RNS Number:7225C
TF Informa PLC
Part 2 : For preceding part double-click [nRNSH7225C]
Merger costs 3 (15,703) - -
Loss on sale or termination of a business (50) - (3,822)
(15,753) - (3,822)
Net interest payable
Net interest payable (8,591) (4,315) (9,372)
Bank loan facility fees expensed on merger 3 (2,415) - -
(11,006) (4,315) (9,372)
Profit on ordinary activities before tax 211 19,793 33,704
Tax on profit on ordinary activities 4 (7,235) (9,149) (16,543)
(Loss)/profit on ordinary activities after tax (7,024) 10,644 17,161
Minority interests - equity 6 (28) (84)
(Loss)/profit for the financial period (7,018) 10,616 17,077
attributable to
shareholders
Dividends 5 (8,369) (4,708) (15,203)
(Loss)/profit for the financial period (15,387) 5,908 1,874
Earnings/(loss) per ordinary share 6
Diluted (normalised) (p) 9.18 8.19 18.54
Diluted (p) (2.36) 3.89 6.15
Basic (p) (2.36) 3.90 6.18
(a) Operating profit for the 6 months ended 30 June 2003 and year ended 31
December 2003 includes charges for exceptional items of £2,083,000 and
£11,829,000 respectively as detailed in note 3.
Consolidated statement of total recognised gains and losses
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
(Loss)/profit attributable to shareholders (7,018) 10,616 17,077
Currency translation difference on foreign currency net investments (4,423) (653) (3,802)
Total recognised (losses) and gains in the period (11,441) 9,963 13,275
The Board of Directors has approved this interim report.
Consolidated Balance Sheet
As at 30 June 2004 - unaudited
30 June 30 June 31
December
2004 2003 2003
Note £'000 £'000 £'000
Fixed assets
Intangible assets 539,517 317,167 483,185
Tangible assets 34,575 27,346 33,456
Investments 8,817 3,253 9,957
582,909 347,766 526,598
Current assets
Stocks 42,298 41,007 42,414
Debtors 94,317 91,850 93,792
Cash at bank and in hand 11,124 3,908 23,586
147,739 136,765 159,792
Creditors: amounts falling due within one year
Loans and overdrafts (7,764) (3,645) (6,046)
Creditors (34,181) (27,539) (30,438)
Proposed dividend (8,369) (4,749) (10,233)
Corporation tax (20,268) (25,206) (23,595)
(70,582) (61,139) (70,312)
Net current assets 77,157 75,626 89,480
Total assets less current liabilities 660,066 423,392 616,078
Creditors: amounts falling due after more than one year
Bank loans (353,164) (188,445) (272,344)
Other creditors (461) (5,923)
-
(353,625) (188,445) (278,267)
Provisions for liabilities and charges (9,686) (6,903) (10,903)
Accruals and deferred income (152,252) (122,195) (164,428)
Minority interests (73) (331) (79)
Net assets 144,430 105,518 162,401
Capital and reserves
Called up share capital 29,845 27,408 29,790
Share premium account 184,875 123,195 184,494
Reserve for own shares 1,267 1,267 1,267
Other reserve 37,398 37,399 37,399
Merger reserve 35,944 34,155 34,540
Profit and loss account (144,899) (117,906) (125,089)
Equity shareholders' funds 7 144,430 105,518 162,401
Consolidated Cash Flow Statement
For the six months ended 30 June 2004 - unaudited
6 months 6 months 12 months
2004 2003 2003
Note £'000 £'000 £'000
Net cash inflow from operating activities 8 15,623 18,238 79,065
Returns on investments and servicing of finance
Interest received 1,347 519 1,490
Interest paid (10,417) (5,541) (10,773)
Net cash outflow from returns on investments and (9,070) (5,022) (9,283)
servicing of finance
Taxation
Corporation tax paid (4,694) (2,544) (6,965)
Overseas taxes paid (3,458) (2,857) (6,220)
Tax paid (8,152) (5,401) (13,185)
Capital expenditure and financial investment
Purchase of publishing goodwill (1,159) (841) (3,469)
Tangible fixed assets acquired (3,585) (2,484) (5,689)
Tangible fixed assets sold 229 122 267
Disposal/(purchase) of investments 1,141 (8,810)
-
Net cash outflow from investing activities (3,374) (3,203) (17,701)
Acquisitions and disposals
Purchase of business/subsidiary undertakings (net of cash (88,138) (64,396) (225,854)
and overdrafts acquired)
Disposal of business/subsidiary undertakings - - 1,045
Net cash outflow from acquisitions and disposals (88,138) (64,396) (224,809)
Equity dividends paid (10,207) (8,813) (13,787)
Net cash outflow before use of liquid resources and financing (103,318) (68,597) (199,700)
Management of liquid resources - 11,988 11,988
Financing
Net loans advanced 85,306 49,667 148,482
Proceeds (net) from share issues 1,839 264 52,580
Net cash inflow from financing 87,145 49,931 201,062
(Decrease)/increase in cash 9 (16,173) (6,678) 13,350
Notes to the Unaudited Interim Statements
For the six months ended 30 June 2004
1 Basis of preparation
The interim accounts for the six month period to 30 June 2004 have been prepared
under the basis of merger accounting following the combination of Informa Group
plc and Taylor & Francis Group plc.
The figures for the six months to 30 June 2004 and 30 June 2003 are unaudited.
The comparative figures for the financial year ended 31 December 2003, except
for the adjustments discussed below, have been abridged from the statutory
accounts of Taylor & Francis Group plc which have been reported on by Deloitte
and Touche LLP and Informa Group plc which has been reported on by KPMG Audit
Plc, both of which have been filed with the registrar of companies. The
respective auditors' opinions on those accounts were unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985. The
interim statements do not comprise statutory accounts within the meaning of
section 240 of the Companies Act 1985.
The interim accounts have been prepared using the accounting policies set out
and applied in the 2003 annual report and accounts of Taylor & Francis Group plc
and Informa Group plc, except that the Group has adopted UITF abstract 38 '
Accounting for ESOP Trusts' and has made certain adjustments to achieve
uniformity of accounting policies.
UITF Abstract 38
Shares purchased through Employee Share Option Plan (ESOP) trusts are taken as a
deduction in arriving at shareholders' funds. Previously these were held within
investments. The balance sheets as at 30 June 2003 and 31 December 2003 have
been restated to reflect this change in accounting policy, resulting in a
reduction in shareholders' funds of £3,641,000 as at 30 June 2003 and 31
December 2003. There is no impact on the profit and loss account in the current
or prior period.
Accounting policy alignment
Certain adjustments have been made, and reflected in the results of the Group,
to align the accounting policies previously adopted by Informa Group plc and
Taylor & Francis Group plc. The principal adjustment is to write off previously
deferred costs resulting in a reduction in other debtors of £511,000 and
£1,066,000 at 30 June 2003 and 31 December 2003 respectively, and an increase in
other operating costs before goodwill amortisation of £555,000 for the year
ended 31 December 2003.
2 Segmental analysis
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
Geographical analysis of turnover by destination
United Kingdom 53,561 45,530 91,135
North America 74,094 66,281 143,030
Western Europe 76,494 67,008 140,955
Rest of the World 42,124 30,702 66,556
246,273 209,521 441,676
Geographical analysis of turnover by origin
United Kingdom 138,681 121,434 240,704
North America 60,349 46,451 114,505
Western Europe 36,797 36,191 71,147
Rest of World 10,446 5,445 15,320
246,273 209,521 441,676
Analysis of turnover by class of business
Academic & Scientific Division
STM 67,500 45,011 106,145
Humanities & Social Sciences 44,177 39,604 91,122
111,677 84,615 197,267
Professional Division
Finance 30,235 20,686 49,130
Insurance, Law & Tax 14,702 18,358 39,570
44,937 39,044 88,700
Commercial Division
Telecoms & Media 25,902 25,911 34,982
Maritime, Trade & Transport 19,272 18,852 37,737
Commodities 9,434 6,288 13,020
International Conferences 35,051 34,811 69,970
89,659 85,862 155,709
246,273 209,521 441,676
Operating profit before goodwill amortisation and exceptional
items by class of business
Academic & Scientific Division
STM 17,217 11,670 27,745
Humanities & Social Sciences 6,556 7,214 18,754
23,773 18,884 46,499
Professional Division
Finance 8,045 4,815 10,251
Insurance, Law & Tax 1,792 424 4,555
9,837 5,239 14,806
Commercial Division
Telecoms & Media 6,953 7,315 7,943
Maritime, Trade & Transport 2,467 660 1,558
Commodities 1,039 737 1,437
International Conferences 2,551 3,170 7,794
13,010 11,882 18,732
46,620 36,005 80,037
3 Exceptional items
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
Exceptional operating costs 2,026 2,083 11,829
Merger costs 15,703 - -
Loss on sale or termination of a business 50 - 3,822
Bank loan facility fees expensed on merger 2,415 - -
20,194 2,083 15,651
Taxation on exceptional items (2,884) (138) (2,576)
17,310 1,945 13,075
Exceptional operating costs of £2,026,000 in the 6 months ended 30 June 2004
represent the costs of integrating the acquired businesses of Marcel Dekker,
Cass and Swets.
Of the £15,703,000 of merger costs in 2004, £15,443,000 relate to transactional
professional fees and £260,000 to other costs.
There are also £2,415,000 of exceptional interest costs which relate to
expensing prepaid bank loan facility fees on the termination of existing bank
loan facilities in connection with the merger.
Operating costs before goodwill amortisation for the 6 months ended 30 June 2003
and the year ended 31 December 2003 are stated after charging exceptional items
of £2,083,000 and £11,829,000 respectively. In the 6 months ended 30 June 2003
these consist of costs associated with the attempted acquisition of
BertelsmannSpringer and costs of re-organising book publishing operations in the
US. For the year ended 31 December 2003 they also include further costs of
re-organising book publishing operations in the US (£1,705,000 in total), the
write off of bank facility loan fees (£874,000) and business restructuring costs
(£7,669,000). Further details can be found in the relevant statutory accounts.
4 Tax on profit on ordinary activities
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
United Kingdom corporation tax 1,204 4,226 9,695
Overseas tax 3,906 3,387 4,661
Current tax 5,110 7,613 14,356
Deferred tax 2,125 1,536 2,187
7,235 9,149 16,543
5 Dividends
An interim dividend of 2.8p per share will be paid on 8 November 2004 to
ordinary shareholders registered at the close of business on 8 October 2004.
6 Earnings/(loss) per share
Basic
The basic (loss)/earnings per share calculation is based on a loss on ordinary
activities after taxation of £7,018,000 (2003 profit: £10,616,000 six months and
£17,077,000 twelve months). This loss (2003:profit) on ordinary activities after
taxation is divided by the weighted average number of shares in issue (less
those non-vested shares held by an employee share ownership trust) which is
297,349,000 (2003: 272,101,000 six months and 276,493,000 twelve months).
Diluted
The diluted earnings per share calculation is based on the basic earnings per
share calculation above except that the weighted average number of shares
includes all potentially dilutive options granted by the balance sheet date as
if those options had been exercised on the first day of the accounting period or
the date of the grant, if later, giving a weighted average of 304,084,000 (2003:
273,048,000 six months and 277,604,000 twelve months). In accordance with FRS14
the weighted average number of shares includes the estimated maximum number of
shares payable to the vendors of Routledge Publishing Holdings Limited assuming
that there are no claims for compensation by the Group that will reduce this
deferred consideration and assuming that the Company does not exercise its
option to pay the balance of deferred consideration in cash. The deferred
consideration shares are also assumed for the purposes of this calculation to
have been issued on 1 January 2004 at the closing mid-market share price on 30
June 2004 of £4.04, making 533,000 (2003: 454,000 six months and 423,000 twelve
months) ordinary shares potentially issued.
The table below sets out the adjustment in respect of diluted potential ordinary
shares:
6 months 6 months 12 months
2004 2003 2003
Weighted average number of shares used in basic earnings per 297,349,000 272,101,000 276,493,000
share calculation
Effect of dilutive share options 6,202,000 493,000 688,000
Shares potentially to be issued or allotted 533,000 454,000 423,000
Weighted average number of shares used in diluted earnings per 304,084,000 273,048,000 277,604,000
share calculation
Diluted normalised
The diluted earnings per share (normalised) calculation has been made to allow
shareholders to gain a better understanding of the trading performance of the
Group. It is based on the diluted earnings per share calculation above except
profits are adjusted for goodwill amortisation and the after tax effect of
exceptional items as follows:
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
(Loss)/profit for the financial period attributable to shareholders (7,018) 10,616 17,077
Goodwill amortisation 17,624 9,814 21,310
Exceptional items after tax (Note 3) 17,310 1,945 13,075
Normalised profit on ordinary activities after taxation 27,916 22,375 51,462
7 Reconciliation of movement in consolidated shareholders' funds
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
(Loss)/profit for the period attributable to shareholders (7,018) 10,616 17,077
Dividends (8,369) (4,708) (15,203)
Retained (loss)/profit for the period (15,387) 5,908 1,874
Currency translation difference on foreign currency net investments (4,423) (653) (3,802)
Proceeds of new share issues 1,839 264 64,330
Net addition to shareholders' funds (17,971) 5,519 62,402
Opening shareholders' funds 162,401 99,999 99,999
Closing shareholders' funds 144,430 105,518 162,401
Shareholders' funds at 1 January 2003 were £103,640,000 before the prior year
adjustment for the adoption of UITF abstract 38 'Accounting for ESOP trusts' of
£3,641,000 (See note 1).
8 Reconciliation of operating profit to net cash inflow from operating
activities
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
Operating profit 26,970 24,108 46,898
Merger costs (15,703) - -
Loss on sale or termination of a business (50) - (3,822)
Bank loan facility fees expensed on merger (2,415) - -
Operating profit after exceptional costs 8,802 24,108 43,076
Depreciation and amortisation 22,146 14,059 29,996
Profit on sale of tangible fixed assets (15) (10) (25)
Decrease/(increase) in stocks 2,512 861 (670)
Decrease in debtors 1,777 2,165 4,641
(Decrease)/increase in creditors (19,702) (22,923) 2,073
Other operating items 103 (22) (26)
Net cash inflow from operating activities 15,623 18,238 79,065
Included in net cash inflows from operating activities are payments of
£15,789,000 (June 2003: £4,632,000; December 2003: £9,170,000) relating to
exceptional costs. Excluding these costs the operating cash inflow is
£31,412,000 (June 2003: £22,870,000; December 2003: £88,235,000).
9 Reconciliation of net cash flow to movement in net debt
6 months 6 months 12 months
2004 2003 2003
£'000 £'000 £'000
(Decrease)/increase in cash (16,173) (6,678) 13,350
Increase in bank loans and loan notes (85,306) (49,667) (148,482)
Cash flow from decrease in liquid resources (11,988) (11,988)
-
Change in net debt resulting from cash flows (101,479) (68,333) (147,120)
Foreign exchange translation difference 6,495 1,519 6,515
Non-cash movements (114) (114)
-
Movement in net debt during the period (94,984) (66,928) (140,719)
Opening net debt (261,195) (120,476) (120,476)
Closing net debt (356,179) (187,404) (261,195)
The decrease in liquid resources represents funds withdrawn from deposit
accounts.
10 Analysis of changes in net debt
Non-cash Cash flow Exchange At 30 June
At 1 Jan movements movements 2004
2004
£'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 23,586 - (12,345) (117) 11,124
Overdrafts (1,845) - (3,828) 34 (5,639)
21,741 - (16,173) (83) 5,485
Bank loans due in less than one year (4,201) - 2,076 - (2,125)
Loan notes due in less than one year (455) (5,876) 17 - (6,314)
Bank loans due after one year (272,344) - (87,398) 6,578 (353,164)
Loan notes due after more than one year (5,876) 5,876 - - -
Other (60) - (1) - (61)
Total (261,195) - (101,479) 6,495 (356,179)
Independent Review Report by KPMG Audit Plc to T&F Informa plc
Introduction
We have been engaged by the company to review the financial information set out
on pages 11 to 18 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state in
this report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting polices and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the financial information.
As this is the first independent review report issued on the group's interim
results, the comparative figures for the period ended 30 June 2003 have not been
subject to the review procedures set out above.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2004.
KPMG Audit Plc
Chartered Accountants
8 Salisbury Square
London
EC4Y 8BB
United Kingdom
7 September 2004
This information is provided by RNS
The company news service from the London Stock Exchange
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