Preliminary results for the year ended 31 Dec 2024

Centaur Media plc

Incorporated in England and Wales

Registration number: 04948078

LEI: 2138005WK87G7DQRQI62

ISIN: GB0034291418

19 March 2025

Centaur Media Plc

Preliminary results for the year ended 31 December 2024

Strong revenue growth at The Lawyer and MiniMBA

Group performance impacted by macro-economic and sector headwinds

Centaur Media plc ("Centaur"), an international provider of business information, learning and specialist consultancy, is pleased to present its preliminary results for the year ended 31 December 2024.

Martin Rowland, Executive Chair, commented:

"2024 was a difficult year for Centaur, due to the challenging macro-economic environment that faced some of our customers, driving caution and impacting marketing budgets. Despite these challenges, The Lawyer and MiniMBA delivered healthy growth, providing a strong platform for further value creation through 2025.

"Looking ahead, we have started the year conducting a review of Centaur's business units and brands. We are focused on defining our future strategy and enhancing the reputation of the brands within Centaur to maximise shareholder value while remaining our customers' partner of choice for business intelligence and learning in the marketing and legal sectors."

Financial highlights

Financial and strategic highlights

2024 was a challenging year for Centaur, with performance in its marketing brands impacted by reduced client spend following sustained sector headwinds caused by macro-economic conditions. As a result, Centaur reported revenue of £35.1m, down from £37.3m in 2023, but the Group remained focused on providing solutions for customers that leverage our in-depth information and high quality, market-leading products to engage digital communities.

Centaur generated an adjusted1 EBITDA margin of 17%, down from 26% in 2023. This margin was lowered by the reduction in revenue, but also by an increase in operating expenditure that Centaur invested to drive longer-term growth. Without this enhanced investment the adjusted1 EBITDA margin would have been approximately 20%. Statutory loss after taxation is £9.6m (2023: a profit of £4.9m) after a £12.0m goodwill impairment relating to the Xeim business unit following the lower financial performance during 2024. Net cash3 at 31 December 2024 remained strong at £8.9m after paying ordinary dividends of £2.6m in the year in addition to the increased investment.

The strategic objective across Centaur's suite of brands is to maximise shareholder value by focusing on targeted opportunities to expand profitable revenue. This will be achieved by continuing to strengthen the resilience and reputation of our brands whilst ensuring that the support provided by Centaur to the brands is organised effectively. This is backed up by progress on our ongoing review of Centaur's business operations and strategy, which was announced in December 2024 and is being led by our Executive Chair, Martin Rowland.

Centaur's performance was underpinned by growth in revenue from its two most valuable brands, The Lawyer and MiniMBA:

Performance across the wider marketing sector brands, including Econsultancy, Oystercatchers and Influencer Intelligence, was impacted by the challenges in the macroeconomic environment.

Outlook

Centaur's investments in developing its high-quality products through 2024 means that its brands have solid foundations for 2025, and the opportunity to use their competitive advantage, operational leverage and deep level of expertise to grow in these sectors. The ongoing review of Centaur's operations and strategy will ensure that Centaur's brands are set up for success in the future and generate value for shareholders.

Dividend

In line with our dividend policy of distributing the higher of last year's dividend or 40% of adjusted1 retained earnings, the Board has declared a final dividend of 1.2 pence per share (£1.8m), which when added to the interim dividend provides a total dividend relating to 2024 of 1.8 pence per share (£2.7m).

1 Adjusted EBITDA is adjusted operating profit before depreciation and amortisation. Adjusted results exclude adjusting items as detailed in note 4 of the financial information.

2 Consensus from the analysts' latest coverage following our January trading update was revenue of £35.0m and adjusted EBITDA of £5.6m, with an adjusted EBITDA margin of 16%.

3 Net cash is the total of cash and cash equivalents and short-term deposits.

Enquiries

Note to editors

Centaur is an international provider of business information, learning and specialist consultancy within the marketing and legal professions that inspires and enables people to excel at what they do, to raise their aspirations and to enable our clients to deliver better performance.

Strategic Report

Highlights of the year 

Financial highlights

1 See alternative performance measures section for definition of adjusted results

2 Adjusted EBITDA is reconciled to Adjusted Operating Profit in note 1(b)

3 Net Cash is the total of cash and cash equivalents and short-term deposits

Strategic and operational highlights

Executive Chair's statement

"Enhancing the reputation of each of Centaur's revenue-driving brands and remaining our customers' partner of choice for business intelligence and learning in the marketing and legal sectors."

Introduction

2024 was a difficult year for Centaur due to the challenging macro-economic environment that some of our marketing sector customers faced, driving caution and impacting marketing budgets.

Throughout the year Centaur has maintained its focus on providing solutions for customers requiring in-depth information and engaging digital communities through our high quality, market-leading products. I am therefore pleased to report that despite such tough trading conditions, both Group revenue and profit performance came in ahead of market expectations, notably with revenue growth performances from The Lawyer of 7% and MiniMBA of 5%. These were offset by decreases across some of the other marketing sector brands.

People

Coming into the Group towards the end of last year I have been impressed by the energy and capabilities that I have found within the business and, alongside the Board, we want to continue to provide a culture in which our people thrive and feel valued for what they bring to Centaur and our customers. 

A key part of our strategy is ensuring that we have the right people in the right positions to deliver our intended growth in revenue and shareholder value. Over the course of 2024, Centaur continued to strengthen its management team. We made several excellent new hires, including Sarah Sanderson who joined as Managing Director of The Lawyer, Becky Mckinlay as Managing Director of Oystercatchers and Anna Tolhurst as Chief People Officer. 

On 11 December, Swagatam Mukerji announced that he was stepping down as a director of the board with immediate effect and retiring from his role as Chief Executive with effect from 31 December 2024. At this point, I was appointed as Executive Chair which combines the roles of both Chair and Chief Executive.

Performance

The Group achieved Adjusted EBITDA of £5.9m in 2024 (2023: £9.7m) at an adjusted EBITDA margin of 17% (2023: 26%). These results reflect the aforementioned challenging market backdrop, particularly for the marketing industry, leading blue-chip companies and other large clients to cut back on their budgets during the year. Whilst we have been carefully managing costs, we were still able to invest in product, marketing and resources that contributed to the growth of revenue at The Lawyer and MiniMBA, and subscriptions revenue for Marketing Week.

Dividend

In line with our progressive dividend policy to distribute the higher of the previous year's dividend or 40% of Adjusted retained earnings, the Board has proposed a final dividend of 1.2 pence per share which, when added to the interim dividend, provides a total dividend in relation to 2024 of 1.8 pence per share.

ESG

In 2024 we have continued to meet our ESG requirements through our corporate behaviours and have made sure that assessing our impact, environmentally and socially, remain a core consideration in our business decisions. As we do not operate in an emissions-heavy industry, our primary focus remains on our people and their development, concentrating on ensuring we attract and retain the best and most diverse talent.

Looking ahead

Last years' investments in creating new high-quality products that serve the needs of our customers and improving the efficiency of our business model, means Centaur has solid foundations. However, the operating business continues to be tested by the ongoing challenging economic environment.

We have therefore started 2025 with a review of Centaur's business units and their brands. Our focus will be on defining future strategy and enhancing the reputation of the brands within Centaur to maximise shareholder value as set out in the Strategic and Operational Review.

This will ensure that Centaur's strategically valuable brands are set up for success in the future and can continue to deliver the specialist insights their customers need to succeed. I am confident that Centaur has the talent, customers, strategic capability and financial discipline to adapt to these challenges, realise the opportunities that lie ahead, and maximise shareholder value.

Strategic and Operational Review

Centaur is an international provider of business information, learning and specialist consultancy that inspires and enables customers to excel at what they do, raising their aspirations and delivering better performance.

The Group's vision is to be the 'go to' company in the international marketing and legal sectors to:

Our reputation is built on the level of trust and confidence arising from our deep understanding of these sectors. Our key strengths are the expertise of our people, the quality of our brands and products, and our ability to harness technology to innovate continually and develop our customer offering.

Our overall strategy is to create shareholder value by focusing on targeted opportunities to expand profitable revenue, whilst continuing to strengthen our brands' positioning against macroeconomic and sector headwinds. This is being supported by progress on our ongoing review of Centaur's business operations and strategy, which was announced in December 2024 and is being led by our Executive Chair, Martin Rowland.

The review is focused on defining the strategy and enhancing the reputation of each brand within Centaur to maximise shareholder value while remaining our customers' partner of choice for business intelligence and learning in the marketing and legal sectors. We will also continue to simplify our operations and drive efficiency gains through technology.

Our portfolio

Legal sector

The Lawyer is the most trusted brand for the legal profession and a leading provider of information to the global legal market delivered via a scalable digital platform and events portfolio. The Lawyer has built on its 38-year heritage of delivering incisive commentary and cutting-edge analysis of the UK legal market, continuing to broaden its offering to develop a more international business providing data-rich market intelligence to the world's largest law firms. This privileged position enables it to connect law firms with the in-house legal community in a unique way.

In 2024 The Lawyer continued to grow its offering with data-led customer offerings and product development for the top 100 law firms in the UK and US and increase our footprint in the European market. This was enabled by ongoing investment in research and data skills.

The Lawyer had another year of strong performance with 7% revenue growth. Premium Content revenue grew by 11% due to corporate subscription renewal rates of 111%, supported by its market reports, data and analysis, and litigation tracker. 93% of the top 50 UK and top 50 US law firms in London have subscriptions. The Lawyer also added 84 new corporate subscription accounts in 2024 generating an increase in new business billings of 59%, by developing new content and data-led insights including expansion geographically developing data and content for the Top 50 European law firms.

Events revenue of £2.1m was up 17% year-on-year due to increased sponsorship and delegate numbers as well as the introduction of new events that resonate with customers, such as the Legal Transformation Summit and Horizon Live.

Looking forward, demand from high value customer segments for data to inform strategic decision-making will enable The Lawyer to continue to drive growth in its core information product. This includes opportunities to extend in-house coverage, internationalise disputes coverage and provide further support with advisory services and deeper insights. We also have plans to launch data-as-a-service, leveraging our strong access to the legal eco-system to provide detailed information covering talent, deals, firm performance and firm structure.

To augment our digital content, we will continue to expand our events portfolio, with new formats and locations to grow sponsorship revenue and strengthen our position as the leaders in fostering human connections across the commercial legal sector. 

We are also investing in AI to enhance user experience, which will bring operational efficiency gains, with the potential for further efficiencies through marketing and sales automation, giving our teams more opportunity to focus on providing value-add advice and insight to customers.

Marketing sector

This aspect of our portfolio includes the Group's nine marketing brands - MiniMBA, Marketing Week, Festival of Marketing, Creative Review, Econsultancy, Influencer Intelligence, Fashion & Beauty Monitor, Foresight News and Oystercatchers. These brands are trusted by customers to support the marketing sector, providing our customers with the advice, information and connections needed to set themselves apart from their peers.

MiniMBA

MiniMBA courses distil modules of a full MBA programme into easily digestible and thoroughly engaging content. The courses deliver marketing education in a format that is MBA-level, applied and flexible, empowering marketers at all stages of their careers. The current curriculum includes 12-week courses in Marketing and Brand Management with on-demand modules led by Professor Mark Ritson, and a third 12-week course launched in 2023 in Management, a course designed to give marketers the essential skills to make it in the boardroom.

Since its launch in 2016, the MiniMBA has grown to be Centaur's largest brand with over 35,000 learners from across the globe driven by corporate multi-seat packages and online sales. Today, MiniMBA is a market leader in professional marketing education.

The MiniMBA delivered a strong performance in 2024, growing revenues by 5% to £10.7m. This included growth in the MiniMBA in Marketing course and two cohorts of the MiniMBA in Management course. This was driven by a 22% increase in corporate sales, with new blue-chip clients including Nestle, Carlsberg, Michelin and Sephora. Corporate client engagement was supported by the launch of a new skills assessment tool, allowing corporate clients to track the capability uplift of teams undertaking the MiniMBA courses.

Over the year, MiniMBA completed a successful refilm of the MiniMBA in Marketing course, with updates to core teaching and case studies. This supported the brand's strong learner feedback, with NPS across the Marketing and Brand courses remaining at an industry-leading average of +76. We have also successfully incorporated AI assisted assessment into the MiniMBA in Marketing, increasing product efficiency.

Looking ahead, corporate customers remain a key lever for growth. The segment performed strongly in 2024, with further opportunities to expand the number of corporate clients and grow our relationship with existing partners. We are also continuing to expand the number of international markets where the MiniMBA courses are made available through increased marketing, sales and partnership arrangements whilst continuing to develop additional courses to meet the demand of our customers and widen the penetration of the market opportunity that exists. We are continuing to explore additional ways that AI based technologies can enhance our learner experience including AI tutor support, enabling 24/7 tailored learning assistance, explaining concepts and answering questions, as well as additional language versions of our courses.

Marketing Week/Festival of Marketing/Creative Review

For over 40 years, Marketing Week has been the most influential source of marketing information. It generates revenue from subscriptions, proprietary research, white papers, the annual Marketing Week Awards as well as marketing solutions and lead generation services.

Festival of Marketing is Marketing Week's annual thought leadership, learning and networking event. The event sold out yet again in 2024, further demonstrating its position as a leading event for ambitious marketers. Creative Review is a digital platform for opinion and analysis on the commercial creative industries.

In 2024, Marketing Week continued to focus on developing its online platform and content to drive corporate subscriptions. The brand developed additional strategic and premium content to support subscriptions growth, alongside social media marketing and newsletters to build awareness and support the subscription model. The Marketing Week Awards continue to be a successful celebration of the power of marketing leaders and their teams.

Looking to 2025, Marketing Week remains focused on delivering growth through corporate renewals and new business targets, supported by delivery of high-quality events and awards.

Econsultancy

Econsultancy guides, supports and enables customers to achieve excellence in digital marketing and ecommerce. Its focus is on combining learning content and thought leadership with practical applications and tools to support marketers.

Over the last year, we added new functionality to the digital platform, including an improved Digital Skills Index to assess end users' skills gaps and recommend online courses. We have launched the Ecommerce Skills Index as a specialist assessment tool, as well as two new courses - Fast Track to Digital Marketing and Fast Track to Ecommerce - exclusively for our members. The new courses combine live, on-demand, social and interactive learning on the platform.

Econsultancy's performance in 2024, a decline in revenue of 21%, was impacted by the challenging sector conditions for our clients, as renewal rates and new business targets were impacted by client-side budget constraints. Revenue from Advisory and Premium Content subscription services declined due to customer-driven contractual and delivery delays.

In 2025, Econsultancy will continue to focus on the delivery of customised programmes and 'high engagement' learning, leveraging its significant online resources of intelligence and on-demand courses for digital marketing and ecommerce. This includes investment in a new site layout to improve members' user experience, as well as customised online learning hubs for our customers.

The Influencer Group

The Influencer Group (TIG) contains Influencer Intelligence, which provides expertise and support to help customers:

This results in a highly renewable subscription product with a loyal customer base particularly in the fashion and retail sectors. We pride ourselves on having an expert team to compliment the platform and build out the news, trends, events and verified contacts elements of the site. Influencer Intelligence is about 'in depth' content on the influencers that matter.

TIG also contains Fashion & Beauty Monitor, the leading PR solutions provider for the fashion, beauty and lifestyle industries, as well as Foresight News, an essential calendar of forthcoming news and events, used by media, PR agencies and press offices.

In 2024, Influencer Intelligence and Fashion & Beauty Monitor launched new tools and dashboards to improve customer engagement. TIG also improved the functionality of proprietary contacts databases and event planning data to enable sharing and automatic alerts to flag important updates.

Nonetheless, TIG was still impacted by the challenging macroeconomic context in 2024, as companies reduced spend on public relations and events-based promotions. This impacted renewal rates across TIG, which decreased to 78% in 2024 from 87% in 2023. However, new business levels were steady for TIG over the year, demonstrating the continued value of the brands' value propositions.

Looking forwards, Influencer Intelligence is focused on enhancing its position as an expert in validation to support celebrity and influencer selection and brand partnership opportunities. This will meet client demand for the in-depth data and indexing to support more strategic decision-making. The brand will also continue to focus on improvements to the platform for customers, such as content discovery and accessibility. Foresight News is also investing in a new platform with improved functionality to further support the brand's strong renewal rate.

Oystercatchers

Oystercatchers is one of the Financial Times' most highly regarded management consultancies in the UK, differentiated by its best-in-class agency pitch services and business performance transformation advice.

Performance in 2024 was impacted by a reduced number of advertising agency pitches, due to sector headwinds and cyclical timings, which led to a significant reduction in revenue, compared with an above average 2023. This outweighed the increase in revenue from the Oystercatchers club membership, which was supported by the brand's stimulating quarterly events programme.

Revenue model

Our business model is integral to driving the profitability and success of the Group. We continue to assess opportunities to maximise the value of our brands, both through targeted investment in opportunities for profitable revenue growth and building resilience against sector headwinds. This includes a focus on our brands, particularly The Lawyer and MiniMBA as proven drivers of growth and value creation. In 2024, revenue from outside the United Kingdom represented 37% of total revenue (2023: 38%).

Revenue breakdown

The chart below shows which brands derive significant revenue from each revenue stream:

Key Performance Indicators

The Group has set out the following core financial and non-financial metrics to measure the Group's performance. The KPIs are monitored by the Board and these indicators are discussed in more detail in the Strategic and Operational Review and Financial Review.

1 See definitions in Financial Review.

Performance: Financial Review

Overview

As highlighted in the interim results in July, the marketing sector headwinds caused by macro-economic challenges have continued to drive restructurings in the marketing functions of many blue-chip customers of Xeim, the business unit that holds our marketing sector facing brands. This has led to the curtailment of marketing budgets and, although we have retained most of these customers, their annual spend has reduced. The impact of these prolonged challenges is materially reduced revenue and profit during 2024.

These headwinds had a significant impact in 2024 on the Econsultancy and Oystercatchers brands, and Xeim's non-strategic advertising revenue. More positively, revenue from our future growth drivers, The Lawyer, MiniMBA and Marketing Week's subscriptions, continued to improve in the second half.

The resulting revenue for the year was £35.1m a reduction of 6% from 2023, with Adjusted EBITDA dropping from £9.7m in 2023 to £5.9m in 2024.

At 31 December the Group's goodwill was tested for impairment in accordance with IAS 36. As a result of this, an impairment of £12.0m was recognised in relation to the Xeim Cash Generating Unit.

Performance

Group

Statutory revenue fell by £2.2m to £35.1m in 2024, a decrease of 6%. The Xeim business unit decreased 10% whereas The Lawyer business unit increased 7%. Revenue generated from outside the UK remained steady at 37% (2023: 38%) with a decrease in revenue across all regions.

Adjusted EBITDA decreased by 39% from £9.7m to £5.9m at a margin of 17% (2023: 26%). This margin was lowered by the reduction in revenue, but also an increase in operating expenditure that Centaur invested to drive longer-term growth. In 2024, we made an incremental investment of £1.1m in operating expenditure and £1.2m in capital expenditure across the Group, related to The Lawyer's content and product unification, marketing expenditure and additional resource in MiniMBA, and behind-the-paywall content for Marketing Week. Without this enhanced investment the adjusted EBITDA margin would have been approximately 20%.

The Group posted a decrease of 51% in adjusted operating profit to £3.7m (2023: £7.6m). The Group achieved an adjusted profit after taxation from continuing operations of £2.8m (2023: £6.4m) resulting in fully diluted adjusted earnings per share of 1.9 pence (2023: 4.2 pence). Statutory loss after taxation is £9.6m (2023: a profit of £4.9m) after a £12.0m goodwill impairment relating to the Xeim business unit following the lower financial performance during 2024.

The focus on cash management and healthy cash collections from customers continued in 2024. Net cash balances decreased from £9.5m to £8.9m with the cash generated from operating profits being offset by £2.6m of dividends, £1.2m of capital expenditure and £1.0m on rental obligations.

Xeim business unit

Xeim's revenue for 2024 was £26.2m, a decrease of 10% from £29.0m in 2023, with lower revenue across many of its marketing sector brands. Blue-chip companies and large clients responded to macro-economic challenges by cutting back on their budgets during the year in particular impacting new and repeat business at Econsultancy.

MiniMBA - the number of delegates on the three courses for 2024 grew by 4% in the year, which with a 2% increase in yield resulted in revenue growing 5% on 2023 from £10.2m to £10.7m. This growth in revenue was driven by a 22% increase in corporate sales offset by a decrease in online sales of 2%.

Marketing Week/Festival of Marketing/Creative Review - total revenue from these brands dropped 6% to £4.1m in 2024 due to the continued decline in non-strategic advertising revenue, down 25%. However, subscription revenue from Marketing Week has increased 16% year-on-year as a result of the investment in Marketing Week premium content, which sits behind a paywall, with higher-than-expected renewal rates of 81% and enhanced new business resulting in a 32% increase in its book of business. The growth in revenue from tickets at the sold-out Festival of Marketing in October and strong attendance at the Marketing Week Awards in November, resulted in events revenue across these three brands in line with 2023.

Econsultancy - Premium Content subscription renewal rates dropped to 67% in 2024 (2023: 72%) with ongoing macro-economic pressures impacting new business resulting in a 20% reduction in premium content revenue. Delays in signing contracts and lower customer budgets also impacted Advisory and market research project revenues, down 20%, resulting in an overall 21% reduction in revenue for the brand to £5.6m.

The Influencer Group (comprising the Influencer Intelligence, Fashion & Beauty Monitor and Foresight News brands) - premium content revenue declined by 10% to £4.9m impacted by tightening budgets in the retail and fashion sector. New business was consistent across the year but was 21% down on 2023 levels and renewal rates decreased to 78% (2023: 87%).

Oystercatchers - sales were significantly impacted by a cyclical downturn in new pitch business and the brand reported a 53% decrease in revenue compared to prior year.

The Lawyer business unit

The Lawyer continues to deliver good growth in Premium Content, with an 11% increase from 2023, driven by a combined 111% renewal rate from all its subscription products and a 59% increase in new business. This resilient performance was further supported by a 17% increase in revenue from events due to the continuing success of the GC Summit and The Lawyer Awards, together with the introduction of the new Legal Transformation Summit in March and Horizon Live. The growth in Premium Content and Events was partially offset by 21% lower revenue from non-strategic Marketing Solutions and Recruitment Advertising.

Measurement and non-statutory adjustments

The statutory results of the Group are presented in accordance with UK-adopted International Accounting Standards (IFRS). The Group also uses alternative reporting and other non-GAAP measures as explained below and as defined in the table at the end of this section.

Adjusting items

Adjusted results are not intended to replace statutory results but are prepared to provide a better comparison of the Group's core business performance by removing the impact of certain items from the statutory results. The Directors believe that adjusted results and adjusted earnings per share are the most appropriate way to measure the Group's operational performance because they are comparable to the prior year and consequently management review the results of the Group on an adjusted basis internally.

Statutory operating profit from continuing operations reconciles to adjusted operating profit and adjusted EBITDA as follows:

Adjusting items from continuing operations of £12.4m in the year (2023: £1.5m) are comprised as follows:

Segment profit

Segmental profit is reported to improve clarity around performance and consists of the gross contribution for the Xeim and The Lawyer business units less specific overheads and allocations of the central support teams and overheads that are related to each business unit. Any costs not attributable to either the Xeim or The Lawyer business units, remain as part of Central costs.

The table below shows the statutory revenue from continuing operations, which is the same as the underlying revenue for both years, for each business unit:

The table below reconciles the adjusted operating profit/(loss) for each segment to the adjusted EBITDA:

Net finance income

Net finance income was £0.2m (2023: £nil). The Group held positive cash balances throughout the year and therefore, in both 2024 and 2023, finance costs mainly relate to the commitment fee payable for the revolving credit facility and interest on lease payments for right-of-use assets. In 2024 this was offset by interest income of £0.3m (2023: £0.3m) on cash and short-term deposits.

Taxation

A tax charge of £1.0m (2023: £0.8m) has been recognised on continuing operations for the year. The adjusted tax charge was £1.1m (2023: £1.2m). The Company's profits were taxed in the UK at a rate of 25.0% (2023: 23.5%). There was a loss before tax of £8.5m, but due to expenses not deductible for tax purposes, there was a net charge of £1.0m. See note 7 for a reconciliation between the statutory reported tax charge and the adjusted tax charge.

Earnings per share

The Group has delivered adjusted diluted earnings per share for the year of 1.9 pence (2023: 4.2 pence). Diluted earnings per share for the year were a negative 6.6 pence (2023: positive 3.2 pence). Full details of the earnings per share calculations can be found in note 9 to the financial information.

Dividends

Under the Group's dividend policy, Centaur distributes the higher of the previous year's dividend or 40% of Adjusted retained earnings.

Therefore, the Group has proposed a final dividend of 1.2 pence per ordinary share in respect of 2024. This brings the total ordinary dividends relating to 2024 to 1.8 pence (2023: 1.8 pence) per ordinary share.

The final ordinary dividend is subject to shareholder approval at the Annual General Meeting and, if approved, will be paid on 23 May 2025 to all ordinary shareholders on the register at the close of business on 9 May 2025.

Cash flow

1 Net cash is the total of cash and cash equivalents and short-term deposits.

Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines adjusted operating cash flow as cash flow from operations excluding the impact of adjusting items. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. A reconciliation between cash flow from operations and adjusted operating cash flow is shown in note 1(b) to the financial information.

The cash conversion of 75% (2023: 80%) has been adjusted to exclude these one-off items and has reduced in the year due to negative working capital movements in particular from the timing of accruals payments.

Financing and bank covenants

On 16 March 2021 the Group signed a revolving credit facility with NatWest which allows the Group to borrow up to £10m and has a three-year duration with the option of two further one-year periods. On 5 December 2022, management exercised the option to extend for the first further one-year period. On 19 February 2024, management exercised the option to extend for the second further one-year period until 31 March 2026. The Group has not drawn down any borrowings under the facility.

Balance sheet

1 Net cash is the total of cash and cash equivalents and short-term deposits.

Goodwill and other intangibles have decreased by £12.1m primarily due to the impairment of goodwill of £12.0m during the year.

Going concern

After due consideration, as required under IAS 1 Presentation of Financial Statements, of the Group's forecasts for at least twelve months from the date of this report and the effectiveness of risk management processes, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in the preparation of the consolidated financial information for the year ended 31 December 2024.

As detailed under the Risk Management section, the Directors have assessed the viability of the Group over a three-year period to March 2028 and the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over that period.

Conclusion

As highlighted in the interim results in July, the marketing sector headwinds caused by macro-economic challenges have continued to drive restructurings in the marketing functions of many blue-chip customers. The impact of these challenges has materially reduced revenue and profit during 2024 in particular having a significant impact on the Econsultancy and Oystercatchers brands, and Xeim's non-strategic advertising revenue.

More positively, revenue from our future growth drivers, The Lawyer, MiniMBA, and Marketing Week's subscriptions, continued to improve throughout the year.

The resulting revenue for the year was £35.1m a reduction of £2.2m from 2023, with Adjusted EBITDA declining from £9.7m in 2023 to £5.9m in 2024.

Alternative performance measures

Risk Management

Risk management approach

The Board has overall responsibility for the effectiveness of the Group's system of risk management and internal controls, and these are regularly monitored by the Audit Committee.

The Executive Committee and General Counsel and Company Secretary are responsible for identifying, managing and monitoring material and emerging risks in each area of the business and for regularly reviewing and updating the risk register, as well as reporting to the Audit Committee in relation to risks, mitigations and controls. As the Group operates principally from one office and with relatively flat management reporting lines, members of the Executive Committee are closely involved in day-to-day matters and are able to identify areas of increasing risk quickly and respond accordingly.

The responsibility for each risk identified is assigned to a member of the Executive Committee. The Audit Committee considers risk management and controls regularly and the Board formally considers risks to the Group's strategy and plans as well as the risk management process as part of its strategic review.

The risk register is the core element of the Group's risk management process. The register is maintained by the General Counsel and Company Secretary with input from the Executive Committee. The Executive Committee initially identifies the material risks and emerging risks facing the Group and then collectively assesses the severity of each risk (by ranking both the likelihood of its occurrence and its potential impact on the business) and the related mitigating controls.

As part of its risk management processes, the Board considers both strategic and operational risks, as well as its risk appetite in terms of the tolerance level it is willing to accept in relation to each principal risk, which is recorded in the Company's risk register. This approach recognises that risk cannot always be eliminated at an acceptable cost and that there are some risks which the Board will, after due and careful consideration, choose to accept.

The Group's risk register, its method of preparation and the operation of the key controls in the Group's system of internal control are regularly reviewed and overseen by the Audit Committee with reference to the Group's strategic aims and its operating environment. The register is also reviewed and considered by the Board.

As part of the ongoing enhancement of the Group's risk monitoring activities, we reviewed and updated the procedures by which we evaluate principal risks and uncertainties during the year including the consideration of climate-related risks as described in the ESG report.

Principal risks

The Group's risk register currently includes operational and strategic risks. The principal risks faced by the Group in 2024, taken from the register, together with the potential effects and mitigating factors, are set out below. The Directors confirm that they have undertaken a robust assessment of the principal and emerging risks facing the Group. Financial risks are shown in note 26 to the financial information.

Viability Statement

In accordance with provision 31 of the UK Corporate Governance Code 2018, the Directors have assessed the viability of the Group over a three-year period from signing of this Annual Report to March 2028, taking account of the Group's current position, the Group's strategy, the Board's risk appetite and, as documented above, the principal risks facing the Group and how these are managed. Based on the results of this analysis, the Directors have a reasonable expectation that the Group and the Company will be able to continue in operation and meet its liabilities as they fall due over the period to March 2028.

The Board has determined that the three-year period to March 2028 is an appropriate period over which to provide its viability statement because the Board's current financial planning horizon covers a three-year period. In making their assessment, the Directors have taken account of the Group's £10m three-year revolving credit facility to March 2026, cash flows, dividend cover and other key financial ratios over the period.

The covenants of the facility require a minimum interest cover ratio of 4 and net leverage not exceeding 2.5 times. In the calculation of net leverage, Adjusted EBITDA excludes the impact of IFRS 16. The Group is not expected to breach any of these covenants in any of the scenarios run for the viability statement and is not forecasting that the facility will be utilised during the viability period.

The three-year forecast was built, bottom-up from the budget for 2025 together with appropriate growth factors for 2026 to 2027. The three months to March 2028 are based directly off the respective forecast in 2027 with inflation applied.

The metrics in the forecast are subject to stress testing which involves sensitising key assumptions underlying the forecasts both individually and in unison. The key sensitivity is on Adjusted EBITDA which is the primary driver of performance in the viability assessment. This base case assumes that Adjusted EBITDA is lowered by 18% in every period that the viability statement covers.

In both the forecast and base case scenarios, the Group would not be required to rely on the revolving credit facility in order to fund its daily operations. Sensitising the model for changes in the assumptions and risks affirmed that the Group and the Company would remain viable over the three-year period to March 2028.

Going concern basis of accounting

In accordance with provision 30 of the UK Corporate Governance Code 2018, the Directors' statement as to whether they consider it appropriate to adopt the going concern basis of accounting in preparing the financial information and their identification of any material uncertainties, including the principal risks outlined above, to the Group's ability to continue to do so over a period of at least twelve months from the date of approval of the financial information and for the foreseeable future, being the period as discussed in the viability statement above.

The Strategic Report was approved by the Board of Directors and signed by order of the Board.

Statement of Directors' Responsibilities in respect of the financial information

The Directors are responsible for preparing the Annual Report and the financial information in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial information for each financial year. Therefore, the Directors have prepared the Group financial information in accordance with UK-adopted International Accounting Standards (IFRS) and the Company financial information in accordance with IFRS.

Under company law, the Directors must not approve the financial information unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period.

In preparing the financial information, the Directors are required to:

The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company. This enables them to ensure that the financial information and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the annual report and financial information, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's and Company's position and performance, business model and strategy.

In accordance with DTR 4.1.12R, each of the Directors, whose names and functions are listed in the Governance Report confirm that, to the best of their knowledge:

A resolution is to be proposed at the 2025 Annual General Meeting for the reappointment of Crowe as auditor of the Company.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2024

1 Adjusted results exclude adjusting items, as detailed in note 1(b).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2024

Attributable to owners of the Company

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2024

Attributable to owners of the Company

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2024

Registered number 04948078

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 December 2024

Registered number 04948078

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in this financial information. The Company's profit for the year was £15,904,000 (2023: loss of £4,521,000).

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2024

COMPANY CASH FLOW STATEMENT

for the year ended 31 December 2024

NOTES TO THE FINANCIAL INFORMATION

1 Summary of material accounting policies

The principal accounting policies adopted in the preparation of these consolidated and Company financial information are set out below. These policies have been consistently applied to all of the periods presented, unless otherwise stated. The financial information are for the Group consisting of Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc. Centaur Media Plc is a public company limited by shares and incorporated in England and Wales.

(a) Basis of preparation

The financial information in this preliminary announcement has been extracted from the audited Group Financial Statements for the year ended 31 December 2024 and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group Financial Statements for 2023 were delivered to the registrar of companies, and those for 2024 will be delivered in due course. The auditor's report on the Group Financial Statements for 2023 and 2024 were both unqualified and unmodified. The auditors' report was signed on 18 March 2025. The Group Financial Statements and this preliminary announcement were approved by the Board of Directors on 18 March 2025.

The consolidated and Company financial information has been prepared in accordance with UK-adopted International Accounting Standards (IFRS) and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial information has been prepared on a historical cost basis except where stated otherwise within the accounting policies.

In preparing the consolidated and Company financial information management has considered the impact of climate change, taking into account the relevant disclosures in the Strategic Report, including those made in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures. This included an assessment of assets with indefinite and long lives as well as impairment assessments of CGUs (including forecasted cash flows), and how they could be impacted by measures taken to address global warming. Recognising that the environmental impact of the Group's operations, and the use of the Group's services, is relatively low, no issues were identified that would impact the carrying values of such assets or have any other impact on the financial information.

Going concern

The financial information has been prepared on a going concern basis. The Directors have carefully assessed the Group's ability to continue trading and have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least twelve months from the date of approval of this financial information and for the foreseeable future, being the period in the viability statement.

At 31 December 2024, the Group had cash and cash equivalents of £928,000 (2023: £1,996,000) and short-term deposits of £8,000,000 (2023: £7,500,000). Since March 2021, the Group has had a multi-currency revolving credit facility with NatWest. The facility consists of a committed £10 million facility and an additional uncommitted £15 million accordion option, both of which can be used to cover the Group's working capital and general corporate needs. In February 2024, the Group took the option to extend the facility for one year and the facility now runs to 31 March 2026. The Group had not drawn down on the facility at 31 December 2024 or at any point during the year.

The Group has net current liabilities at 31 December 2024 amounting to £2,290,000 (2023: net current liabilities £2,929,000). The net current liability position primarily arose from its normal levels of deferred income relating to performance obligations to be delivered in the future rather than an inability to service its liabilities. An assessment of cash flows for the next three financial years has indicated an expected level of cash generation which would be sufficient to allow the Group to fully satisfy its working capital requirements and the guarantee given in respect of its UK subsidiaries, to cover all principal areas of expenditure, including maintenance, capital expenditure and taxation during this year, and to meet the financial covenants under the revolving credit facility. The Company has net current liabilities at 31 December 2024 amounting to £15,183,000 (2023: £49,911,000). In both the current and prior year, these almost entirely arose from unsecured payables to subsidiaries which have no fixed date of repayment.

The preparation of financial information in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial information and the reported amounts of revenue and expenses during the year. Although these estimates are based on management's best knowledge of the amount, events or actions, the actual results may ultimately differ from those estimates.

Having assessed the principal risks and the other matters discussed in connection with the Viability Statement which considers the Group and Company's viability over a three-year period to March 2028, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing both the consolidated financial information of the Group and the financial information of the Company.

New and amended standards adopted by the Group

The Group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2024:

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future period.

New standards and interpretations not yet adopted

There are no accounting standards, amendments, or interpretations effective for the first time this financial year that have had a material impact on the Group. No standards have been early adopted during the year. The Directors also considered the impact on the Group of new and revised accounting standards, interpretations, or amendments which have been issued but were not effective for the Group for the year ended 31 December 2024. On 9 April 2024, the IASB issued a new standard, IFRS 18 "Presentation and Disclosure in Financial Statements", which if adopted by the UK Endorsement Board, will be effective for annual reporting periods beginning on or after 1 January 2027. While IFRS 18 will not impact the recognition or measurement of items in the financial information, it will likely result in changes to how the Group presents certain information.

Comparative numbers

Prior year comparative numbers have been updated to reflect current year presentation and disclosures. The prior year revenue by type reported in note 2 has been re-presented to separate previously presented Training and Advisory into Learning and Development and Advisory, and to combine previously presented Marketing Solutions and Recruitment Advertising into Other revenue. There is no impact on the face of the consolidated statement of comprehensive income.

(b) Presentation of non-statutory measures

In addition to IFRS statutory measures, the Directors use various non-GAAP key financial measures to evaluate the Group's performance and consider that presentation of these measures provides shareholders with an additional understanding of the core trading performance of the Group. The measures used are explained and reconciled to their IFRS statutory headings below.

Adjusted operating profit and adjusted earnings per share

The Directors believe that adjusted results and adjusted earnings per share, split between continuing and discontinued operations, provide additional useful information on the core operational performance of the Group to shareholders, and review the results of the Group on an adjusted basis internally. The term 'adjusted' is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measurements of profit.

Adjustments are made in respect of:

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes, calculated using the standard rate of corporation tax. See note 7 for a reconciliation between reported and adjusted tax charges.

Further details of adjusting items are included in note 4. A reconciliation between adjusted and statutory earnings per share measures is shown in note 9.

(Loss) / profit before tax reconciles to adjusted operating profit as follows:

Adjusted operating cash flow

Adjusted operating cash flow is not a measure defined by IFRS. It is defined as cash flow from operations excluding the impact of adjusting items, which are defined above, and including capital expenditure. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. Statutory cash flow from operations reconciles to adjusted operating cash as below:

Our cash conversion rate for the year was 75% (2023: 80%).

Underlying revenue growth

The Directors review underlying revenue growth in order to allow a like-for-like comparison of revenue between years. Underlying revenue therefore excludes the impact of revenue contribution arising from acquired or disposed businesses and other revenue streams that are not expected to be ongoing in future years. There were no exclusions for underlying revenue in the current or prior year. Statutory revenue growth is equal to underlying revenue growth and is as follows:

Adjusted EBITDA

Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination. It is used by the Directors as a measure to review performance of the Group and forms the basis of some of the Group's financial covenants under its revolving credit facility. Adjusted EBITDA is calculated as follows:

Net cash

Net cash is not a measure defined by IFRS. Net cash is calculated as cash and cash equivalents, plus short-term deposits less overdrafts and bank borrowings under the Group's financing arrangements. The Directors consider the measure useful as it gives greater clarity over the Group's liquidity as a whole. Group net cash is calculated as follows:

(c) Principles of consolidation

The consolidated financial information incorporates the financial information of Centaur Media Plc and all of its subsidiaries after elimination of intercompany transactions and balances. The consolidated financial information is presented in Pounds Sterling, which is the Group and Company's functional and presentation currency.

(i) Subsidiaries

Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that the Group ceases to control them.

(ii) Employee Benefit Trust

The Centaur Employees' Benefit Trust ('Employee Benefit Trust') is a trust established by Trust deed in 2006 for the granting of shares to applicable employees. Its assets and liabilities are held separately from the Company and are fully consolidated in the consolidated statement of financial position. Holdings of Centaur Media Plc shares by the Employee Benefit Trust are shown within the 'own shares' reserve as a deduction from consolidated equity.

(d) Revenue recognition

Revenue is measured at the transaction price, which is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to the customer. Judgement may arise in timing and allocation of transaction price when there are multiple performance obligations in one contract. However, an annual impact assessment is performed which has confirmed that the impact is immaterial in both the current year and comparative year. Revenue arises from the sales of premium content, learning and development, advisory, events, marketing solutions and recruitment advertising in the normal course of business, net of discounts and relevant sales tax. Returns, refunds and other similar allowances, which have historically been low in volume and immaterial in magnitude, are accounted for as a reduction in revenue as they arise.

Where revenue is deferred it is held as a balance in deferred income on the consolidated statement of financial position. At any given reporting date, this deferred income is current in nature and is expected to be recognised wholly in revenue in the following financial year, with the exception of returns and credit notes, which have historically been low in volume and immaterial in magnitude.

The Group recognises revenue earned from contracts as individual performance obligations are met, on a stand-alone selling price basis. This is when value and control of the product or service has transferred, being when the product is delivered to the customer or the period in which the services are rendered as set out in more detail below.

Premium Content

Revenue from subscriptions is deferred and recognised on a monthly straight-line basis over the subscription period, starting in the month in which the subscription commences, reflecting the continuous provision of paid content services over this time. In general, the Group bills customers for premium content at the start of the contract.

Learning and Development

Revenue from learning and development is deferred and recognised over the length of the course. In general, the Group bills customers for learning and development upfront prior to the course start date.

Advisory

Revenue from advisory is deferred and recognised when a separately identifiable milestone of a contract has been delivered to the customer. In general, the Group bills customers for advisory in instalments, including upfront on contract signing and/or periodically throughout the service period.

Events

Consideration received in advance for events is deferred and revenue is recognised at the point in time at which the event takes place. In general, the Group bills customers for events before the event date.

Other revenue

Marketing Solutions

Marketing solutions revenue from display and bespoke campaigns is recognised over the period that the service is provided. In general, the Group bills customers for marketing solutions on delivery.

Recruitment Advertising

Sales of online recruitment advertising space are recognised in revenue over the period during which the advertisements are placed. Sales of recruitment advertising space in publications are recognised at the point at which the publication occurs. In general, the Group bills customers for recruitment advertising on delivery.

(e) Investments

In the Company's financial information, investments in subsidiaries are stated at cost less provision for impairment in value.

Investments are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the investments fair value less cost of disposal and its value-in-use. An asset's value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital. Any impairment is recognised in the statement of comprehensive income. If there has been a change in the estimates used to determine the investment's recoverable amount, impairment losses that have been recognised in prior periods may be reversed. This reversal is recognised in the statement of comprehensive income.

(f) Income tax

The tax expense represents the sum of current and deferred tax.

Current tax is based on the taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years, and it further includes items that are never taxable or deductible. The Group and Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial information and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available to utilise those temporary differences and losses. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit and does not give rise to equal taxable and deductible temporary differences.

Deferred tax is calculated at the enacted or substantively enacted tax rates that are expected to apply in the year when the liability is settled, or the asset is realised. Deferred tax is charged or credited to the consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity or other comprehensive income, in which case the deferred tax is recognised in equity or other comprehensive income respectively.

The carrying amount of deferred tax assets is reviewed at each reporting date and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

(g) Leases

Lessee accounting

Under IFRS 16, leases are accounted for on a 'right-of-use model' reflecting that, at the commencement date, the Group as a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The financial obligation is recognised as a lease liability, and the right to use the underlying asset is recognised as a right-of-use ('ROU') asset. The ROU assets are recognised within property, plant and equipment on the face of the consolidated statement of financial position and are presented separately in note 12.

The lease liability is initially measured at the present value of the lease payments using the rate implicit in the lease or, where that cannot be readily determined, the incremental borrowing rate ('IBR'). The incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the Group estimates the lessee would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment. Subsequently, the lease liability is measured at amortised cost, with interest increasing the carrying amount and lease payments reducing the carrying amount. The carrying amount is remeasured to reflect any reassessment or lease modifications.

The ROU asset is initially measured at cost which comprises:

Subsequently, the ROU asset is measured at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write off the cost on a straight-line basis over the lease term.

Using the exemption available under IFRS 16, the Group elects not to apply the requirements above to:

In these cases, the Group recognises the lease payments as an expense on a straight-line basis over the lease term, or another systematic basis if that basis is more representative of the agreement.

(h) Impairment of assets

Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the asset's fair value less cost of disposal and its value-in-use. An asset's value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital.

(i) Intangible assets

(i) Brands and publishing rights and customer relationships

Separately acquired brands and publishing rights are shown at historical cost. Brands and publishing rights and customer relationships acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses.

(ii) Software

Computer software that is not integral to the operation of the related hardware is carried at cost less accumulated amortisation. Costs associated with the development of identifiable and unique software products controlled by the Group that will generate probable future economic benefits in excess of costs are recognised as intangible assets when the criteria of IAS 38 'Intangible Assets' are met. They are carried at cost less accumulated amortisation and impairment losses.

(iii) Amortisation methods and periods

Amortisation is calculated to write off the cost or fair value of intangible assets on a straight-line basis over the expected useful economic lives to the Group over the following periods:

Goodwill has an indefinite life and is tested for impairment annually at a Group level or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

(j) Property, plant and equipment

See note 1(g) for right-of-use assets. All other property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses. The historical cost of property, plant and equipment is the purchase cost together with any incidental direct costs of acquisition. Depreciation is calculated to write off the cost, less estimated residual value, of assets, on a straight-line basis over the expected useful economic lives to the Group over the following periods:

The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting year, with the effect of any changes in estimate accounted for on a prospective basis.

(k) Employee benefits

Share-based payments

The Group operates several equity-settled share-based payment plans, under which the Group receives services from employees in consideration for equity instruments (share options and shares) of the Company. Information relating to these plans is set out in note 23.

Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured using either a Monte Carlo simulation (stochastic) model or Black-Scholes option pricing model. The fair value of the employee services received in exchange for the grant of share awards and options is recognised as an expense on a straight-line basis over the vesting period, based on the Group's estimate of the number of options or shares that will eventually vest. Non-market-based performance or service vesting conditions (for example profitability and remaining as an employee of the entity over a specified time period) are included in assumptions about the number of share awards and options that are expected to vest. Market-based performance criteria is reflected in the measurement of fair value at the date of grant.

The impact of the revision to original estimates, if any, is recognised in the consolidated statement of comprehensive income, with a corresponding adjustment to equity, such that the cumulative expense reflects the revised estimate. The cumulative share-based payment expense held in reserves is recycled into retained earnings when the share awards or options lapse or are exercised. When options are exercised, shares are either transferred to the employee from the Employee Benefit Trust or by issuing new shares. The social security contributions payable in connection with the grant of share awards is treated as a cash-settled transaction.

The award by the Company of share-based payment awards over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution only if it is left unsettled. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

A deferred tax asset is recognised on share options based on the intrinsic value of the options, which is calculated as the difference between the fair value of the shares under option at the reporting date and exercise price of the share options. The deferred tax asset is utilised when the share options are exercised or released when share options lapse. The accounting policy regarding deferred tax is set out above in note 1(f).

(l) Equity

(i) Share capital

Ordinary and deferred shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company's equity instruments, for example as the result of a share buyback or share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company.

Shares held by the Employee Benefit Trust are disclosed as own shares and deducted from equity.

(ii) Own shares

Own shares consist of treasury shares and shares held within the Employee Benefit Trust.

Own shares are recognised at cost as a deduction from equity shareholders' funds. Subsequent consideration received for the sale of such shares is also recognised in equity, with any excess of consideration received between the sale proceeds and the original cost being recognised in share premium. No gain or loss is recognised in the financial information on transactions in treasury shares.

(m) Financial instruments

The Group has applied IFRS 9 'Financial Instruments' as outlined below:

(i) Financial assets

The Group classifies and measures its financial assets in line with one of the three measurement models under IFRS 9: at amortised cost, fair value through profit or loss, and fair value through other comprehensive income. Management determines the classification of its financial assets based on the requirements of IFRS 9 at initial recognition.

(ii) Trade receivables

Trade receivables are accounted for under IFRS 9, being recognised initially at fair value and subsequently at amortised cost less any allowance for expected lifetime credit losses under the 'expected credit loss' model. As mandated by IFRS 9, the expected lifetime credit losses are calculated using the 'simplified' approach.

A provision matrix is used to calculate the allowance for expected lifetime credit losses on trade receivables which is based on historical default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. The allowance for expected lifetime credit losses is established by considering, on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying those shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The allowance is the sum of these probability weighted outcomes. The allowance and any changes to it are recognised in the consolidated statement of comprehensive income within net operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against net operating expenses in the consolidated statement of comprehensive income. The Group defines a default as failure of a debtor to repay an amount due as this is the time at which our estimate of future cash flows from the debtor is affected.

(iii) Financial liabilities

Debt and trade and other payables are recognised initially at fair value based on amounts exchanged, net of transaction costs, and subsequently at amortised cost.

(iv) Receivables from and payables to subsidiaries and the Employee Benefit Trust

The Company has amounts receivable from and payable to subsidiaries and from the Employee Benefit Trust which are recognised at fair value. Amounts receivable from subsidiaries and the Employee Benefit Trust are assessed annually for recoverability under the requirements of IFRS 9.

(n) Key accounting assumptions, estimates and judgements

The preparation of financial information under IFRS requires the use of certain key accounting assumptions and requires management to exercise its judgement and to make estimates. Those that have the most significant effect on the amounts recognised in the consolidated financial information or have the most risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Key sources of estimation uncertainty

(i) Carrying value of goodwill, other intangible assets and Company investment estimate

In assessing whether goodwill, other intangible assets and the Company's investment are impaired, the Group uses a discounted cash flow model which includes forecast cash flows and estimates of future growth. If the results of operations in future periods are lower than included in the cash flow model, impairments may be triggered. A sensitivity analysis has been performed on the value-in-use calculations. Further details of the assumptions and sensitivities in the discounted cash flow model are included in notes 10 and 13.

Critical accounting judgements

(ii) Adjusting items judgement

The term 'adjusted' is not a defined term under IFRS. Judgement is required to ensure that the classification and presentation of certain items as adjusting, including exceptional costs, is appropriate and consistent with the Group's accounting policy. Further details about the amounts classified as adjusting are included in notes 1(b) and 4.

Other areas of judgement and accounting estimates

The consolidated financial information includes other areas of judgement and accounting estimates. While these areas do not meet the definition under IAS 1 of significant accounting estimates or critical accounting judgements, the recognition and measurement of certain material assets and liabilities are based on assumptions and/or are subject to longer-term uncertainties.

The other areas of judgement and accounting estimates are: