Strong first half performance; unchanged for full year
PR Newswire, events and acquisitions performing well; print and online
media in line with expectations; accelerating investment in new product
development
LONDON, July 25 /PRNewswire/ --
H1 2006 headline results
Revenue Up 25.1% to 394.3m pounds Sterling
(315.2m pounds)
Continuing operating profit* Up 25.1% to 82.3m pounds (65.8m pounds)
Profit before tax** Up 8.9% to 88.5m pounds (81.3m pounds)
EPS** (diluted) Up 24.1% to 23.2p (18.7p)
Dividend per share Up 10% to 4.4p (4.0p)
-- EPS growth driven by strong trading performance and enhanced by share
buybacks
-- On track to meet plans for acquisitions (150m pounds - 250m pounds pa)
and capital returns (> 300m pounds by end 2007)
-- 135m pounds invested in acquisitions in the year to date; acquisitions
performing ahead of 8% post tax hurdle rate
-- 142.2m pounds of capital returned through convertible and share
buybacks
-- Net cash of 181.5m pounds at 30 June
* Before amortisation of intangible assets, non-recurring items and share
of taxation on profit from joint ventures and associates
** Before amortisation of intangible assets, non-recurring items, share of
taxation on profit from joint ventures and associates, net financing
cost -- other than interest, and including profits from discontinued
operations. EPS also excludes deferred tax on the amortisation of
intangible assets
Statutory results
Revenue 394.3m pounds (315.2m pounds)
Group operating profit 74.8m pounds (64.8m pounds)
Profit before tax 64.0m pounds (118.5m pounds)
EPS (diluted) 26.1p (88.5p)
David Levin, Chief Executive of United Business Media plc said:
"We have achieved strong operating and financial results in the first
half of 2006 despite a tough trading environment. Revenue grew by 25.1% to
394.3m pounds, continuing operating profit* by 25.1% to 82.3m pounds, and
we achieved EPS** growth of 24.1% on a fully diluted basis. We have
continued to reshape UBM through acquisitions, disposals and investment in
new product development."
"On 19 July we completed the acquisition of Commonwealth Business
Media, Inc. for $152m. The acquisition provides us with a leading position
in a new market, the global trade and transportation business intelligence
market. At our Preliminary results in February we indicated our intention
to increase acquisition expenditure from the 105m pounds achieved last year
to between 150m pounds and 250m pounds for the current year. Including
Commonwealth, in the year to date we have invested a total of 135m pounds
in eight small and medium-sized acquisitions, all of which provide
opportunities to build our business while meeting our strict financial
acquisition criteria."
"In February we also indicated our intention to move towards a prudent,
leveraged balance sheet over the course of the next two years, and to
return more than 300m pounds of capital over that period. Since February we
have returned 142.2m pounds through convertible and ordinary share
buybacks."
"The outlook for the full year is unchanged. After taking into account
the first half weighting of CMPMedica and the MediaLive events, we
anticipate that the second half will be broadly in line with the trading
patterns reported for the first half of the year. We continue to invest in
new product development and plan to spend an additional 5m pounds to 8m
pounds in the second half, particularly in events and online activities."
Interim results for the six months ended 30 June 2006
Contents Page
1. Summary group income statement 4
2. Summary of interim financial results
for the six months ended 30 June 2006 5
3. Divisional commentary 6
4. Dividend 7
5. Cash and cash conversion 7
6. Pensions 7
7. Tax 8
8. Interest and financing 8
9. Return of capital 8
10. Non-recurring items - Disposals 8
Interim financial report 9
Appendix 1 - Segmental analysis 28
Notes to editors 30
1. Summary group income statement
The income statement set out below re-presents the group's full income
statement (which accompanies this summary) in order to show more clearly the
results from operations.
Six Months Ended 30 June
2006 2005
m pounds m pounds %
Revenue 394.3 315.2 25.1
Operating profit* - continuing
businesses 82.3 65.8 25.1
Operating profit* - investments
sold in 2005 - 3.9 -
Operating profit* - discontinued 0.8 6.4 -
83.1 76.1 9.2
Net interest income 5.4 6.5 (16.9)
Other financing costs - pension schemes - (1.3) -
Profit before tax** 88.5 81.3 8.9
Net financing (cost)/income -
other than interest (20.5) 23.5 -
Amortisation of intangible assets (7.2) (4.6) -
Non-recurring items 13.3 262.2 -
Profit before tax*** 74.1 362.4 -
Taxation (15.4) (13.6) (13.2)
Share of taxation of JV's and associates (0.3) 4.9 -
Taxation relating to non-recurring items - (1.2) -
Profit after tax - Continuing activities 48.8 105.0 -
Profit after tax from discontinued
activities 9.6 247.5 -
Profit after tax 58.4 352.5 -
Minority interest (2.3) (0.9) -
Retained profit for the period 56.1 351.6 -
Dividends paid in period -
Ordinary**** (m pounds) 32.2 28.3 -
Dividends paid in period - Special
(m pounds) - 298.3 -
EPS ** (pence) 24.5 21.2 15.6
Diluted EPS** (pence) 23.2 18.7 24.1
EPS (fully diluted) (pence) 26.1 88.5 -
* Before amortisation of intangible assets, non-recurring items and
share of taxation on profit from joint ventures and associates
** Before amortisation of intangible assets, non-recurring items, share
of taxation on profit from joint ventures and associates, net
financing cost -- other than interest, and including profits from
discontinued operations. EPS also excludes deferred tax on the
amortisation of intangible assets
*** Before share of taxation of joint ventures and associates and
including discontinued operations before related taxation
**** Including B Share dividend
2. Summary of interim financial results for the six months ended 30 June
2006
The results presented below reflect continuing businesses under the new
management structure.
Note: As previously notified the amounts shown against CMP Technology
(formerly CMP Media), CMP Information and CMPMedica in the table below have
been restated to reflect the intra-group transfer of the US Healthcare
titles and CME events from CMP Media to CMPMedica, the transfer of the
Healthcare titles of CMP Information in the UK to CMPMedica and the
transfer of CMP Princeton from CMP Media to CMP Information. The amounts
transferred are stated in detail in the business segments section of the
accompanying financial statements (refer to page 15).
Revenue Operating Profit(2)
Six months to 30 June Six months to 30 June
2006 2005 Change Under- 2006 2005 Change Under-
m pounds m pounds (%) lying m pounds m pounds (%) lying
(1)(%) (1)(%)
PR Newswire
(3) 69.1 51.3 34.7 6.2 20.6 14.3 44.1 24.2
CMP Asia 26.5 24.3 9.1 8.3 7.2 6.3 14.3 8.8
CMP
Information 92.9 77.8 19.4 5.6 22.3 18.8 18.6 (1.3)
CMP
Technology 113.3 87.6 29.3 (3.6) 17.3 12.5 38.4 (32.7)
CMPMedica 92.5 74.2 24.7 5.0 14.9 14.1 5.7 (8.1)
394.3 315.2 25.1 3.2 82.3 66.0 24.7 (2.2)
Corporate(4) - - - - - 3.7 - -
394.3 315.2 25.1 - 82.3 69.7 18.1 -
(1) Underlying: adjusted for the estimated effects of acquisitions,
discontinued operations, foreign exchange and biennial events
(2) Before amortisation of intangible assets, non-recurring items, share
of taxation on profit from joint ventures and associates
(3) Our 50% share of Canada Newswire has been consolidated in H1 2006
increasing reported revenues by 13.2m pounds and operating profit by
2.0m pounds.
(4) Corporate operations comprises net central operating costs, together
with those equity accounted investments which do not form part of one
of the group's operating divisions. The 2005 Corporate costs included
profit of 3.9m pounds in relation to equity accounted investments that
have subsequently been disposed of e.g. five, SIS, SDN.
Underlying revenue was up 3.2% -- after adjusting for the effects of
acquisitions, discontinued operations, biennials and foreign exchange.
Revenue from 2005 and 2006 acquisitions was 68.8m pounds (2006
acquisitions: 19.7m pounds). Operating profit from acquisitions was 17.8m
pounds (2006 acquisitions: 7.1m pounds).
The movement in the US dollar and the Euro has a direct translation
impact -- with approximately two thirds of UBM revenue reported locally in
US dollars or Euros, group revenue increased by 7.8m pounds as a result of
foreign exchange. The average rate of pounds:$ exchange for the first half
was $1.79 (2005 H1: $1.87), together with the effects of other currency
movements, this increased operating profit by 1.5m pounds. A 1 cent
movement in the US dollar against Sterling is approximately equivalent to a
move in profit of around 250,000 pounds to 350,000 pounds over the full
year.
3. Divisional commentary
PR Newswire
PR Newswire delivered another very strong performance in all areas of
operation. Underlying revenue was up 6.2% and underlying operating profit
was up 24.2%, with operating margin up from 27.9% to 29.8%. The US
experienced strong profit growth driven by yield, improving mix and
continued cost reduction. PR Newswire Europe grew profits and achieved a
margin of 34.8% in the first half. China increased revenue by 32.5% and
moved into profit in the first half.
CMP Asia
CMP Asia's strong performance continued. Underlying revenue was up
8.3%, driven principally by the growth of the exhibitions in Hong Kong,
China and Japan. We are investing in China, India and in new online media
products to increase our presence in higher growth markets. We have opened
an office in Mumbai, India and are launching new events. We continue to
seek expansion opportunities and in the first half announced our intention
to acquire a majority share in the Guangzhou Beauty Fair (China).
Underlying operating profits were up 8.8% and operating margins increased
to 27.2% from 25.9%.
CMP Information
CMP Information ("CMPi") increased revenue by 19.4% and profit by 18.6%
to 22.3m pounds and remains our largest profit contributor. Its strong
exhibitions and acquisition performance has been partially offset by
investment in new product development. The margin in the first half was
24%. Underlying revenue, excluding disposed titles was up 5.6% while
underlying operating profit was down 1.3%, reflecting the investment in new
product development. In order to drive additional efficiencies in the
business, CMPi is undergoing further reorganisation including office
rationalisation, outsourcing and off-shoring. The performance of
exhibitions has been strong, particularly in the Chemical and Food
Ingredients, Furniture and Security markets. CMPi seek to expand both by
making acquisitions (like Informex, the National Venue Show and Thames
Gateway Forum) and by extending our events internationally into new
geographies such as China, India and Eastern Europe.
In the first half we continued to rationalise the portfolio and have
realised 16.7m pounds from the disposal of a number of smaller titles.
CMP Technology
CMP Technology revenue rose in the first half by 29.3% with operating
profit rising by 38.4%, largely due to acquisitions. CMP Technology is
performing in line with expectations with a good performance from acquired
businesses, with all round strength in events and strong revenue growth in
online. We continue to see some customers allocating more of their spend
towards online and events. Print performance is in line with established
trends, with volumes trending down.
CMP Technology's underlying revenue fell 3.6% in the first half while
diminished print profitability and investment in online reduced underlying
profit by 32.7%. Events performed strongly in the half with revenues
increasing by over 150% from $27.6m to $69.9m. The performance reflects the
acquisition of a number of successful events which take place during the
first half of the year, particularly those from MediaLive such as Interop
Las Vegas and Interop Japan. CMP Technology's online business grew rapidly
both organically and through acquisition; revenues increasing by 70% to
$31.8m from $18.7m.
CMPMedica
CMPMedica is performing in line with expectations. Revenue increased by
24.7% to euro 134.0m and operating profit increased by 5.7% to euro 21.6m.
CMPMedica's performance reflects a strong seasonal weighting towards the
first half of the year. Our important French business including Vidal and
the French Medical Press business performed well.
All healthcare activities have been consolidated into CMPMedica,
including certain events and publications in the US and UK which were
previously managed by CMP Media and CMP Information respectively.
Corporate
Corporate operations comprises net central operating costs, together
with those equity accounted investments which do not form part of one of
the group's operating divisions. The 2005 profit includes 3.9m pounds
operating profit from equity investments disposed of in 2005 including
five, SIS and SDN.
4. Dividend
An interim dividend of 4.4p (2005: 4.0p) per share will be paid -- an
increase of 10 per cent. The interim dividend on the ordinary shares will
be paid on 20 October to shareholders on the register on 1 September.
5. Cash and cash conversion
Our balance sheet remains strong with net cash at the end of June of
181.5m pounds. Continuing operating cash conversion was 82.1%. After the
end of half year we acquired Commonwealth for 83m pounds.
6. Pensions
At 30 June 2006 the aggregate deficit under IAS 19 had decreased to
25.3m pounds from 52.3m pounds at 31 December 2005. This reflects
additional contributions of 6.1m pounds made by the group, together with an
increase in bond yields. On a funding basis the schemes show an aggregate
surplus of 11m pounds (2005: deficit 10m pounds). The IAS 19 interest
charge was nil pounds (2005: 1.3m pounds).
7. Tax
The effective tax rate in the first half of 2006 was 20%.
As disclosed in our 2005 results, UBM is in dispute with HMRC with
regards to a technical matter arising in relation to the sale of our
Regional Newspapers business in 1998. The tax in dispute is estimated at
80m pounds. The hearing with the Special Commissioners took place on 21
July 2006. We do not expect the matter to be resolved until 2007 at the
earliest.
8. Interest and financing
Net interest income for the six months was 5.4m pounds (6.5m pounds).
Net interest income included 8.5m pounds of interest on surplus cash
balances, reduced by 3.1m pounds interest payments on the group's notes and
facilities.
In H1 2005 the income of 23.5m pounds reflected a credit of 13.3m
pounds for the movement in fair value of the option element of the
convertible bond and a one off exchange gain of 10.2m pounds. Net financing
costs other than interest in H1 2006 of (20.5)m pounds includes the
accounting charge for the movement in fair value of the option element of
the convertible bond prior to buyback or conversion.
Other financing costs relating to the pension schemes of nil pounds
(2005: 1.3m pounds) represent the financing charges on the pensions deficit
calculated in accordance with IAS 19.
9. Return of capital
We indicated in February that we intended to return more than 300m
pounds of capital to shareholders by the end of 2007. We remain committed
to that goal and are working towards a more leveraged balance sheet in the
medium term. Since February we have returned 142.2m pounds through
convertible and ordinary share buybacks. In the first six months of the
year we have spent 68.1m pounds on buying back our convertible bond. The
balance was converted into 10.2m ordinary shares. There are no convertible
bonds outstanding. We also purchased for cancellation 11.1m ordinary shares
at an average price of 666 pence per share i.e. a return of 74.1m pounds
this year.
10. Non-recurring items -- Disposals
In the first half we realised 16.7m pounds from the disposal of a
number of smaller titles including Printing World and Packaging Magazine,
Industrial Equipment Mart, The Trader, Trade-It, The Knowledge and Benn's
Media from the CMP Information portfolio. Revenue (5.1m pounds) (2005: 7.5m
pounds) and operating profits (0.8m pounds) (2005: 1.5m pounds) from these
titles are accounted for as "Discontinued". Proceeds from property
disposals were 15.8m pounds. The profit on disposals was 13.3m pounds.
Consolidated Income Statement
for the six months ended 30 June
As re-
stated As re-
Before Before stated
Non- Non- Non- Non- As
re- re- re- re- re-
curring curring curring curring stated
items items Total items items Total
30 June 30 June 30 June 30 June 30 June 30 June
2006 2006 2006 2005 2005 2005
m m m m m m
Six months ended Notes pounds pounds pounds pounds pounds pounds
Continuing operations
Revenue 3 394.3 - 394.3 315.2 - 315.2
Other operating
income 5.0 - 5.0 4.4 - 4.4
Operating expenses (326.2) (326.2) (260.8) - (260.8)
Non-recurring
reorganisation and
restructuring costs 4 - - - - (5.2) (5.2)
Share of profit in
joint ventures
and associates
(after tax) 3 1.7 - 1.7 2.2 8.5 10.7
Income from
investments - - - 0.5 - 0.5
Group operating
profit 74.8 - 74.8 61.5 3.3 64.8
Profit on disposal of
property,
plant and equipment 4 - 4.3 4.3 - - -
Profit on disposal of
associates 4 - - - - 25.0 25.0
- 4.3 4.3 - 25.0 25.0
Earnings before
interest and taxes
("EBIT") 74.8 4.3 79.1 61.5 28.3 89.8
Finance income/(cost)
Interest income 5 8.5 - 8.5 16.0 - 16.0
Interest cost 5 (3.1) - (3.1) (9.5) - (9.5)
Financing income -
other than
interest 5 1.0 0.4 1.4 26.1 - 26.1
Financing cost -
other than
interest 5 (1.2) (20.7) (21.9) (2.6) - (2.6)
Financing cost -
pension schemes 5 - - - (1.3) - (1.3)
Profit before tax 80.0 (16.0) 64.0 90.2 28.3 118.5
Taxation on UK
earnings (7.9) - (7.9) (8.2) (1.2) (9.4)
Overseas taxation (7.3) (7.3) (4.1) - (4.1)
Profit for the period
from
continuing operations 64.8 (16.0) 48.8 77.9 27.1 105.0
Discontinued
operations
Profit for the period
from discontinued
operations (after
tax) 11 - 9.6 9.6 - 247.5 247.5
Profit for the period 64.8 (6.4) 58.4 77.9 274.6 352.5
Attributable to:
Equity shareholders -
ordinary 55.9 351.4
Equity shareholders -
B shares 0.2 0.2
Minority interests 2.3 0.9
58.4 352.5
Earnings per share -
from continuing
operations (pence)
-- basic 6 16.6p 31.3p
-- diluted 6 22.8p 24.1p
Earnings per share -
from continuing
and discontinued
operations (pence)
-- basic 6 20.0p 106.2p
-- diluted 6 26.1p 88.5p
Adjusted group
operating profit* 3 83.1 76.1
Amortisation of
intangible assets (7.2) (4.6)
Non-recurring
reorganisation and
restructuring costs - (5.2)
Share of taxation on
profit in joint
ventures and
associates (0.3) 4.9
Operating profit from
discontinued
operations (before
tax) (0.8) (6.4)
Group operating
profit from
continuing
operations 3 74.8 64.8
Dividends 7
-- Special dividend
of nil (89.0p) - 298.3
-- Proposed interim
dividend of 4.4p
(4.0p) 12.4 11.0
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, non-recurring items, share
of taxation on profit in joint ventures and associates, and including
operating profit from discontinued operations.
Consolidated income statement
for the year ended 31 December
As
restated As
Before restated
non- Non-
recurring recurring
items items As restated
31 31 Total
December December 31 December
Year ended 2005 2005 2005
Notes m pounds m pounds m pounds
Continuing operations
Revenue 3 660.7 - 660.7
Other operating income 11.9 - 11.9
Operating expenses (563.3) - (563.3)
Non-recurring reorganisation and
restructuring costs 4 - (37.2) (37.2)
Share of profit in joint ventures
and associates (after tax) 3 4.2 8.5 12.7
Income from investments 3.0 - 3.0
Group operating profit 116.5 (28.7) 87.8
Profit on disposal of associates 4 - 150.7 150.7
- 150.7 150.7
Earnings before interest and
taxes ("EBIT") 116.5 122.0 238.5
Finance income/(costs)
Interest income 5 28.2 - 28.2
Interest cost 5 (15.5) - (15.5)
Financing income - other than
interest 5 8.4 - 8.4
Financing cost - other than
interest 5 (13.8) (13.7) (27.5)
Financing cost - pension schemes 5 (2.5) - (2.5)
Profit before tax 121.3 108.3 229.6
Taxation on UK earnings (16.8) (1.2) (18.0)
Overseas taxation (6.3) - (6.3)
Profit for the year from
continuing operations 98.2 107.1 205.3
Discontinued operations
Profit for the period from
discontinued operations
(after tax) 11 - 272.2 272.2
Profit for the year 98.2 379.3 477.5
Attributable to:
Equity shareholders - ordinary 475.2
Equity shareholders - B shares 0.4
Minority interests 1.9
477.5
Earnings per share - from
continuing
operations (pence)
-- basic 6 67.1p
-- diluted 6 64.0p
Earnings per share - from continuing
and discontinued operations (pence)
-- basic 6 157.1p
-- diluted 6 142.8p
Adjusted group operating profit* 3 141.9
Amortisation of intangible assets (11.4)
Non-recurring reorganisation and
restructuring costs (37.2)
Share of taxation on profit in
joint ventures and associates 1.9
Operating profit from
discontinued operations
(before tax) (7.4)
Group operating profit from
continuing operations 3 87.8
Dividends 7
-- Interim dividend of 4.0p 11.0
-- Special dividend of 89.0p 298.3
-- Proposed year end dividend of 11.0p 30.6
Consolidated balance sheet
As
30 June restated 31
Notes 2006 30 June December
m pounds 2005 2005
m pounds m pounds
Assets
Non-current assets
Goodwill 610.9 554.8 590.6
Intangible assets 85.9 65.1 79.9
Property, plant and equipment 27.2 39.2 36.7
Investments in joint ventures and
associates 22.1 61.5 22.2
Other investments 2.8 5.9 5.0
748.9 726.5 734.4
Current assets
Inventories 7.8 7.7 9.4
Trade and other receivables 215.0 266.2 172.5
Derivative financial assets 6.2 1.0 2.9
Cash and cash equivalents 346.1 459.5 489.4
575.1 734.4 674.2
Non-current assets classified as
held for sale - 10.3 -
Total assets 1,324.0 1,471.2 1,408.6
Liabilities
Current liabilities
Trade and other payables 570.2 532.7 538.2
Borrowings 153.2 139.1 145.6
Convertible bond 12 - - 93.7
Derivative financial liabilities - - 31.5
Provisions 23.5 9.9 38.8
746.9 681.7 847.8
Non-current liabilities
Borrowings 3.1 102.7 3.3
Convertible bond 12 - 213.6 -
Derivative financial liabilities 0.4 34.5 -
Retirement benefit obligation 25.3 90.4 52.3
Trade and other payables 4.9 4.6 5.6
Provisions 24.7 31.2 31.2
Deferred tax liabilities 22.1 21.7 24.0
80.5 498.7 116.4
Total liabilities 827.4 1,180.4 964.2
Shareholders' equity
Share capital 8 86.3 84.2 84.9
Share premium 419.7 317.6 327.7
Other reserves 9 162.6 166.6 179.0
Retained earnings 9 (176.2) (280.2) (149.9)
Total shareholders' equity 492.4 288.2 441.7
Minority interests 4.2 2.6 2.7
Total equity 496.6 290.8 444.4
Total equity and liabilities 1,324.0 1,471.2 1,408.6
Consolidated cash flow statement
Six Six Year
months months ended 31
ended 30 ended 30 December
June 2006 June 2005 2005
m pounds m pounds m pounds
Cash flows from operating
activities
Reconciliation of profit to
operating cash flows
Profit for the period 58.4 352.5 477.5
Add back:
Taxation 15.4 14.8 25.8
Depreciation 3.9 6.0 10.4
Amortisation 7.2 4.6 11.4
Interest income (8.5) (16.0) (28.2)
Interest expense 3.1 9.5 15.5
Financing costs - pension schemes - 1.3 2.5
Net financing costs - other than
interest 20.5 (23.5) 19.1
Share in profits from joint
ventures and associates (1.7) (11.0) (13.2)
Income from other investments - (0.5) (3.0)
Profit on disposals (13.3) (267.4) (417.0)
Non-recurring reorganisation and
restructuring charges - 5.2 37.2
Other non-cash items 3.5 1.2 4.1
88.5 76.7 142.1
Payments against provisions (20.2) (7.4) (19.9)
Additional pension contributions (6.1) (9.3) (17.2)
Decrease / (increase) in inventories 1.3 (9.1) (6.2)
(Increase)/decrease in trade and
other receivables (41.4) 10.1 (17.1)
Increase/(decrease) in trade and
other payables 17.7 (10.4) 18.4
Cash generated from operations 39.8 50.6 100.1
Interest received 8.3 14.6 19.9
Interest paid (9.5) (11.3) (16.4)
Taxation paid (3.0) (7.4) (17.4)
Dividends received from joint
ventures and associates 0.7 2.8 2.8
Income from other investments - 0.5 3.0
Net cash flows from operating
activities 36.3 49.8 92.0
Cash flows from investing
activities
Acquisition of interests in
subsidiaries,
net of cash acquired (51.6) (69.3) (115.6)
Sale of subsidiary undertakings
and businesses 16.7 432.9 437.4
Purchase of property and equipment (5.2) (4.7) (9.7)
Proceeds from the sale of property
and equipment 15.8 - 6.3
Sale/(purchase) of interests in
associated companies and joint ventures - - 300.3
Purchase of other investments (0.6) - -
Proceeds from sale of investments - 42.8 42.8
Net cash flows from investing
activities (24.9) 401.7 661.5
Cash flows from financing
activities
Proceeds from the issuance of
ordinary share capital 23.9 7.3 18.2
Return of capital to shareholders
(including costs) (74.5) (6.6) (16.8)
Dividends paid to shareholders (32.2) (326.6) (337.8)
Dividends paid to minority
interests (0.8) (0.9) (1.9)
Investment in own shares - ESOP (11.0) (2.4) (7.4)
Repurchase of bonds (68.1) - (273.2)
Net cash flows from financing
activities (162.7) (329.2) (618.9)
Net (decrease) / increase in cash
and cash equivalents (151.3) 122.3 134.6
Net foreign exchange difference 0.7 (4.6) 11.4
Cash and cash equivalents at
beginning of period 482.6 336.6 336.6
Cash and cash equivalents at end
of period 332.0 454.3 482.6
Cash at bank and in hand 313.7 412.8 99.0
Short-term liquid funds 32.4 46.7 390.4
Bank overdraft (14.1) (5.2) (6.8)
Cash and cash equivalents at end of period 332.0 454.3 482.6
Consolidated statement of recognised income and expense
for the six months ended 30 June
Six Six Year
months months ended 31
Notes ended 30 ended 30 December
June 2006 June 2005 2005
m pounds m pounds m pounds
Profit for the period 58.4 352.5 477.5
Currency translation differences on
foreign operations:
Group (12.3) (21.0) (4.7)
Joint ventures (0.5) (0.2) 0.8
Minority interests (0.2) - 0.3
Actuarial gain recognised in the
pension schemes 19.2 5.4 25.0
Other recognised gains / (losses)
for the year 6.2 (15.8) 21.4
Total recognised income 9 64.6 336.7 498.9
Attributable to:
Equity shareholders - ordinary 62.1 335.6 496.3
Equity shareholders - B shares 0.2 0.2 0.4
Minority interests 2.3 0.9 2.2
64.6 336.7 498.9
Effects of changes in accounting
policy
Effect of adopting financial
instruments
standards IAS 32 & 39 - (41.0) (41.0)
Equity shareholders - (41.0) (41.0)
Minority shareholders - - -
- (41.0) (41.0)
Notes to the interim financial report
for the six months ended 30 June
1. General information
The information for the year ended 31 December 2005 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A
copy of the statutory accounts for that year has been filed with the
Registrar of Companies. The auditors' opinion on those accounts was
unqualified and did not contain a statement under section 237 of the
Companies Act 1985.
The interim financial information was approved by a duly appointed and
authorised committee of the board of directors on 25 July 2006. The interim
financial information is unaudited but has been reviewed by the auditors as
set out in their report on page 27.
The comparative information for 30 June 2005 and 31 December 2005 has
been restated as follows:
-- The results of discontinued operations have been reclassified in
accordance with accounting standards (see note 11).
-- Following a reorganisation of certain operations announced in May 2006,
the segmental results have been restated. The impact is disclosed in
note 3.
2. Accounting policies
The group accounting policies adopted in the preparation of the interim
consolidated financial statements are consistent with those followed in the
preparation of the group's annual financial statements for the year ended
31 December 2005, except for the adoption of the following amendments which
are mandatory for annual periods beginning on or after 1 January 2006:
-- IAS 39 -- Financial Instruments: Recognition and Measurement ("IAS 39")
-- Amendment for financial guarantee contracts -- which amended the
scope of IAS 39 to include financial guarantee contracts issued. The
amendment addresses the treatment of financial guarantee contracts by
the issuer. Under IAS 39, as amended, financial guarantee contracts
are recognised initially at fair value and generally remeasured at the
higher of the amount determined in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets and the amount initially
recognised less, where appropriate, cumulative amortisation recognised
in accordance with IAS 18 Revenue;
-- IAS 39 -- Amendment for hedges of forecast intragroup transactions --
which amended IAS 39 to permit the foreign currency risk of a highly
probable intragroup transaction to qualify as a hedged item in a cash
flow hedge, provided that the transaction is denominated in a currency
other than the functional currency of the entity entering into the
transaction and that the foreign currency risk will affect the
financial statements; and
-- IAS 39 -- Amendment for the fair value option -- which restricted the
use of the option to designate any financial asset or any financial
liability to be measured at fair value through profit and loss.
The adoption of these amendments did not affect the group results of
operations or financial position.
Notes to the interim financial report
for the six months ended 30 June
3. Business segments
At 30 June 2006, the group is organised into five main business
segments -- News Distribution, CMP Asia, CMP Information, CMP Technology
and CMPMedica. These segments are the basis on which the group reports its
primary segment information.
The News Distribution segment operates in the distribution, targeting
and evaluation of company information. The main activities of CMP Asia, CMP
Information, CMP Technology and CMPMedica are the production of magazines,
trade press, directories, events and websites.
The market research business is included in discontinued operations as
it was disposed of on 1 June 2005. The main activities of this segment were
syndicated and custom market research. The motoring titles within CMP
Information, which were disposed of on 16 September 2005, as well as UK
consumer titles disposed of in the period to 30 June 2006 are also included
in discontinued operations (refer to note 11).
The following tables set out the revenue and profit information for the
group's business segments.
Six months ended 30 June 2006
Profit / Share of
Revenue Revenue (loss) results
from from from from JVs
external other Total operating and Segment
customers segments revenue activities associates result
m m m m m m
pounds pounds pounds pounds pounds pounds
Segments
Continuing operations
News Distribution 69.1 - 69.1 20.3 0.3 20.6
CMP Asia 26.5 - 26.5 6.9 - 6.9
CMP Information 92.9 - 92.9 21.0 - 21.0
CMP Technology 113.3 - 113.3 15.1 0.9 16.0
CMPMedica 92.5 - 92.5 10.6 - 10.6
Corporate
operations ** - - - (0.8) 0.5 (0.3)
394.3 - 394.3 73.1 1.7 74.8
Discontinued
operations
CMP Information 5.1 - 5.1 0.8 - 0.8
399.4 - 399.4 73.9 1.7 75.6
Share of
tax on Non-
profit recurring
*Adjusted from items
group JVs charged to Amortisation
operating and operating of Segment
profit associates profit intangibles result
m m m m m
pounds pounds pounds pounds pounds
Segments
Continuing operations
News Distribution 20.6 - - - 20.6
CMP Asia 7.2 - - (0.3) 6.9
CMP Information 22.3 - - (1.3) 21.0
CMP Technology 17.3 - - (1.3) 16.0
CMPMedica 14.9 - - (4.3) 10.6
Corporate operations** - (0.3) - - (0.3)
82.3 (0.3) - (7.2) 74.8
Discontinued operations
CMP Information 0.8 - - - 0.8
83.1 (0.3) - (7.2) 75.6
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, non-recurring items, share
of taxation on profit in joint ventures and associates, and including
operating profit from discontinued operations.
** Corporate operations comprises net central operating costs, together
with those equity accounted investments which do not form part of one of
the group's operating divisions.
Notes to the interim financial report
for the six months ended 30 June
3. Business segments (continued)
Six months ended 30 June 2005 (as restated)
Share of
Revenue Revenue Profit results
from from from from JVs
external other Total operating and Segment
customers segments revenue activities associates result
m m m m m m
pounds pounds pounds pounds pounds pounds
Segments
Continuing operations
News Distribution 51.3 - 51.3 12.4 1.3 13.7
CMP Asia 24.3 - 24.3 6.1 - 6.1
CMP Information 77.8 - 77.8 16.9 - 16.9
CMP Technology 87.6 - 87.6 9.3 0.7 10.0
CMPMedica 74.2 - 74.2 9.1 (0.1) 9.0
Corporate
operations ** - - - 0.3 8.8 9.1
315.2 - 315.2 54.1 10.7 64.8
Non-recurring
items *** - - - - - 25.0
Discontinued
operations
CMP Information 23.7 - 23.7 2.0 - 2.0
Market research 76.9 0.1 77.0 4.4 - 4.4
100.6 0.1 100.7 6.4 - 6.4
Eliminations - (0.1) (0.1) - - -
415.8 - 415.8 60.5 10.7 96.2
Six months ended 30 June 2005 (as restated)
Share of
tax on Non-
profit recurring
*Adjusted from items
group JVs charged to Amortisation
operating and operating of Segment
profit associates profit intangibles result
m m m m m
pounds pounds pounds pounds pounds
Segments
Continuing operations
News Distribution 14.3 (0.5) (0.1) - 13.7
CMP Asia 6.3 - (0.2) - 6.1
CMP Information 18.8 - (1.4) (0.5) 16.9
CMP Technology 12.5 - (2.5) - 10.0
CMPMedica 14.1 - (1.0) (4.1) 9.0
Corporate operations** 3.7 5.4 - - 9.1
69.7 4.9 (5.2) (4.6) 64.8
Non-recurring items*** - - - - 25.0
Discontinued operations
CMP Information 2.0 - - - 2.0
Market research 4.4 - - - 4.4
6.4 - - - 6.4
76.1 4.9 (5.2) (4.6) 96.2
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, non-recurring items, share
of taxation on profit in joint ventures and associates, and including
operating profit from discontinued operations.
** Corporate operations comprises net central operating costs, together
with those equity accounted investments which do not form part of one
of the group's operating divisions.
*** Non-recurring items include the profit on sale of equity accounted for
investments during the year.
ADD: /FIRST ADD -- LNTU001 -- UBM Earnings/
Notes to the interim financial report
for the six months ended 30 June
3. Business segments (continued)
For the year ended 31 December 2005 (as restated)
Profit / Share of
Revenue Revenue (loss) results
from from from from JVs
external other Total operating and Segment
customers segments revenue activities associates result
m m m m m m
pounds pounds pounds pounds pounds pounds
Segments
Continuing operations
News Distribution 104.1 - 104.1 14.2 2.4 16.6
CMP Asia 60.5 0.3 60.8 17.0 - 17.0
CMP Information 158.2 - 158.2 23.7 - 23.7
CMP Technology 183.6 - 183.6 11.0 0.9 11.9
CMPMedica 154.3 - 154.3 14.1 (0.3) 13.8
Corporate
operations ** - - - (4.9) 9.7 4.8
660.7 0.3 661.0 75.1 12.7 87.8
Non-recurring
items *** - - - - - 150.7
Discontinued
operations
CMP Information 36.7 - 36.7 3.0 - 3.0
Market research 76.8 0.1 76.9 4.4 - 4.4
113.5 0.1 113.6 7.4 - 7.4
Eliminations - (0.4) (0.4) - - -
774.2 - 774.2 82.5 12.7 245.9
Share of
tax on Non-
profit recurring
*Adjusted from items
group JVs charged to Amortisation
operating and operating of Segment
profit associates profit intangibles result
m m m m m
pounds pounds pounds pounds pounds
Segments
Continued operations
News Distribution 29.2 (1.4) (11.2) - 16.6
CMP Asia 17.5 - (0.4) (0.1) 17.0
CMP Information 40.7 - (14.8) (2.2) 23.7
CMP Technology 19.9 - (7.2) (0.8) 11.9
CMPMedica 24.1 - (2.0) (8.3) 13.8
Corporate operations** 3.1 3.3 (1.6) - 4.8
134.5 1.9 (37.2) (11.4) 87.8
Non-recurring items*** - - - - 150.7
Discontinued operations
CMP Information 3.0 - - - 3.0
Market research 4.4 - - - 4.4
7.4 - - - 7.4
141.9 1.9 (37.2) (11.4) 245.9
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, non-recurring items, share
of taxation on profit in joint ventures and associates, and including
operating profit from discontinued operations.
** Corporate operations comprises net central operating costs, together
with those equity accounted investments which do not form part of one
of the group's operating divisions.
*** Non-recurring items include the profit on sale of equity accounted for
investments during the year.
Notes to the interim financial report
for the six months ended 30 June
3. Business segments (continued)
The amounts shown for 30 June 2005 and 31 December 2005 have been
restated to reflect the intra-group transfer of 'US Healthcare' from CMP
Technology to CMPMedica; the UK Medical group from CMP Information to CMP
Medica; and CMP Princeton from CMP Technology to CMP Information.
For the period ended 30 June 2005, 13.7m pounds of revenue and 0.7m
pounds of operating loss for 'US Healthcare' was transferred from CMP
Technology to CMPMedica, 3.0m pounds of revenue and 0.4m pounds of
operating profit for the UK Medical group was transferred from CMP
Information to CMPMedica, and 2.6m pounds of revenue and 1.1m pounds of
operating profit for CMP Princeton was transferred from CMP Technology to
CMP Information.
For the year ended 31 December 2005, 37.0m pounds of revenue and 3.5m
pounds of operating profit for 'US Healthcare' was transferred from CMP
Technology to CMPMedica, 5.0m pounds of revenue and 0.5m pounds of
operating loss of the UK Medical group was transferred from CMP Information
to CMPMedica, and 5.3m pounds of revenue and 1.5m pounds of operating
profit for CMP Princeton was transferred from CMP Technology to CMP
Information.
Effective from 1 January 2006 the group has equity accounted for its
17.01% share of Press Association Group Limited and has fully consolidated
its 50% interest in Canada Newswire Inc, where the remaining 50% is held by
the Press Association. These changes result from an increase in the levels
of influence and control exerted by the group.
The impact of the consolidation of Canada Newswire Inc in the period to
30 June 2006 is to increase News Distribution revenue by 13.2 million
pounds and operating profit by 2.0 million pounds. The impact of equity
accounting of the group's share of Press Association Group Limited in the
period to 30 June 2006 is to increase the group operating profit by 0.3
million pounds.
4. Non-recurring items
Six As Year
months restated ended
ended 30 Six 31
June months December
2006 ended 30 2005
June
2005
m pounds m pounds m pounds
Credited / (charged) to operating profit
Vacant property costs - - (8.8)
Redundancy - (0.3) (8.6)
Re-engineering of business processes - (1.5) (10.3)
Restructuring and business reorganisation
costs - (2.2) (7.8)
Integration of acquired businesses - (1.2) (1.7)
Total non-recurring reorganisation and
restructuring costs - (5.2) (37.2)
Share of results from associates disposed
of during the year - 8.5 8.5
Total credited / (charged) to operating
profit - 3.3 (28.7)
Credited to EBIT
Profit on disposal of property, plant and
equipment 4.3 - -
Profit on disposal of equity accounted
investments - 25.0 150.7
Total credited to EBIT 4.3 28.3 122.0
Charged to profit before tax
Bond buybacks (20.3) - (13.7)
Total (charged) / credited to profit before
tax (16.0) 28.3 108.3
(Charged)/credited to profit after tax
Tax on disposal of equity accounted
investments - (1.2) (1.2)
Total (charged) /credited to profit after
tax from continuing operations (16.0) 27.1 107.1
Credited to discontinued operations (note
11)
Profit on disposal of discontinued
operations after tax 9.0 242.4 266.3
Profit from discontinued operations after
tax 0.6 5.1 5.9
(Loss) / profit for the year after
discontinued operations (6.4) 274.6 379.3
Disposals
During the period ended 30 June 2006 UBM announced the sale of a number
of UK consumer titles for an aggregate amount of 16.7 million pounds. A
profit of 9.0m pounds arose on the sale of these publications. The results
of these publications are disclosed as discontinued operations (refer to
note 11).
On 10 April 2006 UBM announced the sale of its Culverhouse Cross property
for 15.8m pounds. A profit of 4.3m pounds arose on the sale of the property.
Notes to the interim financial report
for the six months ended 30 June
5. Finance income /(cost)
30 June 2006 30 June 2005
Before Before
non- Non- non- Non-
re- re- re- re-
curring curring curring curring
items items Total items items Total
2006 2006 2006 2005 2005 2005
m m m m m m
pounds pounds pounds pounds pounds pounds
Interest
Interest income 8.5 - 8.5 16.0 - 16.0
Interest costs (3.1) - (3.1) (9.5) - (9.5)
5.4 - 5.4 6.5 - 6.5
Financing income - other
than interest
Net foreign exchange gain
(a) 1.0 - 1.0 10.2 - 10.2
Buyback of bonds 0.4 0.4 - - -
Fair value gain on embedded
derivative in convertible
bond (c) - - - 15.9 - 15.9
1.0 0.4 1.4 26.1 - 26.1
Financing cost - other than
interest
Convertible bond (b) (0.8) - (0.8) (2.5) - (2.5)
Fair value loss on embedded
derivative in convertible
bond (c) (20.7) (20.7) - - -
Other fair value
adjustments (0.4) - (0.4) (0.1) - (0.1)
(1.2) (20.7) (21.9) (2.6) - (2.6)
Financing cost - pension
schemes - - - (1.3) - (1.3)
Net finance income / (cost) 5.2 (20.3) (15.1) 28.7 - 28.7
31 December 2005
Before
non- Non-
recurring recurring
items items Total
2005 2005 2005
m pounds m pounds m pounds
Interest
Interest income 28.2 - 28.2
Interest costs (15.5) - (15.5)
12.7 - 12.7
Financing income - other than interest
Net foreign exchange gain (a) 8.4 - 8.4
Fair value gain on embedded derivative in
convertible bond (c) - - -
8.4 - 8.4
Financing cost - other than interest
Convertible bond (b) (4.8) - (4.8)
Fair value loss on embedded derivative in
convertible bond (c) (9.0) (2.2) (11.2)
Buyback of bonds (d) - (11.5) (11.5)
Other fair value adjustments - - -
(13.8) (13.7) (27.5)
Financing cost - pension schemes (2.5) - (2.5)
Net finance income / (cost) 4.8 (13.7) (8.9)
(a) Foreign exchange gain on US Dollar denominated balances held in UK
accounts. The gain in 2005 arose from the unhedged US Dollar cash
balances and the strengthening of the US Dollar.
(b) The convertible bond is separated into fixed rate debt and an equity
derivative. This charge reflects the accretion of the debt to the
value at maturity.
(c) Accounting Standards determine that the group's US Dollar convertible
bond contains an embedded derivative, and this option is carried at
fair value with changes taken to the income statement. This charge is
a result of the increase in the group's share price. The non-
recurring fair value loss on the embedded derivative of 20.7 million
pounds (30 June 2005: nil pounds; 31 December 2005: 2.2 million
pounds) relates to the portion of the bond that was repurchased /
converted during the year.
(d) In the second half of 2005, UBM repurchased $179.3 million of the
principal of the US dollar fixed rate unsecured notes. This charge
reflects the premium paid and the fees related to the repurchase and
unamortised costs being written off.
Notes to the interim financial report
for the six months ended 30 June
6. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit
for the year attributable to ordinary equity holders of the parent company
by the weighted average number of ordinary shares outstanding during the
year.
Diluted earnings per share amounts are calculated by dividing the net
profit attributable to ordinary shareholders (after adding back interest on
the convertible bond) by the weighted average number of ordinary shares
outstanding during the year (adjusted for the effects of dilutive options
and dilutive convertible bond).
The weighted average number of ordinary shares for the period were
278,856,165 (30 June 2005: 330,990,030; 31 December 2005: 302,537,497).
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. The impact of dilutive
securities in 2006 would be to increase the profit by 21.3 million pounds
(30 June 2005: 11.5 million pounds charge; 31 December 2005: 19.1 million
pounds profit) for convertible debt and to increase weighted average shares
by 5.5 million shares (30 June 2005: 5.2 million shares; 31 December 2005:
3.3 million shares) for employee share options and 11.4 million shares (30
June 2005: 47.8 million shares; 31 December 2005: 40.4 million shares) for
convertible debt.
The following reflects the income and share data used in basic and
diluted earnings per share computations:
Six months Six months Year ended
ended ended 31 December
30 June 2006 30 June 2005 2005
Earn- Earn- Earn-
Earn- ings Earn- ings Earn- ings
ings per ings per ings per
m share m share m share
pounds pence pounds pence pounds pence
From continuing and
discontinued
operations
Adjusted group operating
profit 83.1 76.1 141.9
Net interest income 5.4 6.5 12.7
Financing cost - pension
schemes - (1.3) (2.5)
Adjusted profit before tax 88.5 81.3 152.1
Taxation (17.7) (10.1) (26.0)
Minority interests (2.3) (0.9) (1.9)
B share dividend (0.2) (0.2) (0.4)
Adjusted earnings per share 68.3 24.5 70.1 21.2 123.8 40.9
Adjustments
Amortisation of intangible
assets (7.2) (2.6) (4.6) (1.4) (11.4) (3.8)
Deferred tax on
amortisation of
intangible assets 2.0 0.7 1.4 0.4 3.3 1.1
Non-recurring items 13.3 4.8 262.2 79.3 379.8 125.6
Taxation relating to
non-recurring items - - (1.2) (0.4) (1.2) (0.4)
Net financing income -
other than interest (20.5) (7.4) 23.5 7.1 (19.1) (6.3)
Basic earnings per share 55.9 20.0 351.4 106.2 475.2 157.1
Dilution
Options - (0.3) - (1.6) - (1.6)
Convertible bond 21.3 6.4 (11.5) (16.1) 19.1 (12.7)
Diluted earnings per share 77.2 26.1 339.9 88.5 494.3 142.8
Adjusted earnings per share
(as above) 68.3 24.5 70.1 21.2 123.8 40.9
Options - (0.4) - (0.2) - (0.4)
Convertible bond 0.2 (0.9) 1.9 (2.3) 3.1 (4.7)
Diluted adjusted earnings per
share 68.5 23.2 72.0 18.7 126.9 35.8
Notes to the interim financial report
for the six months ended 30 June 2006
6. Earnings per share (continued)
Six months Six months ended Year ended
ended 30 June 2005 31 December
30 June 2006 2005
Earn- Earn- Earn-
Earn- ings Earn- ings Earn- ings
ings per ings per ings per
m share m share m share
pounds pence pounds pence pounds pence
From continuing operations
Adjusted group operating
profit 83.1 76.1 141.9
Operating profit from
discontinued
operations (0.8) (6.4) (7.4)
Net interest income 5.4 6.5 12.7
Financing cost - pension
schemes - (1.3) (2.5)
Adjusted profit before tax 87.7 74.9 144.7
Taxation (17.5) (8.8) (24.5)
Minority interests (2.3) (0.9) (1.9)
B share dividend (0.2) (0.2) (0.4)
Adjusted earnings per share 67.7 24.3 65.0 19.6 117.9 39.0
Adjustments
Amortisation of
intangible assets (7.2) (2.6) (4.6) (1.4) (11.4) (3.8)
Deferred tax on
amortisation of
intangible assets 2.0 0.7 1.4 0.4 3.3 1.1
Non-recurring items 4.3 1.6 19.8 6.0 113.5 37.5
Taxation relating to non-
recurring items - - (1.2) (0.4) (1.2) (0.4)
Net financing income -
other than interest (20.5) (7.4) 23.5 7.1 (19.1) (6.3)
Basic earnings per share 46.3 16.6 103.9 31.3 203.0 67.1
Dilution
Options - (0.3) - (0.5) - (0.7)
Convertible bond 21.3 6.5 (11.5) (6.7) 19.1 (2.4)
Diluted earnings per share 67.6 22.8 92.4 24.1 222.1 64.0
Adjusted earnings per share
(as above) 67.7 24.3 65.0 19.6 117.9 39.0
Options - (0.5) - (0.2) - (0.5)
Convertible bond 0.2 (0.9) 1.9 (2.0) 3.1 (3.7)
Diluted adjusted earnings
per share 67.9 22.9 66.9 17.4 121.0 34.8
7. Dividends
Six Six Year
months months ended
ended 30 ended 30 31
June June December
2006 2005 2005
m pounds m pounds m pounds
Declared and paid during the period
Equity dividends on ordinary shares
Final dividend for 2004 of 8.37p - 28.1 28.1
Interim dividend for 2005 of 4.0p - - 11.0
Special dividend of 89.0p - 298.3 298.3
Final dividend for 2005 of 11.0p 31.8 - -
Equity dividends - B shares 0.4 0.2 0.4
Dividends 32.2 326.6 337.8
Proposed but not yet paid (not recognised as
a liability at the end of the period)
Equity dividends on ordinary shares
Interim dividend for 2005 of 4.0p - 11.5 -
Final dividend for 2005 of 11.0p - - 30.6
Interim dividend for 2006 of 4.4p 12.4 - -
On 28 June 2005, UBM paid a special dividend to shareholders of 298.3
million pounds (89.0p per share).
Notes to the interim financial report
for the six months ended 30 June 2006
8. Share capital
31
30 June 30 June December
2006 2005 2005
m pounds m pounds m pounds
Authorised
400,936,636 (30 June 2005: 400,936,636; 31
December 2005: 400,936,636) ordinary shares
of 30 and 5/14 pence each 121.7 121.7 121.7
375,417,690 (30 June 2005: 375,417,690; 31
December 2005: 375,417,690)
B shares of 8 and 23/44 pence each 32.0 32.0 32.0
153.7 153.7 153.7
Ordinary
Shares B Shares Total
m pounds m pounds m pounds
Issued and fully paid
At 1 January 2006 84.5 0.4 84.9
Allocated in respect of share option
schemes and other entitlements 1.7 - 1.7
Own shares purchased by the company 3.1 - 3.1
Shares repurchased and cancelled (3.4) (3.4)
Actual issued and fully paid shares at 30
June 2006 85.9 0.4 86.3
As at 30 June 2006, there were 282,893,351 issued and fully paid
ordinary shares, and 4,830,923 issued and fully paid B shares (30 June
2005: 275,929,219 issued and fully paid ordinary shares, and 5,446,789
issued and fully paid B shares; 31 December 2005: 278,222,120 issued and
fully paid ordinary shares, and 4,830,923 issued and fully paid B shares).
As at 30 June 2006, the holdings of the United ESOP are 3,096,580
ordinary shares, and 34,918 B shares (30 June 2005: 2,566,589 ordinary
shares and 279,484 B shares; 31 December 2005: 1,925,921 ordinary shares
and 34,918 B shares).
The group repurchased and cancelled 11,130,000 ordinary shares during
the year at an average price of 666.0p (30 June 2005: 2,650,000 ordinary
shares for 501.9p; 31 December 2005: 3,010,000 ordinary shares for 508.3p).
The total amount paid to acquire the ordinary shares was 74.1 million
pounds (30 June 2005: 13.3 million pounds; 31 December 2005: 15.3 million
pounds).
In the six months ended 30 June 2006 convertible bond holders elected
to convert bonds with a principal value of $85.3m into 10,196,753 ordinary
shares in the company (2005: nil). Following the completion of the
conversion and repurchase of the convertible bonds on 26 June 2006, there
are no convertible bond amounts outstanding.
On 20 June 2005, in conjunction with the special dividend of 89.0 pence
per share, a share consolidation was carried out to convert 17 existing
ordinary shares to 14 new ordinary shares. The share consolidation
converted the 337,932,001 existing issued and fully paid ordinary shares
into 278,296,942 new issued and fully paid ordinary shares.
Notes to the interim financial report
for the six months ended 30 June
9. Reserves
Foreign
Capital currency Total Re- Minor-
re- trans- ESOP Other other tained ity
Merger demption lation re- re- re- earn- inte-
reserve reserve reserve serve serve serves ings rests
m m m m m m m m
pounds pounds pounds pounds pounds pounds pounds pounds
Balance at 31
December 2005 31.3 43.8 (1.8)(19.3) 125.0 179.0 (149.9) 2.7
Total
recognised
income and
expense
for the year - - (13.0) - - (13.0) 75.3 2.3
Shares
repurchased
and cancelled
by
the company - 3.4 - - - 3.4 (74.5) -
Share-based
payment - - - - - - 5.1 -
Special
dividend - - - - - - - -
Equity dividend - - - - - - (32.2) -
Minority
interest
dividend - - - - - - - (0.8)
Shares awarded
by
ESOP - - - 4.2 - 4.2 - -
Own shares
purchased by
the
company - - - (11.0) - (11.0) - -
Balance at 30
June 2006 31.3 47.2 (14.8)(26.1) 125.0 162.6 (176.2) 4.2
10. Acquisitions
Acquisitions
UBM has completed seven acquisitions in the six months ending 30 June
2006.
On 11 January 2006, UBM acquired the events assets of MediaLive
International, Inc. for a cash consideration of US$65 million. The
transaction adds more than 20 IT and telecoms-related events in the US,
Japan, and Europe.
On 11 January 2006, UBM acquired Shorecliff Communications LLC, a US
events business, for a cash consideration of US$12.3 million plus
contingent consideration up to US$1.4 million. Shorecliff's four principal
events focus on the high growth technology markets of radio frequency
identification, broadband services, wireless infrastructure and telecoms
television/internet protocol television.
On 13 March 2006 UBM acquired a set of assets from Mediworld
Publications, an Indian medical publisher, for 0.4 million pounds plus
contingent consideration up to 0.3 million pounds.
On 4 April 2006 UBM acquired the National Venue Show for 1.5m pounds.
On 1 June 2006, UBM acquired Cable Digital News Inc, an online B2B
media business providing news and analysis of the North American cable
industry. The purchase price was $0.3 million.
On 30 June 2006, UBM acquired MeXi Solutions, a secure communication
and data access solutions provider to the Belgian healthcare industry, for
a total cash consideration of euro 2.65 million.
On 30 June 2006, UBM acquired the Thames Gateway Forum for 3.05 million
pounds plus contingent consideration up to 0.25 million pounds.
Notes to the interim financial report
for the six months ended 30 June
10. Acquisitions (continued)
The following table sets out the book values of the identifiable assets
and liabilities acquired and their fair value to the group in respect of
the acquisition of businesses during the year:
2006 2006
Fair Acquiree's
Value Carrying
to Group Value
m pounds m pounds
Intangible assets 15.7 -
Other non-current assets 0.2 0.2
Current assets 7.9 7.9
23.8 8.1
Creditors and other current
liabilities (8.4) (8.4)
Creditors due after more than one
year (0.4) -
(8.8) (8.4)
Fair value of net assets 15.0
Goodwill arising on acquisition 36.6
51.6
2006
m pounds
Consideration:
Net cash paid 50.5
Deferred consideration 1.1
Total consideration 51.6
The aggregate cash flow effect of the acquisitions was as follows:
2006
m pounds
Cash paid 51.0
Net cash acquired (0.5)
Net cash outflow on 2006 acquisitions 50.5
Payment of deferred consideration on
prior year acquisitions 1.1
Total cash outflow on acquisitions 51.6
In addition to acquisitions made during the period, on 27 March 2006
UBM announced that its CMP Asia division reached agreement to purchase a
majority stake in the Guangzhou Beauty Fair. The acquisition is being made
jointly with BolognaFiere Group, CMP Asia's joint venture partner for its
Asian beauty industry events and is expected to be finalised in the second
half of 2006 or early 2007.
Notes to the interim financial report
for the six months ended 30 June
11. Discontinued operations
The results of the discontinued operations which have been included in
the consolidated income statement were as follows:
Six Six Year
months months ended
ended 30 ended 30 31
June June December
2006 2005 2005
m pounds m pounds m pounds
Revenue 5.1 100.6 113.6
Operating expenses (4.3) (94.2) (106.2)
Profit before tax 0.8 6.4 7.4
Attributable taxation (0.2) (1.3) (1.5)
Profit from discontinued operations after
tax 0.6 5.1 5.9
Profit from disposal of discontinued
operations 9.0 242.4 266.3
Attributable tax expense - - -
Net profit attributable to discontinued
operations 9.6 247.5 272.2
At date
of
disposal
m pounds
Net assets attributable to discontinued operations -
Goodwill 3.3
3.3
Discontinued operations relate to the following:
-- UBM's market research business, NOP World, which was disposed of on 1
June 2005 for a profit of 235.8 million pounds;
-- Exchange & Mart and Auto Exchange which were sold on 16 September 2005
for a profit of 30.5 million pounds; and
-- UK publications which were sold for a profit of 9.0 million pounds
during the period ended 30 June 2006 (refer to note 4).
Notes to the interim financial report
for the six months ended 30 June
12. Borrowings
In the six months ended 30 June 2006 the group repurchased a further
$80.1 million of convertible bonds (30 June 2005: nil; 31 December 2005:
$234.6 million). Additionally, in the six months ended 30 June 2006
convertible bond holders elected to convert $85.3 million of bonds into
ordinary shares in the company (2005: nil). There are no convertible bond
amounts outstanding at 30 June 2006.
13. Share-based payments
The group's management awards share options to directors and employees,
from time to time, on a discretionary basis. During the six months ended 30
June 2006, the Group awarded 1,554,115 (six months ended 30 June 2005:
818,394; year ended 31 December 2005: 3,614,015) shares under the group's
share incentive plans.
14. Retirement benefit obligations
The group operates a number of defined benefit and defined contribution
pension schemes in the UK and overseas. Actuarial valuations are carried
out annually by independent qualified actuaries using the projected unit
method.
15. Contingent liabilities
The company acts as guarantor over a net overdraft facility of 60.0
million pounds (30 June 2005: 60.0 million pounds; 31 December 2005: 60.0
million pounds). The company also acts as guarantor over the fixed interest
payable on interest rate swaps taken out by a subsidiary undertaking.
16. Events after balance sheet date
On 19 July 2006, UBM acquired Commonwealth Business Media, Inc.
("Commonwealth") for a cash consideration of $152m. Commonwealth is a
leading specialist business intelligence provider to the international
trade and transportation industry with comprehensive proprietary data, news
and analytical content.
Independent review report to United Business Media plc
Introduction
We have been instructed by the company to review the financial
information for the six months ended 30 June 2006 which comprises the
Consolidated Income Statement, Consolidated Balance Sheet, Consolidated
Cash Flow Statement, Consolidated Statement of Recognised Income and
Expense, and the related notes 1 to 16. We have read the other information
contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.
This report is made solely to the company in accordance with guidance
contained in Bulletin 1999/4 'Review of interim financial information'
issued by the Auditing Practices Board. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we have
formed.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the interim report in
accordance with the Listing Rules of the Financial Services Authority which
require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
The accounting policies are consistent with those that the directors
intend to use in the next financial statements.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board for use in the United Kingdom. A review consists
principally of making enquiries of group management and applying analytical
procedures to the financial information and underlying financial data, and
based thereon, assessing whether the accounting policies have been
consistently applied, unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with International Standards on Auditing (UK
and Ireland) and therefore provides a lower level of assurance than an
audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as presented
for the six months ended 30 June 2006.
Ernst & Young LLP
London
25 July 2006
Appendix 1
Segmental analysis
New Structure - 30 June
The following table sets out the segmental analysis for revenue and
operating profit* for the six months ended 30 June. Note: The table below
is after adjusting for the transfers of CMP Media's US Healthcare
operations and CMP Information's Healthcare operations to CMPMedica and the
transfer of CMP Princeton to CMP Information.
Six months to 30 Revenue Operating Margins
June profit*
2006 2005 2006 2005 2006 2005
m m m m % %
pounds pounds pounds pounds
Continuing
operations
PR Newswire 69.1 51.3 20.6 14.3 29.8 27.9
CMP Asia 26.5 24.3 7.2 6.3 27.2 25.9
CMP Information 92.9 77.8 22.3 18.8 24.0 24.2
CMP Technology 113.3 87.6 17.3 12.5 15.3 14.3
CMPMedica 92.5 74.2 14.9 14.1 16.1 19.0
Corporate operations - - - 3.7 - 100.0
394.3 315.2 82.3 69.7 20.9 22.1
Discontinued
operations
CMPi disposed titles 5.1 7.5 0.8 1.5 15.7 20.0
Market Research - 76.9 - 4.4 - 5.7
UAP Motoring Titles - 16.2 - 0.5 - 3.1
Total 399.4 415.8 83.1 76.1 20.8 18.3
Old structure - 30 June
The following table sets out the segmental analysis for revenue and
operating profit* under the 2005 divisional structure.
Six months to 30 Revenue Operating Margins
June profit*
2006 2005 2006 2005 2006 2005
m m m m % %
pounds pounds pounds pounds
Continuing
operations
PR Newswire 69.1 51.3 20.6 14.3 29.8 27.9
CMP Asia 26.5 24.3 7.2 6.3 27.2 25.9
CMP Information 94.9 80.9 21.3 19.0 22.4 23.5
CMP Media 132.5 103.9 17.7 12.9 13.4 12.4
CMPMedica 71.3 54.8 15.5 13.5 21.7 24.6
Corporate operations - - - 3.7 - 100.0
394.3 315.2 82.3 69.7 20.9 22.1
Discontinued
operations
CMPi disposed titles 5.1 7.5 0.8 1.5 15.7 20.0
Market Research - 76.9 - 4.4 - 5.7
UAP motoring titles - 16.2 - 0.5 - 3.1
Total 399.4 415.8 83.1 76.1 20.8 18.3
* Before amortisation of intangible assets, non-recurring items and share
of taxation on profit from joint ventures and associates
New structure -- December 2005 divisional restatement
The following table sets out the segmental analysis for revenue and
operating profit* for the year ended 31 December 2005 under the new
divisional basis. Note: The table below is after adjusting for the
transfers of CMP Media's US Healthcare operations and CMP Information's
Healthcare operations to CMPMedica and the transfer of CMP Princeton to CMP
Information.
Year ended 31 Operating
December Revenue profit* Margins
2005 2005 2005
m pounds m pounds %
Continuing
operations
PR Newswire 104.1 29.2 28.0
CMP Asia 60.5 17.5 28.9
CMP Information 158.2 40.7 25.7
CMP Technology 183.6 19.9 10.8
CMPMedica 154.3 24.1 15.6
Corporate operations - 3.1 100.0
660.7 134.5 20.4
Discontinued
operations
CMPi disposed titles 13.7 2.6 18.9
Market Research 76.8 4.4 5.7
UAP Motoring Titles 23.0 0.4 1.7
Total 774.2 141.9 18.3
* Before amortisation of intangible assets, non-recurring items and share
of taxation on profit from joint ventures and associates
Notes to Editors
About United Business Media plc -- United Business Media is one of the
world's leading global business information companies. UBM brings together
the world's buyers and sellers, helping their markets work effectively and
efficiently through PR Newswire's news distribution network and UBM's
portfolio of events, print and on-line publications. For more information,
go to http://www.unitedbusinessmedia.com
About PR Newswire -- PR Newswire is the world's leading corporate news
distribution service. Headquartered in New York, PR Newswire distributes
news globally on behalf of over 28,000 customers, including many of the
world's top companies and agencies, helping them take the latest news to
the media, the investment community, and the general public. For more
information, go to http://www.prnewswire.com
About UBM's media portfolio -- UBM's portfolio of more than 200
newspapers, magazines and directories, 200 websites and 300 events brings
together buyers and sellers from a range of global sectors including
technology, healthcare, the built environment, trade and transportation,
lifestyle, fashion and ingredients.
UBM operates globally through five media businesses:
CMP Asia: Headquartered in Hong Kong with offices throughout the
region, CMP Asia is a leader in exhibitions, online and print business
information publications for Asian markets. Working with partners from
around the world, CMP Asia stages a range of leading events which includes
the largest international jewellery, leather and fashion, beauty and
furniture trade shows in Asia, as well as the definitive health show for
the Japan market. For more information, go to http://www.cmpasia.com
CMP Information: Operating in the UK and internationally, CMPi provides
professional media solutions to around 20 industry sectors. Its products
include magazines, exhibitions, conferences, awards programs, information
products and websites, targeted at business professionals across a range of
markets such as the built environment, travel, licensed trade, agriculture,
security and ingredients. For more information, go to http://www.cmpi.biz
CMP Technology: CMP Technology is the USA's leading high tech B2B media
company, providing marketing solutions for the global technology industry.
Through its market-leading portfolio of trusted information brands, CMP
Technology has earned the confidence of more technology professionals than
any other media company. As a result, CMP Technology is the premier
provider of access, insight and actionable programs designed to connect
sellers and buyers in ways that yield superior return on investment. For
more information, go to http://www.cmp.com
CMPMedica: CMPMedica provides information and education to healthcare
professionals and patients around the world. It has a unique portfolio of
professional media products including newspapers, magazines, drug
directories, electronic databases, websites and events. For more
information, go to http://www.cmpmedica.com
Commonwealth Business Media: Commonwealth Business Media, Inc. is the
leading information provider to the global trade and transportation market
with comprehensive proprietary data, news and analytical content. Its
leading brands include Port Import Export Reporting Service ("PIERS")
Global Intelligence Solutions, BACK Aviation Solutions ("BACK"), The
Journal of Commerce and a number of directory databases covering the
international trade, railroad and trucking markets.
In addition to its information data businesses, Commonwealth publishes
eight magazines, one newsletter and a series of custom-published
directories serving the U.S. seaport market. Through the Journal of
Commerce Conference division, Commonwealth also produces a number of
industry-leading events including Trans-Pacific Maritime and Breakbulk
Conference and Exhibition. Commonwealth is headquartered in East Windsor,
New Jersey with offices around the US and internationally.
In the year to September 2005, more than 60% of Commonwealth's revenues
were derived from data and online products, with 88% of revenues being
earned in the United States. In the same period Commonwealth had revenues
of $55.6m and EBITDA of $12.0m, with revenues and EBITDA being ahead of the
prior year on a pro forma basis by 6% and 14% respectively.
For more information, go to http://www.cbizmedia.com
Disclaimer
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.
SOURCE United Business Media plc
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Related links:
http://www.unitedbusinessmedia.com
http://www.prnewswire.com http://www.cmp.com
http://www.cbizmedia.com http://www.cmpi.biz
http://www.cmpasia.com http://www.cmpmedica.com
CONTACT:
Media: Peter Bancroft, Director of
Communications, communications@ubmgroup.biz, +44-20-7921-5961; or
Chris Barrie, Citigate Dewe Rogerson,
chris.barrie@citigatedr.co.uk, +44-20-7282-2943, Mobile:
+44-796-872-72-89; or Analysts: Catherine Southgate, Head of
Investor Relations, investorrelations@ubmgroup.biz,
+44-20-7921-5031, Mobile: +44-7710-468-996/ /FIRST AND FINAL ADD
-- NOTES TO FINANCIALS -- TO FOLLOW
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