Multimedia Strategy Driving Strong Growth
LONDON, Feb. 25 /PRNewswire-FirstCall/ --
Financial Highlights** for Full Year ended 31 December 2004
Trading
Underlying# profit* up 20.0 per cent, underlying# turnover up 3.2 per cent
Turnover Up 8.4 per cent to 809.6m pounds (746.7m pounds)
Operating profit* Up 33.1 per cent to 132.3m pounds (99.4m pounds)
Operating margin* Up to 16.3 per cent from 13.3 per cent
Profit before tax* Up 36.9 per cent to 141.4m pounds (103.3m pounds)
EPS* Up 36.4 per cent to 32.6p (23.9p)
Dividend Up 33.3 per cent to 12.0p (9.0p)
2003 & 2004 acquisitions performing ahead of plan
48m pounds Sterling of acquisitions announced in 2005
Balance Sheet as at 31 December 2004
Net debt of 68.8m pounds, 191.9m pounds of acquisitions and 102.3 per
cent cash conversion
Tax creditor for prior years reduced by 121.0m pounds
Key Points
Progressively increasing investment in multi-media product development
Strategic review of NOP World
-- high level of interest in acquiring whole business
-- if sold, substantial part of proceeds to be returned to shareholders
# Underlying: adjusted for the estimated effects of acquisitions,
foreign exchange, SARS and biennial events
* Before amortisation of goodwill and intangibles and exceptional items
** The statutory results which show operating profit of 6.3m pounds
((22.3)m pounds) and EPS of 33.2p ((12.5)p) are shown in the
attached summary financial statements
Clive Hollick, Chief Executive of United Business Media, said, "Underlying
revenue growth and significantly increased operating margins delivered an
operating profit* of 132.3 m pounds, up 33.1 per cent. Underlying revenue
grew by 3.2 per cent, with underlying operating profit* up 20.0 per cent. The
continuing drive for operating efficiencies has increased margins from 13.3
per cent in 2003 to 16.3 per cent in 2004. In 2005 UBM will be investing in a
programme of offshoring and outsourcing to maintain the momentum behind the
productivity successes of recent years.
"Acquisitions are performing ahead of plan and the investment in
multimedia products is paying off with a 33 per cent increase in online
revenues and the prospect of good growth in 2005. The investment programme
over the last two years has strengthened the product range we offer to the
increasingly diverse range of market sectors we serve. Many of these new
products have impressive growth rates based upon long term client
relationships. Together with our acquisitions these provide United with a
greater proportion of predictable revenues.
"Following the recent announcement of our intention to undertake a
strategic review of the group's market research business, a number of third
parties have expressed their interest in acquiring NOP World. As part of the
strategic review, we intend to investigate these expressions of interest over
the coming weeks, alongside other options for the business. In the event that
this review results in the Board concluding that United should sell NOP World,
the Board intends that United should return a substantial part of the proceeds
of the sale to shareholders. If sold, a disposal of NOP World is likely to be
tax free.
"The Board is recommending a final dividend which will bring the total for
the year to 12.0 pence, an increase of 33.3 per cent. This increase reflects
the excellent performance achieved in 2004 and UBM's confidence in the long-
term outlook for the business.
Outlook
"Despite the weakness of the dollar and the rise in investments in new
products, overall trading to date and the improving forward order books point
to another year of good progress."
Summary Group Profit & Loss Statement
The profit and loss statement set out below represents the group's full
profit and loss account (which is included in the attached financial
information) in order to show more clearly the results from operations
excluding amortisation.
Year ended 31
December
2004 2003
m pounds m pounds %
Group turnover** 809.6 746.7 8.4
Operating profit* 132.3 99.4 33.1
Net interest income 12.5 9.4 33.0
Other financial expense (FRS17) (3.4) (5.5) (38.2)
Profit before tax* 141.4 103.3 36.9
Amortisation of goodwill (126.0) (121.7)
Exceptional items 7.2 -
Profit/ (loss) before tax 22.6 (18.4)
Taxation (30.8) (22.7) 35.7
Exceptional taxation 121.0 -
Profit / (loss) on ordinary
activities after tax 112.8 (41.1)
Equity minority interest (1.5) (0.3)
Profit / (loss) for the period 111.3 (41.4)
Dividends -equity (40.2) (30.2) 33.3
-non-equity (0.4) (0.4) -
Dividends (40.6) (30.6) 32.7
Retained profit / (loss) for the period 70.7 (72.0)
EPS* (pence) 32.6 23.9 36.4
Basic EPS (pence) 33.2 (12.5)
Dividends per share (pence) 12.0 9.0 33.3
* Before amortisation of goodwill, intangible assets and exceptional items
** Excluding JVs and associates
CONTENTS
1. Summary of full year 2004 Financial Results
2. Divisional Review
3. Dividend
4. Balance Sheets and Cash Conversion
5. Fixed Asset Investments
6. Pensions
7. Tax
8. Interest
9. Exceptional Items and amounts written off investments
10. IFRS
11. Additional Information on Outlook
12. Offshoring and Outsourcing
13. CMP Media Statistics
1. SUMMARY OF FULL YEAR 2004 FINANCIAL RESULTS
Group Turnover Group Operating Profit*
Twelve months to 31 December Twelve months to 31 December
(m pounds) (m pounds)
2004 2003 Change(%) Under- 2004 2003 Change(%) Under-
lying lying
#(%) #(%)
CMP Media 193.8 210.5 (7.9) (3.2) 23.0 14.8 55.4 52.0
CMPMedica 29.8 - 100.0 - 3.4 - 100.0 -
CMP Asia 50.5 44.4 13.7 9.4 15.0 12.6 19.0 7.5
CMPi 159.3 135.0 18.0 4.1 33.6 25.3 32.8 10.4
UAP 58.5 58.1 0.7 0.0 13.2 14.0 (5.7) (8.0)
Professional
Media 491.9 448.0 9.8 0.6 88.2 66.7 32.2 14.8
News
Distri-
bution 94.8 94.8 0.0 10.6 24.0 13.4 79.1 103.2
Market
Research 222.9 203.9 9.3 5.3 20.1 19.3 4.1 (12.1)
Total 809.6 746.7 8.4 3.2 132.3 99.4 33.1 20.0
# Underlying: adjusted for the estimated effects of acquisitions, foreign
exchange, SARS and biennial events
* before amortisation of goodwill and intangible assets and exceptional
items
Underlying revenue was up 3.2 per cent -- after adjusting for the effects
of acquisitions, foreign exchange, SARS and biennials. Group revenue in 2004
was increased by 90.1m pounds of revenue from 2004 acquisitions and the full
year effect of acquisitions made during 2003. The weakness of the US dollar
has a direct translation impact -- with two thirds of UBM revenue reported
locally in US dollars, group revenue was reduced by 53.0m pounds as a result
of foreign exchange.
The average rate of $:pound exchange in 2004 was 1.83 (1.64), together
with the effects of other currency movements this reduced operating profit in
2004 by 7m pounds. A 1 cent movement in the US dollar against sterling is
approximately equivalent to a move in profit of around 300,000 pounds over the
full year.
2. DIVISIONAL REVIEW
Professional Media
Turnover Operating Profit*
Twelve months to Twelve months to
31 December 31 December
2004 2003 Change 2004 2003 Change
m pounds m pounds % m pounds m pounds %
CMP Media 193.8 210.5 (7.9) 23.0 14.8 55.4
CMPMedica 29.8 - 100.0 3.4 - 100.0
CMP Asia 50.5 44.4 13.7 15.0 12.6 19.0
CMPi 159.3 135.0 18.0 33.6 25.3 32.8
UAP 58.5 58.1 0.7 13.2 14.0 (5.7)
Total 491.9 448.0 9.8 88.2 66.7 32.2
Profitability at CMP Media has improved significantly. An increase in
operating margins from 7.0 per cent to 11.9 per cent has boosted operating
profits to 23.0m pounds (14.8m pounds). Despite tougher comparatives in the
second half of 2003, overall full year underlying technology revenues were
only down 1 per cent -- online revenues were strongly up by 29 per cent,
events were up 11 per cent, continuing revenues from traditional print
publishing were down 2 per cent. CMP Media's online business moved into
operating profit. Custom marketing solutions and integrated multi-media
marketing packages continue to do well, to the overall benefit of CMP Media's
technology business -- this does however dilute traditional print yields which
were down 1.5 per cent.
In 2004 CMP Healthcare Media was 18 per cent of CMP Media's total revenue.
Last year's healthcare acquisition (The Oncology Group and Cliggott
Publishing) is fully integrated and performed ahead of its business case.
Underlying healthcare publishing revenues were up 7.6 per cent. Revenue from
the medical education business was down 31.6 per cent as the regulatory issues
of the second quarter registered in both the third and fourth quarters of
2004.
Further operating efficiencies were achieved across CMP Media. In
addition, organic investment projects delivered 12m pounds of revenue and 4m
pounds of incremental contribution.
CMPMedica, acquired on 30 July 2004, is ahead of plan. CMPMedica's
underlying revenues are up 6.4 per cent, with the important French market
performing well. CMPMedica's subsequent JV acquisition of Axilog is providing
it with greater access to doctors' desktops in France.
CMP Asia's profit is now well ahead of pre SARS levels, with visitor
attendance at Hong Kong shows up by around 40 per cent on 2003, and particular
successes from the jewellery fairs, the beauty fair and the natural health
fairs in Japan. Profits of 15.0m pounds reflected improved strength in the
established business and the effects of the steady flow of new products
launched in recent years.
CMP Information increased exhibition space and -- boosted by the
acquisitions and new product launches -- grew display market share in the UK
and US to 38 per cent (35 per cent). Revenues increased by 18.0 per cent and
further improvements in margin drove a 32.8 per cent increase in operating
profit. This growth was boosted by the businesses acquired in 2003 (including
The Builder Group and Barbour Index) which are performing ahead of plan.
Increased product improvements and launches helped to grow underlying revenue
by 4.1 per cent and underlying operating profit by 10.4 per cent.
UAP's performance in the second half of 2004 saw a continuation of the
mixed trends in the first half. Overall revenue was stable, with strong
performances from Daltons Weekly and DaltonsBusiness.com, continued progress
at Auto Exchange, but a decline in revenue at Exchange & Mart. Margins were
down due to the costs of restructuring, promotions and reinvestment in core
brands.
In 2005 UAP is investing in the E&M brand in order to accelerate the
migration online. The acquisition in February 2005 of The Publican and other
licensed trade assets strengthens the breadth and depth of UAP's range of
specialist titles and offers cross selling opportunities with the Businesses
for Sale section of Daltons Weekly.
PR Newswire - News Distribution
Turnover Operating Profit*
Twelve months to Twelve months to
31 December 31 December
2004 2003 Change 2004 2003 Change
m pounds m pounds % m pounds m pounds %
PR Newswire 94.8 94.8 - 24.0 13.4 79.1
PR Newswire achieved a 103.2 per cent increase in underlying operating
profit, an operating margin increase to 25.3 per cent, up from 14.1 per cent
in 2003, and an underlying 10.6 per cent increase in revenue.
There were three main factors behind PR Newswire's growth; improvements in
core US wire volumes and yield, the increasing success of organic product
launches, and significant improvements in the profitability of operations
outside of the Americas.
US wire volumes increased by 3.7 per cent with yields up 6.6 per cent.
The core messaging business benefited from the strength of the Canada Newswire
JV which achieved a 15 per cent increase in revenue and a 14 per cent increase
in operating profit. Video news release and media contacts database products,
both grew revenue by over a third, generating 10m pounds in revenue and moving
into profit. Effective cost control has succeeded in turning the businesses
outside America from a 2.7m pounds loss in 2003 into a profit in 2004.
NOP World - Market Research
Turnover Operating Profit*
Twelve month to Twelve months to
31 December 31 December
2004 2003 Change 2004 2003 Change
m pounds m pounds % m pounds m pounds %
NOP World 222.9 203.9 9.3 20.1 19.3 4.1
Mediamark Research, Allison Fisher, Eurisko and NOP Research each grew
revenue by over 10 per cent, together they accounted for over 90 per cent of
NOP's total profit. And there are signs of improvement in the US healthcare
and consumer business. The reorganisation of NOP along sector lines and the
investment in new products, improved marketing and higher productivity is now
boosting the performance of the custom businesses. Non-recurring
restructuring costs and losses on discontinued businesses reduced operating
profit by 3m pounds.
3. DIVIDEND
In line with the progressive dividend policy, the Board is recommending a
final dividend of 8.37 pence (5.70 pence), bringing the total for the year to
12.00 pence (9.00 pence), an increase of 33.3 per cent. This increase
reflects the excellent performance achieved in 2004 and the directors'
confidence in the long-term outlook for the business.
The final dividend on the ordinary shares will be paid on 26 May to
shareholders on the register on 29 March.
The dividend on the 5,446,789 outstanding B shares will be 8.00 pence per
share. This dividend will be payable on 25 April to shareholders on the
register on 29 March.
4. BALANCE SHEET AND CASH CONVERSION
Net debt at the end of the period was 68.8m pounds, after expenditure of
191.9m pounds on acquisitions during the year and strong operating cash
conversion of 102.3 per cent of operating profit. The year end net debt
follows the retirement of $250m of 7.25 per cent debt in July and $125m of
8.04 per cent debt in September.
5. FIXED ASSET INVESTMENTS
UBM holds investments in five, ITN, SIS, SDN, Paperloop and The Press
Association. Five revenue grew by 11.1 per cent to 288.8m pounds (259.9m
pounds) and increased operating profit to 19.5m pounds (8.5m pounds).
Audience share increased to 6.7 per cent (6.6 per cent) and share of
advertising revenue increased from 8.1 per cent to 8.3 per cent. Five's share
of Individual's viewing on the Freeview platform has increased to 9.3 per
cent.
Income from fixed asset investments -- including SDN, PA and ITN --
amounted to 6.0m pounds.
6. PENSIONS
As at 31 December 2004, the pension deficit of 95.2m pounds had been
increased by 11.3m pounds on the prior year end, largely reflecting an
increase in the assumed rate of inflation.
7. TAX
The effective tax rate in 2004 was 21.8 per cent (22.0 per cent).
Following the successful resolution of outstanding tax liabilities, there
was a 121.0m pounds reduction in prior year liabilities. The year end tax
creditor has been reduced by 100.5m pounds to 208.0m pounds (308.5m pounds).
The tax creditor also reflects a 20.5m pounds accrual in respect of 2004 and a
prudent provision for potential tax liabilities in respect of prior years.
8. INTEREST
Net interest income for the year (before the FRS17 financial expense) was
12.5m pounds (9.4m pounds).
9. EXCEPTIONAL ITEMS AND AMOUNTS WRITTEN OFF INVESTMENTS
A net exceptional profit of 7.2m pounds was credited to the profit on
ordinary activities before tax. This comprised 18.9m pounds additional profit
relating to 2000 disposals and 11.7m pounds written off investments. In
December 2004, United agreed a settlement payment of 32m pounds from Granada
in respect of outstanding items relating to the 2000 disposals. The
additional profit on disposal represents this receipt, after deduction of
interest, costs and the offset of recorded receivables. The Group has also
written down the carrying value of certain fixed asset investments, to reflect
their expected realisable value.
As referred to above, there was also an exceptional taxation credit of
121.0m pounds.
10. IFRS SUMMARY
UBM has estimated the impact of IFRS as if used as the accounting basis
for its 2004 results. There is a significant positive impact on profit due to
the non amortisation of goodwill under IFRS; the net effect of other changes
is expected to be immaterial.
pounds millions
Profit for the financial year in accordance with UK GAAP 111.3
IFRS adjustments (unaudited)
- amortisation of goodwill and intangible assets 122.9
- share based payments (1.5)
- equity accounting 1.7
- deferred tax 0.9
- pensions 0.1
- other 0.4
Profit in accordance with IFRS 235.8
11. ADDITIONAL INFORMATION ON OUTLOOK
The overall start to the year has been promising. Forward bookings are
ahead -- with events worldwide up by over 10 per cent and forward bookings for
medical education indicating a recovery towards 2003 levels. In healthcare,
CMPMedica's forward bookings in its drug directories are up over 5 per cent
compared with the same time last year. Technology publishing remains soft but
online continues to grow strongly. Following the good results from the
organic investment programme of recent years we are increasing new product
investment by a further 5m pounds to 10m pounds in 2005.
12. OFFSHORING AND OUTSOURCING
UBM has stepped up its programme of offshoring and outsourcing. Projects
already offshored or outsourced include data processing, telephone
interviewing, software upgrades, website conversions and circulation
management. New projects currently being finalised or in planning are not
expected to have a material effect in 2005 but should realise annualised
savings of approximately $20m by 2007.
13. CMP Media Statistics
Due to the progressive decline in the significance of this indicator since
its initial publication in 2001 UBM will in future publish these statistics on
a quarterly rather than a monthly basis. The next report will therefore
relate to the first quarter of 2005.
For further information please contact:
For United Business Media enquiries:
Michael Waring United Business Media 020 7921 5031
Colin Browne The Maitland Consultancy 020 7379 5151
Notes to Editors:
United Business Media plc (http://www.unitedbusinessmedia.com) is a
leading provider of business information services to the technology,
healthcare, media, automotive, financial services and property industries.
UBM offers services in market research, consultancy, news distribution,
publishing and events to customers across the globe. Its brands include NOP
World, one of the largest market research groups globally; PR Newswire, the
world's leading corporate news distribution service and CMP, the B2B media and
exhibition group operating in high tech, healthcare, property, entertainment,
jewellery & fashion in the US, UK, Asia and Europe.
This press release includes statements which are not historical facts and
are considered "forward-looking" within the meaning of Section 27 of the
Securities Act of 1933, as amended. These forward-looking statements reflect
UBM's current views about future events, business and growth strategy and
financial performance. These forward-looking statements are identified by
their use of terms and phrases such as "believe," "expect," "plan,"
"anticipate," "on target" and similar expressions identifying forward-looking
statements. Investors should not rely on forward-looking statements because
they are subject to a variety of risks, uncertainties and other factors that
could cause actual results to differ materially from UBM's expectations. UBM
expressly does not undertake any duty to update forward-looking statements.
Management does not attempt to update forecasts unless conditions materially
change.
Group profit and loss account
for the year ended 31 December 2004
(in millions of pounds)
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 3) Total items (note 3) Total
2004 2004 2004 2003 2003 2003
Notes
Turnover - group
and share of
joint ventures
Continuing
operations 803.8 - 803.8 770.3 - 770.3
1 Less: share
of joint
ventures'
turnover (24.0) - (24.0) (23.6) - (23.6)
779.8 - 779.8 746.7 - 746.7
Acquisitions 29.8 - 29.8 - - -
1 Group turnover 809.6 - 809.6 746.7 - 746.7
Group operating
profit / (loss)
Continuing
operations 1.7 - 1.7 (29.1) - (29.1)
Acquisitions (5.1) - (5.1) - - -
Group operating
loss (3.4) - (3.4) (29.1) - (29.1)
Share of operating
profit in joint
ventures and
associates
Continuing
operations 3.7 - 3.7 2.9 - 2.9
Acquisitions - - - - - -
3.7 - 3.7 2.9 - 2.9
Income from other
fixed asset
investments 6.0 - 6.0 3.9 - 3.9
1 Total operating
profit / (loss) 6.3 - 6.3 (22.3) - (22.3)
3 Additional profit
on prior year
disposals - 18.9 18.9 - - -
3 Amounts written
off investments - (11.7) (11.7) - - -
Profit / (loss)
on ordinary
activities
before interest 6.3 7.2 13.5 (22.3) - (22.3)
4 Net interest
income 12.5 - 12.5 9.4 - 9.4
Other finance
expense (3.4) - (3.4) (5.5) - (5.5)
2 Profit / (loss)
on ordinary
activities
before tax 15.4 7.2 22.6 (18.4) - (18.4)
5 Tax on
profit / (loss)
on ordinary
activities (30.8) - (30.8) (22.7) - (22.7)
3 Exceptional
taxation credit - 121.0 121.0
Profit / (loss)
on ordinary
activities
after tax (15.4) 128.2 112.8 (41.1) - (41.1)
Equity minority
interests (1.5) - (1.5) (0.3) - (0.3)
Profit / (loss)
for the
financial year (16.9) 128.2 111.3 (41.4) - (41.4)
6 Dividends
- equity (40.2) (30.2)
- non-equity (0.4) (0.4)
(40.6) (30.6)
Retained
profit / (loss)
for the
financial year 70.7 (72.0)
Earnings/(loss)
per share
7 - adjusted 32.6p 23.9p
7 - basic 33.2p (12.5)p
7 - diluted 29.6p (12.5)p
Balance sheets
at 31 December 2004
(in millions of pounds)
As
restated
Group Group Company Company
2004 2003 2004 2003
Fixed assets
Intangible assets 495.8 430.8 - -
Tangible assets 50.1 54.5 - -
Investments in subsidiary
undertakings - - 3,349.8 3,373.4
Investments in joint ventures:
- share of gross assets 16.6 16.7 - -
- share of gross liabilities (7.8) (5.5) - -
Investments in joint ventures 8.8 11.2 - -
Investments in associated
undertakings 1.9 0.2 - -
Other investments 146.8 168.9 - -
703.4 665.6 3,349.8 3,373.4
Current assets
Stocks and work in progress 22.8 20.4 - -
Debtors 198.0 158.5 141.9 118.3
Short term liquid funds 234.2 425.2 - -
Cash at bank and in hand 144.6 185.9 0.3 0.2
599.6 790.0 142.2 118.5
Creditors: amounts falling
due within one year (668.1) (1,076.6) (34.2) (246.6)
Net current
(liabilities)/ assets (68.5) (286.6) 108.0 (128.1)
Total assets less
current liabilities 634.9 379.0 3,457.8 3,245.3
Creditors: amounts falling due
after more than one year
Bank and other loans (96.1) (101.9) (130.2) (138.2)
Other creditors (4.6) (5.4) (1,999.4) (1,680.1)
Convertible debt (208.7) - - -
(309.4) (107.3) (2,129.6) (1,818.3)
Provisions for liabilities
and charges (50.0) (63.1) - -
Net assets excluding
pension liability 275.5 208.6 1,328.2 1,427.0
Pension liability (95.2) (83.9) - -
Net assets including
pension liability 180.3 124.7 1,328.2 1,427.0
Capital and reserves
Called up share capital 84.5 84.5 84.5 84.5
Share premium account 310.8 309.4 310.8 309.4
Merger reserve 31.3 31.3 - -
Other reserves 156.0 160.1 126.2 126.2
Profit and loss account (404.5) (461.6) 806.7 906.9
Shareholders' funds
(including non-equity
interests) 178.1 123.7 1,328.2 1,427.0
Equity minority interests 2.2 1.0 - -
Capital employed 180.3 124.7 1,328.2 1,427.0
Equity shareholders' funds 177.6 123.2 1,327.7 1,426.5
Non-equity shareholders' funds 0.5 0.5 0.5 0.5
Shareholders' funds 178.1 123.7 1,328.2 1,427.0
These financial statements were approved by a duly appointed and
authorised committee of the Board of Directors on 24 February 2005 and were
signed on its behalf by:
Geoff Unwin Director
Clive Hollick Director
Group cash flow statement
for the year ended 31 December 2004
(in millions of pounds)
Notes 2004 2003
8 Net cash inflow from operating activities 107.1 84.6
Dividends received from joint ventures and
associated undertakings 4.0 2.1
Returns on investments and servicing of finance
Interest received 44.1 20.5
Interest paid (36.3) (18.2)
Dividends paid to minority shareholders - (1.3)
Dividends paid to non-equity shareholders (0.4) (0.6)
Income from other fixed asset investments 5.6 5.4
Net cash inflow from returns on investments and
servicing of finance 13.0 5.8
Taxation
UK corporation tax received 1.0 8.9
Overseas tax paid (11.0) (0.5)
Taxation (paid) / received (10.0) 8.4
Capital expenditure and financial investment
Purchase of tangible fixed assets (8.5) (6.9)
Proceeds from sale of tangible fixed assets 1.9 -
Proceeds from sale of investments 3.0 10.3
Increase in investments - (5.4)
Investment in own shares - ESOP (4.1) -
Net cash outflow from capital expenditure
and financial investment (7.7) (2.0)
Acquisitions and disposals
Purchase of subsidiary undertakings and
businesses (199.9) (138.3)
Net cash acquired with subsidiary undertakings
and businesses 9.7 8.4
Investments in joint ventures and associated
undertakings (1.7) -
Net cash outflow from acquisitions and disposals (191.9) (129.9)
Equity dividends paid to shareholders (31.2) (24.4)
Net cash outflow before use of
liquid resources and financing (116.7) (55.4)
Management of liquid resources
Sale of current asset investments 176.6 134.9
Decrease / (increase) in short term deposits 169.5 (103.3)
Net cash inflow from management
of liquid resources 346.1 31.6
Financing
Proceeds from issue of ordinary share capital 1.5 1.0
Return of capital to shareholders
(including costs) (1.9) (3.6)
(Decrease) / increase in bank loans (98.9) 21.1
Repayment of loan notes - (1.2)
Net cash (outflow) / inflow from financing (99.3) 17.3
Increase / (decrease) in cash in the year 130.1 (6.5)
Reconciliation of net cash flow
to movement in net cash / (debt) 2004 2003
Decrease / (increase) in cash in the year 130.1 (6.5)
Cash outflow / (inflow) from debt 98.9 (19.9)
Cash inflow from decrease in liquid resources (346.1) (31.6)
Changes in net cash resulting from cash flows (117.1) (58.0)
Other non-cash movements (1.0) (2.0)
Translation difference 2.8 13.0
Movement in net cash in year (115.3) (47.0)
Opening net cash 46.5 93.5
9 Closing net (debt) / cash (68.8) 46.5
Liquid resources include term deposits and government and corporate
securities.
Statement of group total recognised gains and losses
for the year ended 31 December 2004
(in millions of pounds)
2004 2003
Profit / (loss) for the financial year 111.3 (41.4)
Currency translation differences on
foreign currency net investments:
Group 3.6 (20.4)
Joint ventures (0.5) (0.1)
Actuarial (loss) / gain recognised in the
pension schemes (14.9) 11.6
Other recognised losses for the year (11.8) (8.9)
Total recognised gains / (losses) for the year 99.5 (50.3)
Adjustment for investment in own shares (see note 11) 3.7 -
Total recognised gains / (losses) since
last annual report 103.2 (50.3)
The historical cost result is not materially different from the reported
loss in either year.
Reconciliation of movements in group shareholders' funds
for the year ended 31 December 2004
(in millions of pounds)
As
restated
2004 2003
Opening shareholders' funds as reported 123.7 211.3
Adjustment for investment in own shares (see note 11) - (4.1)
Opening shareholders' funds - restated 123.7 207.2
Profit / (loss) for the financial year 111.3 (41.4)
Equity dividends (40.2) (30.2)
Non-equity dividends on B shares (see note 6) (0.4) (0.4)
194.4 135.2
Other recognised losses relating to the year (11.8) (8.9)
New share capital subscribed 1.5 1.0
Own share capital purchased - ESOP (4.1) -
Return of capital to shareholders (1.9) (3.6)
Closing shareholders' funds 178.1 123.7
Notes to the financial statements
Group Group
share share
of joint of joint
Group ventures Group ventures
2004 2004 2003 2003
1. Business analysis m pounds m pounds m pounds m pounds
Turnover by division
Continuing operations:
CMP Media 193.8 8.8 210.5 8.2
CMP Asia 50.5 4.5 44.4 3.5
CMP Information 159.3 - 135.0 1.6
United Advertising Publications 58.5 - 58.1 -
Professional media 462.1 13.3 448.0 13.3
News distribution 94.8 10.7 94.8 10.3
Market research 222.9 - 203.9 -
Continuing operations 779.8 24.0 746.7 23.6
Acquisitions:
CMPMedica 29.8 - - -
809.6 24.0 746.7 23.6
Turnover by geographic market
United Kingdom 249.6 - 225.7 1.6
North America 424.1 18.5 450.1 17.7
Europe and Middle East 78.1 1.0 31.5 0.8
Pacific 57.8 4.5 39.4 3.5
809.6 24.0 746.7 23.6
Turnover analysis is based on turnover by origin. Turnover by destination
would not be materially different.
As
restated
2004 2003
Net operating assets/ (liabilities) by division m pounds m pounds
CMP Media 118.7 144.6
CMPMedica 150.9 -
CMP Asia (7.0) (4.0)
CMP Information 65.6 78.9
United Advertising Publications 7.3 6.5
Professional media 335.5 226.0
News distribution 4.8 12.1
Market research 80.2 69.0
420.5 307.1
by geographic market
United Kingdom 92.8 70.0
North America 176.9 226.3
Europe and Middle East 159.0 16.4
Pacific (8.2) (5.6)
420.5 307.1
Reconciliation of net operating assets to net assets
Net operating assets 420.5 307.1
Investments 391.7 605.5
Corporation tax (208.0) (308.5)
Net borrowings (300.2) (376.0)
Proposed dividend (28.5) (19.5)
Pension liability (95.2) (83.9)
Net assets 180.3 124.7
Group
share
of joint
Group ventures Total
2004 2004 2004
1. Business analysis (continued) m pounds m pounds m pounds
*Operating profit before amortisation of
intangible assets by division
Continuing operations:
CMP Media 21.8 1.2 23.0
CMP Asia 14.5 0.5 15.0
CMP Information 33.6 - 33.6
United Advertising Publications 13.2 - 13.2
Professional media 83.1 1.7 84.8
News distribution 20.5 3.5 24.0
Market research 20.1 - 20.1
Continuing operations 123.7 5.2 128.9
Acquisitions:
CMPMedica 3.4 - 3.4
*Operating profit before amortisation
of intangible assets 127.1 5.2 132.3
Amortisation of intangible assets (124.5) (1.5) (126.0)
*Operating profit / (loss) by division
Continuing operations:
CMP Media (38.7) 0.7 (38.0)
CMP Asia 10.9 0.5 11.4
CMP Information (3.7) - (3.7)
United Advertising Publications 12.3 - 12.3
Professional media (19.2) 1.2 (18.0)
News distribution 19.1 2.5 21.6
Market research 7.9 - 7.9
Continuing operations 7.8 3.7 11.5
Acquisitions:
CMPMedica (5.2) - (5.2)
*Operating profit 2.6 3.7 6.3
Non-operating exceptional items and 7.2
amounts written off investments
Net interest and other financial 9.1
income
Profit on ordinary activities before tax 22.6
*Operating profit / (loss) by geographic market
United Kingdom (7.4) - (7.4)
North America (6.6) 3.6 (3.0)
Europe and Middle East 3.4 (0.4) 3.0
Pacific 13.2 0.5 13.7
*Operating profit 2.6 3.7 6.3
Non-operating exceptional items and
amounts written off investments 7.2
Net interest and other financial income 9.1
Profit on ordinary activities before tax 22.6
*Includes income from other fixed asset investments of 6.0 million pounds.
Group
share
of joint
Group ventures Total
2003 2003 2003
1. Business analysis (continued) m pounds m pounds m pounds
*Operating profit before amortisation of
intangible assets by division
Continuing operations:
CMP Media 14.1 0.7 14.8
CMP Asia 12.1 0.5 12.6
CMP Information 25.2 0.1 25.3
United Advertising Publications 14.0 - 14.0
Professional media 65.4 1.3 66.7
News distribution 10.2 3.2 13.4
Market research 19.3 - 19.3
*Operating profit before amortisation
of intangible assets 94.9 4.5 99.4
Amortisation of intangible assets (120.1) (1.6) (121.7)
*Operating (loss)/ profit by division
Continuing operations:
CMP Media (38.4) 0.1 (38.3)
CMP Asia (1.4) 0.5 (0.9)
CMP Information (4.3) 0.1 (4.2)
United Advertising Publications 13.3 - 13.3
Professional media (30.8) 0.7 (30.1)
News distribution 0.7 2.2 2.9
Market research 4.9 - 4.9
*Operating (loss)/ profit (25.2) 2.9 (22.3)
Non-operating exceptional items -
Net interest and other financial 3.9
Loss on ordinary activities income before tax (18.4)
*Operating (loss)/ profit by geographic market
United Kingdom (6.1) 0.6 (5.5)
North America (25.7) 2.8 (22.9)
Europe and Middle East 9.8 (0.9) 8.9
Pacific (3.2) 0.4 (2.8)
*Operating (loss)/ profit (25.2) 2.9 (22.3)
Non-operating exceptional items -
Net interest and other financial income 3.9
Loss on ordinary activities before tax (18.4)
*Includes income from other fixed asset investments of 3.7 million pounds.
2004 2003
2. Reconciliation of operating profit before m pounds m pounds
amortisation and exceptionals to profit / (loss)
before tax
Operating profit before amortisation of
intangible assets and exceptional items 132.3 99.4
Amortisation of intangible assets:
- Group (124.5) (120.1)
- Joint ventures and associates (1.5) (1.6)
Total operating profit / (loss) 6.3 (22.3)
Net interest income 12.5 9.4
Other finance expense (3.4) (5.5)
Exceptional items and amounts written off investments
charged to profit / (loss) before tax (see note 3) 7.2 -
Profit / (loss) before tax 22.6 (18.4)
2004 2003
3. Exceptional items and amounts written off m pounds m pounds
investments
Additional profit relating to prior year disposals (a) 18.9 -
Amounts written off investments (b) (11.7) -
Total charged to loss on ordinary activities before tax 7.2 -
Exceptional taxation credit (c) 121.0 -
(a) In December 2004, United agreed a settlement of 32 million pounds
from Granada in respect of outstanding items relating to the 2000
disposals. The additional profit on disposal represents this
receipt, after deduction of interest, costs, and the offset of
recorded receivables.
(b) The group has written down the carrying value of certain fixed asset
investments, to reflect their expected realisable value. It is the
group's intention to exit these investments.
(c) The group has resolved a number of outstanding items as a
consequence of which there is a net exceptional tax credit of
121.0 million pounds.
2004 2003
4. Net interest income/(expense) m pounds m pounds
Interest receivable 26.6 25.8
Interest payable - on bank loans and overdrafts (2.3) (1.0)
- other (11.8) (15.4)
12.5 9.4
Interest receivable includes 9.8 million pounds (2003: 8.9 million pounds)
of interest receivable from Channel 5 Television Group Limited in respect of
shareholder loans.
2004 2003
5. Tax on profit / (loss) on ordinary activities m pounds m pounds
a) Analysis of tax charge for the year:
UK corporation tax at 30.0% (2003: 30.0%) 16.9 15.9
Overseas corporation tax 12.3 5.4
Tax relating to share of profit of joint ventures 1.2 1.4
Total current tax 30.4 22.7
Overseas deferred tax 0.4 -
30.8 22.7
2004 2003
m pounds m pounds
b) Factors affecting tax charge for the year:
Profit /(loss) on ordinary activities before tax 22.6 (18.4)
Profit / (loss) on ordinary activities before tax
multiplied by standard rate of corporation tax in the
UK of 30% 6.8 (5.5)
Effect of:
Expenses not deductible for tax purposes
(primarily goodwill amortisation) 43.1 35.2
Tax effect of items not recognised in
consolidated financial statements (19.0) (5.4)
Reversal of timing differences 2.4 0.5
Higher tax rates on overseas earnings 4.3 0.4
Additional profit relating to prior year
disposals not taxable (5.7) -
Other (1.5) (2.5)
Total current tax 30.4 22.7
c) Factors that may affect future tax:
No deferred tax has been recognised on the retained profits and reserves
of overseas subsidiaries or joint ventures or associated undertakings as there
is currently no intention to remit such amounts to the UK.
Deferred tax assets have not been recognised, having given consideration
to the likelihood of recovery of the balance.
2004 2003
6. Dividends m pounds m pounds
Equity dividends
Ordinary shares:
Interim of 3.63 p (2003: 3.3p) 12.1 11.0
Proposed final of 8.37p (2003: 5.7p) 28.1 19.2
Non-equity dividends - B shares 0.4 0.4
40.6 30.6
Non-equity dividends relate to the accrual for the LIBOR linked dividend
on 5,446,789 (2003: 6,212,819) B shares remaining in issue.
2004 2004 2004 2003 2003 2003
Weighted Weighted
average Earnings/ average Earnings/
number (loss) number (loss)
Earnings/ of per Earnings/ of per
(loss) shares share (loss) shares share
7. Earnings/(loss) m pounds million pence m pounds million pence
per share
109.1 334.4 32.7 80.3 334.2 24.0
Adjustment in respect
of B share dividends (0.4) - (0.1) (0.4) - (0.1)
Adjusted earnings
per share 108.7 334.4 32.6 79.9 334.2 23.9
Adjustment in respect
of amortisation
of intangible assets (126.0) - (37.7) (121.7) - (36.4)
Adjustment in respect
of exceptional items 128.2 - 38.3 - - -
Basic profit /
(loss) per share 110.9 334.4 33.2 (41.8) 334.2 (12.5)
Dilution 3.5 52.4 (3.6) - - -
Diluted profit /
(loss) per share 114.4 386.8 29.6 (41.8) 334.2 (12.5)
Adjusted earnings per share is presented as the directors consider that
this is a meaningful measure of the performance of the group. For diluted
earnings per share, the weighted average number of shares in issue is adjusted
to assume conversion of all dilutive potential ordinary shares. The group has
two categories of dilutive potential ordinary shares: those share options
granted to employees where the exercise price is less than the average market
price of the company's ordinary shares during the year and shares attributable
to convertible debt. No adjustment has been made for the dilutive impact in
2003 as this would decrease reported loss per share. The impact of dilutive
securities in 2004 would be to increase the profit by 3.5 million pounds for
convertible debt (2003: 3.7 million pounds) and to increase weighted average
shares by 4.6 million shares for employee share options (2003: 2.6 million)
and 47.8 million shares for convertible debt (2003: 47.8 million).
Total Total
2004 2003
8. Reconciliation of operating profit / m pounds m pounds
(loss) to cash inflow from operating activities
Operating profit / (loss) 6.3 (22.3)
Depreciation charges 12.9 25.3
Amortisation of intangible assets - group 124.5 120.1
Share of results of joint ventures (2.5) (2.9)
Income from fixed asset investments (6.0) (3.9)
Profit on sale of fixed asset investments - (4.3)
Loss on sale of tangible fixed assets - 0.3
Payments against provisions (16.1) (23.1)
Decrease / (increase) in stocks 2.8 (1.4)
(Increase) / decrease in debtors (2.8) 12.3
Decrease in creditors (3.3) (11.9)
Other non-cash items including movements on provisions (8.7) (3.6)
Cash inflow from operating activities 107.1 84.6
The effect of exceptional items on cash inflow from operating activities
was nil pounds (2003: nil pounds).
At Other At
1 January Cash non-cash Exchange 31 December
2004 flow movements movements 2004
9. Analysis of m pounds m pounds m pounds m pounds m pounds
movement in
net cash
Cash at bank and in hand 185.9 144.6
Overdrafts (2.7) (2.8)
183.2 141.8
Less deposits treated
as liquid resources (169.5) -
13.7 130.1 - (2.0) 141.8
Debt due after
one year (101.9) (212.7) (1.1) 10.9 (304.8)
Debt due within
one year (460.0) 311.7 - 8.3 (140.0)
(548.2) 229.1 (1.1) 17.2 (303.0)
Deposits included
in cash 169.5 (169.5) - - -
Current asset
investments 425.2 (176.6) - (14.4) 234.2
Total 46.5 (117.0) (1.1) 2.8 (68.8)
Cash deposits with third parties held in respect of letters of credit
included in cash above amounted to 5.6 million pounds.
10. Foreign exchange
The trading results of overseas subsidiaries and associated companies were
translated into sterling at an average of the exchange rates ruling for the
year.
11. Basis of accounting
The financial statements have been prepared under the historical cost
convention, in accordance with applicable Accounting Standards in the United
Kingdom. The financial statements have been prepared on a basis consistent
with prior years, except for the adoption of UITF Abstract 38 'Accounting for
ESOP Trusts'. This Abstract requires that any investment in own shares
through an ESOP trust is deducted from shareholders' funds. As required by
the Abstract, the comparative information at 31 December 2003 has been
restated, with other investments being reduced by 4.1m pounds, other reserves
being reduced by 7.8m pounds and the profit and loss reserve being increased
by 3.7m pounds to reverse provisions made against these shares in prior years.
12. Status of information
The figures and financial information for the year ended 31 December 2004
do not constitute the statutory financial statements for that year. Those
financial statements have not yet been delivered to the Registrar, but include
the auditors' report which was unqualified and did not contain a statement
under Section 237 (2) or (3) of the Companies Act 1985. The figures and
financial information for the year ended 31 December 2003 included in the
preliminary announcement do not constitute the statutory financial statements
for that year. Those financial statements have been delivered to the
Registrar and included the auditors' report which was unqualified and did not
contain a statement under Section 237 (2) or (3) of the Companies Act 1985.
This preliminary announcement was approved by a duly appointed and
authorised committee of the Board of Directors on 24 February 2005.
SOURCE United Business Media
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CONTACT:
Michael Waring, United Business Media,
+44-20-7921-5031; Colin Browne, The Maitland Consultancy,
+44-20-7379-5151, for United Business Media
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