29th Sep 2006 07:06
Centaur Media PLC29 September 2006 Centaur Media plc Preliminary results for the year ended 30 June 2006 Centaur Media plc ("Centaur" or "the Company"), the specialist business publishing and information group, announces results for the year ended 30 June 2006. Centaur's premier brands include Marketing Week, Design Week, Creative Review,Money Marketing, The Lawyer, The Engineer, New Media Age, Homebuilding &Renovating and the online service Perfect Information. HIGHLIGHTS IFRS IFRS Actual Actual Year ended Year ended 30 June 30 June Year on year 2006 2005 movement £m £m % Revenue 82.3 72.2 14% Adjusted EBITDA (a) 15.7 12.2 29%Adjusted EBITDA (a) margin 19% 17% Profit before tax 15.1 9.2 64% Adjusted profit before tax (b) 13.2 9.7 36% Basic EPS (pence) 7.6p 4.4p 73%Adjusted basic EPS (pence) (c) 6.2p 4.7p 32% Cash conversion rate (d) 89% 80%Net cash 6.2 0.0 Full year dividend per share (pence) 3.0p 1.7p 76% • Strong growth in revenues leads to record profits • Adjusted EBITDA margin increases to 19% • 15% growth in advertising revenues, led by strong online performance, which grew by 20% • 15% growth in events revenues, boosted by launch of 6 new events • 4 new magazines and 5 new websites launched in the year • 6 bolt-on acquisitions completed in the period • PBT up 64% to £15.1m (2005 £9.2m) and adjusted PBT up 36% to £13.2m (2005 £9.7m), ahead of expectations • 76% increase in full year dividend • Appointment of Geoff Wilmot as new Chief Executive Officer announced Commenting on the preliminary results, Graham Sherren, Chairman and ChiefExecutive Officer of Centaur said: "I am pleased to announce that Centaur is reporting record profits in the 12months to 30 June 2006, with adjusted PBT ahead of expectations up 36% to£13.2m, and adjusted basic earnings per share 32% up at 6.2p (2005: 4.7p).Revenues, which grew 14% in the year, benefited from strong growth inadvertising in most of our markets, particularly in online media, from continuedgrowth in our events business and from the results of new and recently launchedproducts. Revenue growth was underpinned by the bolt-on acquisitions we madeduring the year, but underlying revenues excluding acquisitions still grew 9% inthe year. The new financial year has started well and our growth prospects continue to besupported by our pipeline of new and recently launched or acquired products.Revenues in the first quarter are comfortably ahead of the same period lastyear. The outlook is encouraging and we expect FY 2007 results to demonstratefurther good progress." Notes a. One of Centaur's key internal measures of profit is earnings before interest, tax, depreciation and amortisation excluding exceptionals and other material non-cash items (Adjusted EBITDA). In addition, "underlying" results of continuing operations are presented to provide a better indication of overall financial performance. The "underlying" results exclude the impact of recent acquisitions or disposals and of new launches into new communities, as well as that of amortisation of acquired intangibles and of exceptional items and other material non-recurring items.. b. Adjusted PBT is profit before tax, excluding the impact of amortisation of acquired intangibles and of exceptional items. c. Adjusted EPS is based on the basic EPS but after making adjustments for amortisation on acquired intangibles and exceptional items as detailed in note 3. d. Cash conversion rate is free cash flow expressed as a percentage of adjusted operating profit. Free cash flow is defined as cash generated from operations less capital expenditure on property, plant and equipment and software. Adjusted operating profit is operating profit after making adjustments for amortisation on acquired intangibles and exceptional items. Enquiries: Centaur Media plc Graham Sherren, CEO Tel: 020 7970 4000 Geoff Wilmot, CFO Gavin Anderson & Company Richard Constant Tel: 020 7554 1400 Robert Speed Janine Brewis CHAIRMAN'S STATEMENT Introduction I am pleased to announce that Centaur is reporting record profits in the 12months to 30 June 2006, with adjusted PBT ahead of expectations up 36% to£13.2m, and adjusted basic earnings per share 32% up at 6.2p (2005: 4.7p).Revenues, which grew 14% in the year, benefited from strong growth inadvertising in most of our served markets, particularly in online media,continued growth in our events business and from the results of new and recentlylaunched products. Revenue growth was underpinned by the bolt-on acquisitions wemade during the year, but underlying revenues excluding acquisitions still grew9% in the year. Adjusted EBITDA increased by 29% to £15.7m, representing a further strongimprovement in margin to 19% from 17% in the previous year, despite another yearof significant further investment in the major new product, Finance Week. Profit before tax amounted to £15.1m compared with £9.2m in the year ended 30June 2005. The 2006 result is stated after an exceptional credit of £2.2mrelating principally to the release of a provision for deferred purchaseconsideration in respect of Synergy Group and after charging, withinadministrative expenses, £0.3m of amortisation of acquired brands and publishingrights (2005 £0.0m). Finally, cash balances at 30 June 2006, net of loan notecreditors, stood at £6.2m (2005: £10.0m). In light of this performance, the Board is recommending a final dividend of 2.4pper share, giving a full year dividend of 3.0p, representing an increase of 76%over prior year. The final dividend will be paid to shareholders on the registeras at 3 November 2006. It is proposed that the dividend will be paid on 1December 2006. The Company will not be proposing any Scrip Dividends or DividendReinvestment Plan Options. These excellent results reflect the success of our strategy of seeking to buildmarket-leading positions across a number of vertical markets through continuouscustomer-focussed innovation. The recovery in the advertising cycle that startedtowards the end of 2003 has continued through the year to June 2006 in most ofour served markets, although the marketing and creative sectors experiencedwell-publicised difficulties, reflecting weakness in the retail and consumergoods sectors in particular. Nevertheless, total advertising turnover during the year increased by 15% overthe equivalent prior year period. Acquisitions made during the year contributedto this growth, but underlying advertising revenues also grew strongly, thanksin particular to buoyant underlying trading conditions in the legal andfinancial markets. The fastest pace of revenue growth was derived from online products (up 20%) andevents (up 15%), reflecting the success of the principal focus of our strategyin the past few years, which has been to extend our major print publishingbrands across multiple media. Centaur has developed most of its businessorganically and in FY2006, 12% of revenues were generated by products launchedwithin the previous three years. We continued to maintain an active pace of newproduct development during the year, with the launch of 4 new magazines, 5 newwebsites and half a dozen new events. In the past year we have also supplemented our growth through a number of smallbolt-on acquisitions. These were in line with our established acquisitionstrategy, making selective purchases of businesses that fit with our overallgrowth strategy, which is to expand existing market positions and to establishmarket-leading positions in new markets. The key developments and initiatives inthe period are outlined in the Business Review. The new financial year has started well and our growth prospects continue to besupported by our pipeline of new and recently launched or acquired products.Revenues in the first quarter are comfortably ahead of the same period lastyear. The outlook is encouraging and we expect FY 2007 results to demonstratefurther good progress. As previously reported, I am also pleased to confirm that Geoff Wilmot willbecome Chief Executive Officer with effect from 1st November 2006. I amconfident that he and his team will continue to take Centaur from strength tostrength. Finally, my thanks to all my colleagues who as always have performedwith great energy and enthusiasm. Business Review Trading Review Revenues grew 14% in the year to 30 June 2006, led by 15% growth in revenuesfrom both advertising and events. Advertising growth was particularly strong inour online media, which grew total revenues by 20%. Overall productivityimproved, with total revenues per employee increasing 11% to £112k. This revenueand productivity growth, combined with other initiatives, resulted in adjustedEBITDA margins improving to 19% (2005:17%) and in adjusted basic earnings pershare rising by 32% to 6.2p. Centaur's rapid growth in the year continued to be supported by its pipeline ofnew and recently launched products and the record results were achieved despitea continuing high level of investment in future growth. Overall, approximately12% of revenues generated in the last financial year were from products orevents launched within the past three years. The bulk of the new productlaunches have been in existing communities, enhancing and extending establishedleading brands. Our major new product development, Finance Week, incurredfurther significant operating losses during the year, which have decreasedsignificantly following its conversion to an online-only format in March 2006. We also completed a number of small bolt-on acquisitions during the past year.In addition to the acquisition of Logistics Manager part way through theprevious year, these acquisitions contributed 5% of revenues in FY2006 and anadjusted EBITDA margin of 10%. Legal & Financial This was our most successful market segment in the year, reflecting the strengthof the underlying communities served. Revenue grew 18% year on year and weincreased the EBITDA margin to 29% (2005:26%). This division's three leading titles, Money Marketing, Mortgage Strategy and TheLawyer, each ended the year strongly. Money Marketing and its sister title, FundStrategy, both benefited from a surge in demand for retail investment productsin the second half, whilst Mortgage Strategy's consistent growth throughout theyear reflected the continuing high levels of activity in that sector. TheLawyer, meanwhile, again recorded its best performance ever, benefiting inparticular from the impact of the healthy levels of underlying M&A activity onthe legal profession. Events in this Division also recorded strong growth, led by the launch of twonew summit events during the year. The Mortgage Summit, launched in September2005, was successfully repeated in June 2006. The Investment Summit, launched inMarch 2006, was also a great success. The Lawyer's European Summit continued togrow as did our major exhibitions in the financial sector, Money Marketing Live. The fastest pace of growth in this Division was derived from online products.Revenues and profits from the three major internet businesses, Money MarketingOnline (principally banner advertising), TheLawyer.com (recruitment anddirectory advertising) and Headlinemoney (subscriptions income) each grewstrongly and each of these business units is now delivering above average EBITDAmargins. Marketing, Creative & New Media Revenues in what was previously our largest market segment declined 2% in theyear, and, despite tight cost control, adjusted EBITDA margins deteriorated to14% (2005: 20%). The advertising recovery in this sector has been severely affected by theconsumer and retail slowdown experienced in the last year and by thewell-publicised challenges faced by traditional media owners. As a result,recruitment advertising in particular suffered and our leading magazines in thissector, Marketing Week, Design Week and Creative Review, all recorded a declinein overall revenues during the year. This was offset to an extent by continuingrecovery in revenues from New Media Age, our leading weekly magazine for theinteractive marketing community. The direct marketing segment, for which we publish the weekly magazine PrecisionMarketing (PM), also remained weak. In response to changing conditions in thismarket, we decided to reduce PM's frequency to fortnightly, with effect fromJuly 2006. We are supplementing the magazine with a new stand-alone website,launched in September 2006, and we are increasing the magazine's revenuepotential by expanding its circulation. The Insight and InStore shows both delivered modest revenue and profits growth.The DM Show, run in September 2005, did not improve its results year on year,reflecting the weakness of the underlying sector of the market. The TotalMotivation Show also achieved only modest revenue growth in its second year. Theonly event which recorded significant growth was The Online Marketing Show, alsoin its second year. Our internet portal, mad.co.uk, which serves the marketing, advertising anddesign communities, delivered strong revenue growth, principally fromrecruitment and banner advertising, but profits growth was held back by theincreased costs of its new technology platform, implemented during the year,which we invested in to support future growth. Construction & Engineering Led by the acquisitions of Period Living and Pro-Talk, revenues in this divisiongrew 24% in the year and EBITDA margins improved 5 points to 21% having doubledin the previous year to 16%. The leading title in the engineering portfolio is The Engineer, which iscelebrating its 150th anniversary in 2006. We have been successfullyrepositioning the title as the news magazine for technology and innovation,published principally for those involved in the development of new applicationsand transferable technology. As a result of this repositioning, the magazinedelivered its second successive year of double digit revenue growth. Our largestmagazine in the construction portfolio is the leading monthly self-buildpublication Homebuilding & Renovating, which experienced a levelling out ofrevenues, following several years of strong growth, reflecting some softness inthe housing market during the year. We continued to experience challenging market conditions for our two majorengineering monthlies, Process Engineering and Metalworking Production. We havereduced the frequency of both magazines to bi-monthly and enhanced their onlinepublication activity. The respective online services will deliver news and jobs,leaving the magazines more capacity for in-depth analysis and case studies. Despite the slowdown in the housing market each of the six establishedHomebuilding exhibitions generated further strong growth in revenues, deliveringnearly 100,000 visitors in aggregate. In the engineering sector, Subcon, theshow for international buyers of sub-contracted manufacturing, deliveredsignificant revenue growth and a useful profit contribution. Online revenues in this Division are driven principally by The Engineer Online(mainly recruitment advertising), homebuilding.co.uk (mainly banneradvertising), plotfinder.co.uk (revenues from subscriptions) and the newlyacquired Pro-Talk (online response driven search-advertising model). Inaggregate, online products delivered strong revenue growth and satisfactoryimprovement in margins. Perfect Information Perfect Information (PI) achieved record results in the year, with revenuegrowth of 8% combined with cost savings leading to a £1m increase in EBITDA to£1.4m, giving an improved adjusted EBITDA margin of 22%. High levels of M&A activity led to improved trading conditions in PI's coreinvestment banking and legal markets. As a result, PI secured significant growthin new subscriptions to its core Perfect Filings service. The year also saw goodprogress on the development of PI's new equity research service, PerfectAnalysis (PA). PA Web, which delivers most of PA's powerful functionality withina pure web environment, was launched in February 2006. A new Excel add-inservice, allowing users to exploit the full functionality of PA from withintheir own desktop version of Excel, was substantially completed by the year-endand was released to the market in the first quarter of the new financial year.We secured a number of new subscribers to PA during the year under review andnet operating losses relating to this service were substantially reduced. PA isexpected to generate a net profit contribution in the current year. Other This division comprises products serving a number of distinct businesscommunities. These include HR (Employee Benefits), logistics (LogisticsManager), the recruitment sector (The Recruiter), corporate accounting andfinance managers (Finance Week), business travel (Business Travel Shows),carpets and textiles (Hali) and TV and film production (Televisual). Inaggregate, revenues grew 37%, with most of the growth arising in the newlyacquired sectors, logistics and recruitment. EBITDA grew £1.1m to £0.5m, despitecontinuing losses on Finance Week amounting to £1.3m (2005: £1.4m). Revenue and profits growth in this division were driven principally by LogisticsManager and The Recruiter. In both cases, the underlying served markets areenjoying buoyant trading conditions and our investment in redeveloping theserecently acquired titles is delivering promising results. In addition, theEmployee Benefits portfolio and the Business Travel shows also delivered growthin revenues and profit contribution. As previously reported, we converted Finance Week (FW) into an online-onlyformat in the third quarter of last year. This was done in order to enable us toexpand the readership base of the title so as to provide the market with a moreeffective recruitment medium. It also enabled us to make a substantial reductionin FW's operating costs. FW's online circulation has been building steadily overthe past few months and revenue growth is on target. Since the year-end we have sold Televisual (TV) to its former publisher. TV is astrong brand that enjoys an exceptional position in its market. However, themarket it serves has been in decline for a number of years, as a result oftechnology innovations, TV has recently begun to incur losses and we do notbelieve that it offers the potential to justify Centaur's continued investment. New Business Development Initiatives During the year we continued to focus on new product development opportunitiesand we became more proactive in searching for suitable bolt-on acquisitions. Thekey development initiatives in the period are outlined below. New Magazines In the first half we launched two new magazines within existing productportfolios. The monthly magazine Move or Improve is an extension of themarket-leading publication, Homebuilding and Renovating, which will inparticular enable us to address the metropolitan market more successfully. Itpublished 6 issues during the year and delivered a small profit contributionbefore overheads. Modern Carpets & Textiles is a quarterly magazine published bythe Hali team for the major buyers of these products in this growinginternational market. We published 3 issues in the year and traded at a smallloss. In January 2006, in response to recent regulatory and technology changes in theUK lending industry, we launched the monthly magazine Lending Strategy,published alongside its successful sister publication, Mortgage Strategy. Wepublished 5 issues in the year which generated a small loss. In May 2006 we launched Corporate Adviser, a monthly publication targeted atfinancial intermediaries selling pensions and employee benefits products intothe corporate market. The magazine bridges the gap between Employee Benefits andMoney Marketing and builds on our extensive knowledge of these two sectors. Wepublished two issues in the year and generated a small loss. Each of these new products is expected to make a profit contribution in the newfinancial year. New Online Products The Internet is becoming established as an increasingly important advertisingand information medium, which offers significant business opportunities toCentaur. We have continued to invest steadily in enhancing the performance,functionality and reach of our established internet operations and as reportedabove they are now delivering high rates of revenue growth and increasinglyattractive profit margins. Our success in this area was reflected in theTheLawyer.com's great achievement in winning the Association of OnlinePublishers' award of Business Website of the Year in autumn 2005. Apart from the ongoing development of financeweek.co.uk and Perfect Analysis, asreported above, most of our new online product activity during the year waslinked to our bolt-on acquisitions, which are addressed below. New Events We organised three new trade exhibitions during the year. Two of these wereregional logistics shows acquired with Logistics Manager magazine. The thirdshow was a new launch of a third regional logistics show combined with a sectionfor materials handling suppliers. These shows all made a useful profitcontribution and served to enhance our strengthening position in this importantnew market. In June 2006 we also announced a major repositioning of the SmartHomes show in conjunction with Future Publishing's market-leading consumer titleT3. The first of the new-look shows will be run alongside the NationalHomebuilding show at the NEC in March 2007. In FY2006, Centaur established a new extension to its events business with theformation of Centaur Summits. Summits typically comprise meetings/workshop-basedevents, bringing together relatively small numbers of senior decision-makerswithin particular vertical markets. We give these events a strong independent"editorial" base, but revenues are normally derived from sponsorship. As noted above, we organised three new summits during the year, two MortgageSummits and one Investment Summit, which made an important profit contributionin their first year and have resulted in increased levels of bookings for repeatevents in FY2007. We also announced the launch of the first Employee Benefitssummit which ran successfully in July 2006. The Conferences division, most of whose events have traditionally been in themarketing sector, suffered from the underlying weakness of that market. This wasoffset to a certain extent by the launch of a number of new conferences in otherCentaur communities, notably, legal, financial and engineering and we will seekto consolidate our position as a conference producer in these markets in thefuture. Acquisitions Our acquisition strategy is typically to identify targets that meet thefollowing criteria: a. The business is operating in a market with high growth potential and high value. b. There is an identifiable high value information need on which to base a range of products c. The business is a market-leader in its respective sector or capable of achieving market leadership quickly d. Its key people fit comfortably into Centaur's culture In the past year we have completed six bolt-on acquisitions which we believemeet these criteria. In October 2005 we strengthened our position in theincreasingly important logistics market with the acquisition of two smallmagazines and an established awards event from UKTP for £0.3m. In December 2005 we acquired the fortnightly magazine The Recruiter for £4m. Weare pleased with the progress we have made in investing in the quality of themagazine, which has performed ahead of our expectations at the time of purchase.In the second half we organised a successful awards event for the community andrelaunched The Recruiter's website. In January 2006, we acquired the monthly magazine Period Living for £1.5m. Wehave made improvements to the editorial and visual quality of this strong brand,which is fitting in well with our growing portfolio of special interest consumerbrands, focussed currently on the property sector. In March 2006 we announced the acquisition, for a maximum of £1.2m, of theremaining 50% of the website Headlinemoney (HM), the highly successfulinformation service for financial journalists. Total ownership of this businesswill enable us more readily to apply the Headlinemoney model in other markets.Since acquisition, we have successfully integrated HM's operations withinCentaur and we expect to launch the first new extension of this business in thenext few months. In May 2006 we announced the purchase of the online sales lead service Pro-Talkfor an initial consideration of £4m. We believe that this acquisition willprovide us with a model which can be applied across a number of vertical marketsto take advantage of the ongoing significant growth in search engine marketingexpenditure. Since acquisition, we have identified and launched three new siteswithin Pro-Talk and invested further in sales resources to drive future growth. We have also recently announced the acquisition for £0.1m of Air and BusinessTravel News (ABTN), an online publication for the business travel communitywhich complements our successful trade shows serving this community. ABTNcurrently comprises a website and an online newsletter reaching 23,000 readers.We intend to develop ABTN to unlock its true commercial potential and to enhanceour position in this market. Overall, our recently acquired companies have contributed revenues in FY2006 of£3.9m on which they earned an EBITDA margin of 10%. Current Development Activity Innovation is central to Centaur's culture and is an almost constant activityacross the whole portfolio. In the new financial year, we are continuing todevelop new products at a steady pace. Our current development effort isfocussed on extending our established brands into new areas and enhancing ourrecent acquisitions. In addition to the ongoing development of initiatives mentioned above, we haverecently launched a new specialist consumer exhibition, The Good Parent Show andthree new summits in the financial and legal sectors. We have also launched twonew stand-alone marketing websites, marketingweek.co.uk andprecisionmarketing.co.uk, to complement our leading magazines in this sector andwill shortly launch a dedicated website to complement Design Week. We have alsorecently launched eCR, a digital version of Creative Review, with which we planto extend the title's circulation and which is allowing us to offer advertisersimproved marketing solutions. Editors' Notes a. One of Centaur's key measures of profit is earnings before interest, tax, depreciation and amortisation and excluding exceptionals and other material non-cash items (EBITDA). In addition, we report adjusted PBT which is profit before tax excluding the impact of amortisation of acquired intangibles and of exceptional items. b. Centaur's product portfolio currently comprises 7 weekly magazines, 3 fortnightly magazines, 14 monthly magazines, 7 magazines of a quarterly or bi-monthly frequency, 33 online products or services, 30 awards or other sponsored events, 26 exhibitions and approximately 90 conferences. c. Centaur reports its results within 5 distinct divisions, namely Legal and Financial, Marketing and Creative, Engineering and Construction, Perfect Information and Other. The first 3 segments comprise principally the following vertical business communities in which Centaur publishes market-leading magazine titles: Marketing Services, Creative Services, New Media, Retail Financial Products, Legal Services, Engineering and Special Interest Residential Property. d. Centaur also enjoys strong positions in a number of other specialist communities, namely HR, Recruitment, Logistics, Business travel, Construction, Carpets and Textiles and Public/Private Finance. Business Review (continued) Analysis of results 2006 2006 2005 2005 ------------------------------------------------- £m £m £m £mBy Division Revenue EBITDA Revenue EBITDALegal and Financial 24.5 7.1 20.7 5.4Marketing, Creative and New Media 23.5 3.3 24.0 4.9Construction and Engineering 16.5 3.4 13.3 2.1Perfect Information 6.4 1.4 5.9 0.4Other 11.4 0.5 8.3 (0.6)----------------------------------------------------------------------------------------- Total 82.3 15.7 72.2 12.2------------------------------------------------------------------------------------------ By SourceRecruitment advertising 12.9 - 11.6 -Other advertising 31.0 - 26.7 -Circulation revenue 5.8 - 5.6 -Online subscriptions 7.6 - 6.9 -Events 23.9 - 20.8 -Other 1.1 - 0.6 ------------------------------------------------------------------------------------------ Total 82.3 - 72.2 ------------------------------------------------------------------------------------------- By Product typeMagazines 43.8 7.6 39.3 7.1Events 23.9 5.1 20.8 3.8Online products 12.8 2.1 10.7 0.9Other 1.8 0.9 1.4 0.4----------------------------------------------------------------------------------------- Total 82.3 15.7 72.2 12.2----------------------------------------------------------------------------------------- UnderlyingUnderlying 78.4 15.3 72.1 12.3Acquisitions (1) 3.9 0.4 0.1 (0.1)----------------------------------------------------------------------------------------- Total 82.3 15.7 72.2 12.2----------------------------------------------------------------------------------------- By MaturityNew (2) 9.6 (0.3) 10.6 (0.3)Existing and acquired 72.7 16.0 61.6 12.5----------------------------------------------------------------------------------------- Total 82.3 15.7 72.2 12.2----------------------------------------------------------------------------------------- Notes 1. Acquisitions are reported by reference to the two years preceding each reporting date 2. New products are defined as any product launched in the last three years and are reported by reference to the three years preceding each reporting date. Consolidated Income Statement for the year ended 30 June 2006 2006 2005 Note £m £m Revenue 1 82.3 72.2 Cost of sales (42.8) (39.2)----------------------------------------------------------------------------------------- Gross profit 39.5 33.0 Distribution costs (4.5) (4.2)Administrative expenses (20.3) (19.9) Adjusted EBITDA 1 15.7 12.2 Depreciation of property, plant and equipment (0.7) (0.6)Amortisation of software (1.8) (1.8)Amortisation of acquired intangibles (0.3) -Share based payments (0.4) (0.4)Exceptional administrative credit / (costs) 2.2 (0.5) Operating profit 14.7 8.9 Interest receivable 0.3 0.3Share of post-tax profit from associate 0.1 ------------------------------------------------------------------------------------------ Profit before taxation 15.1 9.2 Taxation 2 (3.7) (2.8)----------------------------------------------------------------------------------------- Profit for the year attributable to equity shareholders 11.4 6.4----------------------------------------------------------------------------------------- Earnings per share 3Basic 7.6p 4.4pFully diluted 7.6p 4.3p----------------------------------------------------------------------------------------- All operations in the current and prior year relate to continuing activities The accompanying accounting policies and notes form an integral part of thesefinancial statements. Consolidated Balance Sheet at 30 June 2006 2006 2005 -------------------- £m £mNon-current assetsGoodwill 142.0 138.4Other intangible assets 13.1 4.1Property, plant and equipment 2.5 2.1Investments accounted for using the equity method 0.3 0.2Deferred tax assets 1.6 1.2----------------------------------------------------------------------------------------- 159.5 146.0----------------------------------------------------------------------------------------- Current assetsInventories 1.5 1.3Trade and other receivables 18.7 15.7Cash and cash equivalents 7.8 12.5----------------------------------------------------------------------------------------- 28.0 29.5----------------------------------------------------------------------------------------- Current liabilitiesFinancial liabilities - borrowings 1.6 2.5Trade and other payables 11.3 10.4Deferred income 10.5 9.9Current tax liabilities 2.6 0.5Provisions 0.6 ------------------------------------------------------------------------------------------ 26.6 23.3-----------------------------------------------------------------------------------------Net current assets 1.4 6.2----------------------------------------------------------------------------------------- Non - current liabilitiesProvisions 1.9 2.5Deferred tax liabilities 1.1 1.1 3.0 3.6-----------------------------------------------------------------------------------------Net assets 157.9 148.6----------------------------------------------------------------------------------------- Capital and reservesShare capital 14.9 14.9Share premium 0.3 0.3Other reserves 2.4 2.0Retained earnings 140.3 131.4-----------------------------------------------------------------------------------------Total shareholders' equity 157.9 148.6----------------------------------------------------------------------------------------- The financial statements were approved by the Board of Directors on 28 September2006 and were signed on its behalf by: GTD WilmotDirector Consolidated Cash Flow Statement for the year ended 30 June 2006 2006 2005 ----------------------- £m £m Cash flows from operating activitiesCash generated from operations 14.4 9.6Tax paid (1.8) (1.1)-----------------------------------------------------------------------------------------Cash flows from operating activities 12.6 8.5----------------------------------------------------------------------------------------- Cash flows from investing activitiesInterest received 0.3 0.3Acquisition of subsidiaries (net of cash acquired) (4.8) -Proceeds from the disposal of subsidiaries 0.4 0.4Purchase of property, plant and equipment (1.0) (0.7)Purchase of intangible assets (8.6) (2.4)-----------------------------------------------------------------------------------------Cash flows from investing activities (13.7) (2.4)----------------------------------------------------------------------------------------- Cash flows from financing activitiesNet proceeds from issue of ordinary share capital - 0.4Repayment of loan notes (0.9) (0.9)Dividends paid (2.7) (2.2)-----------------------------------------------------------------------------------------Cash flows from financing activities (3.6) (2.7)-----------------------------------------------------------------------------------------Net (decrease) / increase in cash and cash equivalents (4.7) 3.4-----------------------------------------------------------------------------------------Cash and cash equivalents at 1 July 12.5 9.1-----------------------------------------------------------------------------------------Cash and cash equivalents 30 June 7.8 12.5----------------------------------------------------------------------------------------- Statement of accounting policies The principal accounting policies adopted in the preparation of these financialstatements are set out below. These policies have been consistently applied toall the years presented, unless otherwise stated. Basis of preparation The consolidated and Company financial statements have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adopted bythe European Union and International Financial Reporting InterpretationsCommittee (IFRIC) applicable at 30 June 2006 and with those parts of theCompanies Act, 1985 applicable to companies reporting under IFRS. The financialstatements have been prepared on the historical cost basis. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, events or actions, the actual results may ultimatelydiffer from those estimates. Alternative presentation within the consolidated income statement The Group has presented separately on the face of the consolidated incomestatement an alternative profit measure of adjusted EBITDA. Adjusted EBITDA isearnings before interest, tax, depreciation, amortisation and excludingexceptionals and other material non-cash items. This presentation has beenprovided as the Directors believe that this measure reflects more clearly theongoing operations of the Group. First time adoption of IFRS On first time adoption of IFRS, Centaur followed the guidelines outlined in IFRS1, First Time Adoption of International Financial Reporting Standards, in whicha number of optional exemptions to the general principle of full retrospectiveapplication are permitted. Centaur has adopted the following approach in respectof the following key exemptions: • Business combinations: Centaur has not reclassified business combinations prior to the transition date. • Share based payment: Centaur has adopted the exemption from full retrospective application of all share based payment awards and in accordance with the guidance in IFRS 2, Share-based payments has only applied the standard to equity instruments that were granted after 7 November 2002, and which had not vested before 1 July 2005. • Financial instruments: Centaur has taken the exemption not to restate comparatives for IAS 32 Financial Instruments: Disclosure and Presentation and IAS 39 Financial Instruments: Recognition and Measurement for the year ended 30 June 2005. Reconciliations to assist in understanding the nature and value of thedifferences between UK GAAP and IFRS are given in note 4. Notes to the financial statements 1 Segmental reporting Primary reporting format - business segments The group is currently organised into five main business segments: Year ended Legal and Marketing, Construction Perfect Other Unallocated Eliminations Group30 June 2006 Financial Creative and information and New engineering------------------------------------------------------------------------------------------------------------------- £m £m £m £m £m £m £m £m Sales to external cutomers 24.5 23.5 16.5 6.4 11.4 - - 82.3Sales to other segments 0.3 0.8 0.2 - 0.3 - (1.6) --------------------------------------------------------------------------------------------------------------------Revenue 24.8 24.3 16.7 6.4 11.7 - (1.6) 82.3------------------------------------------------------------------------------------------------------------------- Adjusted EBITDA 7.1 3.3 3.4 1.4 0.5 - - 15.7Depreciation ofproperty, plant andequipment (0.1) (0.2) (0.2) (0.1) (0.1) - - (0.7)Amortisation of intangibles (0.4) (0.3) (0.3) (0.8) (0.3) - - (2.1)Share based payments - - - - - (0.4) - (0.4)Exceptional administrative credit - - - 2.2 - - - 2.2-------------------------------------------------------------------------------------------------------------------Segment result 6.6 2.8 2.9 2.7 0.1 (0.4) - 14.7------------------------------------------------------------------------------------------------------------------- Interest receivable - - - - - 0.3 - 0.3Share of post tax profitof associates 0.1 - - - - - - 0.1-------------------------------------------------------------------------------------------------------------------Profit before tax 6.7 2.8 2.9 2.7 0.1 (0.1) - 15.1Taxation - - - - - (3.7) - (3.7)-------------------------------------------------------------------------------------------------------------------Profit for the year attributable to equityshareholders 6.7 2.8 2.9 2.7 0.1 (3.8) - 11.4-------------------------------------------------------------------------------------------------------------------Segment assets 68.6 51.9 40.7 15.1 11.2 - - 187.5-------------------------------------------------------------------------------------------------------------------Consolidated total assets 68.6 51.9 40.7 15.1 11.2 - - 187.5-------------------------------------------------------------------------------------------------------------------- Segment liabilities 4.7 5.5 6.9 2.8 3.7 - - 23.6Corporate liabilities - - - - - 6.0 - 6.0-------------------------------------------------------------------------------------------------------------------Consolidated total liabilities 4.7 5.5 6.9 2.8 3.7 6.0 - 29.6------------------------------------------------------------------------------------------------------------------- Other items:Capital expenditure 1.6 0.5 7.9 1.2 4.9 - - 16.1Impairment of trade receivables 0.2 0.2 0.1 - 0.1 - - 0.6------------------------------------------------------------------------------------------------------------------- Corporate costs are allocated to business segments on an appropriate basisdepending on the nature of the cost. Inter-segment pricing is determined on anarm's length basis. Segment assets consist primarily of property, plant andequipment, intangible assets including goodwill, inventories, trade receivablesand cash and cash equivalents. Segment liabilities comprise trade payables,accruals and deferred income. Corporate assets and liabilities comprise currentand deferred tax balances, cash and cash equivalents and borrowings. Capitalexpenditure comprises additions to property, plant and equipment, intangibleassets and goodwill and includes additions resulting from acquisitions throughbusiness combinations. Notes to the financial statements (continued) 1 Segmental reporting (continued) Year ended Legal and Marketing, Construction Perfect Other Unallocated Eliminations Group30 June 2005 Financial Creative and information and New engineering Media £m £m £m £m £m £m £m £mSales to external customers 20.7 24.0 13.3 5.9 8.3 - - 72.2Sales to other segments 0.2 0.8 0.2 0.1 0.2 - (1.5) --------------------------------------------------------------------------------------------------------------------Revenue 20.9 24.8 13.5 6.0 8.5 - (1.5) 72.2------------------------------------------------------------------------------------------------------------------- Adjusted EBITDA 5.4 4.9 2.1 0.4 (0.6) - - 12.2Depreciation of property, plant andequipment (0.1) (0.1) (0.1) (0.2) (0.1) - - (0.6)Amortisation of intangibles (0.5) (0.3) (0.2) (0.6) (0.2) - - (1.8)Share based payments - - - - - (0.4) - (0.4)Exceptional administrative costs - - - - - (0.5) - (0.5)-------------------------------------------------------------------------------------------------------------------Segment result 4.8 4.5 1.8 (0.4) (0.9) (0.9) - 8.9-------------------------------------------------------------------------------------------------------------------Interest receivable - - - - - 0.3 - 0.3-------------------------------------------------------------------------------------------------------------------Profit before tax 4.8 4.5 1.8 (0.4) (0.9) (0.6) - 9.2Taxation - - - - - (2.8) - (2.8)-------------------------------------------------------------------------------------------------------------------Profit for the yearattributable to equityshareholders 4.8 4.5 1.8 (0.4) (0.9) (3.4) - 6.4------------------------------------------------------------------------------------------------------------------- Segment assets 60.9 49.2 35.3 15.1 10.8 - - 171.3Corporate assets - - - - - 4.2 - 4.2-------------------------------------------------------------------------------------------------------------------Consolidated total assets 60.9 49.2 35.3 15.1 10.8 4.2 - 175.5------------------------------------------------------------------------------------------------------------------- Segment liabilities 3.6 5.6 4.4 5.5 3.2 - - 22.3Corporate liabilities - - - - - 4.6 - 4.6-------------------------------------------------------------------------------------------------------------------Consolidated total liabilities 3.6 5.6 4.4 5.5 3.2 4.6 - 26.9------------------------------------------------------------------------------------------------------------------- Other items:Capital expenditure 0.6 0.4 0.2 1.2 0.7 - - 3.1Impairment of trade receivables - - - 0.1 - - - 0.1------------------------------------------------------------------------------------------------------------------- Secondary reporting format - geographical segments Substantially all of Centaur's net assets are located and all revenue and profitare generated in the United Kingdom. The Directors consider that the groupoperates in a single geographical segment, being the United Kingdom, andtherefore secondary format segmental reporting is not required. Notes to the financial statements (continued) 2 Taxation (a) Analysis of charge in period 2006 2005 -------------------- £m £mCurrent tax- Current period 3.3 1.7- Adjustment in respect of prior period 0.6 0.2---------------------------------------------------------------------------------------- 3.9 1.9---------------------------------------------------------------------------------------- Deferred tax- Current period 0.5 1.1- Adjustment in respect of prior period (0.7) (0.2)---------------------------------------------------------------------------------------- (0.2) 0.9----------------------------------------------------------------------------------------Taxation 3.7 2.8---------------------------------------------------------------------------------------- (b) Tax on items charged to equity----------------------------------------------------------------------------------------Deferred tax (credit) on share based payments (0.2) (0.1)---------------------------------------------------------------------------------------- (c) Factors affecting tax charge for the period The tax assessed for the period is lower (2005: lower) than the standard rate ofcorporation tax in the UK (30%). The differences are explained below: 2006 2005 £m £mProfit on ordinary activities before tax 15.1 9.2 Profit on ordinary activities multiplied by standard rate of corporation 4.5 2.8tax in the UK of 30% (2005: 30%) Effects of: Non taxable release of deferred consideration provision (0.8) -Expenses not deductible for tax purposes 0.2 0.2Statutory deduction in respect of non-capital research and development - (0.2)expenditureDeferred tax credit on share based payments taken to income statement (0.1) -Adjustments to tax charge in respect of previous periods (0.1) ------------------------------------------------------------------------------------------Total taxation 3.7 2.8----------------------------------------------------------------------------------------- Notes to the financial statements (continued) 3 Earnings per share The calculation of the basic earnings per share (EPS) is calculated by dividingthe earnings attributed to ordinary shareholders by the weighted average numberof shares in issue during the year, For diluted earnings per share the weightedaverage number of ordinary shares in issue is adjusted to assume conversion ofall dilutive potential ordinary shares. The Company has two classes of dilutivepotential ordinary shares: share options granted to Directors and employeeswhere the exercise price is less than the average market price of the Company'sordinary shares during the year; and the contingently issuable shares under theCompany's long term incentive plan to the extent that the conditions are met atthe period end. An alternative measure of adjusted earnings per share has been provided as theDirectors believe that this measure is more reflective of the ongoing trading ofthe Group. 2006 2005 Earnings Weighted Per share Earnings Weighted Per share average amount average amount number of number of shares shares ---------------------------------------------------------------------- £m millions Pence £m millions Pence----------------------------------------------------------------------------------------------------Basic EPS 11.4 149.3 7.6 6.4 148.3 4.4---------------------------------------------------------------------------------------------------- Effect of dilutive securitiesOptions 0.7 1.2Contingently issuable shares 0.1 -----------------------------------------------------------------------------------------------------Diluted basic EPS 11.4 150.1 7.6 6.4 149.5 4.3---------------------------------------------------------------------------------------------------- Adjusted EPSEarnings attributable to ordinary shareholders 11.4 149.3 7.6 6.4 148.3 4.4 Amortisation of acquired intangibles 0.3 - 0.2 - - - Exceptional administrative (credit) / costs (2.2) - (1.5) 0.5 - 0.3Tax effect of above adjustments (0.2) - (0.1) - - - ----------------------------------------------------------------------------------------------------Adjusted EPS 9.3 149.3 6.2 6.9 148.3 4.7---------------------------------------------------------------------------------------------------- Effect of dilutive securitiesOptions 0.7 1.2Contingently issuable shares 0.1 -----------------------------------------------------------------------------------------------------Diluted adjusted EPS 9.3 150.1 6.2 6.9 149.5 4.6---------------------------------------------------------------------------------------------------- Notes to the financial statements (continued) 4 Explanation of transition to IFRS Centaur Media plc reported under UK GAAP in its previously published financialstatements for the year ended 30 June 2005. The analysis below shows areconciliation of net assets and profit as reported under UK GAAP as at 30 June2005 to the revised net assets and profit under IFRS as reported in thesefinancial statements. In addition there is a reconciliation of net assets underUK GAAP to IFRS at the transition date for this group, being 1 July 2004. Reconciliation of profit for the year ended 30 June 2005 Group Company UK GAAP Effect of IFRS UK GAAP Effect of IFRS transition transition to IFRS to IFRS Note £m £m £m £m £m £m Revenue 72.2 - 72.2 - - - Cost of sales (39.2) - (39.2) - - --------------------------------------------------------------- ------------------------------- Gross Profit 33.0 - 33.0 - - - Distribution costs (4.2) - (4.2) - - -Administrative expenses b, c (26.5) 6.6 (19.9) (2.2) (0.1) (2.3) Adjusted EBITDA 12.2 - 12.2 (2.2) - (2.2) Depreciation of property, plant and equipment a (i) (2.4) 1.8 (0.6) - - -Amortisation of intangibles a (i),c (7.0) 5.2 (1.8) - - - Share based payments b - (0.4) (0.4) - (0.1) (0.1)Exceptional administrative costs (0.5) - (0.5) - - - Operating profit / (loss) 2.3 6.6 8.9 (2.2) (0.1) (2.3) Interest payable and similar charges - - - (0.3) - (0.3) Interest receivable 0.3 - 0.3 0.1 - 0.1 Dividends received from subsidiaries - - - 5.0 (3.0) 2.0--------------------------------------------------------------- ------------------------------- Profit / (loss) before tax 2.6 6.6 9.2 2.6 (3.1) (0.5) Taxation b (2.8) - (2.8) - - --------------------------------------------------------------- ------------------------------- Profit / (loss) for the year attributable toequity shareholders (0.2) 6.6 6.4 2.6 (3.1) (0.5)-------------------------------------------------------------- ------------------------------- Notes to the financial statements (continued) 4 Explanation of transition to IFRS (continued) Reconciliation of equity at 30 June 2004 (date of transition to IFRS) Group Company Note UK GAAP Effect of IFRS UK GAAP Effect of IFRS transition transition to IFRS to IFRS Assets £m £m £m £m £m £mNon-current assetsGoodwill a (ii) - 138.5 138.5 - - -Other intangible assets a (i),a 138.7 (135.1) 3.6 - - - (ii)Property, plant and equipment a (i) 5.3 (3.4) 1.9 - - -Investments in subsidiaries - - - 147.8 - 147.8Investments accounted for using the equity method 0.2 - 0.2 - - -Deferred tax assets a (viii) - 2.1 2.1 - - ------------------------------------------------------------------------------------------------------------ 144.2 2.1 146.3 147.8 - 147.8----------------------------------------------------------------------------------------------------------- Current assetsInventories 1.2 - 1.2 - - -Trade and other receivables a (viii) 14.8 (1.0) 13.8 0.2 - 0.2Cash and cash equivalents 9.1 - 9.1 5.6 - 5.6----------------------------------------------------------------------------------------------------------- 25.1 (1.0) 24.1 5.8 - 5.8----------------------------------------------------------------------------------------------------------- LiabilitiesCurrent liabilitiesFinancial liabilities - borrowings a (vi) - (3.4) (3.4) - (3.4) (3.4)Trade and other payables a (vi),d,e (23.4) 4.5 (18.9) (6.8) (0.1) (6.9) Current tax liabilities - - - - - -Provisions a (iii) - (0.9) (0.9) - - ------------------------------------------------------------------------------------------------------------ (23.4) 0.2 (23.2) (6.7) (3.5) (10.2)------------------------------------------------------------------------------------------------------------ Net current assets /(liabilities) 1.7 (0.8) 0.9 (1.0) (3.5) (4.5) Non- current liabilitiesProvisions a (iii) (3.4) 0.9 (2.5) - - -Deferred tax liabilities a (viii) - (1.1) (1.1) - - ------------------------------------------------------------------------------------------------------------ (3.4) (0.2) (3.6) - - ------------------------------------------------------------------------------------------------------------Net assets 142.5 1.1 143.6 146.8 (3.5) 143.3----------------------------------------------------------------------------------------------------------- Capital and reservesShare capital a (vii) 14.9 (0.1) 14.8 14.9 (0.1) 14.8Share premium account 127.0 - 127.0 127.0 - 127.0Other reserves a (vii) 1.5 0.1 1.6 1.5 0.1 1.6Retained earnings (0.9) 1.1 0.2 3.4 (3.5) (0.1)------------------------------------------------------------------------------------------------------------Total shareholders' equity 142.5 1.1 143.6 146.8 (3.5) 143.3----------------------------------------------------------------------------------------------------------- Notes to the financial statements (continued) 4 Explanation of transition to IFRS (continued) Reconciliation of equity at 30 June 2005 Group Company Note UK GAAP Effect of IFRS UK GAAP Effect of IFRS transition transition to IFRS to IFRS Assets £m £m £m £m £m £mNon-current assetsGoodwill a (ii),c - 138.4 138.4 - - -Other intangible assets a (i),a (ii) 132.1 (128.0) 4.1 - - - Property, plant and equipment a (i) 5.5 (3.4) 2.1 - - -Investments in subsidiaries b, f - - - 147.7 (2.7) 145.0Investments accounted for using the equity method 0.2 - 0.2 - - -Deferred tax assets a (viii) - 1.2 1.2 - - ------------------------------------------------------------------------------------------------------------ 137.8 8.2 146.0 147.7 (2.7) 145.0----------------------------------------------------------------------------------------------------------- Current assetsInventories 1.3 - 1.3 - - -Trade and other receivables a (viii) 15.8 (0.1) 15.7 4.7 (4.7) -Cash and cash equivalents 12.5 - 12.5 4.7 - 4.7----------------------------------------------------------------------------------------------------------- 29.6 (0.1) 29.5 9.4 (4.7) 4.7----------------------------------------------------------------------------------------------------------- LiabilitiesCurrent liabilitiesFinancial liabilities - borrowings a (vi) - (2.5) (2.5) - - -Trade and other payables a (vi),d,e (24.7) 4.4 (20.3) (9.8) 1.5 (8.3) Current tax liabilities a (v) - (0.5) (0.5) - - -Provisions a (iii) - - - - - ------------------------------------------------------------------------------------------------------------ (24.7) 1.4 (23.3) (9.8) 1.5 (8.3)----------------------------------------------------------------------------------------------------------- Net current assets /(liabilities) 4.9 1.3 6.2 (0.4) (3.2) (3.6) Non- current liabilitiesProvisions a (iii) (2.5) - (2.5) - - -Deferred tax liabilities a (viii) - (1.1) (1.1) - - ------------------------------------------------------------------------------------------------------------ (2.5) (1.1) (3.6) - - ------------------------------------------------------------------------------------------------------------Net assets 140.2 8.4 148.6 147.3 (5.9) 141.4----------------------------------------------------------------------------------------------------------- Capital and reservesShare capital a (vii) 15.0 (0.1) 14.9 15.0 (0.1) 14.9Share premium account 0.3 - 0.3 0.3 - 0.3Other reserves a (vii),b 1.5 0.5 2.0 1.5 0.5 2.0 Retained earnings 123.4 8.0 131.4 130.5 (6.3) 124.2-----------------------------------------------------------------------------------------------------------Total shareholders' equity 140.2 8.4 148.6 147.3 (5.9) 141.4----------------------------------------------------------------------------------------------------------- Notes to the financial statements (continued) 4 Explanation of transition to IFRS (continued) Explanation of reconciling items between UK GAAP and IFRS (a) The financial information is in IFRS format and reflects a number of differences in presentation between UK GAAP and IFRS as follows; i) The classification of software that is not an integral part of operating hardware, including website development costs, as an intangible asset separate from property plant and equipment on the balance sheet and the classification of the related depreciation as amortisation. ii) The disclosure of goodwill as separate from intangible assets on the balance sheet. iii) The reclassification of provisions as current or non current liabilities. iv) The classification of dividends as a movement in equity. v) The disclosure of current tax liabilities as separate from creditors falling due within one year. vi) The disclosure of loan notes as separate from creditors falling due within one year. vii) The disclosure of deferred shares as other reserves. viii) The separate disclosure of deferred tax assets and liabilities. b) Share-based payments IFRS 2 requires a charge to be made to the income statement for the cost ofproviding share options to employees. The expense is calculated as the fairvalue of the award on the date of the grant, and is recognised over the vestingperiod of the scheme. A stochastic model has been used to calculate the fairvalue of options on their grant date. Centaur has applied IFRS 2 to shareoptions that were granted after 7 November 2002 that were unvested at 1 January2005 in accordance with the transitional provisions of IFRS2. There was no netimpact on the balance sheet at 1 July 2004 as a result of adopting IFRS 2. Inthe year to 30 June 2005, the application of IFRS 2 results in pre tax chargesto the income statement of £0.4m. In the financial statements of the Company, the application of IFRS 2 results inpre tax charges to the income statement of £0.1m and an increase in investmentsin subsidiaries of £0.3m representing the expense in relation to share optionsgranted to employees of subsidiary companies. c) Business combinations Under UK GAAP, goodwill arising on business combinations is amortised over aperiod not exceeding 20 years. Under IFRS 3, regular amortisation of goodwill isprohibited. Instead, an annual impairment test is required to support thecarrying value of goodwill. This test was carried out at 30 June 2004 and 30June 2005. No impairment of goodwill was noted at either of these dates. Amortisation of goodwill arising on the acquisition of the CentaurCommunications Group in March 2004 ceased on 1 July 2004, resulting in anincrease of pre tax profits of £7.0m for the year to 30 June 2005. d) Employee benefits Under UK GAAP, no provision was made for annual leave accrued. Under IAS 19, theexpected cost of compensated short term absences should be recognised at thetime the related service is provided. As a result, on transition, a provision of£0.4m has been recognised. Notes to the financial statements (continued) 4 Explanation of transition to IFRS (continued) e) Dividends Interim dividends declared are not considered a liability under IFRS until theyare paid. Final dividends declared are recognised as a liability under IFRS inthe period in which they are approved by the shareholders in general meeting. Centaur has restated its liabilities in respect of dividend payments ontransition and in the year to 30 June 2005. The Company has also restated its liabilities in respect of dividends receivablefrom subsidiaries which were previously recorded as a reduction in amounts duefrom subsidiaries. f) Dividends from pre-acquisition profits Dividends received from subsidiary undertakings that are paid frompre-acquisition profits are treated as a reduction in the cost of investmentunder IFRS. The cost of investment in subsidiaries has been reduced by £3.0m inthe year ending 30 June 2005 in the financial statements of the Company. Explanation of material adjustments to the Cash Flow Statement for 2005 Income taxes of £1.1m paid in the year ended 30 June 2005 are classified as partof operating cash flows under IFRS, but were included in a separate category oftax cash flows under UK GAAP. Net interest income of £0.3m (Company: £0.1m) received in the year ended 30 June2005 is classified as part of investing cash flows under IFRS, but were includedin a separate category of returns on investment and servicing of finance cashflows under UK GAAP. Proceeds from the disposal of subsidiaries of £0.4m received in the year ended30 June 2005 are classified as part of investing cash flows under IFRS, but wereincluded in separate category of acquisitions and disposals cash flows under UKGAAP. Purchases of computer software of £1.8m paid in the year ended 30 June 2005 areclassified as purchases of intangible assets under IFRS, but were included inamounts paid for purchases of tangible assets under UK GAAP. Equity dividends of £2.2m paid in the year ended 30 June 2005 are classified aspart of financing cash flows under IFRS, but were included in separate categoryof equity dividends cash flows under UK GAAP. There are no other material differences between the cash flow statementpresented under IFRS and the cash flow statement presented under UK GAAP. 5. Nature of the financial information The foregoing financial information does not amount to full accounts within themeaning of Section 240 of Companies Act 1985. The financial information has beenextracted from the Group's Annual Report and Accounts for the year ended 30 June2006 on which the auditors have not yet expressed an opinion, but for which anunqualified report is expected. Copies of the Annual Report and Accounts will beposted to shareholders shortly and will be available from the Company'sregistered office at 50 Poland Street, London, W1F 7AX This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Centaur