Level 2

Company Announcements

Preliminary Statement

RNS Number : 2320G
Euromoney Institutional InvestorPLC
19 November 2015
 

 

 

 

                     

 

 

Euromoney

Institutional

Investor PLC

 

 

Preliminary Statement (unaudited)

September 30 2015

 

 

Preliminary Statement (unaudited)

November 19, 2015

 

 

 

Highlights

2015

 

2014

 

Change

 

 

 

 

 

 

Total revenue

£403.4

m

£406.6

m

(1%)

Adjusted results

 

 

 

 

 

• Adjusted operating profit

£104.2

m

£119.8

m

(13%)

• Adjusted profit before tax

£107.8

m

£116.2

m

(7%)

• Adjusted diluted earnings a share

70.1

p

70.6

p

(1%)

Statutory results

 

 

 

 

 

• Operating profit

£123.1

m

£103.3

m

+19%

• Profit before tax

£123.3

m

£101.5

m

+21%

• Diluted earnings a share

83.4

p

59.2

p

+41%

Net cash/(debt)

£17.7

m

(£37.6)

m

£55.3m

Final dividend

16.40

p

16.00

p

+3%

 

 

 

 

 

 

A detailed reconciliation of the group's adjusted results is set out in the appendix to this statement.

 

 

 

·      Total revenues down 1% to £403.4m

·      Second half underlying1 revenues fell by 5%, due to weak commodity markets, after a 1% first half increase

·      Adjusted operating margin down 4% points to 26% reflecting higher property and investment costs, impact of Dealogic transaction and the high marginal flow through from lower delegate and advertising revenues

·      Adjusted profit before tax down 7% at £107.8m

·      Strong operating cash conversion further strengthens balance sheet - net cash of £17.7m

·      Three investments in financial technology companies completed

·      Roll-out of Delphi content platform as planned, and good pipeline of new products in asset management

·      Final dividend increased to 16.4p in line with policy

·      First quarter trading has started in line with board's expectations and 2015 second half trends

·      New board structure to be implemented

 

 

1 Underlying revenues exclude the impact of acquisitions, disposals and currency movements.

 

 

Commenting on the results, Andrew Rashbass, CEO, said:

""I am delighted and privileged to join Euromoney with its unique portfolio of businesses and outstanding people. Today's results reflect the strong headwinds, both cyclical and structural, facing many of our customers and our businesses. But they also show areas of real strength, for example around our asset-management-related businesses. They demonstrate, too, how cash generative the business is. These strengths create great opportunity. Following the completion of the strategy review which I am leading, we shall present an update to investors in early 2016. My initial impressions are that more active management of our portfolio and allocating our capital rigorously towards the best opportunities will allow us to grow existing businesses and invest in new areas too."

 

Highlights

Euromoney Institutional Investor PLC, the international online information and events group, achieved an adjusted profit before tax of £107.8m for the year to September 30, 2015, against £116.2m in 2014.  Adjusted diluted earnings a share were 70.1p (2014: 70.6p). The directors recommend a final dividend of 16.40p (2014: 16.00p), giving a total for the year of 23.40p (2014: 23.00p) to be paid to shareholders on February 11, 2016.

 

Total revenues for the year were 1% behind last year at £403.4m.  Underlying1 revenues, after also excluding event timing differences, decreased by 2%.  The underlying revenue trends reported for the first half for subscriptions and advertising largely continued into the second.  But after first half growth, event revenues deteriorated in the second half following the downturn in commodity prices and weakness in emerging markets.

 

Adjusted operating profit fell by £15.6m to £104.2m. The adjusted operating margin fell from 30% to 26% as a result of a number of factors highlighted at the start of the year, including higher property costs, the full year impact of the group's investment in its Delphi content platform, and the impact of the Dealogic transaction.  In addition, the margin fell by 2% points as a result of the high marginal profit on declining advertising and delegate revenues, as well as the pressure on people costs that comes from operating in the digital space.

 

The 7% fall in adjusted profit before tax compares to a 13% drop in adjusted operating profit, helped by a £2.5m credit (2014: £2.4m expense) following the first half decision to reverse last year's long-term incentive expense, and by an increase of £2.2m in the adjusted share of results in associates following the Dealogic transaction.   

 

The 1% decrease in adjusted diluted earnings a share reflects the benefit of a lower underlying tax rate and a reduction in the number of shares in issue following last year's share buy-back.  Earnings for dividend purposes increased by 2% and this is reflected in the increase in the final dividend.  

 

The statutory profit before tax of £123.3m is higher than the adjusted profit before tax as a result of gains realised on a number of assets sold during the period, partly offset by acquired intangible amortisation and goodwill impairment charges.

 

The group continued to invest in its digital products during 2015 including rolling out the functionality of the Delphi content platform to the group's remaining titles, investing in a strong pipeline of new information services now being launched, and continuing the move to a digital-only format for many of the group's titles by the end of 2016.

 

The group ended the year in a net cash position for the first time since the acquisition of Institutional Investor in 1997.  Net cash of £17.7m at September 30 compared with net debt of £10.6m at March 31 and £37.6m at last year end.  This balance sheet position reflects the group's strong operating cash flows, supplemented by net property proceeds of £10.6m following the group's move to new London offices.  This was offset by net acquisition and disposal spend of £15.6m including £11.6m for the deferred consideration on the acquisition of Insurance Insider.  Underlying cash flows remain strong and there is plenty of headroom for the group to pursue selective acquisitions.

 

As highlighted in previous statements, trading conditions became more challenging during the second half of 2015.  The investment banking, particularly fixed income, and commodities sectors, which together account for more than two thirds of the group's revenues, continue to face significant structural and cyclical headwinds, while the outlook for emerging markets also deteriorated.  In contrast, the group's businesses serving the asset management industry, which are predominantly subscription-driven, have remained robust.  These trading conditions are expected to continue into the first half of 2016.

 

Board Structure

A separate RNS has been issued today covering changes to the board's structure.

 

Strategy

Andrew Rashbass was appointed Executive Chairman on October 1, 2015 and is now leading the board's review of the group's strategy and its portfolio of businesses. The group plans to give investors a full strategy update early in 2016. 

 

However, during 2015 Euromoney's strategy had been to build a robust and tightly-focused global online information business with an emphasis on both developed and emerging markets.  The group continued to focus on increasing the proportion of revenues derived from electronic subscription products; investing in technology to develop existing and new electronic information services; building large, must-attend annual events; keeping the quality of its portfolio under review and eliminating products with a low margin or too high a dependence on print advertising; maintaining tight cost control; retaining and fostering an entrepreneurial culture; and using its healthy balance sheet and strong cash flows to fund selective acquisitions and strategic investments.

 

The group continued to invest in technology and digital products and to roll out its Delphi digital platform for authoring, storing and delivering content. By the end of September, Euromoney had completed the transition of all applicable publishing products onto the Delphi authoring system. BCA Research's new Delphi tools - BCA Analytics, its standalone interactive charting tool, and BCA Edge, its fully integrated online research service - have begun to attract significant customer support. 

 

The group's largest organic investment in 2015 was Institutional Investor's Investor Intelligence Network and Manager Intelligence Network. These capital introduction networks bring together institutional investors and asset managers from around the world in two separate but linked digital communities that allow them to connect, share knowledge and put capital to work.  Revenues will come from capital introduction fees, data services, platform fees and, subject to regulatory approval in the US being obtained, which is now expected in spring 2016, the ability to charge basis points on capital placed.

 

The group made three minority investments in financial technology companies in 2015.  The first was a 15.5% equity stake in Dealogic in December 2014, alongside the Carlyle Group which acquired a controlling interest.  Further details of the Dealogic transaction are provided later in this report.

 

Secondly, in July 2015 the group acquired a 10% equity interest in Estimize, the most comprehensive crowd-sourced financial estimates platform, for a consideration of $3.6m.  Estimize sources company earnings and estimates from over 7,000 hedge fund, brokerage and independent analysts as well as a diverse community of individuals. By being more representative of market expectations, Estimize has proved to be an especially accurate forecaster of company earnings. Estimize is working with BCA Research to develop new datasets, and BCA's extensive list of buy-side clients now has access to data and insights from Estimize.

 

Thirdly, in September 2015 the group acquired a 9.9% interest in Zanbato, an international private capital placements platform for $5.4m. Founded in 2010, Zanbato (www.zanbato.com) is based in California and builds technology to address inefficiencies in private capital markets. Zanbato's Marketplace software allows institutional investors and family offices to review private investment opportunities in pre-IPO company shares and real estate. Zanbato and Institutional Investor have also entered into a joint venture to bring together the technology of Zanbato and the market reach of Institutional Investor's Investor Intelligence Network to serve the institutional segment of the private placements market.

 

In 2015, the group also disposed of some non-strategic assets, predominantly print-based newsletters and magazines.

 

Currency

As highlighted in previous statements, the group generates approximately two thirds of both its revenues, including approximately a third of its UK revenues, and profit before tax in US dollars.  The exposure to US dollar revenues in its UK businesses is hedged using forward contracts to sell US dollars, which delays the impact of movements in exchange rates for at least a year.  However, the group does not hedge the foreign exchange risk on the translation of overseas profits.  While it endeavours to match foreign currency borrowings with investments, as debt levels have fallen the related foreign currency finance cost has been of only limited benefit as a hedge against the translation of overseas profits.  

 

The strength of the US dollar has had a favourable impact on the translation of overseas profits.  The average sterling-US dollar rate for the year to September 30 was $1.55 (2014: $1.66).  This improved headline revenue growth rates for the year by approximately three percentage points and adjusted profit before tax by approximately £7m.  Each one cent movement in the US dollar rate has an impact on profits on translation of approximately £0.6m on an annualised basis.

 

The revenue tables below show headline growth rates.  Underlying1 revenue growth rates exclude the impact of acquisitions, disposals and currency movements.

 

Dealogic Transaction

Euromoney acquired a 15.5% equity interest, and 20% of the voting rights, in Dealogic in December 2014.  This investment was funded through the sale to Dealogic of Euromoney's interests in two businesses, Capital DATA and Capital NET, which Dealogic and Euromoney had operated since the 1980s. The transaction valued Euromoney's participation in these two businesses at $85m, for which Euromoney received equity in Dealogic valued at $59m, cash of $5m, and preference shares of $21m which are redeemable in December 2015. The transaction generated a gain on sale of £48m which has been included in exceptional items.

 

For the year to September 30, 2014, Euromoney's subscription revenues and adjusted operating profits included licence fees of £5.4m from its investment in Capital DATA.  For the same period, Euromoney recognised a profit after tax of £0.3m from its 48.4% associate interest in Capital NET.  In financial year 2015, for the three months prior to the transaction Euromoney recognised subscription revenues of £1.2m from Capital DATA and a profit after tax of £0.1m from Capital NET.  For the nine months subsequent to the transaction, Euromoney recognised an adjusted share of profit in associates of £2.4m from Dealogic.  As well as reducing the group's adjusted operating margin by 1% point, the transaction diluted Euromoney's 2015 adjusted after-tax earnings by approximately 2%.

 

With its strong brand and global use among investment banks, Dealogic offers Euromoney attractive strategic potential.  The Dealogic transaction has significant potential long-term financial upside but, as highlighted at the time of the transaction, in the short-term the loss of earnings from the Capital DATA and Capital NET arrangements have more than offset the group's share of profits from the Dealogic associate interest.

 

Trading Review

Total revenues decreased by 1% to £403.4m.  Underlying1 revenues, after also adjusting for unfavourable event timing differences, decreased by 2%.  A 1% increase in the first half was followed by a 5% decrease in the second, largely due to weakness in the commodities sector.

 

Trading has remained difficult, particularly in investment banking, where tougher regulation, increased compliance costs and significant fines levied by regulators have led to banks reducing headcount and cutting spend on marketing and information. The commodities sector has also suffered from oversupply, falling prices and lower trading volumes. In contrast, the performance of the group's asset management businesses has remained robust throughout the year, and subscription revenues, particularly for data and research products, have proved resilient.  Emerging markets, which account for more than a third of the group's revenues, have proved challenging with increased geopolitical risk and weakening currencies.

 

 

 

 

 

 

 

Underlying1

 

 

 

 

 

change

 

 

 

 

 

excluding

 

2015

2014

Headline

Underlying1

timing

Revenues

£m

£m

change

change

differences

 

 

 

 

 

 

Subscriptions

210.5

196.8

7%

2%

2%

Advertising

48.9

52.2

(6%)

(11%)

(11%)

Sponsorship

59.2

56.6

5%

(4%)

(2%)

Delegates

70.5

71.1

(1%)

(12%)

(5%)

Other

12.1

13.3

(9%)

(11%)

(11%)

Sold/closed businesses

1.6

13.7

 

 

 

FX gains on forward contracts

0.6

2.9

 

 

 

Total revenue

403.4

406.6

(1%)

(4%)

(2%)

 

 

Growth in underlying1 subscriptions partly offset the declines experienced in advertising and event revenues.  Underlying1 subscription revenues have been increasing at a steady rate of 2% for the past two years from a combination of new products and a robust asset management sector. After first half growth of 5%, underlying1 event revenues (after also excluding event timing differences) declined by 9% in the second half due mainly to weakness in the commodities sector. Most of the group's larger events have performed well, particularly in the specialist finance and wholesale telecoms sectors, but this has been more than offset by the weaker performance from smaller events and training which traditionally struggle more in difficult markets.  Underlying1 advertising revenues continued to decline as a result of the structural and cyclical headwinds which have reduced banks' marketing spend, and more recently due to reductions in energy company advertising in response to weak oil prices.

 

The adjusted operating margin fell from 30% to 26% as a result of a number of factors highlighted at the start of the year, including higher property costs, the full year impact of the group's investment in its Delphi content platform, and the impact of the Dealogic transaction.  In addition, the adjusted operating margin fell by nearly 2% points as a result of the high marginal profit on declining advertising and delegate revenues.  Permanent headcount has fallen by 23 to 2,168 people since September 30, 2014 but like many businesses operating in the digital space the group continues to experience increases in people costs in excess of inflation, particularly in technology, data and research.

 

Business Review

The research and data division, with its revenues derived predominantly from subscription services, held up well during the year.  Financial publishing continued to suffer from the structural and cyclical challenges facing global investment banks, while business publishing, which is less advertising dependent, was more robust.  The conferences, seminars and training division had a difficult year after the sharp downturn in energy markets in the second half.  This particularly hit the training business with the impact felt from reductions in training spend both from the energy sector itself as well as from banks in energy-dependent economies, many of them in emerging markets.

 

 

 

 

 

 

 

Underlying1

Adjusted

Adjusted

 

 

 

 

 

change

operating

operating

 

 

 

 

 

excluding

margin

margin

 

2015

2014

Headline

Underlying1

timing

2015

2014

Revenues

£m

£m

change

change

differences

£m

£m

 

 

 

 

 

 

 

 

Research and data

125.8

120.8

4%

0%

0%

35%

37%

Financial publishing

74.3

75.8

(2%)

(6%)

(6%)

25%

28%

Business publishing

70.0

67.8

3%

0%

0%

35%

34%

Conferences, seminars and training

131.1

125.6

4%

(7%)

(2%)

25%

27%

Sold/closed businesses

1.6

13.7

 

 

 

 

 

FX gains on forward contracts

0.6

2.9

 

 

 

 

 

Total revenue

403.4

406.6

(1%)

(4%)

(2%)

26%

30%

 

 

Research and data: the asset management sector remained robust throughout 2015 and renewal rates at BCA and NDR remained high.  However, the group's emerging market information and data products, CEIC and EMIS, which generate a significant proportion of their revenues from local emerging markets as well as the banking sector, fared less well.  As a result, underlying1 revenues for the division were flat.  The adjusted operating margin fell 2% to 35% due to amortisation at BCA for its new Delphi content platform, investment at CEIC in content automation, and new product and sales investment at EMIS.

 

Financial publishing: underlying1 revenues decreased by 6% reflecting continued weakness in the group's financial titles and their dependence on bank advertising.  In contrast, subscription revenues for the division increased, including strong growth from Insider Publishing, the insurance information business acquired in 2013, and Euromoney TRADEdata, the group's derivative data business. The adjusted operating margin fell 3% to 25% reflecting amortisation for GlobalCapital's Delphi content platform, and increased technology spend, particularly for HedgeFund Intelligence.

 

Business publishing: underlying1 revenues were flat despite a strong performance from the wholesale telecoms business, TelCap, which was offset by the challenging energy markets faced by Gulf Publishing.  Despite tougher metals markets, Metal Bulletin's revenues held up well.  The adjusted operating margin improved from 34% to 35% attributable to the strong performance of TelCap and an improving margin for Metal Bulletin following a period of investment in its steel information service and pricing database.

 

Conferences, seminars and training: the 7% decrease in underlying1 revenues is primarily attributable to the difficult market conditions faced by the group's commodities-related events, including metals and coal, particularly during the second half.  Even after adjusting for some unfavourable events timing, this commodities weakness more than offset the strength of Institutional Investor's subscription-based memberships for the asset management industry which continued to grow at double digit rates.  The adjusted operating margin dropped 2% to 25% reflecting the high margin flow through from lower delegate revenues, and investment in e-learning products for Euromoney's training division.  The increase in headline event revenues reflects the acquisition of Mining Indaba in July 2014, which achieved revenues of more than £9m the first time it was run under Euromoney ownership in February 2015.

 

Financial Review

The 7% fall in adjusted profit before tax to £107.8m compares to a 13% drop in adjusted operating profit. This partly reflects a £2.5m credit (2014: £2.4m expense) following the first half decision to reverse last year's CAP expense on the grounds that management believe it is unlikely the minimum performance target under CAP 2014, the group's long-term incentive plan, will be achieved in 2017.  In addition, the Dealogic transaction gave rise to an increase of £2.2m in the adjusted share of results in associates.

 

The 1% decrease in adjusted diluted earnings a share reflects the benefit of a lower underlying tax rate and a reduction in the number of shares in issue following last year's share buy-back. The adjusted effective tax rate for the year was 18% against 22% for 2014 as the group continues to benefit from reductions in the UK corporate tax rate and the tax effects of acquisitions. The tax rate in each year depends mainly on the geographic mix of profits and applicable tax rates.

 

The statutory profit before tax of £123.3m is higher than the adjusted profit before tax due to a net exceptional credit of £33.4m (see note 3), offset by acquired intangible amortisation of £17.0m.  The net exceptional credit mostly arises from profits on assets sold during the year, less goodwill impairment charges including a second half charge of £10.7m for Mining Indaba to reflect the sharp downturn in the commodities sector which is not expected to reverse in the near term.  A detailed reconciliation of the group's adjusted and statutory results is set out in the appendix to this statement.

 

Net Cash, Cash Flow and Dividend

Net cash at September 30 was £17.7m compared with net debt of £10.6m at March 31 and £37.6m at last year end.  This balance sheet position reflects the group's strong operating cash flows, as well as net property proceeds of £10.6m following the group's London office move.  This was offset by net acquisition and disposal spend of £15.6m including £11.6m for the deferred consideration on the acquisition of Insurance Insider. 

 

The operating cash conversion rate was 105% (2014: 92%). The rate was more than 100% due to the favourable effect of the rent-free period on the new London offices. The rate was less than 100% in 2014 after the vesting of options under CAP 2010 triggered cash outflows of approximately £9m for which the expense was accrued in previous years. After adjusting for these timing differences, the underlying operating cash conversion rate in each year was 101% (2014: 100%).

 

The group has a US$160m (£106m) dedicated multi-currency borrowing facility from Daily Mail and General Trust plc, the group's parent, which expires in April 2016.  The group has no significant outstanding acquisition commitments for 2016 and expects to receive a further $21m in December 2015 from the redemption of preference shares as part of the Dealogic transaction.  The need for, and size of, a new borrowing facility will therefore depend on the group's expected borrowing requirements at the time the facility expires, including its acquisition pipeline.

 

The company's policy is to distribute a third of its adjusted after-tax earnings by way of dividends.  In line with its policy, the board recommends a final dividend of 16.40p a share (2014: 16.00p), to be paid to shareholders on February 11, 2016, giving a total dividend for the year of 23.40p a share (2014: 23.00p).

 

Outlook

Andrew Rashbass was appointed Executive Chairman on October 1, 2015 and is now leading the board's review of the group's strategy and its portfolio of businesses.  The group plans to give investors a full strategy update early in 2016.

 

The first quarter has started as expected with a continuation of the challenging market conditions experienced in the second half of financial year 2015. The group's activities in the investment banking and commodities sectors, which together account for more than two thirds of the group's revenues, continue to face significant structural and cyclical headwinds, while the outlook for emerging markets remains weak.  In contrast, the group's businesses serving the asset management industry, which are predominantly subscription-driven, have remained relatively robust.  These conditions are expected to continue for the foreseeable future and the revenue trends experienced in the second half of 2015 are continuing into the first half of 2016.

  

 

1 Underlying revenues exclude the impact of acquisitions, disposals and currency movements.

 

END

 

For further information, please contact:

 

Euromoney Institutional Investor PLC

Andrew Rashbass, CEO:                                       +44 20 7779 8300; Andrew.Rashbass@euromoneyplc.com

Colin Jones, Finance Director:                                +44 20 7779 8666; cjones@euromoneyplc.com

 

FTI Consulting

Charles Palmer:                                                       +44 20 3727 1400; charles.palmer@fticonsulting.com

 

 

Appendix to Preliminary Statement (unaudited)

 

Reconciliation of Consolidated Income Statement to adjusted results for the year ended September 30 2015

The reconciliation below sets out the adjusted results of the group and the related adjustments to the statutory Income Statement that the directors consider necessary in order to provide an indication of the underlying trading performance.

 

 

 

 

 

 

Adjust-

2015

 

 

Adjust-

2014

 

 

 

 

Adjusted

ments

Total

 

Adjusted

ments

Total

 

 

Notes

 

£000's

£000's

£000's

 

£000's

£000's

£000's

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

2

 

403,412

-

403,412

 

406,559

-

406,559

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating profit

 

2

 

104,234

-

104,234

 

119,809

-

119,809

Acquired intangible amortisation

 

8

 

-

(17,027)

(17,027)

 

-

(16,735)

(16,735)

Long-term incentive credit/(expense)

 

 

 

2,490

-

2,490

 

(2,367)

-

(2,367)

Exceptional items

 

3

 

-

33,421

33,421

 

-

2,630

2,630

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

106,724

16,394

123,118

 

117,442

(14,105)

103,337

Share of results in associates and joint ventures

 

9

 

2,435

(2,816)

(381)

 

264

-

264

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

4

 

379

4,748

5,127

 

248

1,298

1,546

Finance expense

 

4

 

(1,728)

(2,851)

(4,579)

 

(1,799)

(1,873)

(3,672)

Net finance income/(costs)

 

4

 

(1,349)

1,897

548

 

(1,551)

(575)

(2,126)

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

 

 

107,810

15,475

123,285

 

116,155

(14,680)

101,475

Tax expense on profit

 

5

 

(18,890)

1,291

(17,599)

 

(25,722)

112

(25,610)

Profit for the year

 

 

 

88,920

16,766

105,686

 

90,433

(14,568)

75,865

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

 

 

88,678

16,766

105,444

 

89,832

(14,568)

75,264

Equity non-controlling interests

 

 

 

242

-

242

 

601

-

601

 

 

 

 

88,920

16,766

105,686

 

90,433

(14,568)

75,865

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

7

 

70.12p

13.26p

83.38p

 

70.60p

(11.45)p

59.15p

 

 

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, databases and customer relationships), exceptional items, share of acquired intangibles amortisation and tax in associates and joint ventures, net movements in acquisition deferred consideration and acquisition commitments. In respect of earnings, adjusted amounts reflect a tax rate that includes the current tax effect of the goodwill and intangible assets.

 

Further analysis of the adjusting items is presented in notes 3, 4, 5, 7, 8 and 9 to the Preliminary Statement.

 

 

Consolidated Income Statement

for the year ended September 30 2015 

 

 

 

Unaudited

Audited

 

 

2015

2014

 

Notes

£000's

£000's

 

 

 

 

Total revenue

2

403,412

406,559

 

 

 

 

Operating profit before acquired intangible amortisation, long-term

incentive credit/(expense) and exceptional items

2

104,234

119,809

Acquired intangible amortisation

8

(17,027)

(16,735)

Long-term incentive credit/(expense)

 

2,490

(2,367)

Exceptional items

3

33,421

2,630

 

 

 

 

Operating profit

 

123,118

103,337

Share of results in associates and joint ventures

9

(381)

264

 

 

 

 

Finance income

4

5,127

1,546

Finance expense

4

(4,579)

(3,672)

Net finance income/(costs)

4

548

(2,126)

 

 

 

 

Profit before tax

 

123,285

101,475

Tax expense on profit

5

(17,599)

(25,610)

Profit for the year

 

105,686

75,865

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

Equity holders of the parent

 

105,444

75,264

Equity non-controlling interests

 

242

601

 

 

                105,686

                75,865

 

 

 

 

Basic earnings per share

7

83.42p

59.49p

Diluted earnings per share

7

83.38p

59.15p

Adjusted basic earnings per share

7

70.16p

71.00p

Adjusted diluted earnings per share

7

70.12p

70.60p

Dividend per share (including proposed dividends)

6

23.40p

23.00p

 

 

A detailed reconciliation of the group's statutory results to the adjusted results is set out in appendix to the preliminary statement on page 7.

 

 

Consolidated Statement of Comprehensive Income

for the year ended September 30 2015

 

Unaudited

Audited

2015

2014

£000's

£000's

 

 

105,686

75,865

 

 

 

 

(5,000)

(1,642)

 

 

1,657

990

(375)

164

24,305

(207)

-

(482)

(8,788)

(3,448)

581

36

 

 

 

 

2,421

(2,297)

(484)

459

 

 

14,317

(6,427)

 

 

120,003

69,438

 

 

 

 

119,429

69,418

574

20

120,003

69,438

 

  

 

Consolidated Statement of Financial Position

as at September 30 2015

 

 

 

 

 

Unaudited

Audited

 

 

2015

2014

 

Notes

£000's

£000's

Non-current assets

 

 

 

Intangible assets

 

 

 

Goodwill

8

381,993

383,934

Other intangible assets

8

149,386

161,509

Property, plant and equipment

 

9,171

16,924

Investment in associates

9

32,437

72

Investment in joint venture

9

30

-

Available-for-sale investments

9

5,835

-

Deferred consideration

 

258

1,532

Deferred tax assets

 

20

-

Derivative financial instruments

 

9

179

 

 

579,139

564,150

Current assets

 

 

 

Trade and other receivables

 

83,386

67,424

Deferred consideration

 

331

354

Current income tax assets

 

5,912

6,470

Group relief receivable

 

515

613

Cash deposit with DMGT group company

 

9,799

-

Cash and cash equivalents (excluding bank overdrafts)

 

8,889

8,571

Derivative financial instruments

 

1,313

2,611

 

 

110,145

86,043

Current liabilities

 

 

 

Acquisition commitments

12

-

(2,088)

Deferred consideration

12

-

(10,389)

Trade and other payables

 

(24,011)

(25,532)

Current income tax liabilities

 

(14,043)

(9,125)

Accruals

 

(55,743)

(47,973)

Deferred income

 

(112,129)

(109,842)

Loan notes

 

(267)

(490)

Bank overdrafts

 

(741)

-

Derivative financial instruments

 

(3,346)

(1,322)

Provisions

 

(835)

(2,164)

 

 

(211,115)

(208,925)

Net current liabilities

 

(100,970)

(122,882)

Total assets less current liabilities

 

478,169

441,268

 

 

 

 

Non-current liabilities

 

 

 

Acquisition commitments

12

(9,171)

(11,277)

Other non-current liabilities

 

(641)

(804)

Preference shares

 

(10)

(10)

Committed loan facility with DMGT group company

 

-

(45,677)

Deferred tax liabilities

 

(18,424)

(19,101)

Net pension deficit

 

(1,973)

(4,787)

Derivative financial instruments

 

(661)

(385)

Provisions

 

(2,345)

(2,704)

 

 

(33,225)

(84,745)

Net assets

 

444,944

356,523

Shareholders' equity

 

 

 

Called up share capital

11

320

320

Share premium account

 

102,557

102,011

Other reserve

 

64,981

64,981

Capital redemption reserve

 

8

8

Own shares

 

(21,582)

(21,582)

Reserve for share-based payments

 

37,169

39,158

Fair value reserve

 

(27,506)

(22,259)

Translation reserve

 

53,420

36,706

Retained earnings

 

228,823

149,564

Equity shareholders' surplus

 

438,190

348,907

Equity non-controlling interests

 

6,754

7,616

Total equity

 

444,944

356,523

 

 

Approved by the board on November 19, 2015. 

 

Consolidated Statement of Changes in Equity

for the year ended September 30 2015

 

 

 

 

 

 

 

Reserve

 

 

 

 

 

 

 

 

 

 

 

 

for

 

 

 

 

 

 

 

 

 

 

Capital

 

share-

 

 

 

 

Non-

 

 

 

Share

 

redemp-

 

based

Fair

Trans-

 

 

control-

 

 

Share

premium

Other

tion

Own

pay-

value

lation

Retained

 

ling

Total

 

capital

account

reserve

reserve

shares

ments

reserve

reserve

earnings

Total

interests

equity

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

At September 30 2013 (audited)

316

101,709

64,981

8

(74)

37,122

(20,216)

38,707

102,959

325,512

8,247

333,759

Profit for the year

-

-

-

-

-

-

-

-

75,264

75,264

601

75,865

Other comprehensive expense for the year

-

-

-

-

-

-

(2,043)

(2,001)

(1,802)

(5,846)

(581)

(6,427)

Total comprehensive income for the year

-

-

-

-

-

-

(2,043)

(2,001)

73,462

69,418

20

69,438

Exercise of acquisition commitments

-

-

-

-

-

-

-

-

176

176

(176)

-

Adjustment arising from change in non-controlling interest

-

-

-

-

-

-

-

-

44

44

114

158

Charge for share-based payments

-

-

-

-

-

2,036

-

-

-

2,036

-

2,036

Cash dividend paid

-

-

-

-

-

-

-

-

(28,771)

(28,771)

(589)

(29,360)

Own shares acquired

-

-

-

-

(21,508)

-

-

-

-

(21,508)

-

(21,508)

Exercise of share options

4

302

-

-

-

-

-

-

-

306

-

306

Tax relating to items taken directly to equity

-

-

-

-

-

-

-

-

1,694

1,694

-

1,694

At September 30 2014 (audited)

320

102,011

64,981

8

(21,582)

39,158

(22,259)

36,706

149,564

348,907

7,616

356,523

Profit for the year

-

-

-

-

-

-

-

-

105,444

105,444

242

105,686

Other comprehensive income/(expense) for the year

-

-

-

-

-

-

(5,247)

16,714

2,518

13,985

332

14,317

Total comprehensive income for the year

-

-

-

-

-

-

(5,247)

16,714

107,962

119,429

574

120,003

Derecognition of non-controlling interest

-

-

-

-

-

-

-

-

1,079

1,079

(1,079)

-

Adjustment arising from change in non-controlling interest

-

-

-

-

-

-

-

-

(226)

(226)

82

(144)

Credit for share-based payments

-

-

-

-

-

(1,989)

-

-

-

(1,989)

-

(1,989)

Cash dividend paid

-

-

-

-

-

-

-

-

(29,064)

(29,064)

(439)

(29,503)

Exercise of share options

-

546

-

-

-

-

-

-

-

546

-

546

Tax relating to items taken directly to equity

-

-

-

-

-

-

-

-

(492)

(492)

-

(492)

At September 30 2015 (unaudited)

320

102,557

64,981

8

(21,582)

37,169

(27,506)

53,420

228,823

438,190

6,754

444,944

 

The investment in own shares is held by the Euromoney Employees' Share Ownership Trust (ESOT) and Euromoney Employee Share Trust (EEST). The EEST was incorporated in February 2014 to facilitate the purchase of shares for the Capital Appreciation Plan 2014. The trusts waived the rights to receive dividends. Interest and administrative costs are charged to the profit and loss account of the trusts as incurred.

 

 

2015

2014

 

Number

Number

Euromoney Employees' Share Ownership Trust

58,976

58,976

Euromoney Employee Share Trust

1,747,631

1,747,631

Total

1,806,607

1,806,607

Nominal cost per share (p)

0.25

0.25

Historical cost per share (£)

11.95

11.95

Market value (£000)

17,163

18,337

 

The other reserve represents the share premium arising on the shares issued for the purchase of Metal Bulletin plc in October 2006.

 

 

Consolidated Statement of Cash Flows

for the year ended September 30 2015

 

 

Unaudited

Audited

 

2015

2014

 

£000's

£000's

Cash flow from operating activities

 

 

Operating profit

123,118

103,337

Acquired intangible amortisation

17,027

16,735

Licences and software amortisation

2,680

1,962

Depreciation of property, plant and equipment

2,643

2,908

Goodwill impairment

18,458

-

Profit on disposal of property, plant and equipment

(4,168)

(7)

Long-term incentive (credit)/expense

(2,490)

2,367

Profit on disposal of associate

(2,921)

-

Profit on disposal of available-for-sale investment

(45,502)

-

Profit on disposal of business (2014: includes recycled cumulative translation differences)

(2,446)

(6,834)

Impairment of carrying value of associate

-

444

Decrease in provisions

(1,757)

(1,326)

Operating cash flows before movements in working capital

104,642

119,586

Decrease/(increase) in receivables

1,169

(4,662)

Increase/(decrease) in payables

3,641

(4,765)

Cash generated from operations

109,452

110,159

Income taxes paid

(13,670)

(19,553)

Group relief tax paid

(1,116)

(2,927)

Net cash generated from operating activities

94,666

87,679

 

 

 

Investing activities

 

 

Dividends received from associate

123

323

Interest received

401

242

Purchase of intangible assets

(1,760)

(3,236)

Purchase of property, plant and equipment

(6,487)

(3,105)

Proceeds from disposal of property, plant and equipment

15,837

10

Purchase of available-for-sale investments

(5,835)

-

Payment following working capital adjustment from purchase of subsidiary

-

(9)

Purchase of subsidiary undertaking, net of cash acquired

-

(58,001)

Proceeds from disposal of non-controlling interest

-

158

Proceeds from disposal of business

40

5,345

Purchase of associates and joint venture

(934)

-

Proceeds from disposal of associate and joint venture

2,912

-

Net cash from/(used) in investing activities

4,297

(58,273)

 

 

 

Financing activities

 

 

Dividends paid

(29,064)

(28,771)

Dividends paid to non-controlling interests

(439)

(589)

Interest paid

(904)

(1,372)

Issue of new share capital

546

306

Payments to acquire own shares

-

(21,508)

Payment of acquisition deferred consideration

(11,558)

(2,849)

Purchase of additional interest in subsidiary undertakings

(252)

(369)

Redemption of loan notes

(223)

(538)

Loan (repaid to)/received from DMGT group company

(56,735)

23,916

Net cash used in financing activities

(98,629)

(31,774)

Net increase/(decrease) in cash and cash equivalents

334

(2,368)

Cash and cash equivalents at beginning of year

8,571

11,268

Effect of foreign exchange rate movements

(757)

(329)

Cash and cash equivalents at end of year

8,148

8,571

 

 

Cash and cash equivalents include bank overdrafts.

 

 

Note to the Consolidated Statement of Cash Flows

 

 

 

Unaudited

Audited

Net Cash/(Debt)

2015

2014

 

£000's

£000's

 

 

 

At October 1

(37,596)

(9,937)

Net increase/(decrease) in cash and cash equivalents

334

(2,368)

Net decrease/(increase) in amounts owed to DMGT group company

56,735

(23,916)

Redemption of loan notes

223

538

Effect of foreign exchange rate movements

(2,016)

(1,913)

At September 30

17,680

(37,596)

 

 

 

Net cash/(debt) comprises:

 

 

Cash at bank and in hand

8,889

8,571

Cash deposit with DMGT company

9,799

-

Bank overdrafts

(741)

-

Total cash and cash equivalents

17,947

8,571

Committed loan facility

-

(45,677)

Loan notes

(267)

(490)

Net cash/(debt)

17,680

(37,596)

 

 

The group's debt is provided through a dedicated multi-currency borrowing facility from Daily Mail and General Trust plc (DMGT). The total maximum borrowing capacity is US$160m (£106m) facility which expires at the end of April 2016. Interest is payable on this facility at a variable rate of between 1.35% and 2.35% above LIBOR dependent on the ratio of adjusted net debt to EBITDA. The facility's covenant requires the group's net debt to be no more than three times adjusted EBITDA on a rolling 12 month basis. Failure to do so would result in the group being in breach of the facility, potentially resulting in the facility being withdrawn or impediment of management decision making by the lender. Management regularly monitor the covenant and prepare detailed debt forecasts to ensure that sufficient headroom is available and that the covenants are not close or potentially close to breach. At September 30 2015, the group's net cash to adjusted EBITDA was (0.15) times and the committed undrawn facility available to the group was £106m given the loan was paid in full.

 

In the absence of any significant acquisitions, the group has no pressing requirement to arrange new finance before the facility expires in April 2016 and the group intends to replace it with a new borrowing facility, the amount and terms of which will depend on its expected borrowing requirements at the time. There is a risk that the undrawn portion of the facility, or that the additional funding, may be unavailable or withdrawn if DMGT experiences funding difficulties themselves. However, if DMGT were unable to fulfil its funding commitment to the group, the directors are confident that the group would be in a position to secure adequate external facilities, although at a higher cost of funding.

 

The group's strategy is to use excess operating cash to deposit with DMGT or pay down its debt. As at September 2015, the group repaid the multi-currency borrowing facility from DMGT in full. The group generally has an annual cash conversion rate (the percentage by which cash generated from operations covers operating profit before acquired intangible amortisation, long-term incentive expense and exceptional items) of 100% or more due to much of its subscription, sponsorship and delegate revenue being paid in advance. The group's operating cash conversion rate was 105%. The underlying operating cash conversion rate is 101% compared to 100% in 2014.

Notes to the Preliminary Statement

 

1 Basis of preparation

While the financial information contained in this unaudited preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRS.

 

The information for the year ended 30 September 2015 does not constitute statutory accounts for the purposes of section 435 of the Companies Act 2006. A copy of the accounts for the year ended 30 September 2014 has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. The audit of the statutory accounts for the year ended 30 September 2015 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting.

 

The loan (repaid to)/received from DMGT group company in the 2014 Consolidated Statement of Cash Flows has been re-presented to show the allowable netting of the draw downs and repayment of amounts from a committed facility with DMGT group company.

 

The 2014 Consolidated Statement of Financial Position has been re-presented to reflect a reclassification to net down certain balances within trade receivables of £8.5m, accrued income of £4.0m and deferred income of £12.4m. This has a corresponding impact on the working capital movements in the Consolidated Statement of Cash Flows.  This reclassification has no impact on net assets or net cash and cash equivalents.

 

Accounting policies

The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments.

 

The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the group's 2014 annual audited financial statements, except as described below.

 

·      IFRS 10 'Consolidated Financial Statements'. This standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within consolidated financial statements. The amendments do not have an effect on these consolidated financial statements.

·      IFRS 11 'Joint Arrangements' provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. The amendments do not have an effect on these consolidated financial statements.

·      IFRS 12 'Disclosure of Interests in Other Entities' includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The amendments do not have a material effect on these consolidated financial statements.

·      IAS 27 (revised) 'Separate Financial Statements (2011)' now contains requirements relating only to separate financial statements as the new IFRS 10 'Consolidated Financial Statements' addresses the requirements for consolidated financial statements. The amendments do not have an effect on these consolidated financial statements.

·      IAS 28 (revised) 'Investments in Associates and Joint Ventures (2011)' includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11. The amendments do not have an effect on these consolidated financial statements.

·      Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities' provide clarification on the application of offsetting rules relating to financial assets and financial liabilities. The amendments do not have a significant effect on these consolidated financial statements.

·      Amendments to IFRS 10, 11, and 12 on transition guidance clarify the 'date of initial application' in IFRS 10, and provide relief in IFRS 11 and 12 from the presentation or adjustment of comparative information for periods prior to the immediately preceding period. The amendments do not have a significant effect on these consolidated financial statements.

·      Amendments to IFRS 10, IFRS 12 and IAS 27 on 'Consolidation for Investment Entities' define an investment entity and introduce an exception to consolidating particular subsidiaries for investment entities. The amendments do not have an effect on these consolidated financial statements.

·      Amendments to IAS 36 on Recoverable Amount Disclosures for Non-financial Assets remove certain disclosures of the recoverable amounts of CGUs. The application of these amendments has no material impact on the disclosures in these consolidated financial statements.

·      Amendments to IAS 39 on Novation of Derivatives and Continuation of Hedge Accounting provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. The application of these amendments has not had any material impact on these consolidated financial statements.

 

Going concern 

Having assessed the principal risks and the other matters discussed in connection with the viability statement, the directors consider it appropriate to adopt the going concern basis of accounting in preparing this annual report.

 

 

2 Segmental analysis

 

 

 

United Kingdom

North America

Rest of World

Eliminations

Total

 

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Revenue

 

 

 

 

 

 

 

 

 

 

by division and source:

 

 

 

 

 

 

 

 

 

 

Research and data

16,784

16,202

85,081

80,747

23,940

23,897

-

(3)

125,805

120,843

Financial publishing

50,565

49,549

28,382

28,907

2

1,949

(4,646)

(4,600)

74,303

75,805

Business publishing

51,151

48,900

19,621

19,327

1,687

1,786

(2,505)

(2,212)

69,954

67,801

Conferences, seminars and training

59,237

54,576

57,370

51,824

14,675

19,680

(219)

(528)

131,063

125,552

Closed businesses

1,212

8,226

596

5,433

-

182

(144)

(160)

1,664

13,681

Foreign exchange losses on

forward contracts

623

2,877

-

-

-

-

-

-

623

2,877

Total revenue

179,572

180,330

191,050

186,238

40,304

47,494

(7,514)

(7,503)

403,412

406,559

Investment income (note 4)

-

-

117

64

262

171

-

-

379

235

Total revenue and investment income

179,572

180,330

191,167

186,302

40,566

47,665

(7,514)

(7,503)

403,791

406,794

 

 

 

 

 

 

United Kingdom

North America

Rest of World

Total

 

 

 

2015

2014

2015

2014

2015

2014

2015

2014

 

 

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Revenue

 

 

 

 

 

 

 

 

 

 

by type and destination:

 

 

 

 

 

 

 

 

 

 

Subscriptions

 

 

35,195

32,016

103,055

92,343

72,226

72,465

210,476

196,824

Advertising

 

 

5,136

6,842

23,343

22,659

20,426

22,660

48,905

52,161

Sponsorship

 

 

10,156

6,330

23,737

24,445

25,262

25,857

59,155

56,632

Delegates

 

 

7,380

7,383

15,287

15,813

47,820

47,945

70,487

71,141

Other

 

 

2,523

2,762

6,937

7,383

2,640

3,097

12,100

13,242

Sold/closed businesses

 

 

1,215

6,150

450

5,274

1

2,258

1,666

13,682

Foreign exchange gains on forward contracts

 

 

623

2,877

-

-

-

-

623

2,877

Total revenue

 

 

62,228

64,360

172,809

167,917

168,375

174,282

403,412

406,559

 

 

 

 

 

United Kingdom

North America

Rest of World

Total

 

 

 

2015

2014

2015

2014

2015

2014

2015

2014

 

 

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Operating profit1

 

 

 

 

 

 

 

 

 

 

by division and source:

 

 

 

 

 

 

 

 

 

 

Research and data

 

 

3,922

5,111

34,362

34,311

5,315

5,733

43,599

45,155

Financial publishing

 

 

13,395

15,456

4,977

5,774

95

332

18,467

21,562

Business publishing

 

 

17,008

15,483

7,451

7,474

(215)

(149)

24,244

22,808

Conferences, seminars and training

 

 

14,621

12,362

17,113

16,446

1,568

5,679

33,302

34,487

Sold/closed businesses

 

 

1,019

5,984

322

752

(25)

(24)

1,316

6,712

Unallocated corporate costs

 

 

(15,566)

(9,451)

(260)

(798)

(868)

(666)

(16,694)

(10,915)

Operating profit before acquired intangible amortisation, long-term incentive credit/(expense) and exceptional items

34,399

44,945

63,965

63,959

5,870

10,905

104,234

119,809

Acquired intangible amortisation2 (note 8)

 

 

(6,822)

(6,869)

(9,645)

(9,485)

(560)

(381)

(17,027)

(16,735)

Long-term incentive (credit)/expense

 

 

1,269

(1,146)

757

(1,090)

464

(131)

2,490

(2,367)

Exceptional items (note 3)

 

 

36,781

(2,887)

1,752

6,062

(5,112)

(545)

33,421

2,630

Operating profit before associates

 

 

65,627

34,043

56,829

59,446

662

9,848

123,118

103,337

Share of results in associates and joint ventures

 

 

 

 

 

 

 

 

(381)

264

Finance income (note 4)

 

 

 

 

 

 

 

 

5,127

1,546

Finance expense (note 4)

 

 

 

 

 

 

 

 

(4,579)

(3,672)

Profit before tax

 

 

 

 

 

 

 

 

123,285

101,475

Tax expense (note 5)

 

 

 

 

 

 

 

 

(17,599)

(25,610)

Profit for the year

 

 

 

 

 

 

 

 

105,686

75,865

                         

 

1.    Operating profit before acquired intangible amortisation, long-term incentive credit/(expense) and exceptional items (refer to the appendix to the Preliminary Statement).

2.    Acquired intangible amortisation represents amortisation of acquisition-related non-goodwill assets such as trademarks and brands, customer relationships and databases (note 8).

 

 

Acquired

Long-term

 

Depreciation

 

intangible

incentive

Exceptional

and

 

amortisation

credit/(expense)

items

amortisation

 

2015

2014

2015

2014

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Other segmental information

 

 

 

 

 

 

 

 

by division:

 

 

 

 

 

 

 

 

Research and data

(10,344)

(9,469)

622

(628)

(1,259)

(547)

(1,137)

(1,224)

Financial publishing

(1,988)

(3,434)

498

(464)

(5,133)

(1,202)

(85)

(30)

Business publishing

(2,141)

(2,322)

249

(232)

(40)

(28)

(25)

(28)

Conferences, seminars and training

(2,454)

(1,403)

598

(557)

(15,045)

(190)

(37)

(48)

Sold/closed businesses

-

-

-

-

2,441

6,834

-

-

Unallocated corporate income/(costs)

(100)

(107)

523

(486)

52,457

(2,237)

(4,039)

(3,540)

 

(17,027)

(16,735)

2,490

(2,367)

33,421

2,630

(5,323)

(4,870)

 

 

 

 

United Kingdom

North America

Rest of World

Total

 

2015

2014

2015

2014

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Non-current assets (excluding derivative financial instruments, deferred consideration and deferred tax assets)

 

 

 

 

 

 

 

 

by location:

 

 

 

 

 

 

 

 

Goodwill

122,037

137,669

253,560

236,369

6,396

9,896

381,993

383,934

Other intangible assets

64,773

73,681

83,913

86,978

700

850

149,386

161,509

Property, plant and equipment

7,274

14,661

1,340

1,757

557

506

9,171

16,924

Investments

38,302

72

-

-

-

-

38,302

72

Non-current assets

232,386

226,083

338,813

325,104

7,653

11,252

578,852

562,439

Capital expenditure by location

(5,622)

(2,465)

(493)

(397)

(372)

(243)

(6,487)

(3,105)

 

The group has taken advantage of paragraph 23 of IFRS 8 'Operating Segments' and does not provide segmental analysis of net assets as this information is not used by the directors in operational decision making or monitoring of business performance.

 

3 Exceptional items

Exceptional items are items of income or expense considered by the directors, either individually or if of a similar type in aggregate, as being either material or significant and which require additional disclosure in order to provide an indication of the underlying trading performance of the group.

 

 

2015

2014

 

£000's

£000's

 

 

 

Profit on disposal of associate

2,921

-

Profit on disposal of available-for-sale investment

45,502

-

Profit on disposal of business (2014: includes recycled cumulative translation differences)

2,446

6,834

Profit on disposal of property, plant and equipment

4,181

-

 

55,050

6,834

Goodwill impairment

(18,458)

-

Restructuring and other exceptional costs

(3,171)

(3,760)

Impairment of carrying value of associate

-

(444)

 

33,421

2,630

 

For the year ended September 30 2015 the group recognised an exceptional credit of £33.4m.  During the year the group disposed of its interests in a number of assets generating a gain on sale of £55.1m. Most of this relates to the sale of group's interests in Capital DATA and Capital NET as part of the Dealogic transaction (note 9). The group also sold a number of predominantly print-based newsletters and magazines (note 10) as well as certain freehold and leasehold properties as part of the relocation of its London offices.

 

Following the sharp downturn in the commodities sector in 2015 and no sign that market conditions will improve over the near term, the group has impaired the value of its investment in the Investing in African Mining Indaba ("Mining Indaba"), originally purchased in July 2014, by £10.7m. The group expects Mining Indaba to recover strongly once commodity markets pick up and will continue with its strategy set out at the time of the acquisition to develop the event's investor content and networking opportunities and to use its expertise in emerging markets, as well as its international network, to accelerate growth outside Africa.

 

The acquisition goodwill for Centre for Investor Education ("CIE") has been subject to an impairment charge of £2.9m. See below for further details.

 

The remaining £4.8m charge for goodwill impairment relates to HedgeFund Intelligence ("HFI"), the group's information and events business serving the hedge fund industry.  The performance of the business since the last year end has been disappointing but for 2016 HFI products have moved onto the Delphi content platform which will significantly enhance their quality. 

 

Restructuring and other exceptional costs cover the major reorganisation of certain businesses initiated in the first half, costs relating to the relocation of the group's London headquarters, and professional fees resulting from the CIE dispute.

 

The group's tax charge includes a related tax charge on these exceptional items of £1.0m (note 5).

 

Centre for Investor Education Limited ("CIE")

In April 2013 the group acquired a 75% equity interest in CIE for a final consideration of £10.2m, with a commitment to acquire the remaining 25% by early 2016. At September 30 2014 based on the reported financial performance of CIE up to that date, the liability for the acquisition commitment was valued at £3.5m and the acquisition deferred consideration was valued at £1.7m. However, as part of the local statutory audit of CIE for the year to September 30 2014, a number of governance and financial irregularities were identified which remain subject to legal resolution. As a result of these irregularities, the former owner-managers of CIE were replaced and a number of adjustments made to the group's investment in CIE. The acquisition goodwill has been subject to an impairment charge of £2.9m. The group, in preparation of these financial statements at September 30 2015 has examined all evidence, including its own management investigation and Deloitte & Touche LLP Australia's findings, in reaching the conclusion that no further amounts are payable under the share purchase agreement for CIE. In October 2015, the group filed a public statement of claim against the previous owners for breaches of warranties and other damages.

 

As a result, the group has revised its prior estimate of acquisition commitments in respect of CIE which has given rise to a credit of £3.5m and acquisition deferred consideration of £1.7m included in net finance income as a fair value adjustment (note 4). The group has also de-recognised the non-controlling interest in equity.

 

For the year ended September 30 2014 the group recognised a net exceptional credit of £2.6m. This comprised an exceptional credit for the profit on disposal of MIS Training offset by exceptional acquisition costs, restructuring and property costs, and impairment of carrying value of associate. The restructuring and other exceptional costs of £3.8m include acquisition costs of £0.9m for the acquisitions of Infrastructure Journal and Mining Indaba, costs of £1.5m for the relocation of the group's London headquarters and restructuring costs of £1.3m from the reorganisation of certain businesses including closure of print products. The group's tax charge included a related tax charge of £0.3m.

 

4 Finance income and expense

 

 

2015

2014

 

£000's

£000's

Finance income

 

 

Interest income:

 

 

Interest receivable from short-term investments

379

235

Movements in acquisition commitments (note 12)

4,748

1,298

Fair value gains on financial instruments:

 

 

Ineffectiveness of interest rate swaps and forward contracts

-

13

 

5,127

1,546

Finance expense

 

 

Interest expense:

 

 

Interest payable on committed borrowings

(1,120)

(1,349)

Net interest expense on defined benefit liability

(170)

(120)

Movements in acquisition deferred consideration (note 12)

(2,851)

(1,873)

Interest on tax

(438)

(330)

 

(4,579)

(3,672)

Net finance income/(costs)

548

(2,126)

 

 

 

2015

2014

 

£000's

£000's

Reconciliation of net finance income/(costs) in Income Statement to adjusted net finance costs

 

 

Total net finance income/(costs) in Income Statement

548

(2,126)

Add back:

 

 

Movements in acquisition commitments

(4,748)

(1,298)

Movements in acquisition deferred consideration

2,851

1,873

 

(1,897)

575

Adjusted net finance costs

(1,349)

(1,551)

 

The reconciliation of net finance income/(costs) in the Income Statement has been provided since the directors consider it necessary in order to provide an indication of the adjusted net finance costs.

 

Included in the movements of acquisition commitments and acquisition deferred consideration are fair value adjustments of £3.5m and £1.7m respectively for CIE (for further detail see note 3).

  

5 Tax on profit on ordinary activities

 

 

2015

2014

 

£000's

£000's

Current tax expense

 

 

UK corporation tax expense

7,989

6,906

Foreign tax expense

12,949

12,695

Adjustments in respect of prior years

(1,083)

(570)

 

19,855

19,031

Deferred tax expense

 

 

Current year

(1,764)

6,107

Adjustments in respect of prior years

(492)

472

 

(2,256)

6,579

Total tax expense in Income Statement

17,599

25,610

Effective tax rate

14%

25%

 

The adjusted effective tax rate for the year is set out below:

 

 

2015

2014

 

£000's

£000's

Reconciliation of tax expense in Income Statement to adjusted tax expense

 

 

Total tax expense in Income Statement

17,599

25,610

Add back:

 

 

Tax on acquired intangible amortisation

4,096

4,114

Tax on exceptional items

(983)

(263)

 

3,113

3,851

Tax on US goodwill amortisation

(4,113)

(3,837)

Share of tax on associates

716

-

Adjustments in respect of prior years

1,575

98

 

1,291

112

Adjusted tax expense

18,890

25,722

 

 

 

Adjusted profit before tax (refer to the appendix to the Preliminary Statement)

107,810

116,155

Adjusted effective tax rate

18%

22%

 

The group presents the above adjusted effective tax rate to help users of this report better understand its tax charge. In arriving at this rate, the group removes the tax effect of items which are adjusted for in arriving at the adjusted profit disclosed in the appendix to the Preliminary Statement. However, the current tax effect of goodwill and intangible items is not removed. The group considers that the resulting adjusted effective tax rate is more representative of its tax payable position, as the deferred tax effect on the goodwill and intangible items is not expected to crystallise.

 

The actual tax expense for the year is different from 20.5% of profit before tax for the reasons set out in the following reconciliation:

 

 

2015

2014

 

£000's

£000's

 

 

 

Profit before tax

123,285

101,475

Tax at 20.5% (2014: 22%)

25,273

22,325

Factors affecting tax charge:

 

 

Different tax rates of subsidiaries operating in overseas jurisdictions

3,150

6,238

Share of tax on profits of associates and joint ventures

(84)

(73)

US state taxes

1,371

1,075

Non-taxable income

(6,356)

-

Goodwill and intangibles

197

63

Disallowable expenditure

1,734

92

Other items deductible for tax purposes

(5,515)

(3,394)

Tax impact of consortium relief

(596)

(618)

Adjustments in respect of prior years

(1,575)

(98)

Total tax expense for the year

17,599

25,610

 

In addition to the amount charged to the Income Statement, the following amounts relating to tax have been directly recognised in other comprehensive income and equity:

 

 

Other comprehensive income

Equity

 

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

 

 

 

 

 

Current tax

-

-

-

(2,690)

Deferred tax

(97)

(495)

492

996

 

(97)

(495)

492

(1,694)

 

 

6 Dividends

 

 

2015

2014

 

£000's

£000's

Amounts recognisable as distributable to equity holders in year

 

 

Final dividend for the year ended September 30 2014 of 16.00p (2013: 15.75p)

20,501

19,917

Interim dividend for year ended September 30 2015 of 7.00p (2014: 7.00p)

8,977

8,969

 

29,478

28,886

Employee share trusts dividend

(414)

(115)

 

29,064

28,771

 

 

 

Proposed final dividend for the year ended September 30

21,033

20,501

Employee share trusts dividend

(296)

(289)

 

20,737

20,212

 

A final dividend of 16.40p per ordinary share (2014:16.00p) is proposed for the year ended September 30 2015. Subject to shareholder approval at the AGM on January 28 2016, this would be paid on Thursday February 11 2016 to shareholders on the register on Friday November 27 2015. It is expected that the shares will be marked ex-dividend on Thursday November 26 2015.

 

The proposed final dividend has not been included as a liability in these financial statements in accordance with IAS 10 'Events after the balance sheet date'.

 

 

7 Earnings per share

 

 

 

 

2015

2014

 

 

 

£000's

£000's

 

 

 

 

 

Basic earnings attributable to equity holders of the parent

 

 

105,444

75,264

Adjustments (refer to the appendix to the Preliminary Statement)

 

 

(16,766)

14,568

Adjusted earnings

 

 

88,678

89,832

 

 

 

 

 

2015

2014

 

 

 

 

 

 

 

 

Number

Number

 

 

 

000's

000's

 

 

 

 

 

Weighted average number of shares

 

 

128,202

127,506

Shares held by the employee share trusts

 

 

(1,807)

(990)

Weighted average number of shares

 

 

126,395

126,516

Effect of dilutive share options

 

 

65

720

Diluted weighted average number of shares

 

 

126,460

127,236

 

 

 

 

 

 

 

 

Pence

Pence

Basic earnings per share

 

 

83.42

59.49

Adjustments per share

 

 

(13.26)

11.51

Adjusted basic earnings per share

 

 

70.16

71.00

 

 

 

 

 

Diluted earnings per share

 

 

83.38

59.15

Adjustments per share

 

 

(13.26)

11.45

Adjusted diluted earnings per share

 

 

70.12

70.60

 

 

The adjusted diluted earnings per share figure has been disclosed since the directors consider it necessary in order to give an indication of the underlying trading performance.

 

 

8 Goodwill and other intangibles

 

 

Acquired intangible assets

 

 

 

 

 

 

 

 

Total

 

Intangible

 

 

 

 

Customer

 

acquired

 

assets in

 

 

 

Trademarks

relation-

 

intangible

Licences &

develop-

 

 

 

& brands

ships

Databases

assets

software

ment

Goodwill

Total

 

2015

2015

2015

2015

2015

2015

2015

2015

2015

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Cost/carrying amount

 

 

 

 

 

 

 

 

At October 1 2014

164,843

98,713

12,083

275,639

12,923

62

411,815

700,439

Additions

-

-

-

-

1,324

436

-

1,760

Transfer

-

-

-

-

498

(498)

-

-

Exchange differences

7,018

4,064

533

11,615

420

-

17,457

29,492

At September 30 2015

171,861

102,777

12,616

287,254

15,165

-

429,272

731,691

Amortisation and impairment

 

 

 

 

 

 

 

 

At October 1 2014

62,144

53,059

7,225

122,428

4,687

-

27,881

154,996

Amortisation charge

8,209

7,737

1,081

17,027

2,680

-

-

19,707

Impairment 

-

-

-

-

-

-

18,458

18,458

Exchange differences

3,157

2,351

463

5,971

240

-

940

7,151

At September 30 2015

73,510

63,147

8,769

145,426

7,607

-

47,279

200,312

Net book value/carrying amount at September 30 2015

98,351

39,630

3,847

141,828

7,558

-

381,993

531,379

                   

 

 

 

Acquired intangible assets

 

 

 

 

 

 

 

 

Total

 

Intangible

 

 

 

 

Customer

 

acquired

 

assets in

 

 

 

Trademarks

relation-

 

intangible

Licences &

develop-

 

 

 

& brands

ships

Databases

assets

software

ment

Goodwill

Total

 

2014

2014

2014

2014

2014

2014

2014

2014

2014

£000's

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Cost/carrying amount

 

 

 

 

 

 

 

 

At October 1 2013

148,636

89,859

9,150

247,645

3,023

6,690

385,518

642,876

Additions

-

-

-

-

244

2,992

-

3,236

Transfer

-

-

-

-

9,598

(9,598)

-

-

Acquisitions

16,581

9,031

2,941

28,553

-

-

30,832

59,385

Balance at disposal of company

-

-

-

-

-

-

(3,450)

(3,450)

Exchange differences

(374)

(177)

(8)

(559)

58

(22)

(1,085)

(1,608)

At September 30 2014

164,843

98,713

12,083

275,639

12,923

62

411,815

700,439

Amortisation and impairment

 

 

 

 

 

 

 

 

At October 1 2013

54,746

44,821

6,043

105,610

2,709

-

28,944

137,263

Amortisation charge

7,417

8,300

1,018

16,735

1,962

-

-

18,697

Balance at disposal of company

-

-

-

-

-

-

(907)

(907)

Exchange differences

(19)

(62)

164

83

16

-

(156)

(57)

At September 30 2014

62,144

53,059

7,225

122,428

4,687

-

27,881

154,996

Net book value/carrying amount at September 30 2014

102,699

45,654

4,858

153,211

8,236

62

383,934

545,443

 

 

9 Investments

  

 

 

Investment

Available-

 

 

Investment

in joint

for-sale

 

 

in associates

ventures

investments

Total

 

£000's

£000's

£000's

£000's

 

 

 

 

 

At October 1 2013

702

-

-

702

Impairment

(444)

-

-

(444)

Disposals

(127)

-

-

(127)

Share of profits after tax retained

264

-

-

264

Share of profits before tax and acquired intangible amortisation

337

-

-

337

Share of tax

(73)

-

-

(73)

Dividends

(323)

-

-

(323)

At September 30 2014

72

-

-

72

Additions

32,855

34

5,835

38,724

Disposals

10

-

-

10

Share of profits after tax retained

(377)

(4)

-

(381)

Share of profits before tax and acquired intangible amortisation

2,440

(5)

-

2,435

Share of tax

(775)

1

-

(774)

Share of acquired intangible amortisation net of tax

(2,042)

-

-

(2,042)

Dividends

(123)

-

-

(123)

At September 30 2015

32,437

30

5,835

38,302

 

 

All of the above investments in associates and joint ventures are accounted for using the equity method in these consolidated financial statements.

 

 

2015

2014

 

£000's

£000's

Reconciliation of share of results in associates and joint ventures in Income Statement to adjusted share of results in associates and joint ventures

 

 

Total share of results in associates and joint ventures in Income Statement

(381)

264

Add back:

 

 

Share of tax

774

-

Share of acquired intangible amortisation net of tax

2,042

-

 

2,816

-

Adjusted share of results in associates and joint ventures

2,435

264

 

 

Information on investment in associates, investment in joint ventures and available-for-sale investments:

 

 

 

Note

Principal activity

Year

Description

Group

Country of

 

 

 

ended

of holding

interest

incorporation

Investment in associates

 

 

 

 

 

 

Diamond TopCo Limited (Dealogic)

1

Capital market software solutions

31 Dec

Equity share capital

15.5%

UK

World Bulk Wine Exhibition (WBWE)

2

Event for commercialisation of bulk wine

31 Dec

Equity share capital

40.0%

Spain

Investment in joint ventures

 

 

 

 

 

 

Institutional Investor Zanbato Limited (II Zanbato)

3

Hedge fund manager trading signals

30 Sept

Equity share capital

50.0%

UK

Sanostro Institutional AG (Sanostro)

4

Hedge fund manager trading signals

31 Dec

Equity share capital

50.0%

Switzerland

Available-for-sale investments

 

 

 

 

 

 

Estimize, Inc (Estimize)

5

Financial estimates platform

31 Dec

Equity share capital

10.0%

Delaware, US

Zanbato, Inc (Zanbato)

6

Private capital placement and workflow

31 Dec

Equity share capital

9.9%

California, US

 

 

 

 

 

 

 

 

1.     In December 2014 the group acquired 15.5% of the equity share capital with 20% voting rights in Dealogic, a company incorporated by the Carlyle Group (see below). Dealogic provides data and analytics, market intelligence and capital markets software solutions to investment banks to help them manage their workflows, assist with deal origination and execution, and optimise productivity across their equity capital markets, fixed income, investment banking and research, sales and trading businesses.

2.     In April 2015 the group acquired 40% of the equity share capital of WBWE for a consideration of €1.3m (£0.9m). WBWE is the biggest event in the world dedicated to the commercialisation of bulk wine.

3.     In November 2014 the group set up a new joint venture with Zanbato Inc. with each owning 50% equity share capital in II Zanbato.

4.     In December 2014 the group acquired 50% of the equity share capital of Sanostro for a cash consideration of £34,000. Sanostro provides hedge fund manager trading signals to European banks. The group has joint control over the company.

5.     In July 2015 the group acquired 10% of the equity share capital of Estimize for a cash consideration of $3.6m (£2.3m).  Estimize provides a financial estimates platform through sourcing estimates from hedge fund, brokerage and independent analysts to provide consensus market expectations. This investment is treated as an available-for-sale investment.

6.     In September 2015 the group acquired 9.9% of the equity share capital of Zanbato for a cash consideration of $5.4m (£3.5m).  Zanbato is an international private capital placement and workflow tools provider. This investment is treated as an available-for-sale investment.

 

Capital NET Limited (CapNet)

In December 2014 the group disposed of 100% of its equity share capital in CapNet for a cash consideration of US$4.6m (£2.9m). At date of disposal, CapNet had a net liability value of £10,000 resulting in a profit on disposal of £2.9m (note 3).

 

Assets available-for-sale investments

Capital DATA Limited (CapData)

The group had a 50% interest in CapData. The ordinary share capital of CapData was divided into 50 'A' shares and 50 'B' shares with the group owning the 50 'A' shares. Under the terms of the Articles of Association of CapData, the 'A' shares held by the group did not carry entitlement to any share of dividends or other distribution of profits of CapData. The group did not have the ability to exercise significant influence nor was it involved in the day-to-day running of CapData. As such the investment in CapData was accounted for as an asset available-for-sale with a carrying value of £nil (2014: £nil).

 

In December 2014 the group disposed its equity share capital in CapData for a total consideration of US$80.4m, settled by US$59.2m of ordinary 'B' shares (representing 15.5%) and US$21.2m of zero-coupon redeemable preferences shares in Dealogic. The $59.2m of 'B' shares were valued based on the price paid by other third party investors in Dealogic. IAS 28 requires that where a non-monetary asset is contributed to an associate for an equity interest in that associate, the resulting gain must be restricted.  As the group received part of the consideration for CapData (US$59.2m) in the form of an associate interest in Dealogic, this element of the disposal gain must be restricted by the percentage of the group's investment in the new structure, namely 15.5%. The consideration in preference shares is treated as a current receivable given the fixed short-term redemption of this instrument, and the related profit on disposal is recognised immediately. The profit on disposal (note 3) is as follows:

 

 

$000's

£000's

 

 

59,225

37,817

(9,180)

(5,862)

50,045

31,955

21,215

13,547

71,260

45,502

  

 

10 Acquisitions and disposals

 

Purchase of new business

Infrastructure Journal (IJ)

During the financial year to September 30 2014, the group acquired IJ. The fair value of net assets acquired and consideration for the acquisition have been finalised and there were no changes since September 30 2014.

 

Increase in equity holdings

TTI Technologies LLC (TTI/Vanguard)

In March 2015 the group acquired 5.4% of the equity share capital of TTI/Vanguard for a cash consideration of US$0.2m (£0.1m). The group's equity shareholding in TTI/Vanguard increased to 100%.

 

Family Office Network Limited (FON)

In April 2015 the group acquired 49% of the equity share capital of FON for a cash consideration of US$0.2m (£0.1m). The group's equity shareholding in FON increased to 100%.

 

Sale of business

Institutional Investor Titles (II Titles)

On October 31 2014, the group completed the sale of its newsletter publications and website services titled Compliance Intelligence, Fund Director Intelligence, Fund Industry Intelligence, and Real Estate Finance Intelligence to Pageant Media Limited. The disposal of II Titles gave rise to a profit on disposal of US$4.0m (£2.4m), after deducting disposal costs incurred, which was recognised as an exceptional item (note 3) in the Income Statement.

 

The net assets of II Titles at the date of disposal were as follows:

 

 

 

 

 

Final

 

 

 

fair value

 

 

 

£000's

 

 

 

 

Net liabilities disposed

 

 

(2,129)

Directly attributable costs

 

 

53

Profit on disposal

 

 

2,446

Total consideration

 

 

370

Consideration satisfied by:

 

 

 

Cash

 

 

93

Deferred consideration

 

 

277

 

 

 

370

Net cash inflow arising on disposal:

 

 

 

Cash consideration (net of directly attributable costs)

 

 

40

Less: cash and cash equivalent balances disposed

 

 

-

 

 

 

40

 

 

The net liabilities disposed mainly relates to the deferred revenue balances held by the group, with Pageant Media now being responsible for the delivery of the underlying service.

11 Called up share capital

 

 

2015

2014

 

£000's

£000's

Allotted, called up and fully paid

 

 

128,248,894 ordinary shares of 0.25p each (2014: 128,133,417 ordinary shares of 0.25p each)

320

320

 

During the year, 115,477 ordinary shares of 0.25p each (2014: 1,676,093 ordinary shares) with an aggregate nominal value of £289 (2014: £4,191) were issued following the exercise of share options granted under the company's share option schemes for a cash consideration of £0.5m (2014: £0.3m).

 

12 Acquisition commitments and deferred consideration

The group is party to contingent consideration arrangements in the form of both acquisition commitments and deferred consideration payments. IAS 39 'Financial Instruments' requires the group to recognise the discounted present value of the contingent consideration. This discount is unwound as a notional interest charge to the Income Statement. The group regularly performs a review of the underlying businesses to assess the impact on the fair value of the contingent consideration. Any resultant change in these fair values is reported as a finance income or expense in the Income Statement.

 

 

Acquisition commitments

Deferred consideration

 

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

 

 

 

 

 

At October 1

13,365

15,037

8,503

11,646

Reduction from disposals during the year

-

-

(269)

(2,214)

Net movements in finance income and expense during the year (note 4)

(4,748)

(1,298)

2,851

1,873

Exercise of commitments

(109)

(247)

-

-

Paid during the year

-

(111)

(11,558)

(2,738)

Exchange differences to reserves

663

(16)

(116)

(64)

At September 30

9,171

13,365

(589)

8,503

 

Included in net movements in finance income and expense is a credit of £5.2m in respect of CIE (note 4) and the remaining amount relates to other movements in fair value adjustments and acquisition imputed interest.

 

Exchange differences to reserves were recorded within net exchange differences on translation of net investments in overseas subsidiary undertakings in the Statement of Comprehensive Income.

 

Reconciliation of finance income and expense (note 4):

 

 

Acquisition commitments

Deferred consideration

 

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

 

 

 

 

 

Fair value adjustment during the year

(5,727)

(2,682)

2,617

800

Imputed interest

979

1,384

234

1,073

Net movements in finance income and expense during the year

(4,748)

(1,298)

2,851

1,873

 

 

 

 

 

Unrealised (income)/expense included in net movements during the year

(5,729)

(2,485)

560

753

 

Maturity profile of contingent consideration:

 

 

Acquisition commitments

Deferred consideration

 

2015

2014

2015

2014

 

£000's

£000's

£000's

£000's

 

 

 

 

 

Assets

 

 

 

 

Within one year (included in current assets)

-

-

(331)

(354)

In more than one year (included in non-current assets)

-

-

(258)

(1,532)

 

-

-

(589)

(1,886)

Liabilities

 

 

 

 

Within one year (included in current liabilities)

-

2,088

-

10,389

In more than one year (included in non-current liabilities)

9,171

11,277

-

-

 

9,171

13,365

-

10,389

 

9,171

13,365

(589)

8,503

 

There is a deferred tax asset of £nil (2014: £40,000) related to the acquisition commitments.

 

The discounted acquisition commitment and deferred consideration are based on pre-determined multiples of future profits of the businesses, and have been estimated on an acquisition-by-acquisition basis using available performance forecasts. The directors derive their estimates from internal business plans and financial due diligence. At September 30 2015, the weighted average growth rates used in estimating the expected profits range was 23%.

 

A one percentage point increase or decrease in growth rate in estimating the expected profits, results in the acquisition commitment at September 30 2015 increasing or decreasing by £0.1m with the corresponding change to the value at September 30 2015 charged to the Income Statement in future periods.

 

13 Related party transactions

The group has taken advantage of the exemption allowed under IAS 24 'Related Party Disclosures' not to disclose transactions and balances between group companies that have been eliminated on consolidation. Other related party transactions and balances are detailed below:

 

(i)   The group had borrowings under a US$160m multi-currency facility with Daily Mail and General Holdings Limited (DMGH), a Daily Mail and General Trust plc (DMGT) group company as follows:

 

 

2015

2015

2014

2014

 

US$000's

£000's

US$000's

£000's

 

 

 

 

 

Amounts owing under US$ facility at September 30

-

-

62,486

38,543

Amounts owing under GBP facility at September 30

 

-

-

7,895

Amounts due under current account facility at September 30

 

-

(1,234)

(761)

 

 

-

 

45,677

 

 

 

 

 

Fees on the available facility for the year

-

733

-

417

 

 

(ii)  On August 3 2015 the company entered into a deposit agreement with Daily Mail and General Holdings Limited:

 

 

 

2015

2015

2014

2014

 

US$000's

£000's

US$000's

£000's

 

 

 

 

 

Deposits denominated in US$ at September 30

1,787

1,182

                   -

                   -

Deposits denominated in GBP at September 30

                   -

8,617

                   -

                   -

 

 

-

 

                   -

 

 

(iii)  During the year the group expensed services provided by DMGT, the group's parent, and other fellow group companies, as follows:

 

 

 

 

 

2015

2014

 

 

 

£000's

£000's

 

 

 

 

 

Services expensed

 

 

849

503

 

(iv) During the year DMGT group companies surrendered tax losses to Euromoney Consortium Limited under an agreement between the two groups.  These tax losses are relievable against UK taxable profits of the group under HMRC's consortium relief rules:

 

 

 

 

2015

2014

 

 

 

£000's

£000's

 

 

 

 

 

Amounts payable

 

 

1,787

1,626

Tax losses with tax value

 

 

2,383

2,168

Amounts owed by DMGT group at September 30

 

 

(313)

(387)

 

(v)  DMGT group companies have an agreement to surrender tax losses to Euromoney Consortium 2 Limited. These tax losses are relievable against UK taxable profits of the group under HMRC's consortium relief rules:

 

 

 

 

2015

2014

 

 

 

£000's

£000's

 

 

 

 

 

Amounts payable

 

 

-

226

Tax losses with tax value

 

 

-

302

Amounts owed by DMGT group at September 30

 

 

(202)

(226)

 

(vi) During the year, in an arms-length transaction, the group sold a property to Mintel Limited for a consideration of £2.3m.  Mr N Berry, a director of DMGT plc, owns 97% of Mintel Limited through a family holding.

 

(vii)          During the year the group received dividends from its associate undertakings:

 

 

 

 

2015

2014

 

 

 

£000's

£000's

 

 

 

 

 

Capital NET Limited

 

 

123

291

GGA Pte. Limited

 

 

-

32

 

 

 

123

323

 

14 Events after the balance sheet date

A board meeting was held on November 18 2015 and a number of board changes were implemented as proposed by the nominations committee. The nominations committee agreed that:

·      the chairman of the board be changed to a non-executive role and that JC Botts be appointed as the non-executive chairman in an interim capacity until such time as the company appoints a permanent independent non-executive chairman;

·      A Rashbass's role as executive chairman be changed to the new role of chief executive officer;

·      A Rashbass to step down as chairman of the nominations committee and JC Botts to replace A Rashbass as chairman of the nominations committee until an independent non-executive chairman has been appointed;

·      CHC Fordham to step down from the nominations committee; and

·      the number of executive directors on the board to reduce and accordingly CHC Fordham, N Osborn, J Wilkinson, B AL-Rehany and D Alfano not to seek re-election at the company's next AGM in January 2016.

 

The directors propose a final dividend of 16.40p per share (2014: 16.00p) totalling £21.0m (2014: £20.2m) for the year ended September 30 2015. The dividend will be submitted for formal approval at the AGM to be held on January 28 2016. In accordance with IAS 10 'Events after the Reporting Period', these financial statements do not reflect this dividend payable but will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ending September 30 2016.

 

There were no other events after the balance sheet date. 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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