Metal Bulletin PLC
26 August 2003
26 August 2003
METAL BULLETIN PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2003
Key Financials
30 June 30 June 2002 Change
2003
Turnover £19.2m £20.9m -8.0%
Operating profit £1.3m £1.0m +25.6%
Adjusted operating profit* £2.5m £2.8m -11.9%
Profit before tax £0.8m £0.5m +53.9%
Adjusted pre-tax profit* £2.2m £2.5m -12.1%
Tax rate 31.8% 20.0% -
Basic earnings per share 0.09p 0.14p -35.7%
Diluted earnings per share 0.09p 0.14p -35.7%
Adjusted earnings per share* 2.78p 3.63p -23.4%
Dividend per share 1.90p 1.90p 0%
Overview
• First half profitability impacted by difficult economic environment and
events postponed until second half.
• Strong performance at BCA with turnover up 11% (+16% in local currency) -
partially mitigating performance in rest of Financial Information division
where conferences were hit by SARS and Iraqi war.
• Metals, Minerals & Mining division had a difficult first half - product
development leading to better current performance and reduced subscription
attrition.
• Commodities & Energy division ahead on back of strong Atalink performance.
• Ongoing benefits of cost cutting initiatives - savings of £0.5m achieved
in period.
• Gross margin up 2% points due to strict cost management and move to
electronic delivery.
• Good cash flow from operations.
• Dividend maintained at 1.90p.
• The Group continues to trade in line with the guidance given in May and
the Board remains confident of a satisfactory outcome for the year.
* Glossary
Adjusted operating profit = profit before amortisation and exceptional items
Adjusted pre-tax profit = profit before amortisation, exceptional items and discount on
deferred consideration
Adjusted earnings per share = before amortisation, discount on deferred consideration and
exceptional items (including tax thereon)
Commenting on the results, Tom Hempenstall, Chief Executive of Metal Bulletin,
said:
'Trading conditions during the first half of the year remained challenging and
the Group's performance was impacted by the difficult economic environment and
the postponement of events. However, the results for the period reflect the
strength and resilience of the Group's brands and the lower cost base following
last year's restructuring. BCA continues to perform well and we are beginning to
see the benefits of the investment in subscriber marketing and the move to
electronic delivery across the Group.
'While the business will continue to be affected by the uncertain economic
environment, the action taken during the last 18 months will position the Group,
with its strong portfolio of products, to benefit from a recovery in the markets
we serve. Taking into account the rescheduling of events into the second half
and the current trading at the three divisions, the Board remains confident of a
satisfactory year for the Group.'
Enquiries:
Tom Hempenstall, Chief Executive
Leslie-Ann Reed, Finance Director
Metal Bulletin plc Tel: 020 7827 9977
Tim Spratt / Charles Palmer
Financial Dynamics Tel: 020 7831 3113
Chief Executive's Interim Statement
In the six months ended 30 June 2003, the Group made pre-tax profits of £0.8m
(2002: £0.5m) and adjusted pre-tax profits of £2.2m (2002: £2.5m) on turnover of
£19.2m (2002: £20.9m). These results were achieved against a backdrop of the
weak global economy, which adversely impacted many of our core customer groups.
We manage costs very tightly across the Group and this was reflected in the 2
percentage point improvement in the gross margin. This was achieved as a direct
result of the actions undertaken in 2002, including the successful transfer of
AMM to electronic delivery. In addition, we continue to address the cost base
with £0.5m of savings achieved during the period.
Major trading issues in the first half were SARS and the war in Iraq, which led
to the curtailment of attendance at events in the first quarter and also the
postponement of three events to the second half of the year.
BCA maintained its strong performance, increasing its turnover in the period by
11%. Group advertising revenues were in line with the first half of last year,
notwithstanding weaker advertising revenues in the Metals, Minerals and Mining
division. Atalink, the Group's contract publisher, increased advertising
revenues by £0.5m, delivering seven publications compared to four in the same
period last year. Advertising continues to be challenging but there are
increasing signs of customer confidence returning across the Group. Particularly
encouraging are forward advertising orders on the two principal metals titles,
which at this point are 6% ahead of last year.
Product development initiatives have been in place for 18 months and, for the
second half, include the transfer of the Metal Bulletin title to a daily
electronic service, supported by a weekly hardcopy newspaper, and the upgrade of
our subscription web service www.metalbulletin.com, which was successfully
relaunched in July 2003.
The Group's strategy remains one of organic growth within our existing brands,
supplemented by the acquisition of high quality businesses that complement our
current activities.
Financial Results
Group turnover declined by 8% to £19.2m (2002: £20.9m). The principal decline in
Group turnover of £1.2m is attributed to conferences and exhibitions held in the
first half that were adversely impacted, as mentioned above. A further £0.7m
related to discontinued products and services following the restructuring of the
business in 2002 and the weakness of the US Dollar accounted for £0.5m.
Profit before tax, goodwill, amortisation, and discount on deferred
consideration amounted to £2.2m (2002: £2.5m).
The Group's effective tax rate of 32% (2002: 20%) is greater than the UK
statutory rate of 30% as a result of the higher level of corporate tax on North
American profits, the region where the Group incurs its highest rates of tax
with effective rates of 33% in Canada and 45% in USA. In 2002, the Group
utilised the remainder of its US tax losses.
As a result of the fall in adjusted pre-tax profits and the increased effective
tax rate, adjusted earnings per share fell to 2.78p per share (2002: 3.63p).
Net current liabilities have increased by £2.5m to £19.4m compared to 31
December 2002 mainly reflecting an increase in the income received in advance.
Net debt at 30 June 2003 was £10.5m, an increase of only £0.9m compared to 31
December 2002, after a capital payment of £2.5 million in April to the former
BCA shareholders under the earn-out arrangement.
The Directors have resolved to maintain the interim dividend at 1.90p per share
(2002: 1.90p). The interim dividend will be paid on 3 October 2003 to
shareholders on the register on 5 September 2003. The shares will go ex-dividend
on 3 September 2003.
Financial Information Division
Although turnover within BCA increased £0.5m to £5.3m, turnover for the division
as a whole was down 9% to £7.7m. This was due to the shortfall in conferences
and exhibitions at FOW and MAR in the build up to the Iraqi War, coupled with
the removal of some £0.6m of revenues relating to discontinued non-profitable
products and services at FOW.
Delegate registrations for the flagship Bermuda Hedge Fund conference, scheduled
for September, are in line with budget. However, overall revenues are likely to
be down by US$0.5m as prime brokers eschew sponsorship opportunities ahead of
the SEC ruling on the role of prime brokers soft dollar services in the US hedge
fund industry.
The performance of BCA illustrates the demand within the financial community for
high quality and truly independent macro-economic research; the BCA team is on
track to achieve its 2003 earn-out in full. As part of the ongoing development
of the business, we have reorganised the sales and customer service functions of
BCA to address its clients' evolving needs and have recently installed an
account team in our London office to service the growing number of European
customers.
Metals, Minerals and Mining Division
Turnover for the division was £7.8m, down by £1.2m, impacted by lower conference
revenues in the build up to the war, and the decision to defer the three Asian
metals and minerals conferences into the second half because of the SARS
outbreak. The Industrial Minerals Congress in Canada also fell short of
expectation because of the commercial environment and the threat of SARS.
Advertising revenues for Metal Bulletin, Metal Bulletin Monthly and AMM proved
difficult in this environment. Subscription marketing has reduced the subscriber
attrition on the core Metal Bulletin product to under 6% from the 15% level we
were experiencing last year.
After nearly ninety years as a twice-weekly newspaper, Metal Bulletin will
become a daily electronic service from 1 October 2003. Following the success of
the transition to an electronic service at AMM, subscribers will receive a daily
electronic newsletter and a weekly printed edition that will continue to carry
metal prices, a summary of the week's news and provide a journal of record. The
subscription web service www.metalbulletin.com has been re-engineered and
expanded to provide more facilities to subscribers.
Commodities and Energy Division
Turnover from the Commodities and Energy division was £3.7m, up 5% on last year.
The division benefited from Atalink's first half publishing programme, which
almost doubled Atalink's turnover compared to the same period last year.
However, this was offset by reduced turnover at EIC, World Textiles and
Systematics because of discontinued services and tough conditions within the UK
energy market.
Atalink has already achieved 85% of its annual target revenues and has a strong
publishing programme of twenty-two titles, which bodes well for the second half
of the year. World Textiles will benefit from its involvement in the quadrennial
ITMA tradeshow in Birmingham in October and EIC is seeing stronger demand for
its tendering and negotiation services on the back of wholesale energy price
increases, which are some 10% to 15% higher than the first half.
Current Trading and Prospects
Although the economic environment remains challenging, the Group continues to
trade in line with the guidance given to the market in May.
In the current year, the Group's results will be more second half weighted than
usual. Trading for the Metals, Minerals and Mining division was difficult in the
first half but the actions undertaken over the last eighteen months (cost
reduction, subscription marketing, product innovation) make us cautiously
optimistic about an improving performance in the second half. This, together
with continued progress at BCA and in the Commodities and Energy division
underpins the Board's confidence in a satisfactory outcome for the year.
Tom Hempenstall
26 August 2003
Metal Bulletin plc Notes Unaudited 6 months Audited
Ended 30 June 31 Dec
Consolidated Profit and Loss Account 2003 2002 2002
£ 000's £ 000's £ 000's
Turnover 4 19,214.6 20,881.0 44,601.3
Cost of sales (3,561.7) (4,348.9) (9,154.2)
Gross profit 15,652.9 16,532.1 35,447.1
Administration expenses
Operating expenses (13,174.6) (13,718.8) (27,624.4)
Exceptional item - (447.1) (1,654.0)
Amortisation of intangible assets including (1,221.3) (1,365.1) (2,420.7)
goodwill
(14,395.9) (15,531.0) (31,699.1)
Operating profit 5 1,257.0 1,001.1 3,748.0
Finance charges (net)
Other finance charges (257.6) (287.9) (530.0)
Discount on deferred consideration (242.5) (221.4) (414.1)
(500.1) (509.3) (944.1)
Profit on ordinary activities before taxation 756.9 491.8 2,803.9
Tax on profit on ordinary activities 6 (706.4) (416.5) (2,050.6)
Profit on ordinary activities after taxation 50.5 75.3 753.3
Minority interests - 1.9 -
Profit for the financial period 50.5 77.2 753.3
Dividends paid and proposed on equity shares (1,033.3) (1,033.3) (3,181.5)
Retained loss for the period (982.8) (956.1) (2,428.2)
Adjusted earnings per share * 7 2.78p 3.63p 8.73p
Basic earnings per share 7 0.09p 0.14p 1.39p
Diluted earnings per share 7 0.09p 0.14p 1.39p
Dividends per share
Interim 1.90p 1.90p 1.90p
Final - - 3.95p
Adjusted profit ** 2,220.7 2,525.4 7,292.7
* Adjusted earnings represents the profit for the financial period after adjusting for amortisation,
discount on deferred consideration and exceptional items (including tax thereon).
** Adjusted profit represents the profit on ordinary activities for the financial period before tax,
amortisation, discount on deferred consideration and exceptional items.
Metal Bulletin plc Audited
Consolidated Balance Sheet Unaudited as at 30 June 31 Dec
2003 2002 2002
£ 000's £ 000's £ 000's
Fixed Assets
Goodwill 36,797.7 34,114.8 34,278.1
Publishing rights and titles 7,707.0 9,745.7 8,510.1
Intangible assets 44,504.7 43,860.5 42,788.2
Tangible assets 3,741.8 4,111.7 3,819.3
48,246.5 47,972.2 46,607.5
Current Assets
Stocks 616.6 632.4 359.0
Debtors 5,870.7 7,700.4 7,091.1
Short term investments 366.6 1,041.2 217.0
Cash and cash equivalents 7,733.6 3,960.8 8,831.4
14,587.5 13,334.8 16,498.5
Creditors Amounts falling due within one year
Income received in advance (13,943.5) (14,039.2) (11,484.0)
Bank overdrafts (12,959.7) (7,183.5) (11,153.7)
Other creditors (7,120.4) (6,996.7) (10,795.4)
(34,023.6) (28,219.4) (33,433.1)
Net Current Liabilities (19,436.1) (14,884.6) (16,934.6)
Total Assets less Current Liabilities 28,810.4 33,087.6 29,672.9
Creditors Amounts falling due after more than one year (12,756.8) (15,256.5) (13,576.3)
Provisions for (liabilities) and charges (3,460.9) (3,170.8) (3,598.0)
Net Assets 12,592.7 14,660.3 12,498.6
Capital & Reserves
Called-up share capital 1,087.7 1,087.3 1,087.7
Share premium account 1,983.9 1,963.0 1,983.9
Capital reserve 7,940.7 7,940.7 7,940.7
Profit and loss account 1,580.4 3,669.3 1,486.3
Equity shareholders' funds 12,592.7 14,660.3 12,498.6
Metal Bulletin plc Audited
Consolidated Cash Flow Statement Unaudited as at 30 June 31 Dec
2003 2002 2003
Note £ 000's £ 000's £ 000's
Net cash flow from operating activities 8 5,890.8 4,723.4 8,991.4
Returns on investments and servicing of finance (247.5) (287.9) (530.0)
Taxation (1,916.1) (896.2) (1,931.4)
Capital expenditure and financial investments (264.8) (1,131.8) (1,299.2)
Acquisitions and disposals (2,487.2) - (119.6)
Dividends (2,148.2) (2,148.5) (3,180.6)
Cash (outflow)/inflow before management of
liquid resources and financing (1,173.0) 260.0 1,930.6
Management of liquid resources 1,800.0 (293.7) 1,245.2
Financing (1,771.5) (4,964.3) (6,368.9)
Decrease in cash in the period (1,144.5) (4,998.0) (3,193.1)
Reconciliation of net cash flow to movement in net funds
Decrease in cash in the period (1,144.5) (4,998.0) (3,193.1)
Cash (outflow)/inflow from change in liquid resources (1,800.0) 293.7 (1,245.2)
Cash inflow from change in net debt 1,771.5 4,970.9 6,235.7
Change in net funds resulting from cash flows (1,173.0) 266.6 1,797.4
Translation difference 239.9 618.1 833.9
Movement in net funds in the period (933.1) 884.7 2,631.3
Net debt brought forward (9,550.9) (12,182.2) (12,182.2)
Net debt carried forward (10,484.0) (11,297.5) (9,550.9)
Statement of total recognised gains and losses
Profit for the financial period 50.5 77.2 753.3
Exchange difference on foreign net investments 1,076.9 572.3 (138.6)
Total recognised gains and losses for the period 1,127.4 649.5 614.7
Notes to the Interim Financial Statement
1. The financial information, which is neither audited nor reviewed, does
not constitute full accounts within the meaning of Section 240 of the Companies
Act 1985. The information in respect of the period ended 31 December 2002 has
been extracted from the statutory accounts of the financial period then ended.
The Auditors have made a report under Section 235 of the Companies Act 1985 on
those accounts and such a report was unqualified and did not contain a statement
under Section 237(2) or (3) of the Companies Act 1985. Statutory accounts
relating to the financial period ended 31 December 2002 have been delivered to
the Registrar of Companies.
2. The accounting polices remain the same as stated in the Annual Report
for the period ended 31 December 2002.
3. The Board approved this interim statement on 26 August 2003.
4. Turnover
Unaudited 6 months ended 30 June Audited 31 Dec
2003 2002 2002
a. By market sector £ 000's % £ 000's % £ 000's %
Financial 7,722.2 40.2 8,513.8 40.8 17,653.9 39.6
Metals, Minerals & Mining 7,758.4 40.4 8,980.9 43.0 16,862.5 37.8
Commodities & Energy 3,734.0 19.4 3,386.3 16.2 10,084.9 22.6
19,214.6 100.0 20,.881.0 100.0 44,601.3 100.0
b. By type of business
Print & electronic publishing 14,512.9 75.5 14,929.8 71.5 32,015.0 71.8
Events & conferences 2,221.3 11.6 3,607.2 17.3 7,142.2 16.0
Books & directories 469.0 2.4 488.1 2.3 1,284.9 2.9
Statistical analysis 624.3 3.2 735.3 3.5 1,326.2 3.0
Research & consultancy 1,397.1 7.2 1,120.6 5.4 2,833.0 6.3
19,214.6 100.0 20,881.0 100.0 44,601.3 100.0
c. By geography
Origin
UK 10,728.8 55.8 12,105.9 58.0 26,306.8 59.0
European Union - - - - - -
North America 8,485.8 44.2 8,775.1 42.0 18,292.8 41.0
Rest of World - - - - 1.7 -
19,214.6 100.0 20,881.0 100.0 44,601.3 100.0
Destination
UK 4,640.5 24.2 5,056.9 24.2 13,133.3 29.4
European Union 3,968.5 20.6 3,996.6 19.1 8,810.9 19.8
North America 7,817.2 40.7 8,573.8 41.1 16,060.1 36.0
Rest of World 2,788.4 14.5 3,253.7 15.6 6,597.0 14.8
19,214.6 100.0 20,881.0 100.0 44,601.3 100.0
5. Adjusted operating profit *
Unaudited 6 months ended 30 June Audited 31 Dec
2003 2002 2002
By market sector £ 000's % £ 000's % £ 000's %
Financial 2,308.8 93.2 2,245.4 79.8 5,392.5 68.9
Metals, Minerals & Mining 764.0 30.8 1,275.2 45.3 2,313.7 29.6
Commodities & Energy (594.5) (24.0) (707.3) (25.1) 116.5 1.5
2,478.3 100.0 2,813.3 100.0 7,822.7 100.0
* Adjusted operating profit represents the operating profit before amortisation
and exceptional items.
6. The tax charge for the 6 months to 30 June 2003 is based on the
profits before tax for that period, and results in an effective tax rate of
31.8% (2002: 20.0%).
7. Earnings per share
The calculation of earnings per share is based on the following profits, and
number of shares.
Audited
Unaudited as at 30 June 31 Dec
2003 2002 2002
£' 000 £' 000 £' 000
Profit for the financial period 50.5 77.2 753.3
Add: Exceptional items - 313.0 1,157.8
Discount on deferred consideration 242.5 221.4 414.4
Amortisation 1,221.3 1,365.1 2,420.7
Adjusted earnings * 1,514.3 1,976.7 4,745.9
Audited
Unaudited as at 30 June 31 Dec
2003 2002 2002
Average number of ordinary shares 54,383,989 54,359,245 54,373,056
Exercise of share options 196,327 302,896 201,312
Diluted average number of ordinary shares 54,580,266 54,662,141 54,574,368
Basic earnings per share 0.09p 0.14p 1.39p
Diluted earnings per share 0.09p 0.14p 1.38p
Adjusted earnings per share * 2.78p 3.63p 8.73p
* Adjusted earnings represents the profit for the financial period after adjusting for amortisation,
discount on defe
rred consideration and exceptional items (including tax thereon).
8. Reconciliation of operating profit to net cash inflow from operating
activities.
Audited
Unaudited as at 30 June 31 Dec
2003 2002 2002
£' 000 £' 000 £' 000
Operating profit 1,257.0 1,001.1 3,748.0
Depreciation 381.5 355.4 807.4
Amortisation 1,221.3 1,365.1 2,420.7
Loss / (profit) on disposal of fixed assets 0.2 3.3 (56.6)
Increase in stocks (257.6) (317.4) (44.2)
(Decrease) / increase in provisions (180.0) - 281.0
Decrease in debtors 1,478.2 3,416.8 3,811.5
Increase / (decrease) in creditors 1,990.2 (1,100.9) (1,976.4)
Net cash inflow from operating activities 5,890.8 4,723.4 8,991.4
9. All transactions included in the Profit and Loss Account arise from
continuing activities.
10. Copies of this statement are being despatched to shareholders, and are
available for members of the public from the registered office, Park House, Park
Terrace, Worcester Park, Surrey KT4 7HY.
This information is provided by RNS
The company news service from the London Stock Exchange
