- Positioning for Growth -
- Strong First Half Performance -
LONDON, July 27 /PRNewswire-FirstCall/ --
Financial Highlights for Six Months Ended 30 June 2005
Headline Results
Revenue Up 19.7 per cent to 336.6m pounds (281.1m pounds)
Operating profit* Up 23.3 per cent to 76.1m pounds (61.7m pounds)
Profit before tax* Up 30.1 per cent to 81.3m pounds (62.5m pounds)
EPS** Up 50.4 per cent to 21.2p (14.1p)
Dividend Up 10.2 per cent to 4.00p (3.63p)
Note: the net impact of IFRS accounting standards over UK GAAP has been to
increase these key 2005 indicators as follows: operating profit 0.3m pounds,
profit before tax 1.1m pounds, EPS 1.7p.
-- Acquisitions performing ahead of plan
-- 67m pounds invested in acquisitions in 2005
-- 38 organic new product initiatives, 20 underperforming products closed
-- 418m pounds proceeds from disposals, 267m pounds profit on disposals
-- 311.6m pounds of capital distributed to investors via special dividend
and buyback
-- Net debt of (0.2)m pounds at period end
* Before amortisation of intangible assets, non-recurring items and
including discontinued operations
** Before amortisation of intangible assets, non-recurring items, other
financial income other than interest and including discontinued
operations
Statutory Results
Revenue Up 19.7 per cent to 336.6m pounds (281.1m pounds)
Operating profit Up 33.0 per cent to 66.5m pounds (50.0m pounds)
Profit before tax Up 613.8 per cent to 362.6m pounds (50.8m pounds)
EPS Up 653.2 per cent to 106.2p (14.1p)
Dividend Up 10.2 per cent to 4.00 (3.63p)
David Levin, Chief Executive of United Business Media, said, "UBM
delivered a strong overall performance in the first half of 2005, including
the first time impact of the mid 2004 acquisition of CMPMedica.
CMP Asia and PR Newswire both performed well -- at both the revenue and
operating profit levels. CMPi (excluding UAP) delivered a solid revenue
growth performance and investment in new product development was stepped up.
UAP saw some impact from the slowdown in the UK markets but achieved positive
momentum in online. Integration of these CMPi and UAP businesses is
progressing well with good prospects across the UAP titles being brought into
CMPi. CMPMedica's performance was split by geography, with strength in its
important French market but softness in Asia-Pacific trade press. CMP Media
saw little change in its recent performance trends.
In order to focus the business and to crystallise value created for
investors, UBM has either sold, or agreed to sell, three major assets in 2005
-- and we are working on the sale of our UK auto titles. This makes UBM an
increasingly focused business. UBM is now a leading global provider of news
distribution and specialist information services for the professional and
enthusiast markets, actively bringing buyers and sellers together across
targeted media channels -- publications, events and online. Following the
disposals UBM has returned over 310m pounds Sterling of capital to
shareholders -- via a special dividend and also an open market buyback
programme.
In 2005 UBM has invested 67m pounds in seven acquisitions, building the
business by significantly strengthening positions in attractive end markets.
Integration of the acquisitions is progressing well and they are performing
according to plan. Internally 38 new organic product development initiatives
are underway and 20 underperforming products have been closed down. The
business has been further reshaped by changes in the management reporting
structure designed to align the structure of UBM's management and UBM's cost
base with the geographical needs of customers and their marketplaces.
UBM is a great business with many strong market positions in specific
verticals. We are steadily working at making those positions even stronger.
In my first four months I have been directly engaging with many of our major
customers. I have been encouraged both by the strength of the existing
relationships and also by the evident potential UBM has to add more value.
Outlook
The overall operating profit performance outlook for the second half is
broadly in line with the first half -- subject to the first half weighting of
CMPMedica. Solid booking levels and new investment are encouraging us to
expect higher levels of underlying revenue growth. This will be offset at the
operating profit level by measured increases in development spend -- around
the upper end of the 5m pounds to 10m pounds previously announced for 2005.
While print remains challenged, the events businesses in particular have
strong forward bookings and are looking healthy, and CME bookings have
improved in the US. Online revenue is set to continue to increase."
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
2005 2004
pounds m pounds m %
Revenue 336.6 281.1 19.7
Adjusted group operating profit* 76.1 61.7 23.3
Net interest income 6.5 3.2 103.1
Other financing costs - pension
schemes (1.3) (2.4) (45.8)
Adjusted profit before tax** 81.3 62.5 30.1
Net financing income other than
interest 23.5 - -
Profit before non recurring items
and tax* 104.8 62.5 67.7
Amortisation of intangible
assets (4.6) - -
Non-recurring items 262.2 - -
Share of taxation of JV's and
associates 4.9 (0.7) -
Operating profit on discontinued
operations (4.7) (11.0) -
Profit/(loss) before tax 362.6 50.8 614.8
Taxation (12.7) (11.4) (11.4)
Taxation relating to
non-recurring items (1.2) - -
Profit after tax - Continuing
activities 348.7 39.4
Discontinued operations 3.8 8.7
Profit after tax 352.5 48.1 633.9
Minority interest (0.9) (0.9) -
Retained profit for the period 351.6 47.2 646.0
Dividends paid in period 326.6 19.5
EPS ** (pence) 21.2 14.1 50.4
Basic EPS (pence) 106.2 14.1
* Before amortisation of intangible assets, non-recurring items and
including discontinued operations
** Before amortisation of intangible assets, non-recurring items, other
financial income other than interest and including discontinued
operations
CONTENTS
1. Summary of interim financial results for 2005
2. Divisional commentary
3. Dividend
4. Balance sheets and cash conversion
5. Pensions
6. Tax
7. Interest
8. Non-recurring items
9. IFRS
1. SUMMARY OF INTERIM FINANCIAL RESULTS FOR 2005
Reflecting new management structure - continuing businesses only
Adjusted Group Operating
Revenue Profit*
Six months to 30 June Six months to 30 June
(pounds m) (pounds m)
Under- Under-
2005 2004 Change lying 2005 2004 Change lying
(%) #(%) (%) #(%)
CMP Media 103.9 110.6 (6.1) (3.4) 12.9 14.3 (9.8) (8.2)
CMPMedica 54.7 - - - 13.5 - - -
CMP Asia 22.0 20.1 9.5 10.1 6.3 5.7 10.5 7.5
CMPi 104.7 102.7 1.9 0.7 21.0 24.2 (13.2) (13.0)
PR Newswire 51.3 47.7 7.5 9.6 14.3 12.4 15.3 21.5
Corporate+ - - - - 3.4 (5.9) - -
Total 336.6 281.1 19.7 1.2 71.4 50.7 40.8 16.5
# Underlying: adjusted for the estimated effects of acquisitions, foreign
exchange and biennial events
* before amortisation of intangible assets, non-recurring items and
including 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.
Underlying revenue was up 1.2 per cent -- after adjusting for the effects
of acquisitions, foreign exchange and biennials. Group revenue in 2005 was
increased by 61.1m pounds of revenue from acquisitions in 2004 and 2005. The
weakness of the US dollar has a direct translation impact -- with
approximately two thirds of UBM revenue reported locally in US dollars, group
revenue was reduced by 3.7m pounds as a result of foreign exchange.
The average rate of $:pounds exchange in the first six months of 2005 was
1.87 (1.82), together with the effects of other currency movements this
reduced operating profit in the first half of 2005 by 0.7m pounds. A 1 cent
movement in the US dollar against sterling is approximately equivalent to a
move in profit of around 200,000 pounds to 300,000 pounds over the full year.
2. DIVISIONAL COMMENTARY
Note: As previously notified the amounts shown against CMP Media, CMP
Asia and CMP Information in the table above have been restated to reflect the
intra-group transfer of United Entertainment Media in the US from CMP
Information to CMP Media, the transfer of CMP Princeton from CMP Asia to CMP
Media, and the transfer of United Advertising Publications to CMP Information.
The amounts transferred are stated in detail in the business segments section
of the accompanying financial statements.
PR NEWSWIRE
PR Newswire delivered another strong performance in all main areas of
operation. Underlying revenue was up 9.6 per cent, underlying operating
profit was up 21.5 per cent, with an overall operating margin up from 26.0 per
cent to 27.9 per cent. The core US messaging business achieved a strong yield
increase on steady volume levels. Revenue from new and recent developments in
the media intelligence product range was up over 22 per cent. Businesses in
Europe and Asia achieved 17.8 per cent revenue growth with the European
operating margin up to 20.8 per cent and a total Rest of the World operating
profit of 1.1m pounds (0.3m pounds loss in the same period in 2004).
CMP INFORMATION
The UAP and CMPi businesses were combined during the first half of 2005.
The UK Auto businesses have been put up for sale with the remaining UAP
businesses being fully integrated into CMPi. Underlying revenue of the
combined entity was up 0.7 per cent reflecting some softness in the UK markets
but also strong growth in online revenues. Overall underlying operating
profit was down 13.0 per cent, also reflecting increased investment in new
product development (this increased spend is not backed out in the underlying
calculation). The "old" CMPi again grew underlying revenue -- by a solid 3.8
per cent.
The 2005 acquisitions of ABI and the Publican titles are performing in
line with business case.
CMP MEDIA
In dollar terms technology revenues were down 1.6 per cent reflecting the
continuation of recent trends across the different media platforms -- with
print declining and with events and online both strong.
Although the healthcare business was weak, with dollar revenues down 13.0
per cent, the medical education businesses customers have now restructured
themselves to address US regulatory concerns.
The US based entertainment businesses -- formerly part of CMPi -- have now
been integrated into CMP Media and have delivered steady revenue levels
compared to the same period in 2004.
The 8.2 per cent decline in underlying operating profits across CMP Media
largely reflected the previously announced increased level of investment in
new product development -- in particular in online. Overall new cost savings
of over $7m were achieved in controllable areas such as staffing but these
were offset to some extent by incremental increases in postage and paper
costs.
CMPMEDICA
CMPMedica was acquired on 30 July 2004 with the acquisition of additional
MediMedia assets completed on 31 March 2005. The 2004 acquisition has been
trading broadly in line with its acquisition case. Its performance again
reflects a strong seasonal weighting towards the first half of the year. The
drug information products have performed well but there was some softness in
the Asia-Pacific trade press markets.
The 2005 acquisition is proceeding according to plan -- with the
integration of the French medical education and communication business
-- including trade press titles -- Quotidien Du Medecin and Le Generaliste
-- well underway.
CMP ASIA
The first half of 2005 saw CMP Asia deliver another strong performance
from this exhibitions based business. Underlying revenue was up 10.1 per
cent, with underlying operating profits up 7.5 per cent. Operating margins
were again high at 28.6 per cent (28.4 per cent) and the steady programme of
new product launches continued -- including more geographic extensions into
mainland China.
The acquisition of Tissue World is performing in line with its business
case.
These numbers exclude the Princeton based businesses (the Cruise Shipping
and the Health & Beauty exhibitions) which are now part of CMP Media.
CORPORATE
As noted above "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 -- these included five, SIS, ITN and
SDN.
A major factor during this period was the strong improvement in the
operating performance of five. Total revenue at five was up 16.2 per cent to
155.3m pounds (133.6m pounds) with operating profit up from 6.2m pounds to
17.9m pounds.
3. DIVIDEND
An interim dividend of 4.00 pence (3.63) pence per share will be paid
-- an increase of 10.2 per cent.
The interim dividend on the ordinary shares will be paid on 20 October to
shareholders on the register on 12 of August.
4. BALANCE SHEET AND CASH CONVERSION
Net debt at the end of the period was (0.2)m pounds, after operating cash
conversion of 85.0 per cent of operating profit, expenditure of 67m pounds on
acquisitions during the year, receipts of 418m pounds from disposals, a return
of approximately 300m pounds of capital to investors by means of a special
dividend.
Our target rate for the full year is again to achieve cash conversion of
over 90 per cent.
5. PENSIONS
During the period the pension deficit was reduced from 96.0 m pounds to
90.4m pounds, reflecting the effects of additional contributions.
6. TAX
The effective tax rate in the first half of 2005 was 20.0 per cent (21.8
per cent).
Neither the disposals of NOP World nor (post balance sheet) of the stake
in five are expected to generate any tax liability for UBM.
7. INTEREST
Net interest income for the year was 6.5m pounds (3.2m pounds). Interest
income of 16.0m pounds included 4.1m pounds in relation to loans to five, with
interest expense being (9.5)m pounds.
8. NON-RECURRING ITEMS
Non-recurring items of 262.2m pounds represents the net of the profits on
the disposal of NOP World and SDN of 267.4m pounds, less redundancy and
restructuring costs of 5.2m pounds. The disposals are both subject to
completion adjustments. SDN has an associated tax charge of 1.2m pounds.
9. INTERNATIONAL FINANCIAL REPORTING STANDARDS "IFRS"
UK GAAP TO IFRS RECONCILIATION OF 2005 INTERIM RESULTS
The following table reconciles the adjusted group operating profit, PBT
and EPS between the reported IFRS results and the 'UK GAAP' numbers consistent
with UBM's historical reporting:
Adjusted Adjusted Adjusted
operating PBT EPS
profit
pounds m pounds m pence
'UK GAAP' 75.8 80.2 19.5
Charge for share based payments (1.2) (1.2) (0.3)
Movement in holiday pay accrual (1.1) (1.1) (0.3)
Accounting for equity investments
pre tax 3.3 3.3 1.0
Share of tax of JV's and equity
investments - - 1.3
Adjustment to WIP overhead
capitalisation (0.7) (0.7) -
IAS 32 & 39 adjustments - 0.8 -
IFRS 76.1 81.3 21.2
In addition to these items, the statutory results also include 23.5m
pounds of net financing income -- other than interest. This includes 10.2m
pounds net foreign exchange gain, a (2.5)m pounds charge reflecting the
accretion of the convertible bond debt to maturity value and a 15.9m pounds
gain on the fair value of the embedded derivative in the US Dollar convertible
bond. The accounting for this embedded derivative follows currently worded
accounting standards however it is possible that the accounting standard will
change. The 23.5m pounds of net financing income - other than interest has
been excluded from the headline PBT and EPS numbers
Notes to Editors:
UNITED BUSINESS MEDIA
Background
United Business Media plc (http://www.unitedbusinessmedia.com)
UBM is a market leading global provider of specialist business information
services to the technology, healthcare, media & entertainment, property and
financial services industries. Geographically revenues are generated in
Europe (39%), the US (51%) and in Asia (10%).
Customers
UBM's market leading -- typically ranked number one or two -- products
serve top blue chip clients in all their end markets including: Microsoft,
Hewlett Packard, IBM, Astra Zeneca, Forest Laboratories, Pfizer/Pharmacia,
Merck & Co, GlaxoSmithKline, Novartis, Cisco, Toyo Shinaku, India Trade
Promotions Organisation, China Chamber of Commerce, Sinopharm, Incase, Edelman
Worldwide, Porter Novelli, Fleishman Hillard, NASA.
Product Categories
Publications
-- Over 160 magazines, 110 countries, 4m readers, 4,500 advertisers
Events
-- Over 300 events, 1.3m visitors, 2,500 exhibitors, from 120 countries
Directories
-- Over 50 directories, over 750 thousand recipients, in over 40 countries
Online
-- Over 200 websites, 22 million page impressions, revenue up over 35%
News Distribution
-- Over 180,000 messages, in 135 countries, in more than 150 languages
-- Over 460,000 journalists, monitoring message boards with over 25m users
Product Brands
CMP Media (http://www.cmpmedia.com)
Information Week, CRN, EE Times, Network Computing, VARBusiness, TechWeb,
Consultant Magazine, Game Developer Conference, Embedded Systems Conference,
Xchange Conferences, Guitar Player, Health & Beauty America, Seatrade Cruise
Shipping Convention,
CMP Information (http://www.cmpinformation.com)
CPHI, Building, Furniture Show, Property Week, Farmer's Guardian, FIE,
Ifsec, Health & Safety, Pulse, Daltons Weekly, Trade It, Trader,
Opportunities, Private Villas, This Caring Business, ECM
CMPMedica
Vidal, Quotidien du Medecin, Le Generaliste, Medec, HopitalExpo, Le
Journal du Medicin, Medex, MedServe, Gelbeliste, Kassenartzt, Pharmindex,
Vademecum, MIMS, Medical Observer, Medical Tribune
CMP Asia (http://www.cmpasia.com)
Asia Pacific Leather Fair, Cosmoprof Asia, Hong Kong Jewellery and Watch
Fair, Health Industry News, Jewellery News Asia, Tokyo Intnl Health Industry
Show.
PR Newswire (http://www.prnewswire.com)
MultiVu, MediaAtlas, eWatch, Profnet, US1
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.
Consolidated income statement
for the six months ended 30 June 2005
As restated As restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2005 2004 2004
Notes pounds m pounds m pounds m
Continuing operations
Revenue 3 336.6 281.1 586.7
Operating expenses (276.1) (233.9) (490.0)
Non-recurring restructuring
costs 4 (5.2) - -
Share of profit in joint
ventures and associates
(after tax) 3 10.7 0.3 4.9
Income from investments 0.5 2.5 5.2
Group operating profit 66.5 50.0 106.8
Non-recurring items
Profit on disposal of
businesses 4 267.4 - -
Additional profit on prior
year disposals 4 - - 18.9
Amounts written off
investments 4 - - (11.7)
267.4 - 7.2
Earnings before interest
and taxes ("EBIT") 3 333.9 50.0 114.0
Net interest income 5 6.5 3.2 12.4
Net financing income
- other than interest 5 23.5 - -
Net financing costs
- pension schemes 5 (1.3) (2.4) (3.4)
Profit before tax 362.6 50.8 123.0
Taxation (12.7) (11.4) (24.3)
Taxation relating to
non-recurring items 4 (1.2) - -
Non-recurring taxation
credit - - 121.0
Profit for the period from
continuing operations 348.7 39.4 219.7
Discontinued operations
Profit for the period from
discontinued operations
(after tax) 10 3.8 8.7 17.6
Profit for the period 352.5 48.1 237.3
Attributable to:
Equity shareholders
- ordinary 351.4 47.0 235.4
Equity shareholders
- B shares 0.2 0.2 0.4
Minority interests 0.9 0.9 1.5
352.5 48.1 237.3
Earnings per share
- basic 6 106.2 p 14.1 p 70.4 p
- diluted 6 92.0 p 12.6 p 61.8 p
Adjusted group operating
profit* 3 76.1 61.7 132.6
Amortisation of intangible
assets (4.6) - (3.1)
Share of taxation on profit
in joint ventures and
associates 4.9 (0.7) (0.8)
Non-recurring items (net) 4 262.2 - 7.2
Operating profit from
discontinued operations
(before tax) (4.7) (11.0) (21.9)
Earnings before interest
and taxes ("EBIT") 3 333.9 50.0 114.0
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, and non-recurring items,
and including operating profit from discontinued operations.
Consolidated balance sheet
at 30 June 2005
As restated As restated
30 June 30 June 31 December
2005 2004 2004
Notes pounds m pounds m pounds m
Assets
Non-current assets
Goodwill 554.2 431.5 583.4
Intangible assets 65.1 - 50.4
Property, plant and equipment 39.2 51.4 45.0
Investments accounted for using
the equity method 62.0 53.4 55.1
Other investments 5.9 118.2 47.9
726.4 654.5 781.8
Current assets
Inventories 7.7 14.2 14.9
Trade and other receivables 265.7 276.3 304.7
Derivative financial assets 1.0 - -
Cash and cash equivalents 455.2 474.0 336.8
729.6 764.5 656.4
Non-current assets classified
as held for sale 10.3 - 5.1
Total assets 1,466.3 1,419.0 1,443.3
Liabilities
Current liabilities
Borrowings 139.1 202.1 142.8
Convertible bond - 217.8 -
Trade and other payables 528.2 592.0 500.3
667.3 1,011.9 643.1
Non-current liabilities
Borrowings 102.7 101.4 96.1
Convertible bond 213.6 - 208.7
Derivative financial liabilities 34.5 - -
Retirement benefit obligation 90.4 72.0 96.0
Trade and other payables 4.6 6.4 4.6
Provisions 41.1 56.3 48.6
Deferred tax liabilities 21.7 - 16.8
508.6 236.1 470.8
Total liabilities 1,175.9 1,248.0 1,113.9
Shareholders' equity
Share capital 8 69.9 72.6 72.6
Share premium 317.6 310.1 310.8
Other reserves 180.1 196.1 201.3
Retained earnings (279.4) (409.5) (257.5)
Total shareholders' equity 288.2 169.3 327.2
Minority interests 2.2 1.7 2.2
Total equity 290.4 171.0 329.4
Total equity and liabilities 1,466.3 1,419.0 1,443.3
Consolidated cash flow statement
for the six months ended 30 June 2005
As restated As restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2005 2004 2004
Notes pounds m pounds m pounds m
Cash flows from operating
activities
Cash generated from
operations 11 50.6 27.0 107.1
Interest received 14.6 6.6 27.4
Interest paid (11.3) (7.5) (19.6)
Taxation paid (7.4) (4.9) (10.0)
Dividend received from
joint ventures and
associates 2.8 2.8 4.8
Dividend paid to non
equity shareholders - (0.4) (0.4)
Income from fixed asset
investments 0.5 2.6 4.8
Net cash flows from operating
activities 49.8 26.2 114.1
Cash flows from investing
activities
Acquisition of interests in
subsidiaries, net of cash
acquired (69.3) - (190.2)
Sale of subsidiary undertakings
and businesses 432.9 - -
Purchase of property and equipment (4.7) (2.9) (8.5)
Proceeds from the sale of
property and equipment - - 1.9
Acquisition of interests in
associated companies and joint
ventures - - (1.7)
Proceeds from sale of investments 42.8 18.8 67.1
Purchase of investments - (4.6) -
Investment in own shares - ESOP (2.4) - (4.1)
Net cash flows from investing
activities 399.3 11.3 (135.5)
Cash flows from financing
activities
Proceeds from the issuance of
ordinary share capital 7.3 0.7 1.5
Return of capital to shareholders
(including costs) (6.6) - (1.9)
Dividend paid to shareholders (326.8) (19.1) (31.2)
Dividend paid to minority
interests (0.9) (0.2) -
Decrease in borrowings - (44.0) (98.9)
Net cash flows from financing
activities (327.0) (62.6) (130.5)
Net increase/(decrease) in cash
and cash equivalents 122.1 (25.1) (151.9)
Net foreign exchange difference (6.1) 5.1 (8.0)
Cash and cash equivalents at
beginning of period 334.0 493.9 493.9
Cash and cash equivalents at
end of period 450.0 473.9 334.0
Cash at bank and in hand 408.5 364.6 144.6
Short-term liquid funds 46.7 109.4 192.2
Bank overdraft (5.2) (0.1) (2.8)
Cash and cash equivalents at
end of period 450.0 473.9 334.0
Consolidated statement of changes in equity
for the six months ended 30 June 2005
Share ESOP Share Other Retained Total Minority Total
capital shares premium reserves earnings interests equity
Balance
at 1 January
2004 84.5 (7.8) 309.4 199.2 (461.6) 123.7 1.0 124.7
Changes in
accounting
policy
relating to
first-time
adoption of
IFRS - - - - 15.2 15.2 - 15.2
Restated
balance at
1 January
2004 84.5 (7.8) 309.4 199.2 (446.4) 138.9 1.0 139.9
Currency
translation
differences - - - (3.1) - (3.1) - (3.1)
Net profit - - - - 47.2 47.2 0.9 48.1
Own shares
purchased
by the
company - (4.1) - - - (4.1) - (4.1)
Premium on
shares
issued - - 0.7 - - 0.7 - 0.7
Share-based
payment - - - - 0.5 0.5 - 0.5
Actuarial gains
on pensions - - - - 8.6 8.6 - 8.6
Equity dividends - - - - (19.4) (19.4) (0.2) (19.6)
Restated
balance at
30 June 2004 84.5 (11.9) 310.1 196.1 (409.5) 169.3 1.7 171.0
Currency
translation
differences - - - 5.2 - 5.2 - 5.2
Net profit - - - - 188.6 188.6 0.6 189.2
B shares
purchased by
the company - - - - (1.8) (1.8) - (1.8)
Premium on
shares issued - - 0.7 - - 0.7 - 0.7
Share-based
payment - - - - 1.0 1.0 - 1.0
Actuarial
losses on
pensions - - - - (23.5) (23.5) - (23.5)
Equity
dividends - - - - (12.3) (12.3) (0.1) (12.4)
Restated
balance at
31 December
2004 84.5 (11.9) 310.8 201.3 (257.5) 327.2 2.2 329.4
Currency
translation
differences - - - (21.2) - (21.2) - (21.2)
Net profit - - - - 351.6 351.6 0.9 352.5
Changes in
accounting
policy
relating to
first-time
adoption of
IAS 32 and 39 - - - - (41.0) (41.0) - (41.0)
Own shares
purchased by
the company - (2.4) - - - (2.4) - (2.4)
Shares
repurchased
and cancelled
by the
company (0.8) - - - (12.5) (13.3) - (13.3)
Shares issued 0.5 - 6.8 - - 7.3 - 7.3
Share-based
payment - - - - 1.2 1.2 - 1.2
Actuarial
gain on
pensions - - - - 5.4 5.4 - 5.4
Special
dividends - - - - (298.3) (298.3) - (298.3)
Equity
dividends - - - - (28.3) (28.3) (0.9) (29.2)
Balance at
30 June
2005 84.2 (14.3) 317.6 180.1 (279.4) 288.2 2.2 290.4
Notes to the interim financial report
for the six months ended 30 June 2005
1. General information
The information for the year ended 31 December 2004 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 27 July 2005. It is
unaudited but has been reviewed by the auditors as set out in their report on
page 22.
2. Accounting policies
The interim financial report has been prepared in accordance with the
group's IFRS accounting policies. These are the first IFRS financial
statements of the company and details of the impact of transition are set out
in note 17.
Changes in accounting policies
The same accounting policies and methods of computation are followed in
the interim financial report as published by the company on 30 June 2005,
which are available on the company's website, http://www.unitedbusinessmedia.com. For
the recognition and measurement of financial instruments, the group applied
the exemption in IFRS 1 'First-time Adoption of International Financial
Reporting Standards' to adopt IAS 32 'Financial Instruments: Disclosure and
Presentation' and IAS 39 'Financial Instruments: Recognition and Measurement'
from 1 January 2005 and comparative information presented does not need to
comply with these standards in the first year of transition.
The principal changes with the adoption of these standards are discussed
below.
IAS 32 Financial Instruments: Disclosure and Presentation' and IAS 39
'Financial Instruments: Recognition and Measurement'
IAS 39 'Financial Instruments: Recognition and Measurement' requires that
assets and liabilities are all classified into one of five categories, which
dictates the accounting treatment. Items are measured either at fair value,
or at amortised cost using the effective interest rate method.
The main impact of IAS 32 and IAS 39 on the Group is to record the
movement in fair values through the income statement for all derivatives. The
embedded derivatives within the credit link notes and the convertible bond are
both required to be at fair value on transition.
IAS 39 specifies three types of hedging relationships: fair value hedges,
cash flow hedges, and hedges of a net investment in a foreign operation. IAS
39 requires all hedges to be formally documented on transition, explaining the
hedging relationship and the objectives and strategy for undertaking the
hedge. The hedge must be expected to be highly effective, and effectiveness
must be able to be reliably measured. The Group is applying hedge accounting
for its hedges that qualify under IAS 39 on transition. For qualifying cash
flow hedges and hedges of a net investment, the change in the fair value of
the hedging instrument is deferred in equity to the extent the hedge is
effective. Accumulated fair value changes from qualifying hedges are released
from equity to the profit and loss account in the period when the hedged cash
flow effects the profit and loss account (for cash flow hedges) or on disposal
of the foreign operation (for hedges of net investments). For qualifying fair
value hedges, all gains or losses on the hedging instrument are recognised
immediately in the profit and loss account.
IAS 32 'Financial Instruments: Disclosure and Presentation' requires
convertible bonds denominated in a foreign currency to be split into the debt
component and the component representing the embedded derivatives in the bond.
IAS 39 requires the debt component to be measured at amortised cost, and the
embedded derivatives to be measured at fair value through profit or loss. The
Group's convertible bond is denominated in US Dollars, so must be split into
its relevant debt and derivative components and measured accordingly.
The revised accounting policies for derivative financial instruments and
other investments are as follows:
Derivative Financial Instruments
The policy for financial instruments represents that which will be applied
from 2005 onwards. Derivative financial instruments are initially recorded at
cost and then remeasured to fair value at subsequent balance sheet dates for
reporting purposes.
The fair value of forward exchange contracts is calculated by reference to
current forward exchange rates for contracts with similar maturity profiles.
The fair value of interest rate swap contracts is determined by reference to
market rates of interest.
For the purpose of hedge accounting, hedges are classified as either fair
value hedges when they hedge the exposure to changes in the fair value of a
recognised asset or liability; or as cash flow hedges where they hedge
exposure to variability in cash flows that is either attributable to a
particular risk associated with a recognised asset or liability or a forecast
transaction.
Changes in the fair value of derivative financial instruments that are
designated and effective as cash flow hedges of forecast transactions are
recognised directly in equity. Amounts deferred in this way are recognised in
the income statement in the same period in which the hedged firm commitments
or forecast transactions are recognised in the income statement.
In relation to fair value hedges which meet the conditions for hedge
accounting, any gain or loss from remeasuring the hedging instrument at fair
value is recognised in the income statement. Any gain or loss on the hedged
item attributable to the hedged risk is adjusted against the carrying amount
of the hedged item and recognised in the income statement.
Changes in the fair value of the derivative financial instruments that do
not qualify for hedge accounting are recognised in the income statement as
they arise.
Hedge accounting is discontinued when the hedging instrument expires or is
sold, terminated or exercised, or no longer qualifies for hedge accounting. At
that point in time, any cumulative gains or losses on the hedging instrument
recognised in equity are retained until the forecast transaction occurs. If a
hedged transaction is no longer expected to occur, the net cumulative gain or
loss recognised in equity is transferred to the income statement for the
period.
Other Investments
The Group classifies its investments in the following categories:
available-for-sale financial assets and loans and receivables. The
classification depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial
recognition and re-evaluates this designation at every reporting date.
All investments are initially recognised as cost, being the fair value of
the consideration given and including acquisition charges associated with the
investments. After initial recognition, investments that are classified as
available-for-sale are measured at fair value and loans and receivables are
carried at amortised cost using the effective interest method. The Group
assesses at each balance sheet date whether there is objective evidence that a
financial asset or a group of financial assets is impaired.
(a) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either
designated in this category or not classified in any of the other categories.
They are included in non-current assets unless management intends to dispose
of the investment within 12 months of the balance sheet date. Listed and
unlisted investments are stated at market value, except where there is no
market value in an active market and where the fair value cannot be reliably
measured, in which case they are measured at cost.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They arise
when the Group provides money, goods or services directly to a debtor with no
intention of trading the receivable. They are included in current assets,
except for maturities greater than 12 months after the balance sheet date.
These are classified as non-current assets.
Convertible Bonds
The convertible bond is split into two components: a debt component and a
component representing the embedded derivatives in the bond. The debt
component represents the group's liability for future interest coupon payments
and the redemption amount. The embedded derivatives represent the value of
the option that bondholders have to convert into ordinary shares of the
company.
The debt component of the convertible bond is measured at amortised cost
and therefore increases as the present value of the interest coupon payments
and redemption amount increases, with a corresponding charge to interest
payable. The debt component decreases by the cash interest coupon payments
made. The embedded derivatives are measured at fair value at each balance
sheet date, and the change in the fair value is recognised in the income
statement.
The impact of accounting for the convertible bond in this way, in
accordance with current IFRS interpretation, from 1 January 2005 compared to
UK GAAP is to:
-- increase interest payable in the income statement;
-- reduce the debt component of the bonds; and
-- introduce volatility to the income statement through the change in fair
value of the embedded derivatives.
Borrowings
All loans and borrowings are initially recognised at cost, being the fair
value of the consideration received net of issue costs associated with the
borrowings. After initial recognition, loans and borrowings are subsequently
measured at amortised cost, and any difference between the proceeds and the
redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method. Amortised cost is calculated
by taking into account any issue costs, and any discount or premium on
settlement.
3. Business segments
At 30 June 2005, the Group is organised into five main business segments -
CMP Media, CMPMedica, CMP Asia, CMP Information, and News Distribution.
These segments are the basis on which the group reports its primary segment
information.
CMP Media's, CMPMedica's, CMP Asia's and CMP Information's main activities
are the production of magazines, trade press, directories, events, and
websites. The News Distribution segment operates in the distribution,
targeting and evaluation of company information.
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 following tables set out the revenue and profit information and
certain asset and liability information for the Group's business segments.
Six months ended 30 June 2005
Share of
Profit profit/(loss)
from from equity
operating accounted
Revenue activities investments EBIT
pounds m pounds m pounds m pounds m
Segments
Continuing operations
CMP Media 103.9 12.2 0.7 12.9
CMPMedica 54.7 9.5 (0.1) 9.4
CMP Asia 22.0 5.9 0.3 6.2
CMP Information 104.7 20.5 - 20.5
News distribution 51.3 12.5 1.3 13.8
Corporate operations ** - 0.4 8.5 8.9
336.6 61.0 10.7 71.7
Non-recurring items - - - 262.2
- - - 333.9
Discontinued operations
Market research 76.9 4.4 - 4.4
Corporate operations ** - - 0.3 0.3
76.9 4.4 0.3 4.7
413.5 65.4 11.0 338.6
Share of
tax on
profit
*Adjusted from
group equity Amortisation
operating accounted Impairment of
profit investments of goodwill intangibles EBIT
pounds m pounds m pounds m pounds m pounds m
Segments
Continuing
operations
CMP Media 12.9 - - - 12.9
CMPMedica 13.5 - - (4.1) 9.4
CMP Asia 6.3 - - - 6.3
CMP Information 21.0 - - (0.5) 20.5
News distribution 14.3 (0.5) - - 13.8
Corporate
operations** 3.4 5.4 - - 8.8
71.4 4.9 - (4.6) 71.7
Non-recurring
items - - - - 262.2
- - - - 333.9
Discontinued
operations
Market research 4.4 - - - 4.4
Corporate
operations ** 0.3 - - - 0.3
4.7 - - - 4.7
76.1 4.9 - (4.6) 338.6
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, and non-recurring items,
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.
Six months ended 30 June 2004
Share of
Profit/ profit/
(loss) (loss)
from from equity
operating accounted
Revenue activities investments EBIT
pounds m pounds m pounds m pounds m
Segments
Continuing operations
CMP Media 110.6 13.7 0.6 14.3
CMPMedica - - - -
CMP Asia 20.1 5.6 0.1 5.7
CMP Information 102.7 24.2 - 24.2
News distribution 47.7 10.7 1.2 11.9
Corporate operations ** - (4.5) (1.6) (6.1)
281.1 49.7 0.3 50.0
Discontinued operations
Market research 102.8 10.4 - 10.4
Corporate operations ** - - 0.6 0.6
102.8 10.4 0.6 11.0
383.9 60.1 0.9 61.0
Six months ended 30 June 2004
Share of
tax on
profit
*Adjusted from
group equity Impairment Amortisation
operating accounted of of
profit investments goodwill intangibles EBIT
pounds m pounds m pounds m pounds m pounds m
Segments
Continuing
operations
CMP Media 14.3 - - - 14.3
CMPMedica - - - - -
CMP Asia 5.7 - - - 5.7
CMP Information 24.2 - - - 24.2
News
distribution 12.4 (0.5) - - 11.9
Corporate
operations ** (5.9) (0.2) - - (6.1)
50.7 (0.7) - - 50.0
Discontinued
operations
Market research 10.4 - - - 10.4
Corporate
operations ** 0.6 - - - 0.6
11.0 - - - 11.0
61.7 (0.7) - - 61.0
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, and non-recurring items,
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.
For the year ended 31 December 2004
Share of
Profit/ profit
(loss) from
from equity
operating accounted
Revenue activities investments EBIT
pounds m pounds m pounds m pounds m
Segments
Continuing operations
CMP Media 220.3 25.9 1.2 27.1
CMPMedica 29.8 0.3 - 0.3
CMP Asia 45.0 13.2 0.5 13.7
CMP Information 196.8 43.4 - 43.4
News distribution 94.8 20.4 2.3 22.7
Corporate operations ** - (1.3) 0.9 (0.4)
586.7 101.9 4.9 106.8
Additional profit on
prior year disposals - - - 18.9
Amounts written off
investments - - - (11.7)
586.7 101.9 4.9 114.0
Discontinued operations
Market research 222.4 20.3 - 20.3
Corporate operations ** - - 1.6 1.6
222.4 20.3 1.6 21.9
809.1 122.2 6.5 135.9
Share of
tax on
profit
*Adjusted from
group equity Impairment Amortisation
operating accounted of of
profit investments goodwill intangibles EBIT
pounds m pounds m pounds m pounds m pounds m
Segments
Continued
operations
CMP Media 27.1 - - - 27.1
CMPMedica 3.4 - - (3.1) 0.3
CMP Asia 13.7 - - - 13.7
CMP Information 43.4 - - - 43.4
News
distribution 23.9 (1.2) - - 22.7
Corporate
operations ** (0.8) 0.4 - - (0.4)
110.7 (0.8) - (3.1) 106.8
Additional profit
on prior year
disposals - - - - 18.9
Amounts written
off investments - - - - (11.7)
- - - (3.1) 114.0
Discontinued
operations
Market research 20.3 - - - 20.3
Corporate
operations ** 1.6 - - - 1.6
21.9 - - - 21.9
132.6 (0.8) - (3.1) 135.9
* Adjusted group operating profit represents group operating profit
excluding amortisation of intangible assets, and non-recurring items,
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.
The amounts shown against CMP Media, CMP Asia and CMP Information for 30
June 2004 and 31 December 2004 in the tables above have been restated to
reflect the intra-group transfer of United Entertainment Media in the US from
CMP Information to CMP Media, the transfer of CMP Princeton from CMP Asia to
CMP Media, and the transfer of United Advertising Publications to CMP
Information.
For the six months ended 30 June 2004, 9.8 million pounds of revenue and
0.7 million pounds of operating profit for United Entertainment Media was
transferred from CMP Information to CMP Media, 2.5 million pounds of revenue
and 1.0 million pounds of operating profit for CMP Princeton was transferred
from CMP Asia to CMP Media, and 29.9 million pounds of revenue and 7.2 million
pounds of operating profit for United Advertising Publications was included in
CMP Information.
For the year ended 31 December 2004, 21.0 million pounds of revenue and
3.4 million pounds of operating profit for United Entertainment Media was
transferred from CMP Information to CMP Media, 5.5 million pounds of revenue
and 1.2 million pounds of operating profit for CMP Princeton was transferred
from CMP Asia to CMP Media, and 58.5 million pounds of revenue and 13.2
million pounds of operating profit for United Advertising Publications was
included in CMP Information.
4. Non-recurring items
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Charged to group operating
profit:
Restructuring costs (a) (5.2) - -
Credited to EBIT:
Profit on disposal of
businesses (b) 267.4 - -
Additional profit on prior
year disposals (c) - - 18.9
Amounts written off
investments (d) - - (11.7)
262.2 - 7.2
Taxation relating to
non-recurring items (e) (1.2) - -
Non-recurring tax credit (f) - - 121.0
(1.2) - 121.0
(a) Redundancy, restructuring, business integration costs and other costs
relating to the reorganisation of the group recognised in the period.
(b) Profit on disposal of businesses includes the profit on disposal of
the market research business, 242.4 million pounds, and the profit on
the disposal of SDN, 25.0 million pounds. These profits represent the
consideration received after deduction of net assets, attributable
goodwill and directly attributable costs. Both disposals are subject
to completion adjustments which will be reflected as at 31 December
2005.
(c) In December 2004, UBM agreed a settlement of 32.0 million pounds from
Granada in respect of outstanding items relating to the disposals in
2000. The additional profit on disposal represents this receipt,
after deduction of interest, costs, and the offset of recorded
receivables.
(d) In 2004, the group wrote the carrying value of certain fixed asset
investments to reflect their expected realisable value. It is the
group's intention to exit these investments.
(e) Taxation relating to the disposal of SDN.
(f) In 2004, the group resolved a number of outstanding items, as a
consequence of which there was a net exceptional tax credit of
121.0 million pounds.
5. Net interest and financing income
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Net interest income
Interest income 16.0 13.6 26.6
Interest costs (9.5) (10.4) (14.2)
6.5 3.2 12.4
Net financing income
- other than interest
Net foreign exchange gain (a) 10.2 - -
Convertible bond (b) (2.5) - -
Fair value gain on derivative
embedded in convertible
bond (c) 15.9 - -
Other fair value adjustments (0.1) - -
23.5 - -
Net financing costs - pension
schemes (1.3) (2.4) (3.4)
28.7 0.8 9.0
(a) Foreign exchange gain on US Dollar denominated balances held in UK
accounts. This gain arose from the strengthening of the US Dollar in
the first half of 2005.
(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) As currently drafted, accounting standards determine that UBM's US
Dollar convertible bond contains an embedded derivative, and this
option needs to be fair valued through the income statement. This
credit is a result of the movement in UBM's share price and
strengthening of the US Dollar.
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 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 deducting 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 following reflects the income and share data used in the total
operations basic and diluted earnings per share computations:
Six months Six months
ended ended Year ended
30 June 2005 30 June 2004 31 December 2004
Earnings Earnings Earnings
per per per
Earnings share Earnings share Earnings share
pounds m pence pounds m pence pounds m pence
Adjusted earnings
per share 70.1 21.2 47.0 14.1 109.4 32.7
Adjustments
Amortisation of
intangible
assets (4.6) (1.4) - - (3.1) (0.9)
Deferred tax on
amortisation of
intangible assets 1.4 0.4 - - 0.9 0.3
Non-recurring
items 262.2 79.3 - - 128.2 38.3
Taxation
relating to
non-recurring
items (1.2) (0.4) - - - -
Net financing
income
- other
than interest 23.5 7.1 - - - -
Basic earnings
per share 351.4 106.2 47.0 14.1 235.4 70.4
Dilution
Options - (1.6) - (0.2) - (1.0)
Convertible bond 1.9 (12.6) 1.8 (1.3) 3.5 (7.6)
Diluted earnings
per share 353.3 92.0 48.8 12.6 238.9 61.8
The weighted average shares for the period were 330,990,030 (30 June 2004:
334,297,844; 31 December 2004: 334,436,606).
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 2005 would be to
increase the profit by 1.9 million pounds (30 June 2004: 1.8 million pounds;
31 December 2004: 3.5 million pounds) for convertible debt and to increase
weighted average shares by 5.2 million shares (30 June 2004: 5.1 million
shares; 31 December 2004: 4.6 million shares) for employee share options and
47.8 million shares (30 June 2004: 47.8 million shares; 31 December 2004: 47.8
million shares) for convertible debt.
7. Dividends
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Declared and paid
during the period
Equity dividends
on ordinary shares
Final dividend for 2004 of
8.37p (2003: 5.7p) 28.1 19.2 19.2
Interim dividend - - 12.1
Special dividend of 89.0p 298.3 - -
Equity dividends - B shares 0.2 0.2 0.4
Dividends 326.6 19.4 31.7
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
4.00p (2004: 3.63p) 11.5 12.1 -
Final dividend for 2004 of
8.37p - - 28.1
On 28 June 2005, UBM paid a special dividend to shareholders of 298.3
million pounds (89.0p per share).
8. Share capital
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Authorised
400,936,636 ordinary shares
of 30 and 5/14 pence each
(June 2004: 486,851,630;
December 2004: 486,851,630
ordinary shares of 25 pence
each) 121.7 121.7 121.7
375,417,690 (June 2004:
375,417,690; December 2004:
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 B ESOP
Shares Shares Shares Total
pounds m pounds m pounds m pounds m
Issued and fully paid
At 1 January 2005 84.1 0.4 (11.9) 72.6
Allocated in respect
of share option schemes
and other entitlements 0.5 - - 0.5
Own shares purchased by
the company - - (2.4) (2.4)
Shares repurchased (0.1) - - (0.1)
At 20 June 2005
(Pre-share
consolidation) 84.5 0.4 (14.3) 70.6
Share consolidation of
337,932,001 shares at
17 shares into 14
ordinary shares - - - -
Shares repurchased (0.8) - - (0.8)
Allocated in respect
of share option
schemes and other
entitlements 0.1 - - 0.1
Actual issued and fully
paid shares at 30 June
2005 83.8 0.4 (14.3) 69.9
As at 30 June 2005, there were 275,929,219 issued and fully paid ordinary
shares, and 5,446,789 issued and fully paid B shares. As at 30 June 2005, the
holdings of the United ESOP are 2,566,589 ordinary shares, and 279,484 B
shares.
The group repurchased and cancelled 2,650,000 of its own shares during
June 2005. The total amount paid to acquire the shares was 13.3 million
pounds.
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.
9. Acquisitions and disposals
Acquisitions
UBM has completed five acquisitions in the six months ending 30 June 2005.
On 1 February 2005, UBM acquired Tissue World, an events and publication
company, from Paperloop.com, Inc. The purchase price was $4.8 million.
On 7 February 2005, UBM acquired the licensed trade sector publishing and
events assets of Quantum Business Media ('Quantum') for 21.0 million pounds.
On 31 March 2005, UBM acquired the medical trade press and other
professional healthcare business information services in France from
MediMedia. The purchase price was euro 36.0 million in cash.
On 4 April 2005, UBM acquired DotNetJunkies.com and SqlJunkies.com for
$0.2 million.
On 10 May 2005, UBM acquired ABI Building Data Limited for 12.0 million
pounds from EMAP plc.
Details of net assets acquired and goodwill are as follows:
2005
pounds m
Purchase consideration:
Cash paid 61.6
Direct costs relating to the acquisition 1.3
Total purchase consideration 62.9
Fair value of assets acquired 10.1
Identified intangibles* (21.8)
Goodwill on acquisition 51.2
*Based on preliminary purchase price allocation.
The following table sets out the aggregated book values of the
identifiable assets and liabilities acquired in respect of the acquisitions
detailed above and their fair value to the group:
2005 2005 2005
Acquiree's Adjustments Fair
Carrying Value
Value
pounds m pounds m pounds m
Fixed assets 24.4 (22.9) 1.5
Current assets 22.6 0.3 22.9
47.0 (22.6) 24.4
Current liabilities (32.0) - (32.0)
Non-current liabilities (2.1) (0.4) (2.5)
(34.1) (0.4) (34.5)
Net assets acquired 12.9 (23.0) (10.1)
The adjustments relate to the alignment of accounting policies principally
in relation to fixed asset capitalisation and amortisation, and revenue
recognition policies with those of the group.
The aggregate cash flow effect of the acquisitions was as follows:
2005
pounds m
Net cash acquired with the subsidiary 2.9
Cash paid (62.9)
Further consideration for prior year acquisitions (9.3)
Net cash outflow on acquisitions (69.3)
Disposals
On 27 April 2005, UBM completed the sale of its associate SDN Limited for
net proceeds of 31.1 million pounds, subject to working capital adjustments to
the purchase price. SDN has been included in 'Corporate operations' for
segmental reporting purposes.
A profit of 25.0 million pounds arose on the disposal of SDN Limited,
being the proceeds of disposal less the carrying amount of the associate's net
assets and costs of disposal, subject to completion adjustments.
On 15 April 2005, UBM announced the sale of its market research business,
NOP World, to GfK Aktiengesellschaft for 383.0 million pounds, subject to
working capital adjustments to the purchase price which will be finalised in
the six months to 31 December 2005. The disposal was completed on 1 June 2005,
on which date control of NOP World passed to the acquirer.
A profit of 242.4 million pounds arose on the disposal of NOP World, being
the proceeds of disposal less the carrying amount of the subsidiary's net
assets, attributable goodwill and directly attributable costs, subject to
completion adjustments.
10. Discontinued operations
The results of the discontinued operations which have been included in the
consolidated income statement were as follows:
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Revenue 76.9 102.8 222.4
Share of profit from equity
accounted investments 0.3 0.6 1.6
Operating expenses (72.5) (92.4) (202.1)
Profit before tax 4.7 11.0 21.9
Interest income - - 0.1
Attributable taxation (0.9) (2.3) (4.4)
3.8 8.7 17.6
Profit from disposal of
discontinued operations 267.4 - -
Attributable tax expense (1.2) - -
Net profit attributable to
discontinued operations 266.2 - -
At date of
disposal
pounds m
Intangible assets 78.6
Property, plant and equipment 6.6
Trade and other receivables 60.0
Inventories 24.8
Cash and cash equivalents 2.7
172.7
Trade and other payables (68.1)
Provisions (0.1)
(68.2)
Net assets attributable to
discontinued operations 104.5
The tables above include the figures for NOP World and SDN.
11. Cash generated from operations
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
pounds m pounds m pounds m
Profit for the period 352.5 48.1 237.3
Taxation 14.8 13.7 (92.3)
Depreciation charges 6.0 6.4 12.9
Amortisation of intangible assets 4.6 - 3.1
Net Interest (income)/expense (28.7) 0.8 (9.0)
Share of results from joint
ventures and associates (11.0) (0.1) (5.0)
Income from other investments (0.5) (2.5) (5.2)
Loss on sale of property,
plant and equipment - 0.1 -
Payments against provisions (7.4) (6.8) (16.1)
Additional pension contributions (9.3) (6.6) (7.0)
Non-recurring items (262.2) - (7.2)
Other movements in
working capital (9.4) (25.7) (3.8)
Other non-cash items including
movements on provisions 1.2 (0.4) (0.6)
50.6 27.0 107.1
12. 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 2005, the Group awarded 345,138 shares under the Medium Term Incentive
Plan ('MTIP').
13. 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.
14. Contingent liabilities
The company acts as guarantor over a net overdraft facility of 60.0
million pounds and a foreign exchange line of 50.0 million pounds that are
available to subsidiary undertakings. The company also acts as guarantor over
the fixed interest payable on interest rate swaps taken out by a subsidiary
undertaking, and acts as guarantor over the convertible bonds.
15. Capital commitments
Capital expenditure contracted for but not provided in the financial
statements amounts to 2.3 million pounds (June 2004: nil pounds, December
2004: 1.2 million pounds).
16. Events after balance sheet date
On 15 June 2005, UBM entered an agreement to acquire the assets of "Theme"
magazine, and 100% of the share capital in Bar Exhibitions Limited, from
Mondiale Publishing Limited. The purchase price for this acquisition is to be
5 million pounds, and is expected to be completed in August 2005.
On 7 July 2005, UBM announced that CMP Media has acquired the US based
Incoming Calls Management Institute (ICMI) for initial consideration of
US$3.75 million, and earn out to a maximum of $7.5 million.
On 20 July 2005, UBM announced that it has agreed to sell its 35.4%
shareholding in Channel 5 Television Group Limited ("five") to the RTL Group
for 247.6 million pounds, equivalent to a valuation of 700.0 million pounds
for 100% shareholding.
SOURCE United Business Media plc
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+44-20-7921-5031; or Colin Browne of The Maitland Consultancy,
+44-20-7379-5151, for United Business Media
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