RECOVERY UNDER WAY
Financial Highlights** for Full Year ended 31 December 2003
-- Turnover Down 5.9 per cent to 746.7m pounds sterling
(793.4m euros)
-- Operating profit* Up 53.2 per cent to 99.4m pounds(64.9m pounds)
-- Profit before tax* Up 41.7 per cent to 103.3m pounds (72.9m pounds)
-- EPS* Up 45.5 per cent to 24.0p (16.5p)
-- Dividend Up 28.6 per cent to 9.0p (7.0p)
-- Operating* margin Up to 13.3 per cent (8.2 per cent)
-- Cash Conversion 119 per cent (140 per cent)
* Before amortisation of goodwill and intangibles and prior year
exceptional items
** The statutory results are shown in the attached summary financial
statements
LONDON, Feb. 26 /PRNewswire-FirstCall/ --
Clive Hollick, Chief Executive of United Business Media, said:
"These excellent results have been achieved through a combination of
gradually improving revenues and significant operating margin gains. After a
slow first half, revenues in the second half grew by 5.8 per cent. In the US,
underlying CMP Media healthcare revenues were up 31.0 per cent in the full
year and in the second half continuing technology revenues matched the prior
period for the first time in three years. The productivity and cost gains
achieved through the radical transformation of our business model over the
last two years boosted United's 2003 operating margin to 13.3 per cent - well
ahead of our published target of 10 per cent.
"Where changed, key market shares and yields have improved. Increased
investment in new products and in carefully targeted acquisitions is making a
growing contribution to revenue and profit growth. During the year, six
acquisitions totalling 130m pounds strengthened our core healthcare,
construction publishing and market research businesses.
Current Trading & Outlook
"The trading momentum achieved in the second half of 2003 is continuing
into the current year and this, together with the contribution from our
investment programme, points to good progress in 2004. Underlying growth in
our US businesses will, as a result of the weakness of the US dollar, be
reduced on translation to sterling.
"In our publications and exhibitions business we are seeing an improving
tech climate and healthcare is continuing to grow. Business in Asia is
returning to pre-SARS levels and in the UK margins are growing. News
distribution is continuing to achieve volume and yield improvements. Our
market research order book was up at the year end and we are restructuring
this business to improve its margin and revenue growth.
"With a higher level of operational gearing and improved positions in our
core markets we are well placed to benefit from economic recovery. The group
continues to evaluate a number of investments to strengthen core markets and
capitalise on our efficient operating base."
SUMMARY GROUP PROFIT & LOSS STATEMENT
The profit and loss statement set out below re-presents 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 and prior year exceptional items.
Year ended 31 December
2003 2002 Movement
m pounds m pounds %
Turnover - continuing 725.0 793.4 (8.6%)
Turnover - acquisitions 21.7 -- --
Group turnover** 746.7 793.4 (5.9%)
Operating profit*- continuing 96.5 64.9 48.7%
Operating profit* - acquisitions 2.9 -- --
Total operating profit* 99.4 64.9 53.2%
Net interest 9.4 10.1 (6.9%)
Other financial expense (FRS17) (5.5) (2.1) (161.9%)
Operating profit*
after interest 103.3 72.9 41.7%
Amortisation of goodwill
and intangibles (121.7) (135.9) (10.4%)
Operating loss before
exceptional items (18.4) (63.0) 70.8%
Exceptional items*** -- (158.2)
Loss before tax (18.4) (221.2) 91.7%
Taxation expense (22.7) (16.0) (41.9%)
Loss on ordinary
activities after tax (41.1) (237.2) 82.7%
Equity minority interest (0.3) (1.8) 83.3%
Loss for the year (41.4) (239.0) 82.7%
Dividends - equity (30.2) (23.6) (9.3%)
- non-equity (0.4) (0.6) (33.3%)
Dividends (30.6) (24.2) (8.3%)
Retained loss for the year (72.0) (263.2) 74.3%
EPS* (pence) 24.0 16.5 45.5%
Basic EPS (pence) (12.4) (71.6) --
Dividend per share (pence) 9.0 7.0 28.6%
* Before amortisation of goodwill and intangibles and prior year
exceptional items
** Excluding JVs and Associates
*** Includes 114.2m pounds in 2002 of exceptional impairment of goodwill.
CONTENTS
1. Summary of Results
2. Second half (H2) of 2003
3. Divisional Review
4. Dividend
5. Balance Sheets and Cash Conversion
6. Fixed Asset Investments
7. Pensions
8. Tax
1. SUMMARY OF RESULTS
Group Turnover
Twelve months to 31 December
(m pounds)
2003 2002 Change Underlying
(%) #(%)
CMP Media 210.5 238.2 (11.6) (5.4)
CMP Asia 44.4 51.1 (13.1) 9.9
CMPi 135.0 127.6 5.8 (9.6)
UAP 58.1 58.1 0.0 (0.5)
Professional Media 448.0 475.0 (5.7) (4.4)
News Distribution 94.8 105.4 (10.1) (3.4)
Market Research 203.9 213.0 (4.3) 0.5
Total 746.7 793.4 (5.9) (3.0)
Group Operating Profit
Twelve months to 31 December
(m pounds)
2003 2002 Change Underlying
(%) #(%)
CMP Media 14.8 (6.8) 317.6 384.4
CMP Asia 12.6 13.7 (8.0) 20.3
CMPi 25.3 10.1 150.5 130.1
UAP 14.0 12.7 10.2 12.4
Professional Media 66.7 29.7 124.6 128.7
News Distribution 13.4 17.3 (22.5) (9.3)
Market Research 19.3 17.9 7.8 30.5
Total 99.4 64.9 53.2 67.4
# Underlying:
- adjusted for the estimated effects of acquisitions, foreign exchange,
SARS and biennial events
Underlying revenue was down by 3.0 per cent or 22.5m pounds- after
adjusting for the effects of acquisitions, foreign exchange, SARS and
biennials. 2003 turnover was boosted by 21.7m pounds of acquisition revenue
and reduced by approximately 9m pounds due to the effects of SARS. The
weakness of the US dollar has a direct translation impact upon consolidation -
with two thirds of UBM revenue reported locally in US dollars, consolidated
turnover was reduced by 38.8m pounds as a result of foreign exchange impacts.
The average rate of $:pounds exchange in 2003 was 1.64 (2002: 1.51). A 1
cent movement in the US dollar against sterling is approximately equivalent to
a move in profit of around 400,000 pounds.
2. SECOND HALF (H2) 0F 2003
Group Turnover
Six months to 31 December
(m pounds)
2003 2002 Change Underlying
(%) #(%)
CMP Media 108.7 108.3 0.4 6.5
CMP Asia 30.4 25.6 18.8 15.8
CMPi 76.3 58.7 30.0 (4.1)
UAP 28.6 28.6 0.0 (1.0)
Professional Media 244.0 221.2 10.3 3.6
News Distribution 46.8 47.9 (2.3) 5.2
Market Research 111.9 111.5 0.4 5.3
Total 402.7 380.6 5.8 4.3
Group Operating Profit
Six months to 31 December
(m pounds)
2003 2002 Change Underlying
(%) #(%)
CMP Media 9.9 0.5 1,880.0 1,824.5
CMP Asia 13.3 6.0 121.7 78.2
CMPi 14.6 3.8 284.2 256.3
UAP 5.1 5.8 (12.1) 1.4
Professional Media 42.9 16.1 166.5 156.6
News Distribution 5.4 5.0 10.0 64.9
Market Research 9.1 6.4 42.2 171.5
Total 57.4 27.5 109.1 143.8
3. DIVISIONAL REVIEW
Professional Media
Turnover Operating Profit
Twelve months to Twelve months to
31 December 31 December
2003 2002 Change 2003 2002 Change
m pounds m pounds % m pounds m pounds %
CMP Media 210.5 238.2 (11.6) 14.8 (6.8) 317.6
CMP Asia 44.4 51.1 (13.1) 12.6 13.7 (8.0)
CMPi 135.0 127.6 5.8 25.3 10.1 150.5
UAP 58.1 58.1 0.0 14.0 12.7 10.2
Total 448.0 475.0 (5.7) 66.7 29.7 124.6
The turnaround in Professional Media's performance in the second half of
the year was a major driver of the improvement in the group's performance,
with revenue up 10.3 per cent - despite the weakness of the US dollar - and
operating profit up by 166.5 per cent. Professional Media turnover was down
5.7 per cent for the full year with operating profit up by 124.6 per cent.
CMP Media returned to profit in 2003. It achieved significant
improvements in operating efficiencies and in the second half overall revenues
were up to the levels of the prior year. In the second half, high tech dollar
revenues from continuing business regained 2002 levels, while underlying
healthcare dollar revenues - which on a pro-forma basis now account for
approximately 20 per cent of divisional revenues - rose 42 per cent. Many of
our core healthcare markets grew strongly, with market leading positions in
Psychiatry, Oncology and General Consulting - positions which were
strengthened by the 2003 acquisition of The Oncology Group and Cliggott
Publishing. CMP Media's market leading technology titles drove an overall
increase in yields, up 4 per cent in 2003. Organic investments performed
well, generating over 10m pounds of revenue and 3m pounds of operating profit.
CMP Asia has seen an impressive post-SARS recovery. Following the SARS
related cancellation of one of the major shows in the first half, revenue in
the second half increased by 18.8 per cent on the prior year. Underlying
second half operating profit was up 78.2 per cent on 2002 - after stripping
out the SARS related 3.8m pounds insurance receipt. Further good progress was
achieved in launching new shows, in expanding into mainland China, and with
the continuing success of the KSS business in Japan - acquired in late 2001.
CMP Information operating profit more than doubled in 2003. Despite an
underlying decline in revenue - stripping out acquisitions - significant
improvements in operating efficiency helped to drive profit from 10.1m pounds
in 2002 to 25.3m pounds in 2003, representing an overall operating margin of
18.7 per cent (7.9 per cent in 2002). CMPi again increased its investment in
organic project initiatives. In 2003 CMPi strengthened its leadership
position in the UK construction and design market with 81m pounds of
acquisitions - including The Builder Group and Barbour Index. Integration is
proceeding well and these businesses are on track to deliver 9m pounds of
operating profit in 2004.
United Advertising Publications delivered strong profit growth of 10.2 per
cent on flat revenue, driving operating margins to 24.1 per cent (21.9 per
cent in 2002). Following several years of investment, Auto Exchange - the
UK's leading free pick up weekly motoring advertising magazine - is now firmly
into profit. Exchange & Mart with Auto Exchange successfully developed cross
selling initiatives and gave UAP a stronger competitive position nationally.
Online extensions of the Daltons Weekly brand are showing good progress.
These extensions and the acquisition of This Caring Business added further
depth to the range of products targeted at small and medium sized businesses.
PR Newswire - News Distribution
Turnover Operating Profit
Twelve months to Twelve months to
31 December 31 December
2003 2002 Change 2003 2002 Change
m pounds m pounds % m pounds m pounds %
PR Newswire 94.8 105.4 (10.1) 13.4 17.3 (22.0)
Following year on year declines in each of the first three quarters of
2003, the fourth quarter saw US wire volumes begin to recover with 43,400 wire
messages compared to 42,300 in the fourth quarter of 2002. The volume of
discretionary releases is growing, with new product announcements up
approximately 9 per cent on 2002. US wire yields increased by 1 per cent
increase over 2002. Full year margins were down to 14.1 per cent (2002: 16.4
per cent) due to restructuring costs of over 2m pounds and to the increased
commitment to organic investment and geographic expansion.
The much smaller markets outside of the US remained both competitive and
loss making (a 2.9m loss pounds) and the challenge for 2004 is to drive the
European business into profit.
NOP World - Market Research
Turnover Operating Profit
Twelve months to Twelve months to
31 December 31 December
2003 2002 Change 2003 2002 Change
m pounds m pounds % m pounds m pounds %
NOP World 203.9 213.0 (4.3) 19.3 17.9 7.8
In 2003 NOP World increased operating profit by 7.8 per cent to 19.3m
pounds (2002: 17.9m pounds) on flat underlying revenue. Revenue grew in the
second half despite the weakness of the US dollar. Our syndicated and
continuous businesses such as AFI and MRI delivered strong performances and
the healthcare business is recovering.
A major restructuring programme is under way to improve margins, focus the
business around its core sector strengths - automotive, healthcare, financial,
business & technology and consumer & retail - and introduce global account
management. Despite the expensing of costs associated with this major
restructuring and an increased level of organic investment, operating margins
rose to 9.5 per cent (2002: 8.4 per cent).
NOP World is already achieving a good performance from Eurisko - this
acquisition gives NOP World a leading position in the Italian market, provides
a platform to export NOP products throughout Europe and in "Sinottica" secures
a major new syndicated product which complements NOP World's sector strengths.
4. DIVIDEND
The Board is recommending a final dividend of 5.7 pence (2002: 4.0 pence),
bringing the total for the year to 9.0 pence (2002: 7.0 pence), an increase of
28.6 per cent. This increase reflects the excellent performance achieved in
2003 and the directors' confidence in the long-term outlook for the business.
This is in line with our progressive dividend policy.
The final dividend on the ordinary shares will be paid on 28 May to
shareholders on the register on 12 March.
The dividend on the B shares will be 6.59 pence per share. This dividend
will be payable on 26 April to shareholders on the register on 19 March.
5. BALANCE SHEET AND CASH CONVERSION
Net cash balances at the end of the period were 46.5m pounds, after
expenditure of 130m pounds on acquisitions during the year and strong
operating cash conversion of 119 per cent of operating profit. Cash
conversion has now been 100 per cent or more for three years in succession.
6. FIXED ASSET INVESTMENTS
UBM holds investments in five, ITN, SIS, SDN, Paperloop and the Press
Association. Five revenue grew by 6.2 per cent to 259.9m pounds (2002:
244.7m pounds) and it turned a 2002 operating loss of 4.8m pounds into a 2003
operating profit of 8.5m pounds. Its audience share held firm at 6.6 per
cent (2002: 6.5 per cent) and its share of advertising revenue increased from
7.5 per cent to 8.1 per cent.
Income from investments of 3.9m pounds includes dividends received from
SIS, PA and ITN.
7. PENSIONS
As at 31 December 2003, the pension deficit of 83.9m pounds had been
reduced by 7m pounds on the prior year end. The charge against profit for
2003 was 5.6m pounds with financing costs of 5.5m pounds. This combined
charge is currently expected to be approximately 10m pounds in 2004.
8. TAX
The effective tax rate in 2003 was 22.0 per cent (2002: 21.9 per cent).
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 2003
Before Exceptional Before Exceptional
Exceptional items Exceptional items
Items (note 3) Total items (note 3) Total
2003 2003 2003 2002 2002 2002
Notes m pounds m pounds m pounds m pounds m pounds m pounds
Turnover - group
and share of
joint ventures
Continuing
operations 748.6 -- 748.6 819.2 -- 819.2
1 Less: share
of joint
ventures'
turnover (23.6) -- (23.6) (25.8) -- (25.8)
725.0 -- 725.0 793.4 -- 793.4
Acquisitions 21.7 -- 21.7 -- -- --
1 Group turnover 746.7 -- 746.7 793.4 -- 793.4
Group operating
loss
Continuing
operations (27.8) -- (27.8) (83.0) (144.2) (227.2)
Acquisitions (1.3) -- (1.3) -- -- --
Group operating
loss (29.1) -- (29.1) (83.0) (144.2) (227.2)
Share of
operating profit
in joint
ventures and
associates
Continuing
operations 2.9 -- 2.9 1.6 -- 1.6
Acquisitions -- -- -- -- -- --
2.9 -- 2.9 1.6 -- 1.6
Income from
other fixed
asset
investments 3.9 -- 3.9 10.4 -- 10.4
1 Total operating
loss (22.3) -- (22.3) (71.0) (144.2) (215.2)
Loss on sale and
closure of
businesses
Continuing
operations -- -- -- -- -- --
Discontinued
operations -- -- -- -- (14.0) (14.0)
-- -- -- -- (14.0) (14.0)
Loss on ordinary
activities
before
interest (22.3) -- (22.3) (71.0) (158.2) (229.2)
4 Net interest
income 9.4 -- 9.4 10.1 -- 10.1
Other finance
expense (5.5) -- (5.5) (2.1) -- (2.1)
Loss on ordinary
activities
before tax (18.4) -- (18.4) (63.0) (158.2) (221.2)
5 Tax on loss on
ordinary
activities (22.7) -- (22.7) (16.0) -- (16.0)
Loss on ordinary
activities
after tax (41.1) -- (41.1) (79.0) (158.2) (237.2)
Equity minority
interests (0.3) -- (0.3) (1.8) -- (1.8)
Loss for the
financial year (41.4) -- (41.4) (80.8) (158.2) (239.0)
6 Dividends -
equity (30.2) (23.6)
- non-equity (0.4) (0.6)
(30.6) (24.2)
Retained loss
for the
financial
year (72.0) (263.2)
Earnings/(loss) per share
7 -before
amortisation of
intangible assets
and exceptional items 24.0p 16.5p
7 -basic (12.4)p (71.6)p
7 -diluted (12.4)p (71.6)p
Balance sheets
at 31 December 2003
Group Group Company Company
2003 2002 2003 2002
m pounds m pounds m pounds m pounds
Fixed assets
Intangible assets 430.8 442.7 -- --
Tangible assets 54.5 67.3 -- --
Investments in
subsidiary undertakings -- -- 3,373.4 3,543.9
Investments in
joint ventures:
- share of
gross assets 16.7 17.2 -- --
- share of
gross liabilities (5.5) (4.4) -- --
Investments in
joint ventures 11.2 12.8 -- --
Investments in
associated undertakings 0.2 0.2 -- --
Other investments 173.0 169.5 -- --
669.7 692.5 3,373.4 3,543.9
Current assets
Stocks 20.4 16.6 -- --
Debtors 158.5 163.3 118.3 102.3
Investments -- 1.5 -- --
Short term liquid funds 425.2 594.8 -- --
Cash at bank and in hand 185.9 96.7 0.2 --
790.0 872.9 118.5 102.3
Creditors: amounts
falling due within
one year (1,076.6) (605.9) (246.6) (34.5)
Net current
(liabilities)/ assets (286.6) 267.0 (128.1) 67.8
Total assets less
current liabilities 383.1 959.5 3,245.3 3,611.7
Creditors: amounts
falling due after
more than one year
Bank and other loans (101.9) (338.5) (138.2) (385.5)
Other creditors (5.4) (13.3) (1,680.1) (2,398.5)
Convertible debt -- (245.0) -- --
(107.3) (596.8) (1,818.3) (2,784.0)
Provisions for
liabilities
and charges
(63.1) (58.5) -- --
Net assets excluding
pension liability 212.7 304.2 1,427.0 827.7
Pension liability (83.9) (90.9) -- --
Net assets including
pension liability 128.8 213.3 1,427.0 827.7
Capital and reserves
Called up share capital 84.5 84.5 84.5 84.5
Share premium account 309.4 308.5 309.4 308.5
Merger reserve 31.3 31.3 -- --
Other reserves 167.9 167.8 126.2 126.1
Profit and loss account
(465.3) (380.8) 906.9 308.6
Shareholders' funds
(including non-equity
interests) 127.8 211.3 1,427.0 827.7
Equity minority interests 1.0 2.0 -- --
Capital employed 128.8 213.3 1,427.0 827.7
Equity shareholders'
funds 127.3 210.7 1,426.5 827.1
Non-equity shareholders'
funds 0.5 0.6 0.5 0.6
Shareholders' funds 127.8 211.3 1,427.0 827.7
Group cash flow statement
for the year ended 31 December 2003
2003 2002
m pounds m pounds
Net cash inflow from operating activities 84.6 55.5
Dividends received from joint ventures
and associated undertakings 2.1 0.9
Returns on investments and servicing of finance
Interest received 20.5 33.5
Interest paid (18.2) (29.1)
Dividends paid to minority shareholders (1.3) (1.9)
Dividends paid to non-equity shareholders (0.6) (0.9)
Income from other fixed asset investments 5.4 13.6
Net cash inflow from returns on
investments and servicing of finance 5.8 15.2
Taxation
UK corporation tax received 8.9 3.4
Overseas tax (paid)/ received (0.5) 11.9
Taxation received 8.4 15.3
Capital expenditure and financial investment
Purchase of tangible fixed assets (6.9) (10.9)
Proceeds from sale of tangible fixed assets -- 1.0
Purchase of other intangible assets -- (0.3)
Proceeds from sale of investments 10.3 --
Increase in investments (5.4) (11.9)
Net cash outflow from capital expenditure
and financial investment (2.0) (22.1)
Acquisitions and disposals
Purchase of subsidiary undertakings
and businesses (138.3) (1.3)
Net cash acquired with subsidiary
undertakings and businesses 8.4 --
Investments in joint ventures and
associated undertakings -- (0.1)
Costs incurred on the sale
and closure of operations -- (19.0)
Net cash outflow from acquisitions
and disposals (129.9) (20.4)
Equity dividends paid to shareholders (24.4) (13.5)
Net cash (outflow)/ inflow before
use of liquid resources and financing (55.4) 30.9
Management of liquid resources
Sale/ (purchase) of current asset investments 134.9 (42.4)
(Increase)/ decrease in short term deposits (103.3) 264.4
Net cash inflow from management of
liquid resources 31.6 222.0
Financing
Proceeds from issue of ordinary share capital 1.0 2.9
Return of capital to shareholders
(including costs) (3.6) (7.4)
Repurchase of bond -- (164.0)
Increase/ (decrease) in bank loans 21.1 (47.8)
Repayment of loan notes (1.2) (23.6)
Net cash inflow/ (outflow) from financing 17.3 (239.9)
(Decrease)/ increase in cash in the year (6.5) 13.0
2003 2002
Reconciliation of net cash flow to
movement in net cash m pounds m pounds
Increase in cash in the year (6.5) 13.0
Cash (inflow)/ outflow from (increase)/
decrease in debt (19.9) 235.4
Cash (inflow) from (decrease)
in liquid resources (31.6) (222.0)
Changes in net cash resulting from cash flows (58.0) 26.4
Other non-cash movements (2.0) (6.2)
Translation difference 13.0 24.0
Movement in net cash in year (47.0) 44.2
Opening net cash 93.5 49.3
Closing net cash 46.5 93.5
Liquid resources include term deposits and government and corporate
securities.
Statement of group total recognised gains and losses
for the year ended 31 December 2003
2003 2002
m pounds m pounds
Loss for the financial year (41.4) (239.0)
Currency translation differences on
foreign currency net investments:
Group (20.4) (32.5)
Joint ventures (0.1) (0.9)
Actuarial gain/ (loss)
recognised in the pension schemes 11.6 (50.6)
Other recognised losses for the year (8.9) (84.0)
Total recognised losses for the year (50.3) (323.0)
Implementation of FRS 17 -- (48.9)
Total gains and losses recognised
since last annual report (50.3) (371.9)
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 2003
2003 2002
m pounds m pounds
Opening shareholders' funds as reported 211.3 611.9
Implementation of FRS 17 -- (48.9)
Opening shareholders' funds - restated 211.3 563.0
Loss for the financial year (41.4) (239.0)
Equity dividends (30.2) (23.6)
Non-equity dividends on B shares (see note 6) (0.4) (0.6)
139.3 299.8
Other recognised losses relating to the year (8.9) (84.0)
New share capital subscribed 1.0 2.9
Return of capital to shareholders (3.6) (7.4)
Closing shareholders' funds 127.8 211.3
Notes to the financial statements
As restated
Group share Group share
of joint As restated of joint
Group ventures Group ventures
2003 2003 2002 2002
1. Business analysis m pounds m pounds m pounds m pounds
Turnover; by division
Continuing operations:
CMP Media 208.0 8.2 238.2 9.0
CMP Asia 44.4 3.5 51.1 3.6
CMP Information 117.2 1.6 127.6 4.5
United Advertising
Publications 57.8 -- 58.1 --
Professional media 427.4 13.3 475.0 17.1
News distribution 94.8 10.3 105.4 8.7
Market research 202.8 -- 213.0 --
Continuing operations 725.0 23.6 793.4 25.8
Acquisitions:
CMP Media 2.5 -- -- --
CMP Information 17.8 -- -- --
United Advertising
Publications 0.3 -- -- --
Professional media 20.6 -- -- --
Market research 1.1 -- -- --
Acquisitions 21.7 -- -- --
746.7 23.6 793.4 25.8
by geographic market
United Kingdom 225.7 1.6 216.6 4.5
North America 450.1 17.7 502.2 17.0
Europe and Middle East 31.5 0.8 28.1 0.7
Pacific 39.4 3.5 46.5 3.6
746.7 23.6 793.4 25.8
Turnover analysis is based on turnover by origin. Turnover by destination
would not be materially different.
2003 2002
Net operating assets/
(liabilities); by division m pounds m pounds
CMP Media 144.6 171.4
CMP Asia (4.0) 7.9
CMP Information 78.9 40.8
United Advertising Publications 6.5 5.2
Professional media 226.0 225.3
News distribution 12.1 34.2
Market research 69.0 59.8
307.1 319.3
by geographic market
United Kingdom 70.0 27.9
North America 226.3 282.1
Europe and Middle East 16.4 2.2
Pacific (5.6) 7.1
307.1 319.3
Reconciliation of net
operating assets to net assets
Net operating assets 307.1 319.3
Investments 762.2 778.7
Corporation tax (308.5) (277.4)
Net borrowings (528.6) (502.5)
Proposed dividend (19.5) (13.9)
Pension liability (83.9) (90.9)
Net assets 128.8 213.3
The amounts shown against "CMP Media" and "CMP Information" for 2002 in
the tables above have been restated to reflect the intra-group transfer of CMP
Europe.
Group share
of joint Exceptional
Group ventures Subtotal items Total
2003 2003 2003 2003 2003
m pounds m pounds m pounds m pounds m pounds
1.Business analysis
(continued)
* Operating profit
before amortisation
of intangible assets;
by division Continuing
operations:
CMP Media 13.9 0.7 14.6 -- 14.6
CMP Asia 12.1 0.5 12.6 -- 12.6
CMP Information 22.8 0.1 22.9 -- 22.9
United Advertising
Publications 13.9 -- 13.9 -- 13.9
Professional media 62.7 1.3 64.0 -- 64.0
News distribution 10.2 3.2 13.4 -- 13.4
Market research 19.1 -- 19.1 -- 19.1
Continuing operations 92.0 4.5 96.5 -- 96.5
Acquisitions:
CMP Media 0.2 -- 0.2 -- 0.2
CMP Information 2.4 -- 2.4 -- 2.4
United Advertising
Publications 0.1 -- 0.1 -- 0.1
Professional media 2.7 -- 2.7 -- 2.7
Market research 0.2 -- 0.2 -- 0.2
Acquisitions 2.9 -- 2.9 -- 2.9
* Operating profit
before amortisation
of intangible assets 94.9 4.5 99.4 -- 99.4
Amortisation of
intangible assets (120.1) (1.6) (121.7) -- (121.7)
* Operating profit/
(loss); by division
Continuing
operations:
CMP Media (38.2) 0.1 (38.1) -- (38.1)
CMP Asia (1.4) 0.5 (0.9) -- (0.9)
CMP Information (3.1) 0.1 (3.0) -- (3.0)
United Advertising
Publications 13.2 -- 13.2 -- 13.2
Professional media (29.5) 0.7 (28.8) -- (28.8)
News distribution 0.7 2.2 2.9 -- 2.9
Market research 4.9 -- 4.9 -- 4.9
Continuing operations (23.9) 2.9 (21.0) -- (21.0)
Acquisitions:
CMP Media (0.2) -- (0.2) -- (0.2)
CMP Information (1.2) -- (1.2) -- (1.2)
United Advertising
Publications 0.1 -- 0.1 -- 0.1
Professional media (1.3) -- (1.3) -- (1.3)
Market research -- -- -- -- --
Acquisitions (1.3) -- (1.3) -- (1.3)
* Operating loss (25.2) 2.9 (22.3) -- (22.3)
Non-operating
exceptional items --
Net interest and other
financial income 3.9
Loss on ordinary
activities before tax (18.4)
by geographic market
United Kingdom (6.1) 0.6 (5.5) -- (5.5)
North America (25.7) 2.8 (22.9) -- (22.9)
Europe and Middle East 9.8 (0.9) 8.9 -- 8.9
Pacific (3.2) 0.4 (2.8) -- (2.8)
* Operating loss (25.2) 2.9 (22.3) -- (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
Group share
of joint Exceptional
Group ventures Subtotal items Total
2002 2002 2002 2002 2002
m pounds m pounds m pounds m pounds m pounds
1. Business analysis
(continued)
* Operating profit
before amortisation
of intangible assets;
by division
Continuing operations:
CMP Media (7.3) 0.5 (6.8) (11.3) (18.1)
CMP Asia 13.6 0.1 13.7 (0.7) 13.0
CMP Information 9.9 0.2 10.1 (5.8) 4.3
United Advertising
Publications 12.7 -- 12.7 (0.8) 11.9
Professional media 28.9 0.8 29.7 (18.6) 11.1
News distribution 14.3 3.0 17.3 (4.1) 13.2
Market research 17.9 -- 17.9 (7.3) 10.6
Continuing operations 61.1 3.8 64.9 (30.0) 34.9
Acquisitions:
CMP Media -- -- -- -- --
CMP Information -- -- -- -- --
United Advertising
Publications -- -- -- -- --
Professional media -- -- -- -- --
Market research -- -- -- -- --
Acquisitions -- -- -- -- --
* Operating profit
before amortisation
of intangible assets 61.1 3.8 64.9 (30.0) 34.9
Amortisation of
intangible assets (133.7) (2.2) (135.9) (114.2) (250.1)
* Operating profit/
(loss); by division
Continuing operations:
CMP Media (71.3) (0.7) (72.0) (71.3) (143.3)
CMP Asia (0.5) -- (0.5) (0.7) (1.2)
CMP Information (17.5) 0.2 (17.3) (5.8) (23.1)
United Advertising
Publications 11.7 -- 11.7 (0.8) 10.9
Professional media (77.6) (0.5) (78.1) (78.6) (156.7)
News distribution 8.9 2.1 11.0 (21.3) (10.3)
Market research (3.9) -- (3.9) (44.3) (48.2)
Continuing operations (72.6) 1.6 (71.0) (144.2) (215.2)
Acquisitions:
CMP Media -- -- -- -- --
CMP Information -- -- -- -- --
United Advertising
Publications -- -- -- -- --
Professional media -- -- -- -- --
Market research -- -- -- -- --
Acquisitions -- -- -- -- --
* Operating loss (72.6) 1.6 (71.0) (144.2) (215.2)
Non-operating
exceptional items (14.0)
Net interest and
other financial income 8.0
Loss on ordinary
activities before tax (221.2)
by geographic market
United Kingdom (27.6) 0.5 (27.1) (24.6) (51.7)
North America (54.5) 1.9 (52.6) (112.4) (165.0)
Europe and Middle East 12.5 (0.8) 11.7 (7.2) 4.5
Pacific (3.0) -- (3.0) -- (3.0)
* Operating loss (72.6) 1.6 (71.0) (144.2) (215.2)
Non-operating
exceptional items (14.0)
Net interest and other
financial income 8.0
Loss on ordinary
activities before tax (221.2)
* Includes income from other fixed asset investments
2003 2002
2. Reconciliation of operating profit before m pounds m pounds
amortisation and exceptionals to
loss before tax
Operating profit before amortisation of
intangible assets and exceptional items* 99.4 64.9
Amortisation of intangible assets:
- Group (120.1) (133.7)
- Joint ventures and associates (1.6) (2.2)
Exceptional items charged to
operating profit (see note 3):
- Impairment of goodwill -- (114.2)
- Restructuring costs -- (30.0)
Total operating loss (22.3) (215.2)
Net interest income 9.4 10.1
Other finance expense (5.5) (2.1)
Exceptional items charged to loss before tax -- (14.0)
Loss before tax (18.4) (221.2)
* Included within operating profit before amortisation of intangible
assets and exceptional items is 7.7 million pounds (2002: 8.5 million
pounds) of redundancy and other restructuring costs.
2003 2002
3. Exceptional items m pounds m pounds
Charged to operating loss:
Continuing operations:
Other restructuring costs (note (a)) -- (30.0)
Goodwill impairment (note (b)) -- (114.2)
Total charged to operating loss
(continuing operations) -- (144.2)
Charged to loss before tax;
Payments relating to prior year disposals (note (c)) -- (14.0)
Total charged after operating loss -- (14.0)
Total charged to loss on ordinary
activities before tax -- (158.2)
Tax on exceptional items -- --
(a) Other restructuring costs in 2002 relate to additional provisions for
vacant properties.
(b) In 2002, in accordance with the requirements of FRS11 "Impairment of
fixed assets and goodwill", the directors considered the carrying
value of the group's purchased goodwill, and, in the light of market
conditions, made a provision for impairment. In determining the
amount of the impairment, which was calculated on a net realisable
value basis, the directors considered a number of factors, including
the current and prospective revenues, earnings and cash flows from the
businesses.
(c) In 2002, United settled an outstanding claim relating to the planned
merger with Carlton Communications plc in 2000 and the subsequent sale
of the group's television business. The exceptional cost of this
claim to the group, net of associated receipts, amounted to #14.0
million.
2003 2002
4. Net interest income/(expense) m pounds m pounds
Interest receivable 25.8 36.6
Interest payable - on bank loans and overdrafts (1.0) (1.9)
- on other loans (15.4) (24.6)
9.4 10.1
Interest receivable includes 8.9 million pounds(2002: 8.8 million pounds)
of interest receivable from Channel 5 Television Group Limited in respect of
shareholder loans.
2003 2002
5. Tax on loss on ordinary activities m pounds m pounds
a) Analysis of tax charge for the year:
UK corporation tax at 30.0% (2002: 30.0%) 15.9 (0.5)
Overseas corporation tax 5.4 15.3
Tax relating to share of profit of joint ventures 1.4 1.2
22.7 16.0
2003 2002
m pounds m pounds
b) Factors affecting tax charge for the year:
Loss on ordinary activities before tax (18.4) (221.2)
Loss on ordinary activities before tax multiplied by
standard rate of corporation tax in the UK of 30% (5.5) (66.4)
Effect of:
Expenses not deductible for tax purposes (primarily
goodwill amortisation) 35.2 94.9
Tax effect of items not recognised in consolidated
financial statements (5.4) (8.0)
Reversal of timing differences 0.5 (1.2)
Higher tax rates on overseas earnings 0.4 (3.7)
Other (2.5) 0.4
Tax on loss on ordinary activities 22.7 16.0
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.
2003 2002
6. Dividends m pounds m pounds
Equity dividends
Ordinary shares:
Interim of 3.3 p (2002: 3.0 p) 11.0 10.1
Proposed final of 5.7p (2002 4.0 p) 19.2 13.5
Non-equity dividends - B shares 0.4 0.6
30.6 24.2
Non-equity dividends relate to the accrual for the LIBOR linked dividend
on 6,212,819 (2002: 7,546,387) B shares remaining in issue.
2003 2003 2003 2002 2002 2002
Weighted Weighted
Earnings/ average Earnings/ Earnings/ average Earnings/
(loss) Number (loss) (loss) Number (loss)
m of per m of per
pounds shares share pounds shares share
million pence million pence
7. Earnings/(loss) per share
Earnings per
share before
amortisation
of intangible
assets and
exceptional items 80.3 334.2 24.0 55.1 333.8 16.5
Adjustment in respect
of amortisation
of intangible
assets (121.7) -- (36.4) (135.9) -- (40.7)
Adjustment in respect of
exceptional items -- -- -- (158.2) -- (47.4)
Basic and diluted
loss per share (41.4) 334.2 (12.4) (239.0) 333.8 (71.6)
Earnings per share before amortisation of intangible assets and exceptional
items is presented as the directors consider that this presents 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 2003 would be to decrease the loss by 3.7 million pounds for
convertible debt (2002: 4.1 million pounds) and to increase weighted average
shares by 2.6 million shares for employee share options (2002: 0.7 million)
and 47.8 million shares for convertible debt (2002: 47.8 million).
Total Total
2003 2002
8.Reconciliation of operating loss to cash m pounds m pounds
inflow from operating activities
Operating loss (22.3) (215.2)
Depreciation charges 25.3 23.2
Amortisation of intangible
assets - group 247.9 120.1
Share of results of joint
ventures (2.9) (1.6)
Income from fixed asset
investments (3.9) (10.4)
Profit on sale of fixed asset
investments (4.3) --
Loss on sale of tangible fixed assets 0.4 0.3
Payments against provisions (23.1) (14.9)
Increase in stocks (1.4) (0.7)
Decrease in debtors 12.3 44.3
Decrease in creditors (11.9) (29.4)
Payments against restructuring
and other exceptional costs -- (20.2)
Other non-cash items including
movements on provisions (3.6) 32.1
Cash inflow from operating
activities 84.6 55.5
The effect of exceptional items on cash inflow from operating activities
was an outflow of pounds nil (2002: 30.0 million pounds).
At Other At
1 January Cash non-cash Exchange 31 December
2003 flow movements movements 2003
m pounds m pounds m pounds m pounds m pound
9. Analysis of
movement in
net cash
Cash at bank
and in hand 96.7 185.9
Overdrafts (0.2) (2.7)
96.5 183.2
Less deposits
treated as
liquid
resources (75.4) (169.5)
21.1 (6.5) -- (0.9) 13.7
Debt due
after one
year (583.5) 470.8 (0.7) 11.5 (101.9)
Debt due
within one
year (15.8) (490.7) (1.3) 47.8 (460.0)
(578.2) (26.4) (2.0) 58.4 (548.2)
Deposits
included in
cash 75.4 103.3 -- (9.2) 169.5
Current asset
investments 596.3 (134.9) -- (36.2) 425.2
Total 93.5 (58.0) (2.0) 13.0 46.5
Letters of credit included in cash above amounted to 6.1 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. With the exception of the matters referred to below, the financial
statements have been prepared on a basis consistent with prior years.
12. Status of information
The figures and financial information for the year ended 31 December 2003
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 2002 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 26 February 2004.
SOURCE United Business Media plc
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CONTACT:
Michael Waring, +44(0)20-7921-5031, or Nick
Molden, +44(0)20-7921-5097, both of United Business Media; or
Colin Browne of The Maitland Consultancy, +44(0)20-7379-5151, for
United Business Media
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