Financial Highlights

• Profit before tax, amortisation and exceptional items up 19% to £32.7million (1998: £27.4million further adjusted for MBO interest)
  
• Turnover up 12% to £227.8million (1998: £202.9million)
  
• Operating margin increased to 15.7% (1998: 14.3%)
  
• Telecoms sector operating profits up 42%
  
• £4.8million of annual profits from electronic media
  
• Dividend per share raised to 7p
  

Informa Group’s Chairman Peter Rigby commented: "Informa Group performed strongly in 1999. The creative synergies made possible by the merger of IBC and LLP, combined with the generally good economic conditions in our major markets and the continuing growth of electronic delivery has enabled us to deliver profit growth of 19%.

"The new year has started encouragingly and trading has been in line with expectations. Our flagship GSM World Congress, held in early February, saw a 31% increase in delegates to over 5,500, and we are looking forward to another good year."

Enquiries:

Peter Rigby/David Gilbertson/Jim Wilkinson

The Informa Group plc 020 7453 2222

William Clutterbuck/Charlotte Hamilton/Lydia Stewart

The Maitland Consultancy 020 7379 5151

Extracts from Chairman’s Statement and Chief Executive’s Review

General Trading

1999 was an exciting and eventful year. Pre-tax profits before exceptional items and goodwill amortisation were £32.7million, an increase of 19% over 1998 (£27.4million further adjusted for MBO interest) on turnover up 12% at £227.8million. Adjusted earnings per share increased from 16.34p to 18.79p. Accordingly we have decided to recommend that a final dividend of 4.67p be paid. Together with the interim dividend of 2.33p paid in November this makes a total of 7p for 1999 (6.6p for IBC shareholders and 5.845p for LLP shareholders in 1998).

Particularly encouraging in our results was the 17% organic growth secured in our core business. This reflects the strength of our leading brands in our major markets and the flow through of creative synergies following the merger. Only 2% of our growth came from acquisitions made in the last 12 months and our major 1999 acquisitions came too late in the year to impact the figures.

In 1999 we saw an overall group operating margin before exceptional items and goodwill of 15.7%, a rise of 1.4% on the year before. The advance of our younger conference businesses in Brazil, Australia and Continental Europe, all of which are now attaining critical mass, was an important contributor to the year’s improvement.

We saw robust growth from a number of our regional centres, with Germany showing particular strength. Our Asia businesses, driven from Singapore, also performed very well as the regional economies began to shake off the effect of the economic crisis of the previous year.

Integration progress

Following the merger we intended to create one single company based on market facing lines, rather than two or more divisions dictated by format. As part of that process, we are working towards establishing market facing groups across the company. These will focus on our content and the information needs of our customers in each of our sectors and emphasise product clustering, cross-selling and up-selling.

So far we have established a division for Telecoms and Media, our biggest single market and one for our Commodities businesses. During the remainder of this year we will organise all of our businesses in this way. With a market approach, we can seamlessly turn our customers’ information requirements into products, be they traditional hard copy publications, conferences, web-based electronic services or bespoke packages.

During 1999 we streamlined some of our businesses to achieve operational efficiencies and cost savings. We consolidated our UK based activities, allowing us to take full advantage of efficiencies in business systems, purchasing and distribution. We put together the separate businesses we had in Australia, Asia and Dubai and closed the South African companies, which we felt were unlikely to make a significant contribution to Informa’s profits in the foreseeable future. We also disposed of two small non-core businesses - Political Risk Services and Marcus Bohn Associates - to their respective managements.

The harnessing of our international network to promote sales of Informa’s products is one of the opportunities we have yet to exploit fully. Now the group has a balanced portfolio of events, publications and services, many of which have wide international relevance and appeal, the local market knowledge in our regional offices will offer a cost effective way of expanding our worldwide sales.

Corporate activity

Informa Group completed a total of 11 acquisitions for £67million during the year. One highlight was the purchase last Spring of Washington Policy and Analysis which provides high-level energy consultancy to customers such as the Japanese utility companies and the American Gas Association. This fits well with existing publications such as Energy Day and our worldwide conference business.

Towards the end of the year we acquired titles from EMAP, Financial Times and Baskerville Communications. These publications and events complement our existing portfolio and bring further leading brands such as Containerisation International, Television Business International and Global Mobile into the group.

Going forward we would expect to continue to be acquisitive. Our targets will be international information products within our market sectors with a high level of proprietorial content and high readership retention, where we believe Informa can add value through brand extension.

Electronic Media

• 30 new internet information services launched
  
• £12million revenue generated from internet marketing
  
• Transaction and content management system being installed
  
• Internet investment in 2000 around £3million
  
• Agreement reached with IPv6 Forum to promote new internet standard
  

The internet provides a major opportunity for Informa. Of our 100 electronic services, we already have around 50 web-based products of which 30 have been launched in the last year. Our internet products include established password-controlled subscription services such as Lloyd’s List and Insurance Day and new sites such as iMoneynet.com for the US banking market and e-searchwireless.com, our on-line telecoms data and analysis product.

Our internet investment is currently of the order of £3million per annum and is aimed at delivering added value to our customers and providing a profitable return on investment. Our electronic products currently enjoy a margin of around 24%, some 5% ahead of hard copy publications for which print and physical distribution inevitably represent a significant proportion of overall costs.

Increasingly our customers want their information delivered electronically. E-media products and services across all our market sectors accounted for £4.8million profit in 1999 (1998: £4.1million). We expect this part of our business to grow rapidly in the next few years.

Excluded from these figures are the fast rising revenues we now receive from internet marketing of our products. These grew five fold to £12million in the year and are also certain to become an increasing part of our revenue mix. Of the on-line orders received last year, some 20% came from customers who were not on our database, reflecting entirely new revenue.

Partnership with organisations and associations in the industries we serve is of growing importance in the electronic area. The agreement we have reached with the IPv6 Forum to promote the new internet protocol worldwide is the latest example of such an alliance. In the Telecoms area alone we are working with 35 leading industry bodies.

We are currently installing an integrated e-commerce transaction system to allow on-line ordering, payment and product fulfilment and a content management system for internet delivery. This will allow us to deliver existing products electronically and to create new products through merging text and data files. It will also give us the means to allow customers to begin to personalise their information purchases on a pay as you go basis.

Our position on product format will remain neutral; we will continue to deliver content in the way the audience want it. For some markets, hard copy will remain the preferred format, in others electronic media are already being fully embraced.

Prospects

During the year ahead we will benefit from the continuing organic growth in our business and from the acquisitions and portfolio adjustments made last year. As some of our competitors switch out of niche information products, this provides us with opportunities to absorb profitable and well regarded titles.

The Informa product is high quality business information. We are content providers, not carriers and the great majority of the content we publish is proprietorial to the group. The demand for original relevant information, presented in a form appropriate to commercial decision making, continues to grow. Because of the unique nature of our content, Informa is well placed to capitalise on the opportunities offered by the internet age. Information can be distributed online and with increased functionality, such as the ability to search, to repackage and to display in bespoke form.

The new year has started encouragingly and trading has been in line with expectations. Our flagship GSM World Congress in February, saw a 31% increase in delegate attendance and we look forward to another good year.

Relevant Market Sectors:
Maritime Trade and Transport
IT and Telecommunications
Biomedical and Pharmaceutical
Law and Tax
Energy and Commodities
Finance and Insurance