening and closing total assets less current liabilities for each period.Effective tax rate The effective tax rate on Provides a more adjusted profit before tax comparable basis to reflects the tax rate analyse our tax rate. excluding movements on deferred tax balances on the amortisation of intangible assets.
SUMMARY OF RISKS & UNCERTAINITES
The principal risk factors that the directors believe could materially affect UBM include the following:
The risks listed do not necessarily comprise all those associated with UBM, and are not set out in any order of priority.
- Marketplace risk
- In times of economic slowdown or recession, some companies spend less, particularly on advertising.
- Ability to respond to changes in technological innovation.
- A disaster or natural catastrophe, terrorism, political instability or disease could affect our ability to continue to do business if it renders offices unavailable or curtails travel (which will have an impact on the running of an event).
- Mergers & Acquisitions
- The availability of suitable acquisition candidates, obtaining regulatory approval and changes in the availability or cost of financing may affect our ability to execute on this strategy.
- Delays in integration or unexpected costs or liabilities, as well as the risk of failing to realise operating benefits or synergies from completed transactions may mean that the financial impact is less beneficial than expected.
- Attracting and retaining key management personnel
- Operational
- Operations in new territories may present logistical and management challenges due to different business cultures, laws and languages.
- A diminished reputation for UBM's corporate or products brands may affect competitive position.
- The failure to manage and execute significant projects successfully could lead to increased costs, delays or erosion of UBM's competitive position.
- Failure or conflict with a key supplier at a critical time in the production process could result in loss of revenue or incremental costs.
- There are negative implications if IT system failure impacts our ability to do business.
- Unfavourable legislation changes may have a negative impact.
- Financial
- Liquidity issues may curtail the ability to make certain acquisitions, whilelocal liquidity issues could have a negative reputational impact, particularlywith suppliers.
- FX fluctuations could adversely affect earnings and the strength of the balance sheet.
- Fluctuations in interest rates will impact our costs of borrowing.
- We seek to limit interest rate and foreign exchange risk by the use of financial instruments. As a result we have an unsecured credit risk from the potential non-performance by counterparties to these financial instruments.
- Tax risk - failure to comply with the necessary tax legislation or challenges to legal structures.
- Pension fund risk - risk that asset returns are insufficient to cover changes in the schemes liabilities over time.
Interim consolidated income statement
for the six months ended 30 June 2011
Before Before exceptional Exceptional exceptional Exceptional items items Total items items Total 30 June 30 June 30 June 30 June 30 June 30 June 2011 2011 2011 2010 2010 2010 Unaudited Unaudited Notes £m £m £m £m £m £m Continuing operations 4 Revenue 474.0 - 474.0 434.3 - 434.3 Other operating income 2.5 - 2.5 2.1 - 2.1 Operating expenses (386.7) - (386.7) (355.0) - (355.0) Amortisation of (18.6) - (18.6) (12.2) - (12.2)
intangible assets arising on acquisitions 5 Exceptional - - - - (3.1) (3.1) reorganisation and restructuring costs 5 Exceptional items - (0.3) (0.3) - (0.7) (0.7) relating to acquisitions
Share of results of joint 1.7 - 1.7 1.6 - 1.6
ventures and associates (after tax)
Group operating profit 72.9 (0.3) 72.6 70.8 (3.8) 67.0
Finance income/(expense) 6 Interest income 0.5 - 0.5 0.2 - 0.2 6 Interest expense (13.9) - (13.9) (8.8) - (8.8) 6 Financing income 1.3 - 1.3 1.5 - 1.5 6 Financing income - other 2.0 - 2.0 1.9 - 1.9 6 Financing expense - other (0.3) - (0.3) (3.7) - (3.7) Profit before tax 62.5 (0.3) 62.2 61.9 (3.8) 58.1 Taxation (6.4) - (6.4) (8.5) - (8.5) Profit for the period 56.1 (0.3) 55.8 53.4 (3.8) 49.6 Attributable to: Owners of the parent 50.0 45.5 entity - ordinary shares Non-controlling interests 5.8 4.1 55.8 49.6 Earnings per share (pence) 7 - basic 20.5p 18.7p 7 - diluted 20.1p 18.6p £m £m 4 Adjusted Group operating 91.9 83.2 profit* Amortisation of (18.6) (12.2) intangible assets arising on acquisitions 5 Exceptional - (3.1) reorganisation and restructuring costs 5 Exceptional items (0.3) (0.7) relating to acquisitions Share of taxation on (0.4) (0.2) profit in joint ventures and associates 4 Group operating profit 72.6 67.0 £m £m Dividends 8 Second interim dividend 46.2 44.3 of 19.0p (2010: 18.2p) 8 Proposed interim dividend 15.3 14.6 of 6.3p (2010: 6.0p) *Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates.
Consolidated income statement
for the year ended 31 December 2010
Before exceptional Exceptional Total items items 31 31 December 31 December December 2010 2010 2010 Audited Notes £m £m £m Continuing operations 4 Revenue 889.2 - 889.2 Other operating income 7.0 - 7.0 Operating expenses (728.0) - (728.0) Amortisation of intangible assets arising (27.8) - (27.8) on acquisitions 5 Exceptional reorganisation and - (5.8)
(5.8) restructuring costs
5 Exceptional items relating to acquisitions - (5.1) (5.1)
Share of results from joint ventures and 2.8 -
2.8 associates (after tax) Group operating profit 143.2 (10.9) 132.3 Finance income/(expense) 6 Interest income 0.7 - 0.7 6 Interest expense (19.4) - (19.4) 6 Financing income 3.3 - 3.3
6 Financing income - other 1.2 -
1.2
6 Financing expense - other (2.6) -
(2.6) Profit before tax 126.4 (10.9) 115.5 Taxation (16.1) - (16.1) Profit for the year 110.3 (10.9) 99.4 Attributable to: Owners of the parent entity - ordinary 90.8 shares Non-controlling interests 8.6 99.4 Earnings per share (pence) 7 - basic 37.3p 7 - diluted 36.7p £m
4 Adjusted Group operating profit*
171.8
Amortisation of intangible assets arising (27.8) on acquisitions 5 Exceptional reorganisation and (5.8) restructuring costs 5 Exceptional items relating to acquisitions
(5.1)
Share of taxation on profit in joint
(0.8)
ventures and associates 4 Group operating profit 132.3 £m Dividends 8 Interim dividend of 6.0p 14.6 8 Proposed second interim dividend of 19.0p 46.2 *Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates.
Interim consolidated statement of comprehensive income
for the six months ended 30 June 2011
Notes Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 Unaudited Unaudited Audited £m £m £m Profit for the period 55.8 49.6 99.4 Other comprehensive income/(losses): 12 Currency translation differences on foreign (4.7) 16.1
6.6 operations - Group 12 Net investment hedge 11.7 (20.2) (14.6) Actuarial gains/(losses) recognised in the 13.9 (19.3) 9.0 pension schemes
Irrecoverable element of pension surplus (3.0) 1.2 (2.4)
Share of other comprehensive (expense)/income of joint ventures and associates: 12 Currency translation differences on foreign (0.2) 0.8 0.4 operations Actuarial losses recognised in the pension (0.2) - - schemes of associates (0.4) 0.8 0.4 Income tax relating to components of other - - - comprehensive income Other comprehensive income/(losses) for the 17.5 (21.4) (1.0) period net of tax Total comprehensive income for the period 73.3 28.2 98.4 net of tax Attributable to: Owners of the parent entity - ordinary 67.7 23.3 89.3 shares Non-controlling interests 5.6 4.9
9.1 73.3 28.2 98.4
Interim consolidated statement of financial position
at 30 June 2011Notes 31 30 June 30 June December 2011 2010 2010 Unaudited Unaudited Audited £m £m £m Assets Non-current assets Goodwill 1,047.2 877.5 1,044.1 Intangible assets 156.4 115.7 177.4 Property, plant and equipment 41.0 41.6
41.2
Investments in joint ventures and associates 21.1 18.7 19.8
16 Retirement benefit surplus 14.8 2.4
9.1 Other investments - 0.6 0.6 Derivative financial assets 13.1 6.8 6.8 1,293.6 1,063.3 1,299.0 Current assets Inventories 4.3 4.2 7.8 Trade and other receivables 233.6 199.6
208.6
Derivative financial assets - 0.1 0.1 Cash and cash equivalents 122.0 133.2
125.9 359.9 337.1 342.4 Total assets 1,653.5 1,400.4 1,641.4 Liabilities Current liabilities 10 Borrowings 123.0 1.3 75.3 Derivative financial liabilities 0.3 -
0.1
Trade and other payables 408.4 362.7 378.4 Provisions 9.7 11.1 12.9 Current tax liabilities 70.2 68.1 69.6 611.6 443.2 536.3 Non-current liabilities 10 Borrowings 481.2 434.7 535.2 Derivative financial liabilities 25.2 30.5
34.7
Trade and other payables 15.2 17.2 22.3 Provisions 20.0 30.5 22.2
16 Retirement benefit obligation 11.7 44.8
21.8
Deferred tax liabilities 42.9 28.3 49.7 596.2 586.0 685.9 Total liabilities 1,207.8 1,029.2 1,222.2 Equity attributable to owners of the parent entity 11 Share capital 24.5 24.4 24.4 Share premium 3.8 1.3 3.1 12 Other reserves (600.8) (605.0) (608.7) Retained earnings 1,002.7 929.9 986.7
Put options over non-controlling interests (12.4) - (8.5)
Total equity attributable to owners of the 417.8 350.6 397.0 parent entity Non-controlling interests 27.9 20.6
22.2 Total equity 445.7 371.2 419.2 Total equity and liabilities 1,653.5 1,400.4
1,641.4
Interim consolidated statement of changes in equity
for the six months ended 30 June 2011
Notes Put options over Non- Share Share Other Retained
non-controlling controlling Total
capital premium reserves earnings
interests interests equity
£m £m £m £m £m £m £m At 1 January 2011 24.4 3.1 (608.7) 986.7 (8.5) 22.2 419.2 Profit for the period - - - 50.0 - 5.8 55.8 Other comprehensive - - 7.0 10.7 - (0.2) 17.5 income/(losses) Total comprehensive - - 7.0 60.7 - 5.6 73.3 income/(losses) for the period 8 Equity dividends - - - (46.2) - - (46.2) Non-controlling interest - - - - - (3.6) (3.6) dividends 13 Non-controlling interest - - - - (3.9) 3.7 (0.2) arising on business combinations Issued in respect of 0.1 0.7 - - - - 0.8 share option schemes and other entitlements Share-based payments - - - 2.4 - - 2.4 12 Shares awarded by ESOP - - 0.9 (0.9) - - - At 30 June 2011 24.5 3.8 (600.8) 1,002.7 (12.4) 27.9 445.7 (unaudited) At 1 January 2010 24.4 1.2 (597.7) 948.4 - 9.5 385.8 Profit for the period - - - 45.5 - 4.1 49.6 Other comprehensive - - (4.1) (18.1) - 0.8 (21.4) (losses)/income Total comprehensive - - (4.1) 27.4 - 4.9 28.2 (losses)/income for the period 8 Equity dividends - - - (44.3) - - (44.3) Non-controlling interest - - - - - (3.1) (3.1) dividends Non-controlling interest - - - - - 9.3 9.3 arising on business combinations Issued in respect of - 0.1 - - - - 0.1 share option schemes and other entitlements Share-based payments - - - 1.5 - - 1.5 Shares awarded by ESOP - - 3.1 (3.1) - - - Own shares purchased by - - (6.3) - - - (6.3) the company At 30 June 2010 24.4 1.3 (605.0) 929.9 - 20.6 371.2 (unaudited) At 1 January 2010 24.4 1.2 (597.7) 948.4 - 9.5 385.8 Profit for the year - - - 90.8 - 8.6 99.4 Other comprehensive - - (8.1) 6.6 - 0.5 (1.0) (losses)/income Total comprehensive - - (8.1) 97.4 - 9.1 98.4 (losses)/income for the year 8 Equity dividends - - - (58.9) - - (58.9) Non-controlling interest - - - - - (5.9) (5.9) dividends Non-controlling interest - - - - (8.5) 9.5 1.0 arising on business combinations Issued in respect of - 1.9 - - - - 1.9 share option schemes and other entitlements Share-based payments - - - 3.2 - - 3.2 Shares awarded by ESOP - - 3.4 (3.4) - - - Own shares purchased by - - (6.3) - - - (6.3) the company At 31 December 2010 24.4 3.1 (608.7) 986.7 (8.5) 22.2 419.2
Interim consolidated statement of cash flows
for the six months ended 30 June 2011
Notes Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 Unaudited Unaudited Audited £m £m £m Cash flows from operating activities Reconciliation of profit to operating cash flows Profit for the period 55.8 49.6 99.4 Add back: Taxation 6.4 8.5 16.1 Depreciation 8.4 7.5 15.6
Amortisation of website development costs 0.3 0.4 0.8
Amortisation of intangibles arising on 18.6 12.2 27.8 acquisitions 6 Interest income (0.5) (0.2) (0.7) 6 Interest expense 13.9 8.8 19.4 6 Financing income (1.3) (1.5) (3.3) 6 Financing income - other (2.0) (1.9)
(1.2)
6 Financing expense - other 0.3 3.7 2.6 Share of results from joint ventures and (1.7) (1.6) (2.8) associates (after tax)
5 Exceptional items and charges to provisions 1.4 3.8 11.9
5 Fair value adjustments of contingent (1.1) - (1.0) considerations Other non-cash items 2.9 1.7 3.5 101.4 91.0 188.1 Payments against provisions (8.5) (13.9)
(24.5)
Pension deficit contributions (1.6) (1.6)
(3.1)
Decrease/(increase) in inventories 3.4 3.2
(0.3)
Increase in trade and other receivables (31.8) (20.6) (14.0)
Increase in trade and other payables 49.5 18.8 8.5 Cash generated from operations 112.4 76.9
154.7
Interest and finance income received 0.3 0.4 0.8 Interest and finance costs paid (15.0) (8.5) (23.9) Taxation paid (10.8) (52.1) (62.1) Dividends received from joint ventures and 0.3 0.4 0.6 associates Net cash flows from operating activities 87.2 17.1 70.1 Cash flows from investing activities 13 Acquisition of interests in subsidiaries, (27.8) (27.3) (239.6) net of cash acquired Purchase of interests in joint ventures and - - (1.1) associates Purchase of property, plant and equipment (9.5) (11.0) (19.1) and intangibles Proceeds from sale of businesses, net of 7.8 - - cash disposed Proceeds from sale of joint ventures and - - 1.7 associates
Net cash flows from investing activities (29.5) (38.3) (258.1)
Cash flows from financing activities Proceeds from the issuance of ordinary share 0.8 0.1 1.9 capital 8 Dividends paid to shareholders (46.2) (44.3)
(58.9)
Dividends paid to non-controlling interests (3.6) (3.1) (5.9)
Investment in own shares - ESOP - (6.3)
(6.3)
10 (Decrease)/increase of borrowings (11.2) 43.5 4.4
Issue of $350m fixed rate dollar bonds 2020 - - 214.2
Net cash flows from financing activities (60.2) (10.1) 149.4
Net decrease in cash and cash equivalents (2.5) (31.3) (38.6)
Net foreign exchange difference (1.3) 4.6 5.6 Cash and cash equivalents at beginning of 125.8 158.8 158.8 period
Cash and cash equivalents at end of period 122.0 132.1 125.8
Cash at bank and in hand 34.8 72.1 37.7 Short-term deposits 87.2 61.1 88.2 Bank overdrafts (included in borrowings) - (1.1)
(0.1)
Cash and cash equivalents at end of period 122.0 132.1 125.8
Notes to the interim consolidated financial statements
for the six months ended 30 June 2011
1. General information
UBM plc (formerly United Business Media Limited) is a company incorporated inJersey under the Companies (Jersey) Law 1991. The address of the registeredoffice is Ogier House, The Esplanade, St. Helier, JE4 9WG, Jersey. UBM plc istax resident in the Republic of Ireland. The nature of the Group's operationsand its principal activities are detailed in Note 4.The interim condensed consolidated financial statements of the Group for thesix months ended 30 June 2011 were authorised for issue in accordance with aresolution of the directors on 29 July 2011. The interim condensed consolidatedfinancial statements are unaudited but have been reviewed by the auditors asset out in their report.2. Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2011 have been prepared in accordance with IAS 34 `Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Services Authority.
The interim condensed consolidated financial statements do not constitute theGroup's statutory financial statements. The Group's most recent statutoryfinancial statements, which comprise the annual report and audited financialstatements for the year ended 31 December 2010, were approved by the directorson 1 March 2011 and have been filed with the Jersey Registrar of Companies. Theauditors have reported on those financial statements and have given anunqualified report which does not contain a statement under Article 113B(3) orArticle 113B(6) of the Companies (Jersey) Law 1991.
The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2010, which have been prepared in accordance with International Financial Reporting Standards (`IFRSs') as issued by the International Accounting Standards Board (`IASB').
The directors of UBM plc, having made appropriate enquiries, consider thatadequate resources exist for the business to continue in operational existencefor the foreseeable future and that, therefore, it is appropriate to adopt thegoing concern basis in preparing the financial information for the six monthsended 30 June 2011.
3. Accounting policies and estimates
The accounting policies, significant judgments made by management and keysources of estimation adopted in the preparation of the interim condensedconsolidated financial statements are consistent with those applied in thepreparation of the Group's annual financial statements for the year ended 31December 2010, except for the adoption of new standards and interpretations,noted below:
Improvements to IFRSs 2010 - the IASB issued its third collection of minor amendments to standards, each adopted by the Group from 1 January 2011. None of the amendments are considered to have an immediate impact on the financial position or performance of the Group, although the following amendments may impact future transactions and disclosures:
* IFRS 3 `Business Combinations' * IFRS 7 `Financial Instruments: Disclosures' * IAS 1 `Presentation of Financial Instruments' * IAS 27 `Consolidation and Separate Financial Statements' * IAS 34 `Interim Financial Reporting'
The following standards and interpretations have also been adopted from 1 January 2011, but have had no impact on the financial position or performance of the Group or presentation of the financial statements:
* IAS 24 `Related Party Disclosures' (revised) * IAS 32 `Financial Instruments: Presentation - classification of rights issues' (amended) * IFRIC 14 `The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' (amended) * IFRIC 19 `Extinguishing Liabilities with Equity Instruments' 4. Segment informationBusiness segmentsThe chief operating decision maker (`CODM') for the purpose of IFRS 8 reportingis the executive management team - the Group Chief Executive Officer and theGroup Chief Financial Officer. Consistent with the last annual report andaudited financial statements for the year ended 31 December 2010, the Groupconsiders there to be five reportable operating segments organised aroundproducts and services. The Group operates in a number of different markets andcommunities and considers that presentation of financial results on a productsand services basis is the most appropriate way to demonstrate the performanceof the Group. For the purpose of resource allocation and assessment ofperformance, the CODM regularly reviews information based on the products andservices at a revenue and adjusted operating profit (as defined in the footnoteto the income statement) level.
The five reportable operating segments organised around products and services are:
* Events which provide face to face interaction in the form of exhibitions,
trade shows, conferences and other live events;
* Targeting, Distribution and Monitoring which operates in the targeting and
distribution of company information and the evaluation of its impact on targeted audiences; * Data Services which provide a range of services including data-based workflow products, intellectual property consultancy and analytical services and sales lead generation programmes;
* Online - Marketing Services which provides website sponsorships and banner
advertising as well as online directory products; and
* Print - Magazines which publishes magazines and trade press to specialist
markets.
No operating segments have been aggregated to form the above reportable segments. The Group's management reporting and controlling systems use the accounting policies that are the same as those referred to in Note 3.
Segment measures
The Group measures the performance of its operating segments through a measureof segment profit or loss which is referred to as adjusted operating profit.Adjusted operating profit represents operating profit excluding amortisation ofintangible assets arising on acquisitions, exceptional items, impairmentcharges and share of taxation on results of joint ventures and associates. Thismeasure is reported to the CODM for the purposes of resource allocation andassessment of performance and is consistent with the measure used in the annualreport and audited financial statements for the year ended 31 December 2010.Interest income, interest expense and income tax expense are not included inthe adjusted operating profit measure which is reviewed by the CODM. Treasuryand tax balances are managed centrally.
Segment assets and liabilities are not regularly provided to the CODM. The Group has elected, as provided under IFRS 8 `Operating segments' (amended 2009), not to disclose a measure of segment assets or liabilities where these amounts are not regularly provided to the CODM.
Intersegment revenue is recorded at values that represent estimated third-party selling prices.
With respect to geographical regions, revenue is generally allocated tocountries based on the location where the products and services are provided.Non-current assets are disclosed according to the location of the businesses towhich the assets relate.
Six months ended 30 June 2011
Depreciation Share of (including pre-tax Segment amortisation results adjusted of website from JVs operating External Intersegment Total development and profit/ revenue revenue revenue costs) associates (loss) £m £m £m £m £m £m Events 177.1 0.1 177.2 (2.4) 0.8 57.7 Targeting, 95.2 0.1 95.3 (3.2) 0.5 20.1 Distribution and Monitoring Data Services 100.2 - 100.2 (1.4) 0.3 17.4 Online - Marketing 41.8 - 41.8 (0.6) - 0.7 Services Print - Magazines 59.7 - 59.7 (0.9) - 3.1 Total segments 474.0 0.2 474.2 (8.5) 1.5 99.0 Corporate costs - - - (0.2) 0.6 (10.2) Internal cost - - - - - 3.1 recoveries and sundry income Eliminations - (0.2) (0.2) - - - 474.0 - 474.0 (8.7) 2.1 91.9
Amortisation of intangibles arising on
(18.6)acquisitions
Exceptional reorganisation and
- restructuring costs
Exceptional items relating to acquisitions
(0.3)
Share of taxation on profit in joint
(0.4)ventures and associates Group operating 72.6 profit Interest income 0.5 Interest expense (13.9) Financing income 1.3 Financing income - 2.0 other Financing expense - (0.3)other Profit before tax 62.2 Total corporate costs for the period ended 30 June 2011 were £10.2m (30 June2010: £8.2m; 31 December 2010: £15.6m). The corporate costs are offset by alevel of internal cost recoveries from the Group's operating businesses and bysundry income which is not attributable to any of the Group's operations.
Six months ended 30 June 2010
Depreciation Share of (including pre-tax Segment amortisation results adjusted of website from JVs operating External Intersegment Total development and profit/ revenue revenue revenue costs) associates (loss) £m £m £m £m £m £m Events 139.3 0.1 139.4 (2.0) 0.5 40.7 Targeting, 91.2 0.2 91.4 (2.6) 0.6 23.4 Distribution and Monitoring Data Services 98.6 - 98.6 (1.4) 0.1 20.3 Online - Marketing 30.9 - 30.9 (0.5) - (0.5)Services Print - Magazines 74.3 - 74.3 (1.1) 0.3 3.7 Total segments 434.3 0.3 434.6 (7.6) 1.5 87.6 Corporate costs - - - (0.3) 0.3 (8.2) Internal cost - - - - - 3.8 recoveries and sundry income Eliminations - (0.3) (0.3) - - - 434.3 - 434.3 (7.9) 1.8 83.2
Amortisation of intangibles arising on
(12.2)acquisitions
Exceptional reorganisation and
(3.8)restructuring costs
Share of taxation on profit in joint
(0.2)ventures and associates Group operating 67.0 profit Interest income 0.2 Interest expense (8.8) Financing income 1.5 Financing income - 1.9 other Financing expense - (3.7)other Profit before tax 58.1
Year ended 31 December 2010
Depreciation Share of (including pre-tax Segment amortisation results adjusted of website from JVs operating External Intersegment Total development and profit/ revenue revenue revenue costs) associates (loss) £m £m £m £m £m £m Events 310.0 0.5 310.5 (4.5) 2.0 93.5 Targeting, 181.2 0.4 181.6 (5.7) 1.0 42.1 Distribution and Monitoring Data Services 184.7 - 184.7 (2.7) 0.3 34.1 Online - Marketing 69.2 - 69.2 (1.0) - 1.3 Services Print - Magazines 144.1 - 144.1 (2.1) - 10.0 Total segments 889.2 0.9 890.1 (16.0) 3.3 181.0 Corporate costs - - - (0.4) 0.3 (15.6) Internal cost - - - - - 6.4 recoveries and sundry income Eliminations - (0.9) (0.9) - - 889.2 - 889.2 (16.4) 3.6 171.8
Amortisation of intangibles arising on
(27.8)acquisitions
Exceptional reorganisation and
(5.8)restructuring costs
Exceptional items relating to acquisitions
(5.1)
Share of taxation on profit in joint
(0.8)ventures and associates Group operating 132.3 profit Interest income 0.7 Interest expense (19.4) Financing income 3.3 Financing income - 1.2 other Financing expense - (2.6)other Profit before tax 115.5
Revenue by products and services
Revenue from external customers analysed by products and services is given inthe above segment tables. The Group's reportable segments are organised aroundproducts and services provided to external customers. There are no revenuesderived from a single external customer which are significant.
Geographic information
Revenues from external customers Six Six
Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m United Kingdom 67.9 69.5 129.4 Foreign countries United States and Canada 243.0 207.7 413.8 Europe 69.4 75.4 145.7 China 53.2 44.6 112.2 Emerging markets 23.9 21.8 54.4 Rest of the world 16.6 15.3 33.7 406.1 364.8 759.8 Total revenue 474.0 434.3 889.2 Non-current assets 31 30 June 30 June December 2011 2010 2010 £m £m £m United Kingdom 244.4 252.1 262.3 Foreign countries United States and Canada 658.6 474.3 684.3 Europe 241.2 226.4 244.0 China 34.0 26.9 29.1 Emerging markets 80.8 67.0 56.5 Rest of the world 6.7 7.4 6.9 1,021.3 802.0 1,020.8 Total non-current assets 1,265.7 1,054.1 1,283.1
Non-current assets for this purpose consist of goodwill, intangible assets, property, plant and equipment, investments in joint ventures and associates and other investments.
5. Exceptional itemsExceptional items are presented separately as, due to their nature or for theinfrequency of the events giving rise to them, this allows shareholders tounderstand better the elements of financial performance for the year, tofacilitate comparison with prior periods, and to assess better the trends offinancial performance. Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m
(Charged)/credited to operating profit
Vacant property costs - (1.7) (1.1) Redundancy - (1.0) (3.0)
Restructuring and business reorganisation costs - (0.4) (1.7)
Exceptional reorganisation and restructuring - (3.1) (5.8)costs Acquisition costs on business combinations (1.4) (0.7)
(6.1)
Changes in estimates of contingent consideration 1.1 - 1.0
Exceptional items relating to acquisitions (0.3) (0.7)
(5.1)
Total charged to operating profit (0.3) (3.8)
(10.9)
Total charged to profit for the period (0.3) (3.8)
(10.9)
(Charged)/credited to operating profit
Six months ended 30 June 2011
Acquisition costs of £1.4m have been expensed in the period and an exceptionalnet credit of £1.1m was recognised in relation to the revision of thecontingent consideration estimates for acquisitions made in 2010. Details ofthe acquisitions made in the six months ended 30 June 2011 are given in Note13.
Six months ended 30 June 2010
Management of the UBM product portfolio continued during 2010 in order tomitigate the effects of the difficult economic climate. This involved aheadcount reduction of approximately 28 people. Of the £1.4m redundancy andrestructuring costs charged, £0.6m was incurred in the six months ended 30 June2010 and the balance was expected to be incurred in the second half of 2010.The property costs of £1.7m related to vacant property and other propertycosts, which will be incurred over the remainder of the lease term as well asthe expected relocation costs of certain offices.
Year ended 31 December 2010
During 2010 the Group continued to manage its product portfolio actively,closing or exiting 13 print magazine titles and reducing the frequency of twoothers. The Group also made further progress in the restructuring of a numberof its businesses, particularly within the Data Services business. Theexceptional charge of £5.8m included £3.0m relating to redundancy, £1.7mrelating to restructuring and business reorganisation costs and £1.1m relatingto vacant property. Of the redundancy and restructuring costs charged, £3.2mwas incurred in 2010 and the balance is committed to be incurred in 2011. Theproperty costs of £1.1m related to vacant property and other property costs,which will be incurred over the remainder of the lease terms.Acquisition costs of £6.1m were expensed in the year. Of this amount, £3.3mrelated to the costs incurred in respect of the acquisition of CanonCommunications LLC. For the year ended 31 December 2010 a further exceptionalnet credit of £1.0m was recognised in relation to the revision of thecontingent consideration estimates for acquisitions made in 2010.6. Finance income/(expense) Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m Interest income Cash and cash equivalents 0.4 0.2 0.7 Other interest receivable 0.1 - - 0.5 0.2 0.7 Interest expense Borrowings and loans (12.7) (7.9) (18.2) Other (1.2) (0.7) (1.2)
Total interest expense for financial liabilities (13.9) (8.8) (19.4) not classified at fair value through profit or
loss Financing income Pension schemes 1.3 1.4 3.2
Foreign exchange gain on forward contracts - 0.1
0.1 1.3 1.5 3.3 Financing income - other
Ineffectiveness on net investment hedges 0.6 -
-
Fair value movement on interest rate swaps 6.3 9.0
8.9
Fair value movement on £250m bond (4.9) (7.1)
(7.9)
Ineffectiveness on fair value hedges 1.4 1.9
1.0
Other fair value adjustments - -
0.2 2.0 1.9 1.2 Financing expense - other Foreign exchange loss on forward contracts (0.2) -
(0.2)
Ineffectiveness on net investment hedges - (3.7)
(2.3)
Fair value movement on interest rate swaps 2.0 -
(3.0)
Fair value movement on $350m bond (2.0) -
2.9
Ineffectiveness on fair value hedges - -
(0.1)
Other fair value adjustments (0.1) -
- (0.3) (3.7) (2.6) Net finance expense (10.4) (8.9) (16.8)Foreign exchange gain on forward contracts within financing income representsrealised gains on foreign currency contracts against profits of the overseasoperations.The ineffectiveness on fair value hedges represents the difference between thefair value movement of the interest rate swaps designated as hedge instrumentsand the fair value movement of the hedged portions of the £250m fixed ratesterling bonds and the $350m fixed rate dollar bonds (Note 10).
7. Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit forthe period attributable to owners of the parent entity by the weighted averagenumber of ordinary shares outstanding during the period.Diluted earnings per share amounts are calculated by dividing the net profitattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the period (adjusted for the effects ofdilutive options).The Group has one category of dilutive potential ordinary shares: those shareoptions granted to employees where the exercise price is less than the averagemarket price of the Company's ordinary shares during the period. The impact ofdilutive securities in the six months to 30 June 2011 would be to increaseweighted average shares by 4.8 million shares (30 June 2010: 1.5 millionshares; year to 31 December 2010: 4.2 million shares) for employee shareoptions.The weighted average number of ordinary shares for the period was 243,366,556(30 June 2010: 243,516,180; year to 31 December 2010: 243,352,378). Theweighted average number of shares excludes ordinary shares held by the EmployeeShare Ownership Plan (`ESOP') and the Qualifying Employee Share Ownership Trust(`QUEST').Adjusted earnings per share is calculated on the net profit for the periodattributable to owners of the parent entity before amortisation of intangibleassets arising on acquisitions, deferred tax on amortisation of intangibleassets, exceptional items, impairment charges, taxation relating to exceptionalitems and net financing income/(expense) - other, divided by the weightedaverage number of ordinary shares outstanding during the period. These adjusteditems are excluded from this calculation, as due to their nature and theinfrequency of the events giving rise to them, separate presentation allowsshareholders to understand better the elements of financial performance for theperiod, so as to facilitate comparison with prior periods and to assess betterthe trends of financial performance.
The following reflects the income and share data used in basic and diluted earnings per share computations (all operations are continuing):
Six months ended Six months ended Year ended 30 June 2011 30 June 2010 31 December 2010 Earnings Earnings Earnings per per per Earnings share Earnings share Earnings share £m p £m p £m p Adjusted Group operating 91.9 83.2 171.8 profit Net interest expense (13.4) (8.6) (18.7) Financing income 1.3 1.5 3.3 Adjusted profit before tax 79.8 76.1 156.4 Taxation (11.8) (11.4) (23.5) Non-controlling interests (5.8) (4.1) (8.6) Adjusted earnings per share 62.2 25.6 60.6 24.9 124.3 51.0 Adjustments Amortisation of intangible (18.6) (7.7) (12.2) (5.0) (27.8) (11.4)assets Deferred tax on amortisation 5.0 2.0 2.7 1.1 6.6 2.8 of intangible assets Non-tax exceptional items (0.3) (0.1) (3.8) (1.6) (10.9) (4.6) Net financing income/ 1.7 0.7 (1.8) (0.7) (1.4) (0.5)(expense) - other Basic earnings per share 50.0 20.5 45.5 18.7 90.8 37.3 Dilution - Options - (0.4) - (0.1) - (0.6) Diluted earnings per share 50.0 20.1 45.5 18.6 90.8 36.7 Adjusted earnings per share 62.2 25.6 60.6 24.9 124.3 51.0 (as above) Dilution - Options - (0.5) - (0.2) - (0.8) Diluted adjusted earnings 62.2 25.1 60.6 24.7 124.3 50.2 per share 8. Dividends Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m
Declared and paid during the period Equity dividends on ordinary shares Second interim dividend for 2009 of 18.2p - 44.3
44.3
Interim dividend for 2010 of 6.0p - -
14.6
Second interim dividend for 2010 of 19.0p 46.2 -
- 46.2 44.3 58.9
Proposed (not recognised as a liability at the
end of the period)
Equity dividends on ordinary shares Interim dividend for 2010 of 6.0p - 14.6
-
Second interim dividend for 2010 of 19.0p - -
46.2
Interim dividend for 2011 of 6.3p 15.3 -
-
Pursuant to the Dividend Access Plan (`DAP') arrangements put in place as partof the Scheme of Arrangement, shareholders in the Company are able to elect toreceive their dividends from a UK source (the `DAP election'). Shareholders whoheld 50,000 or fewer shares (i) on the date of admission of the Company'sshares to the London Stock Exchange and (ii) in the case of shareholders whodid not own the shares at that time, on the first dividend record date afterthey become shareholders in the Company, unless they elect otherwise, will bedeemed to have elected to receive their dividends under the DAP arrangements.Shareholders who hold more than 50,000 shares and who wish to receive theirdividends from a UK source must make a DAP election. All elections remain inforce indefinitely unless revoked. Unless shareholders have made a DAPelection, or are deemed to have made a DAP election, dividends will be receivedfrom an Irish source and will be taxed accordingly.
9. Property, plant and equipment and intangible assets
During the six months ended 30 June 2011, the movements on property, plant and equipment and intangible assets were:
Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m Net book value at 1 January 218.6 148.8 148.8 Acquired with subsidiaries 6.9 15.1 94.1 Additions 9.5 11.0 19.1 Disposals (7.3) (2.5) (0.4) Disposal of subsidiaries (0.2) - - Depreciation and amortisation (27.3) (20.1) (44.2) Currency translation (2.8) 5.0 1.2 Net book value at 30 June/ 31 December 197.4 157.3 218.6 10. Borrowings 31 30 June 30 June December 2011 2010 2010 £m £m £m Non-current 481.2 434.7 535.2 Current 123.0 1.3 75.3 604.2 436.0 610.5
Movements in borrowings are analysed as follows:
31 30 June 30 June December 2011 2010 2010 £m £m £m At 1 January 610.5 385.3 385.3
(Decrease)/increase in borrowings (11.2) 43.5
4.4
(Decrease)/increase in overdraft (0.1) 1.0
-
Issue of $350m fixed rate sterling bonds 2020 - - 214.2
Amortisation and fair value adjustments on £250m 5.0 7.2 8.2 fixed rate sterling bonds 2016
Amortisation and fair value adjustments on $350m 2.1 - (2.7)fixed rate dollar bonds 2020 Currency translation (2.1) (1.0) 1.1 At 30 June/31 December 604.2 436.0 610.5
The undrawn portion of all facilities at 30 June 2011 is £290.0m (30 June 2010: £261.8m; 31 December 2010: £304.2m).
Current borrowings consist of £75m floating rate reset bonds and €53.1mfloating rate reset loans 2012 which are subject to put and call options, asdetailed in the Annual Report and Accounts for the year ended 31 December 2010.Since the onset of the 2008/2009 credit crisis, long term swap rates havefallen below the reset interest rates of 4.70% and 4.16%. This, combined with amaterial increase in market volatility, has increased the fair value of thebonds and loans as at 30 June 2011 to £85.4m and €57.4m respectively. If theGroup exercises its call options and repays the instruments, the early unwindat the current valuation would result in a loss of £10.4m crystallising on the£75m bonds and €4.3m crystallising on the €53.1m loans. Under IAS 39 thelosses would be recognised as a financing expense in the income statement.On 11 May 2011, the Group arranged a five year £300m variable ratemulti-currency facility to replace the cancelled £325m variable ratemulti-currency facility due to expire on 27 July 2012. The £300m facilitycurrently bears interest of LIBOR plus 1.0% whilst the UBM plc rating is BBB-/Baa3. The future interest rate is dependent on the credit rating of UBM plc:the rate will be revised to LIBOR plus 1.35% for a downgrade to BB+/Ba1; LIBORplus 1.75% for downgrade to BB/Ba2 or lower; LIBOR plus 0.85% for an upgrade toBBB/Baa2; or LIBOR plus 0.75% for an upgrade to BBB+/Baa1 or higher. The newfacility will mature on 11 May 2016.£150m of the fixed rate sterling bonds and $150m of the fixed rate dollar bondsare subject to a fair value hedges with interest rate swaps. Under these swapsthe Group receives 6.50% and 5.75% respectively to match the bond coupons andpays six month LIBOR plus 2.90% and six month US LIBOR plus an average of 2.63%respectively. The interest rate swaps are used to increase the Group's exposureto interest rates to maintain a balance of fixed and floating interest ratecost. The fair value movement on the bonds are partially offset against thefair value movement of the swaps and the ineffective elements are recognised inthe income statement within "Financing income - other" as "Ineffectiveness
onfair value hedges" (Note 6).11. Share capital 31 30 June 30 June December 2011 2010 2010 Authorised £m £m £m
1,217,124,740 (30 June 2010: 1,217,124,740; 31 December 2010 1,217,124,740) ordinary shares of 121.7 121.7 121.7 10p each Issued and fully paid Ordinary Ordinary Shares shares Number £m At 1 January 2010 244,174,488 24.4
Issued in respect of share option schemes and 41,838
- other entitlements At 30 June 2010 244,216,326 24.4
Issued in respect of share option schemes and 337,280
- other entitlements At 31 December 2010 244,553,606 24.4
Issued in respect of share option schemes and 159,971
0.1 other entitlements At 30 June 2011 244,713,577 24.5 Share repurchases
The Group did not repurchase nor cancel any of its own ordinary shares during the period (30 June 2010: nil; year ended 31 December 2010: nil)
Company share schemes
As at 30 June 2011, the holdings of the ESOP Trust are 1,216,263 ordinaryshares (30 June 2010: 1,382,742 ordinary shares; 31 December 2010: 1,352,273ordinary shares).12. Other reserves Foreign currency Total Merger translation ESOP Other other reserve reserve reserve reserve reserves £m £m £m £m £m At 1 January 2011 (732.2) 7.0 (8.8) 125.3 (608.7) Total comprehensive income for - 7.0 - - 7.0 the period1 Shares awarded by ESOP - - 0.9 - 0.9 At 30 June 2011 (732.2) 14.0 (7.9) 125.3 (600.8)1 The amount included in the foreign currency translation reserve for theperiod ended 30 June 2011 represents the currency translation difference onforeign operations on Group subsidiaries of £(4.5)m (excluding £(0.2)m relatingto non-controlling interests), on net investment hedges of £11.7m and on jointventures and associates of £(0.2)m.
Merger reserve
The merger reserve is used to record entries in relation to certain reorganisations that took place in previous accounting periods. The majority of the balance on the reserve relates to the capital reorganisation that took place in 2008 which created a new holding company which is UK-listed, incorporated in Jersey and with its tax residence in the Republic of Ireland.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differencesarising from the translation of the financial statements of foreignsubsidiaries. It is also used to record the effect of hedging net investmentsof foreign operations.ESOP reserve
The ESOP reserve records ordinary shares held by the ESOP to satisfy futureshare awards. The shares are recorded at cost. During the six months ended 30June 2011 no shares were purchased by the ESOP (six months ended 30 June 2010:1,200,000; year ended 31 December 2010: 1,200,000).
Other reserve
This reserve includes the unrealised gains and losses reserve which records theportion of the gain or loss on a hedging instrument in a cash flow hedge thatis determined to be an effective hedge.
13. Acquisitions
The Group has completed 4 acquisitions, all within the Events segment, in the six months ended 30 June 2011.
On 24 January 2011, the Group completed the acquisition of a 65% stake inRotaforte International Trade Fairs & Media (`Rotaforte'), the owner ofTurkey's largest jewellery exhibitions, for initial cash consideration of $1.7m(£1.1m) and further performance-related consideration of up to $8.1m (£5.1m)payable over the next two years. The acquisition of Rotaforte adds a furtherindustry-leading exhibition to the Group's jewellery portfolio within theEvents segment, and is in line with the Group's strategy to enhance and expandits international presence in geographic regions of significant growth. Thereare put and call options over a further 15% of the equity priced at 5.5x EBITA(capped at $4m (£2.5m)). The Group's call option is exercisable in 2013, andthe vendor's put option between 2014 and 2021. The vendor also has a second putoption over the remaining 20% exercisable between 2014 and 2021 priced at 5.5xEBITA (capped at $10m (£6.3m)). The carrying value of the put option at 30 June2011 is £1.9m, reported within non-current derivative liabilities.On 27 January 2011, the Group acquired the trade and assets of SATTE, India'slargest travel and tourism exhibition, for initial cash consideration ofINR182m (£2.5m) and further performance related consideration of up to INR168m(£2.3m) payable over the next three years. The SATTE event provides the Groupwith a leading position in the rapidly-growing Indian travel and tourismindustry. The event is also supported by T3, a controlled circulation monthlypublication which will be reported in the Group's Print - Magazines division.On 7 May 2011, the Group acquired the business and assets of AMB ExhibitionsSdn Bhd and AMB Events Sdn Bhd (together `AMB') in Malaysia, Vietnam and thePhilippines, for initial cash consideration of MYR26.8m (£5.5m) and a furtherperformance related consideration of up to MYR8.2m (£1.7m) payable over thenext two years. The acquisition of AMB accelerates the expansion of UBM'sEvents business into South East Asia.On 17 June 2011, the Group acquired a 70% equity interest in UBM CatersourceLLC, a limited liability company which owns the trade and assets of theCatersource catering conference and exhibition and its sister show EventSolutions, for initial consideration of $5.0m (£3.1m). The acquisition willstrengthen the Group's portfolio of events serving the Food & Leisureindustries both in the USA and internationally. The vendor also has a putoption over their 30% interest exercisable after 17 June 2013 and priced at 6xEBITA (capped at $7.2m (£4.5m)). The carrying value of the put option at 30June 2011 is £2.0m, reported within non-current derivative liabilities.The Group has acquired 100% of the voting rights in all cases whereacquisitions involved the purchase of companies unless otherwise stated above.All acquisitions listed above where less than 100% of the voting rights of acompany were purchased have been accounted for using the full goodwill method,as permitted by IFRS 3 (revised 2008). As none of these companies are listed,no market information is available. Therefore, the fair value of thenon-controlling interest for each acquisition has been estimated using amultiples approach with assumed adjustments for the lack of control ormarketability that market participants would consider when estimating the fairvalue of the non-controlling interest.
The acquisition accounting for AMB and Catersource have been determined on a preliminary basis as the valuation exercise at the date of publishing the interim financial statements is ongoing.
Also during the period, the Group entered into a framework agreement to acquire 60% of the Famdent dental exhibition and conference. As completion has not occurred at the balance sheet date, the Famdent acquisition has not been
included in these Interim consolidated financial statements. The completion is subject to regulatory approvals, and will enable the Group to expand its offering in the Indian medical exhibition and conference market.
Acquisition costs of £1.4m (30 June 2010: £0.7m; 31 December 2010: £6.1m) have been expensed as exceptional items in the income statement (Note 5) and are included in operating cash flows in the statement of cash flows.
The following table sets out the fair value of the identifiable assets andliabilities acquired in respect of the acquisition of businesses during theperiod: Fair value to Group 2011 £m Intangible assets 6.8 Property, plant and equipment 0.1 Cash and cash equivalents - Trade and other receivables 0.6 7.5 Trade and other payables (0.9) Deferred tax liability (1.0) (1.9) Identifiable net assets 5.6
Goodwill arising on acquisition (net of changes in estimates of pre 1 16.1 January 2010 contingent consideration of £0.1m)
Non-controlling interests (3.7) 18.0 Trade and other receivables acquired have been recognised at fair value whichequates to the gross contractual amounts receivable. All amounts recognised areexpected to be collected.The total consideration paid and payable after working capital adjustments onacquisitions is shown below: 30 June 2011 £m Consideration: Cash paid to acquire subsidiaries
10.4
Contingent consideration on acquisitions
5.7
Deferred consideration on acquisitions
1.8
Contingent consideration adjustments on pre 1 January 2010
0.1 acquisitions Total consideration transferred 18.0 GoodwillThe goodwill of £16.1m recognised above relates to certain intangible assetsthat cannot be individually separated. These include items such as customerloyalty, market share, skilled workforce and synergies expected to arise afterthe acquisition completion. Of the goodwill arising, an amount of £3.4m isexpected to be deductible for tax purposes. The movement in goodwill during
theperiod was: Six months ended 30 June 2011 £m Cost At 1 January 2011 1,195.7 Acquisitions 16.0
Contingent consideration adjustments on pre 1 January 2010
0.1 acquisitions Disposals (9.0) Currency translation (2.6) At 30 June 2011 1,200.2 Impairment At 1 January 2011 151.6 Currency translation 1.4 At 30 June 2011 153.0 Carrying value At 1 January 2011 1,044.1 At 30 June 2011 1,047.2 Acquisition performanceFrom their respective dates of acquisition to 30 June 2011, the acquisitionsmade in the period have contributed £1.3m to operating profit and £4.1m torevenue of the Group. If the acquisitions had taken place at the beginning ofthe period, they would have contributed £1.7m to operating profit and £6.4m torevenue of the Group for the six months ended 30 June 2011.
Contingent and deferred consideration
The potential undiscounted amount for all future payments that the Group couldbe required to make under the contingent consideration arrangements for 2011acquisitions are between nil and the maximum amounts disclosed on the previouspage; £9.1m in aggregate. The contingent consideration for each acquisitionmade during the period is based on the terms set out in the relevant purchaseagreements. The amounts recognised in the above consideration tables as thefair values of contingent consideration have been determined by reference tothe projected financial performance in relation to the specific contingentconsideration criteria for each acquisition.
The maximum remaining payments that the Group could be required to make under contingent consideration arrangements for acquisitions made in 2010 is £53.8m.
The movement in the contingent and deferred consideration payable during theperiod was: Contingent Deferred consideration consideration Total £m £m £m At 1 January 2011 39.7 1.3 41.0 Acquisitions 5.7 1.8 7.5 Consideration paid (16.3) (1.1) (17.4)
Changes in estimates (goodwill) 0.1 -
0.1
Changes in estimates (income statement) (1.1) -
(1.1) Currency translation (0.7) - (0.7) At 30 June 2011 27.4 2.0 29.4
Cash flow effect of acquisitions
The aggregate cash flow effect of the acquisitions was as follows:
30 June 2011 £m
Net cash acquired with subsidiaries
-
Cash paid to acquire subsidiaries
10.4
Net cash outflow on 2011 acquisitions
10.4
Payment of contingent consideration on prior 16.3 year acquisitions
Payment of deferred consideration on prior year
1.1 acquisitions Total cash outflow on acquisitions
27.8
The Group paid £16.3m of contingent consideration during the six months ended30 June 2011 in relation to the 2007 acquisitions of Vintage Filings LLC andPortelligent, Inc.; the 2008 acquisitions of Aerostrategy's aviation businessand Sanguine Micorelectronics; the 2009 acquisition of Virtual Press Office;and the 2010 acquisitions of Game Advertising Online, Sign China, SharedVue,CenTradeX, Inc., PR Newswire do Brasil, Sienna Interlink, Corporate360, theShanghai International Children-Baby-Maternity Products Expo and Lead-InResearch. The Group also paid £1.1m of deferred consideration during the sixmonths ended 30 June 2011 in relation to the 2010 acquisitions of GameAdvertising Online, Sign China and Sienna Interlink. None of the contingent ordeferred consideration balances are individually material.
14. Disposals
On 15 March 2011, the Group disposed of its UK licensed trade portfolio forinitial cash consideration of £1.5m and further performance relatedconsideration of up to £0.2m, payable over the next year. The sale of theportfolio comprises The Publican print magazine title, websites and awardsevent, together with the Theme and Bar Show brands. A loss of £0.7m arose ondisposal of the UK licensed trade portfolio, including directly attributablecosts.On 28 February 2011, the Group sold its French medical newspaper and magazinebusiness, retaining a 34.55% equity share, for initial cash consideration of €4.2m (£3.6m) and extended vendor finance of €6.0m (£5.1m) to the management buyout team. The business publishes weekly, bi-weekly, monthly and othersubscription and controlled circulation titles for the French healthcareprofessional community and was part of the Group's Print - Magazines segment.The transaction further rationalises the Group's print portfolio and continuesits progression towards a portfolio of integrated cross-media marketingservices designed to serve specific commercial and professional communities. Aprofit of £1.1m arose on the sale of this business, reported within operatingprofit. The profit represents the disposal proceeds less the carrying amount ofthe businesses net assets, attributable goodwill and directly attributablecosts, plus the fair value of the retained interest. The Group accounts for theremaining interest as an associate.On 1 April 2011, the Group transferred Canon Communications Asia Pte. Limitedand Beijing Reed Advertising Services Co., Limited (which together own EDNChina, EDN Asia and certain associated titles) to eMedia Asia Limited, theGroup's joint venture with Global Sources Limited, for consideration of $4.0m(£2.4m). The Group acquired the EDN titles as part of its acquisition of CanonCommunications LLC on 21 October 2010. A profit of £0.7m arose on the sale,representing the portion of the gain which is attributable to the interest heldby Global Sources Limited, including directly attributable costs.On 24 May 2011, the Group disposed of France Optique, a print/online supplierdirectory for opticians in France, for total consideration of €0.6m (£0.5m). Noprofit or loss was recognised on disposal.On 15 April 2011, the Group sold its print titles Consultant and Consultant ForPaediatricians for total consideration of $2.3m (£1.4m). A profit of £0.4m wasrecognised on disposal, including directly attributable costs.
On 2 June 2011, the Group sold a portfolio of domain names for total consideration of $4.5m (£2.8m). Profit after directly attributable costs of £ 2.5m was recognised on disposal.
The aggregate net cash inflow on disposals is £7.8m after cash disposed of £ 2.9m.
15. 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 June2011, the Group awarded 3,572,434 (six months ended 30 June 2010: 3,335,516;year ended 31 December 2010: 3,850,485) shares under the Group's shareincentive plans.
16. Retirement benefit obligations
The Group operates a number of defined benefit and defined contribution pensionschemes in the UK and overseas. The most recent actuarial valuations werecarried out at various dates in 2008 and updated to 30 June 2011 by independentqualified actuaries using the projected unit method.
The amounts recognised in the income statement were as follows:
Six Six Year months months ended ended ended 31 30 June 30 June December 2011 2010 2010 £m £m £m Current service cost 0.4 0.6 0.9 Past service cost - - - Curtailments (1.8) - - Interest cost 12.9 12.9 25.6 Expected return on plan assets (14.2) (14.3) (28.8) Total pension credit (2.7) (0.8) (2.3)
The curtailment relates to the sale of the French medical newspaper and magazine business, as detailed in note 14.
The amounts recognised in the balance sheet were as follows:
31 30 June 30 June December 2011 2010 2010 £m £m £m Fair value of plan assets 470.9 429.2 466.8
Present value of defined benefit obligations (459.9) (470.3) (474.6)
Irrecoverable element of pension surplus (7.9) (1.3)
(4.9)
Net surplus/(deficit) in the balance sheet 3.1 (42.4) (12.7) Retirement benefit surplus 14.8 2.4 9.1 Retirement benefit obligation (11.7) (44.8) (21.8) Net surplus/(deficit) in the balance sheet 3.1 (42.4)
(12.7)
17. Commitments and contingencies
Capital expenditure contracted for but not provided in the financial statements amounts to £0.2m (30 June 2010: £2.8m; 31 December 2010: £2.7m).
18. Related party transactions
The Group entered into the following transactions with related parties duringthe period: Balances Balances (owed (owed by)/ by)/ due to due to the the Group at Value of Group at Value ofTransactions 30 June transactions 30 June transactionswith Nature of Nature of 2011 2011 2010 2010related parties relationship transactions £m £m
£m £m CMP Weka Verlag Joint Licensing - - 0.1 0.1 GmbH1 venture revenue GML Exhibitions Joint Advances 0.2 - 0.1 - (Thailand) Co Venture Limited Guangzhou Beauty Joint Commission 0.1 - 0.1 - Fair Venture and management fees PA Group Limited Associate Newswire - (0.3) - - service PR Newswire do Associate2 Newswire - - - (0.2)Brasil2 service Shanghai Tekview Investment IT services -* -* - - IC Analysis Technology Co Ltd
1 The CMP Weka Verlag GmbH joint venture was sold on 29 November 2010. The related party transactions between the Group and CMP Weka Verlag GmbH disclosed above represent transactions until this date.
2 The remaining 62.03% of PR Newswire do Brasil was acquired by the Group on 26April 2010. After this date, as the Group owned 100% of the company it is notrequired to disclose related party transactions. The disclosures given aboverepresent related party transactions with PR Newswire do Brasil until 26 April2010.
* Transactions and balances (owed by)/due to the Group less than £0.1m.
The Group also disposed of Canon Communications Asia Pte. Limited and Beijing Reed Advertising Services Co., Limited to eMedia Asia Limited, one of the Group's joint ventures, as detailed in note 14.
Balances (owed by)/ due to the Group at 31 Value ofTransactions December transactionswith Nature of Nature of 2010 2010
related parties relationship transactions £m
£m CMP Weka Verlag Joint Licensing - 0.2 GmbH1 Venture revenue Guangzhou Beauty Joint Commission 0.1 0.1 Fair Venture and management fees GML Joint Advances 0.3 - (Exhibitions) Venture Thailand Co Limited
PR Newswire do Associate2 Newswire -
- Brasil2 service
Shanghai Tekview Investment IT services 0.1
-* IC Analysis Technology Co Ltd John Botts, Chairman of the Group was a Director of Convera Inc., an ITconsultancy specialising in search technologies, until 8 February 2010. ConveraInc. is party to a five year contract with the Group under which it is entitledto receive a share of revenues from certain related products. Payments underthis contract in the prior year until 8 February 2010 were nil. The Group alsoprovided services to Convera Inc. during this period for fees of £1,680.
In the period ended 30 June 2010 and year ended 31 December 2010, the Group provided services to Euromoney Institutional Investor Plc, an international publishing, events and electronic information group, for fees of £3,916. There were no transactions during the period ended 30 June 2011. John Botts is a Director of Euromoney Institutional Investor Plc.
Allen & Company, a US investment bank, provided services to the Group during the period for fees of nil (period ended 30 June 2010: nil; year ended 31 December 2010: £2.0m). John Botts is a senior advisor of Allen & Company.
Leaders Quest, a non-profit organisation, organised various managementconferences for the Group during the period ended 30 June 2010 and year ended31 December 2010 for a fee of £15,000. There were no transactions during theperiod ended 30 June 2011. Lindsay Levin, wife of David Levin (Chief ExecutiveOfficer of the Group) is a partner of Leaders Quest.Microland, an IT infrastructure management outsourcing services provider, hasprovided services to the Group during the period for fees of nil (period ended30 June 2010 and year ended 31 December 2010: £64,170). During the period, theGroup has provided services to Microland for fees of £4,649 (period ended 30June 2010 and year ended 31 December 2010: nil). At 30 June 2011, the Group hada trade receivable with Microland of £1,001 (30 June 2010 and 31 December 2010:nil). Pradeep Kar, a Non-Executive Director of the Group, is Founder, Chairmanand Managing Director of Microland.Computacenter plc, a provider of IT infrastructure services, provided servicesto the Group during the period for fees of £19,000 (period ended 30 June 2010:£139,021; year ended 31 December 2010: £146,000). At 30 June 2011, the Grouphad a trade payable with Computacenter plc of £5,000 (30 June 2010 and 31December 2010: nil). Greg Lock, a Non-Executive Director of the Group, is theChairman of Computacenter plc.During the period, the Group has provided services to Target Group Limited, aprovider of software and servicing solutions, for fees of nil (period ended 30June 2010: nil; year ended 31 December 2010: £16,568). At 30 June 2011, theGroup had a trade receivable with Target Group Limited of nil (30 June 2010:nil; 31 December 2010: £8,687). Greg Lock is a Non-Executive Director of TargetGroup Limited.
During the period, the Group provided services to Kofax plc, a business solutions provider, for fees of £1,867 (period ended 30 June 2010 and year ended 31 December 2010: nil). Greg Lock is the Non-Executive Chairman of the Board and Chairman of the Nomination Committee of Kofax plc.
Transactions with related parties are made at arm's length. Outstandingbalances at the end of the period are unsecured and settlement occurs in cash.There are no bad debt provisions for related party balances as at 30 June 2011,and no related party transactions have been written off during the period.Unless otherwise stated above, there are no amounts owed by or due to relatedparties by the Group at 30 June 2011.
19. Events after the balance sheet date
On 1 July 2011, the Group disposed of EDN Japan, a print and online directory business, for a total cash consideration of $0.3m (£0.2m).
On 19 July 2011, the Group completed the acquisition of International BusinessEvents Limited (owner of the Ecobuild exhibition business) for initial cashconsideration of £31.2m and a further performance-related consideration of upto £20.0m payable over the next 12 months. The acquisition within the Group'sEvents segment complements the existing UK construction sector media businessessuch as Building and Property Week and also provides opportunities to developEcobuild events in new geographies.The Group sold its UK entertainment and technology product portfolio to IntentMedia Limited for a total cash consideration of £2.4m. Completion is expectedon 29 July 2011, or as soon as is practicable thereafter. Disposal of theportfolio - which comprises Pro Sound News Europe, TVB Europe, InstallationEurope and Music Week print magazine titles and related websites and events -further rationalises the Group's retained print portfolio.
Statement of directors' responsibilities
The directors confirm that the interim condensed consolidated financialstatements for the period ended 30 June 2011 have been prepared in accordancewith IAS 34 as issued by the International Accounting Standards Board, and thatthe interim management report herein includes a fair review of the informationrequired by Rules 4.2.7 and 4.2.8 of the Disclosure and Transparency Rules ofthe United Kingdom Financial Services Authority.
The directors of UBM plc are listed in the Annual Report and Accounts for the year ended 31 December 2010 and on the UBM plc website: www.ubm.com.
By order of the BoardRobert GrayChief Financial Officer29 July 2011
Independent review report to UBM plc
Introduction
We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30 June2011 which comprises the Interim consolidated income statement, the Interimconsolidated statement of comprehensive income, the Interim consolidatedstatement of financial position, the Interim consolidated statement of changesin equity, the Interim consolidated statement of cash flows and the relatedexplanatory notes 1 to 19 that have been reviewed. We have read the otherinformation contained in the half yearly financial report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe information in the condensed set of financial statements.This report is made solely to the Company in accordance with guidance containedin International Standard on Review Engagements 2410 (UK and Ireland) "Reviewof Interim Financial Information Performed by the Independent Auditor of theEntity" issued by the Auditing Practices Board. To the fullest extent permittedby law, we do not accept or assume responsibility to anyone other than thecompany, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of Review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 30 June 2011 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 andthe Disclosure and Transparency Rules of the United Kingdom's FinancialServices Authority.Ernst & Young LLPLondon29 July 2011
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