EMAP PLC
16 November 2004
16 November 2004
Emap plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004
Business Performance - 'normalised'
• Turnover - up 3% to £522 million
• Total group operating profit - up 7% to £110 million
• Pre-tax profit - up 2% to £96 million
• EPS - up 1% to 27.0 pence
• Dividend per share - up 5% to 8.0 pence
Statutory Results
• Turnover - up 3% to £522 million
• Total group operating profit - up 4% to £82 million
• Pre-tax profit - down 4% to £68 million
• EPS - down 9% to 16.3 pence
• Dividend per share - up 5% to 8.0 pence
'Normalised' results are presented to provide a better indication of overall
financial performance and to reflect how the business is managed on a day-to-day
basis. The 'normalised' results exclude the amortisation and impairment of
goodwill and intangible fixed assets, any profit or loss on the disposal or
closure of businesses and fixed asset investments, other exceptional items
including exceptional reorganisation costs, financing costs and the tax impact
of all these items.
Operating Highlights
Consumer Media - Closer joins heat in UK's top 10
- ZOO now well ahead of plan
- FHM/ZOO/Arena first for men
- Grazia launch in Spring 05
Communications - Screen/Broadcast lead the way in display
- Recruitment mixed but LGC strong
- Autumn Fair/Glee internationalise
- Cannes Lions strengthens media vertical
Performance - Magic 105.4 - a London success story
- Kerrang! living-life-loud in W Midlands
- The Big City challenge continues
- The Hits leads music TV recovery
France - TV listings battle lines drawn
- Tele Star relaunched and revitalised
- FHM/ADDX launches gain momentum
- Auto Plus on full power
Current Trading (October to December)
• UK consumer circ. - Good • Television - Strong
• UK consumer adv. - Good • France newsstand - Weak
• UK B2B display - Good • France - Stable
adv. subscriptions
• UK B2B rec'ment - Mixed • France consumer - Tough
adv. adv.
• UK B2B - Strong • US circulation - Stable
exhibitions
• UK radio airtime - Reasonable • US advertising - Good
Commenting on the results Tom Moloney, Emap Group Chief Executive, said:
'We continue to make good progress across our portfolio, and in many parts of
the business we have grown our revenues, increased market share and improved our
profitability, against a trading backdrop that continues to be competitively
intense, especially in France.'
'We have also delivered several new launches and acquisitions, which will make a
growing contribution in future years. We are on track for the current financial
year, and we look forward to delivering good growth into the future.'
Enquiries to:
Emap plc 020-7278-1452
Tom Moloney, Chief Executive
Gary Hughes, Finance Director
Miranda Acland, Communications Director
Brunswick Group 020-7404-5959
Patrick Handley
Ed Williams
Fiona Laffan
Visit Emap's website on www.emap.com
Emap plc
INTERIM STATEMENT 2004
Strategic Review
Emap has made good progress towards its strategic goals during the first half of
the financial year.
Growing the business is Emap's number one priority. The aim is to achieve this
in three ways: driving the core business with focused investment across key
markets; new product development; and bolt-on acquisitions.
Many parts of the business have been successful in driving top line revenues,
increasing market share and improving profitability through greater investment
focus on products and brands with the best returns and the most potential. This
has been achieved in a trading environment which continues to be competitively
intense, particularly in France.
New product development is a proven and effective way of accelerating growth and
achieving a significant return on capital invested. During the period ZOO has
built on its excellent start and is now selling approximately 220,000 copies on
the newsstand every week. ZOO has also been well supported by advertisers.
Another successful recent launch, Closer, has broken even after just two years.
A brand new analogue station was launched, Kerrang 105.2 FM in the West
Midlands, and has just delivered an excellent result with its first Rajar
listening figures. The Group's digital radio network is now well established and
digital airtime revenues are gaining momentum. MEED Projects, a new construction
leads service for the Middle East, has been launched by Emap Communications and
is ahead of plan with a very encouraging response from customers. Two new
exhibitions were launched, Jlee in Paris for the garden and leisure equipment
market, and a retail show, Tradexpo, in London, as well as a whole raft of new
conferences. The Hits TV station on Freeview continues to build audience and is
now one of Emap's top three TV stations in terms of revenue. Plans for the
remainder of the year include a major new consumer magazine launch next Spring
in the UK, Grazia, which will be the first women's weekly 'glossy' featuring
glamour, gossip and style.
Acquisitions which fit well into the existing business, and provide an
attractive return, are the third element of Emap's strategy for growth. During
the period Emap acquired ABI, a sales leads information business serving the
construction market. This acquisition has been provisionally ruled as
anti-competitive by the Competition Commission. Further discussions on this
decision and on possible remedies are expected to conclude in the near future.
The outstanding 50% of Interbuild, the UK's largest construction exhibition, was
acquired, strengthening Emap's construction business. The Cannes Lions
International Advertising Festival was also acquired and will be integrated into
our existing media business, transforming it into a new major vertical B2B
market for Emap.
Financial Review
Total turnover for the half year increased by 3% to £522 million (2003: £509
million). At constant exchange rates total turnover increased by 4%
year-on-year.
Total group operating profit, excluding amortisation, increased by 7% to £110
million (2003: £103 million). Within this associates, including Scottish Radio
Holdings, contributed £4 million (2003: nil). At constant exchange rates total
group operating profit increased by 9% year-on-year. Total group operating
margin increased to 21% (2003: 20%).
Net interest in the period amounted to £14 million (2003: £9 million), including
interest relating to the acquisition of Cannes Lions, which is earnings dilutive
for the current financial year but is expected to be earnings enhancing for its
first full year under Emap's ownership. Pre-tax profit, again excluding
amortisation, was up 2% to £96 million (2003: £94 million).
After amortisation of goodwill and intangible assets amounting to £28 million
(2003: £24 million), including £3 million on associated undertakings
(2003: nil), Emap generated a pre-tax profit of £68 million (2003: £71 million).
A total of £9 million (2003: £8 million) was invested in launches during the
period, principally on ZOO, Kerrang 105.2 FM, digital radio distribution, The
Hits on Freeview and MEED Projects. Full year spend is still expected to be
between £20-22 million, including around £6 million on new launch Grazia in the
second half.
Minority interests were £2 million (2003: £2 million). The normalised tax rate
was 25% (2003: 25%), and remains lower than the nominal rate due to the
successful resolution of prior year claims and the utilisation of
carried-forward relievable losses.
Normalised earnings per share were up 1% to 27.0 pence (2003: 26.7 pence). Total
earnings per share, inclusive of amortisation, were down 9% to 16.3 pence (2003:
18.0 pence).
The strength of the Euro in the prior year has reversed during the first six
months of the current financial year, resulting in a negative currency impact of
£9 million on revenues and £2 million on normalised group operating profit.
As at 30 September 2004, the Group had net debt of £353 million (2003: £268
million), after the acquisitions of ABI and Cannes Lions, and of Emap's 27%
shareholding in SRH in January 2004. The Group continues to be highly cash
generative with 97% (2003: 97%) of operating profit converted into operating
cash flow on a rolling 12 month basis.
The Board has approved an interim dividend of 8.0 pence a share (2003: 7.6
pence), an increase of 5%. This will be paid on 10 January 2005 to shareholders
on the Register as at 10 December 2004.
Operating Review
The following review is based on normalised results, which reflect how the
business is managed and measured on a day-to-day basis.
Emap Consumer Media
2004 2003 Absolute Underlying*
£m £m Change Change
Turnover 189 178 6% 6%
Operating Profit 34 29 17% 22%
Margin 18% 16%
* Like-for-like, excluding foreign exchange, acquisitions and disposals,
launches and closures.
Emap Consumer Media publishes consumer magazines in the UK, Australia, the USA
and South Africa, as well as operating licences for FHM and other titles around
the world. Total turnover was up 6%, with strong performances across the core
portfolio boosted by new launches. Underlying turnover was also up 6%, with
revenues from new launch ZOO broadly offsetting the impact of closure of J17 and
The Face. Operating profit increased markedly by 17% (22% underlying) and the
operating profit margin increased again to 18% as Closer moved from investment
into profit. £4 million was invested in ZOO, which is now well ahead of plan in
terms of both circulation and financial performance.
UK Circulation: In the ABCs for the January to June 2004 period Emap's total
consumer magazine portfolio again increased market share from 16.8% to 17.7%.
Retail sales value was up 8%, a significant outperformance of the overall market
which was up 2% (ABC). Closer joined heat in the UK's top 10 titles by retail
sales value. Consumer magazine circulation revenues for the UK for April to
September increased by 6% (5% underlying), driven by strong growth from Closer
and ZOO as well as from FHM, Empire, Arena, Bliss, Match and Angling Times.
UK Advertising: consumer magazine advertising revenues grew by 3% (3%
underlying), compared to a total consumer magazine advertising market which is
forecast to have grown by 6% (Advertising Association September 2004). Again
strong growth from heat, Closer and ZOO was supported by growth coming from
Empire, Arena, more, Max Power and Angling Times in particular. Toiletries and
cosmetics, films and DVDs, food, drinks and snacks advertising have all been
strong across the women's and men's portfolios.
International: Emap's publishing business in Australia grew revenues by 11% in
the period, and revenues for FHM in the US were up 7%, largely due to a
newsstand cover price increase. Total reported revenues for Emap Consumer
Media's international business were £25 million, including contributions from
the 27 editions of FHM published around the world.
New launches: during October Emap announced the impending launch of Grazia,
Britain's first weekly glossy, in Spring 2005. Grazia will be published under
licence from Italy's market leading publisher Mondadori, and is expected to
break even in three years with a total investment of £16 million.
Emap Communications
2004 2003 Absolute Underlying*
£m £m Change Change
Turnover 108 98 10% 9%
Operating Profit 30 24 25% 19%
Margin 28% 24%
* Like-for-like, excluding foreign exchange, acquisitions and disposals,
launches and closures.
Emap Communications brings together business-to-business magazines, trade
exhibitions, conferences and information products, most of which serve five key
markets - retail, construction, the public sector, healthcare and media.
Turnover grew by 10%, with good organic growth across the business enhanced by
new exhibitions and conferences and the acquisition of ABI, offset by the sale
of Total Telecom in April 2004. Underlying turnover grew by 9%. Operating profit
grew strongly by 25% (19% underlying) and the operating margin increased from
24% to 28%, with revenue growth converting extremely well to profit after a
period of increased investment in the first half of last year. The operating
margin for the full year 03/04 was 28%.
Circulation: circulation revenues for Emap's B2B business as a whole increased
by 18%, and 9% on an underlying basis. Steady revenue growth from paid-for
circulations of core trade titles following investment last year was accelerated
by a particularly strong performance from Glenigan subscriptions and, in the
non-underlying figures, by the acquisition of ABI.
Display advertising: B2B display advertising grew by 1%, and 5% on an underlying
basis, in a business and professional magazine display advertising market which
is forecast to be up 4% (Advertising Association September 2004). This was
driven by a strong cyclical recovery at Screen International and Broadcast as
well as good growth from Construction News, MEED and the rest of the EC
portfolio, as well as growth in conference sponsorship revenues, which improved
markedly during the period.
Recruitment advertising: B2B recruitment advertising was up 1% on a total and
underlying basis. Good growth at Local Government Chronicle and across smaller
recruitment titles such as Drapers, Retail Week and Broadcast following
investment last year, was offset by falling volumes at Health Service Journal
and Nursing Times in particular. Health Service Journal has benefited
significantly over the last two years from changes within the Primary Care
Trusts of the NHS, while Nursing Times has increased share in a nursing
recruitment market depressed by the recruitment of nurses from overseas.
Exhibitions: revenues from B2B exhibitions and events grew by 17%, and 14% on an
underlying basis. The Autumn Fair and Glee again achieved strong revenue growth,
driven by increased exhibition meterage sold. The shows are also benefiting from
a better international visitor profile. Other notable successes were Pure
Womenswear, now wholly owned by Emap, and the Tradexpo shows in Paris acquired
as Agor in February 2003. A number of new shows have also been launched during
the period, including Jlee in Paris and Tradexpo in London. Emap's conference
unit continues to grow strongly, with total delegate revenues up over 50% year
on year.
Emap Performance
2004 2003 Absolute Underlying*
£m £m Change Change
Turnover 78 80 (3%) (4%)
Operating Profit 15 19 (21%) (11%)
Operating Margin 19% 24%
* Like-for-like, excluding foreign exchange, acquisitions and disposals,
launches and closures.
Emap Performance's collection of strong music brands extend across radio, music
magazines and music television. Turnover declined by 3%, reflecting a tough
period for national radio advertising and music magazines, although music
television showed good growth. Underlying turnover, which excludes the newly
launched Kerrang 105.2 FM radio station in the West Midlands and digital radio
advertising revenues, declined by 4%. Operating profits declined by 21%, 11%
underlying, and margins declined from 24% to 19%, after substantial levels of
investment in this business during the period - £2 million in digital radio, £2
million in Kerrang 105.2 FM and £1 million in The Hits TV channel on Freeview.
Total radio revenues, including digital multiplex income, were level at £47
million while profits reduced by 25% to £9 million, largely reflecting the
investments in Kerrang 105.2 FM and digital radio mentioned above. Radio margins
also reduced from 26% to 19%.
Radio audiences: for July to September 2004, Emap's share of commercial
listening hours was 14.7%, an increase from 14.3% in the previous quarter.
London's Kiss 100 and Magic 105.4 retained their combined share of 9.3%, giving
them a strong advantage in this competitive market. Magic 105.4 was the only
major commercial radio station in London to increase its breakfast audience.
Across Emap's Big City stations in the North, market share declined slightly
quarter-on-quarter from 12.5% to 12.0%, although Metro in Newcastle increased
significantly quarter-on-quarter. Significant changes have been made across the
Big City network to protect and rebuild audience share, including changes to the
presenter line-up, a more localised music policy and a broadening of the target
audience. New launch Kerrang 105.2 in the West Midlands got off to a strong
start with 7% reach and 2.7% share, significantly ahead of plan. Emap's national
digital radio stations, broadcast on Freeview, satellite and cable, digital
audio broadcasting and via the internet, delivered around 14 million hours, and
were up approximately 40% year-on-year. These national stations now account for
over 20% of the Group's total hours and put Emap very much at the forefront of
digital broadcasting. (Rajar Q3:04).
Radio advertising: total radio advertising revenues declined by 2% during the
period, 6% underlying, and underperformed the market which is estimated to have
increased by around 7% (RAB). A decline of 11% in the first quarter was partly
due a particularly strong quarter in the prior year (up 16%). Declines in
national advertising also reflected an underspend by Emap's key agency clients
which is expected to reverse during the second half under the Group's agency
share deals. This has affected most major advertising categories, with the
notable exception of food, magazines, TV and books. Local revenues remained
strong, up 9% year on year, and accounted for around 31% of total radio airtime
revenues. London accounted for 26% of total revenues and decreased by 5%,
although Magic 105.4 was up 18%. Big City decreased by 5% following a tightening
up of commercial minutage from August 2003 onwards. Digital radio contributed
approximately £2 million of airtime sales revenues.
Music magazines: circulation revenues declined by 7%, while advertising declined
by 12%, on both a total and an underlying basis. The music market overall
continues to suffer from a shortage of innovative new music, which is affecting
both circulation and advertising. Mojo was the only title showing year-on-year
revenue growth, up 5%, although Q marginally increased its circulation revenues.
Competition for teenagers' spending money continues to be intense, but a new
Emap '3' download service for ringtones and wallpaper generated nearly £1
million of revenues during the period.
Music television: Emap's music television channels have had a strong first half,
with total revenues up 13%, driven by airtime and sponsorship revenues which
were up 24%. Growth has come largely from yield increases generated by Sky
Media. Airtime and sponsorship accounted for around 62% of TV revenues, with the
remainder coming from subscriptions and interactivity. After the competitive
challenges of last year it is encouraging to see this business back on form with
an increased share of 38% of music TV revenues (MMS).
Emap France
2004 2003 Absolute Underlying*
£m £m Change Change
Turnover 147 153 (4%) (4%)
Operating Profit 27 31 (13%) (8%)
Margin 18% 20%
* Like-for-like, excluding foreign exchange, acquisitions and disposals,
launches and closures.
Emap France is one of the leading consumer magazine publishers in France, and
operates with industry-leading margins in the French consumer magazine
marketplace. The trading environment in France has been very tough during the
period, compounded by a negative year-on-year currency translation impact.
Against this backdrop, total turnover decreased by 4%, including a currency
impact of £7 million; at constant currency, turnover increased by 1%. The
underlying decrease in turnover of 4% also excludes the Excelsior titles which
were acquired in July 2003, and Studio magazine, which was sold in March 2004.
Operating profit was down 13%, or 6% excluding a currency impact of £2 million,
and 8% on an underlying basis. Margins fell from 20% to 18%, reflecting margin
erosion at Tele Star and Tele Poche and the addition of the lower margin
Excelsior business for the full six months.
The Excelsior titles acquired in July 2003 have been fully integrated into Emap
France for the whole interim period. Revenues for this business on a standalone
basis were £19 million. Science & Vie is making good progress, but the weakness
of the men's and women's advertising markets in France has resulted in lower
growth on Emap's other titles than expected at this stage. The business is
therefore not yet delivering the level of profit anticipated.
The market for TV listings magazines continues to be highly competitive
following the launch of two new, low price fortnightly magazines by Bertelsmann
earlier this year. Tele Star relaunched in September with more TV-related news
and features and a stronger female bias. Advertising support started in October,
after the end of the interim period, and the early indications are that the
year-on-year rate of decline in newsstand sales has stabilised. Newsstand sales
for the two titles (including Tele Poche) were down 25% in the period but
subscriptions have provided reasonable protection. Total circulation revenues
for the titles were down 16% year-on-year. Advertising revenues declined by 9%,
a significant outperformance of their circulation.
Circulation: In the OJD audited circulation figures for the 12 month period to
June 2004 the retail sales value of Emap's French portfolio increased by 7%,
reflecting the addition of the acquired Excelsior titles, and decreased by 4% on
underlying basis, compared to a market which was broadly level. Emap's market
share increased from 11.8% to 12.6%. Newsstand revenues during the first half
were down by 4% overall, and 8% on an underlying basis. Tele Star and Tele Poche
accounted for 34% of underlying newsstand revenues and were down 25%. The rest
of the portfolio grew underlying newsstand revenues by 3%, with strong
double-digit revenue growth year-on-year from Auto Plus, and solid growth also
coming from ADDX, FHM and Pleine Vie. Subscription revenues increased by 8%,
largely due to the addition of the Excelsior titles; underlying subscription
revenues increased by 1%.
Advertising: total advertising revenues were level year-on-year, while
underlying advertising revenues decreased by 3% in a market which is forecast to
be down 2% (company estimates). Tele Star and Tele Poche accounted for 37% of
underlying advertising revenues and were down 9%; advertising revenues for the
rest of the underlying portfolio were level. Auto Plus again performed strongly,
offset by less strong performances at men's and women's titles, particularly
Modes & Travaux and FHM, largely reflecting a marked slowdown in beauty and
healthcare advertising.
Current Trading (October-December) and Full Year Expectations
Key to Emap's ongoing resilience is its balanced spread of revenues, which have
differing trends and influences.
In the UK, consumer magazine circulation revenues have started the second half
well, with growth across the portfolio and key titles such as heat, Closer and
ZOO all strong. Consumer magazine advertising has strengthened marginally in the
third quarter, particularly on agency sales through Emap Advertising.
In France, the TV listings titles are not experiencing any worsening on the rate
of decline in the newsstand, with the rest of the portfolio showing modest
growth. However, advertising remains very soft across the market as a whole.
In the US both circulation and advertising are stronger than in the first half.
B2B display advertising's improved performance of the second quarter has
continued into the third, while recruitment remains broadly flat. Forward
bookings for the Group's B2B exhibitions, which take place mainly in the fourth
quarter, are strong, although growth will be slightly lower than in the first
half because of capacity constraints at The Spring Fair.
As expected, Emap's agency share deals are delivering an outperformance of the
market on national radio airtime sales. Although the overall market has weakened
noticeably in October and November, Emap expects to deliver reasonable growth
across the quarter. Television revenue growth remains robust.
In the round, the Board is confident of achieving its full year expectations.
Emap plc
Consolidated profit & loss account
For the half year ended 30 September 2004
-------------------------------------------------------------------------------------------------------
Year Half year Half year
Total 'Normalised' Total
03/04 04/05 03/04 04/05 03/04
£m Notes £m £m Growth £m £m Growth
-------------------------------------------------------------------------------------------------------
1,050 Turnover 2(a) 522 509 3% 522 509 3%
-------------------------------------------------------------------------------------------------------
Operating costs
(838) Operating costs (416) (406) (416) (406)
(4) Post acquisition - - - -
reorganisation costs
(47) Amortisation of 9 - - (25) (24)
intangible fixed assets
(1) Impairment of intangible - - - -
fixed assets
-------------------------------------------------------------------------------------------------------
(890) Net operating costs (416) (406) (2%) (441) (430) (3%)
-------------------------------------------------------------------------------------------------------
160 Group operating profit 2(b) 106 103 3% 81 79 3%
Share of operating profit
of joint ventures
1 & associated 10 4 - 1 -
undertakings
-------------------------------------------------------------------------------------------------------
161 Total Group operating 110 103 7% 82 79 4%
profit
1 Profit on business - - - 1
disposals
(18) Net interest payable & 3 (14) (9) (14) (9)
other financing costs
-------------------------------------------------------------------------------------------------------
144 Profit on ordinary 2(c) 96 94 2% 68 71 (4%)
activities before tax
(47) Tax on profit on ordinary 4 (24) (23) (24) (23)
activities
-------------------------------------------------------------------------------------------------------
97 Profit on ordinary 72 71 1% 44 48 (8%)
activities after tax
(4) Minority interests (all (2) (2) (2) (2)
equity)
-------------------------------------------------------------------------------------------------------
93 Profit attributable to 70 69 42 46
shareholders
(60) Dividends 5 (21) (20) (21) (20)
-------------------------------------------------------------------------------------------------------
33 Retained profit 49 49 21 26
-------------------------------------------------------------------------------------------------------
Year Half year Half year
Total 'Normalised' Total
03/04 Notes 04/05 03/04 Growth 04/05 03/04 Growth
-------------------------------------------------------------------------------------------------------
36.3p Earnings per share 6 27.0p 26.7p 1% 16.3p 18.0p (9%)
36.0p Diluted earnings per 6 16.1p 17.9p (10%)
share
23.5p Dividend per share 5 8.0p 7.6p 5% 8.0p 7.6p 5%
-------------------------------------------------------------------------------------------------------
A definition of 'normalised' is provided in Note 1. 'Normalised' results are
presented to provide a better indication of overall financial performance and to
reflect how the business is managed on a day-to-day basis.
There are no discontinued operations. All turnover and operating profit for
2004/05 and 2003/04 relates to continuing operations.
Emap plc
Consolidated cash flow statement
For the half year ended 30 September 2004
--------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m Notes £m £m
--------------------------------------------------------------------------------------
219 Net cash inflow from operating 7(a) 73 67
activities
--------------------------------------------------------------------------------------
1 Dividends from associated 1 -
undertakings
--------------------------------------------------------------------------------------
Returns on investments & servicing
of finance
(12) Net interest paid (14) (2)
(2) Issue costs on 6.25% Sterling - (3)
Eurobond issue
(2) Dividends paid to minority (4) -
shareholders
--------------------------------------------------------------------------------------
(16) Net cash outflow from returns on (18) (5)
investments & servicing of
finance
--------------------------------------------------------------------------------------
(44) Taxation paid (18) (18)
--------------------------------------------------------------------------------------
Capital expenditure & financial
investment
(15) Purchase of tangible fixed assets (7) (5)
(3) Increase in loans to joint - -
ventures
--------------------------------------------------------------------------------------
(18) Net cash outflow from capital (7) (5)
expenditure & financial
investment
--------------------------------------------------------------------------------------
Acquisitions & disposals
(95) Acquisition of businesses 8 (97) (92)
33 Net cash acquired with 8 31 33
subsidiaries
5 Disposal of businesses - 2
(1) Costs of business disposals - -
(92) Acquisition of associated - -
undertakings
--------------------------------------------------------------------------------------
(150) Net cash outflow from acquisitions (66) (57)
& disposals
--------------------------------------------------------------------------------------
(57) Equity dividends paid (41) (37)
--------------------------------------------------------------------------------------
(65) Cash outflow before financing (76) (55)
--------------------------------------------------------------------------------------
Financing
- Issue of ordinary share capital 1 1
2 (Purchase)/sale of own shares (1) -
(167) Increase/(decrease) in bank loans 75 (209)
250 Issue of 6.25% Sterling Eurobond - 250
- Repayment of loan notes (4) -
(6) Increase/(decrease) in loans from 2 (6)
associated undertakings
(2) Gain/(loss) on foreign exchange 1 (4)
swaps
- Increase in other borrowings - 29
--------------------------------------------------------------------------------------
77 Net cash inflow from financing 74 61
--------------------------------------------------------------------------------------
12 (Decrease)/increase in net cash (2) 6
--------------------------------------------------------------------------------------
Emap plc
Consolidated balance sheet
At 30 September 2004
--------------------------------------------------------------------------------------
As As
restated restated
31 Mar 30 Sept 30 Sept
2004 2004 2003
£m Notes £m £m
--------------------------------------------------------------------------------------
Fixed assets
576 Intangible fixed assets 9 631 614
31 Tangible fixed assets 32 31
Investments
96 - Joint ventures and associated 96 2
undertakings
2 - Other investments 2 3
--------------------------------------------------------------------------------------
705 761 650
--------------------------------------------------------------------------------------
Current assets
10 Stocks 10 11
238 Debtors - amounts falling due 286 276
within one year
7 Debtors - amounts falling due 7 7
after more than one year
38 Cash at bank and in hand 36 32
--------------------------------------------------------------------------------------
293 339 326
(428) Creditors - amounts falling due (418) (432)
within one year
--------------------------------------------------------------------------------------
(135) Net current liabilities (79) (106)
--------------------------------------------------------------------------------------
570 Total assets less current 682 544
liabilities
(272) Creditors - amounts falling due (363) (249)
after more than one year
(16) Provisions for liabilities and 11 (12) (14)
charges
--------------------------------------------------------------------------------------
282 Net assets 307 281
--------------------------------------------------------------------------------------
Capital and reserves
64 Called up share capital 64 64
589 Share premium account 592 589
7 Revaluation reserve 7 8
(381) Profit and loss account 12 (362) (386)
--------------------------------------------------------------------------------------
279 Shareholders' funds (all equity) 301 275
3 Minority interests (all equity) 6 6
--------------------------------------------------------------------------------------
282 Capital employed 307 281
--------------------------------------------------------------------------------------
Approved by the Board of Directors
on 16 November 2004.
T C Moloney G W Hughes
Emap plc
Consolidated statement of total recognised gains & losses
For the half year ended 30 September 2004
----------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
----------------------------------------------------------------------------------------
93 Profit attributable to 42 46
shareholders
(3) Foreign exchange - 1
translation differences
----------------------------------------------------------------------------------------
90 Total recognised gains & 42 47
losses in the period
----------------------------------------------------------------------------------------
There is no material difference between the reported profits and the historical
cost profits on ordinary activities before taxation for all periods being
reported.
Reconciliation of movement in shareholders' funds
For the half year ended 30 September 2004
----------------------------------------------------------------------------------------
As As
restated restated
Year Half year Half year
03/04 04/05 03/04
£m £m £m
----------------------------------------------------------------------------------------
93 Profit attributable to 42 46
shareholders
(60) Dividends (21) (20)
----------------------------------------------------------------------------------------
33 Retained profit 21 26
3 Shares issued 3 3
(2) Shares issued to Employee (4) (2)
Share Ownership Plan
2 Sale of shares in Employee - 1
Share Ownership Plan
3 Adjustment in respect of 2 3
employee share schemes
(3) Foreign exchange - 1
translation differences
----------------------------------------------------------------------------------------
36 Net addition to 22 32
shareholders' funds
----------------------------------------------------------------------------------------
248 Opening shareholders' funds (all equity) 282 248
as previously reported
(5) Prior year adjustment - (3) (5)
implementation of UITF 38
(note 1)
----------------------------------------------------------------------------------------
243 Opening shareholders' 279 243
funds (all equity) as
restated
----------------------------------------------------------------------------------------
279 Closing shareholders' 301 275
funds (all equity)
----------------------------------------------------------------------------------------
Reconciliation of movement in net debt
For the half year ended 30 September 2004
------------------------------------------------------------------------------------------
Net cash Borrowings Net debt
£m £m £m
------------------------------------------------------------------------------------------
At 1 April 2004 38 (306) (268)
Exchange differences - (7) (7)
Non cash movement - (2) (2)
Net cash movement (2) (74) (76)
------------------------------------------------------------------------------------------
At 30 September 2004 36 (389) (353)
------------------------------------------------------------------------------------------
Emap plc
Notes
For the half year ended 30 September 2004
1 Basis of preparation
The interim financial information has been prepared on the basis of the
accounting policies set out in the Group's statutory accounts for the financial
year ended 31 March 2004 with the exception of the accounting policy change
described below. The prior year unaudited financial information does not
constitute statutory accounts as defined in Section 240 of the United Kingdom
Companies Act 1985. The full year comparative financial information has been
extracted from the Group's statutory accounts for the financial year ended 31
March 2004. These accounts, upon which the auditors have issued an unqualified
opinion, have been filed with the Registrar of Companies.
The Group has adopted UITF Abstract 38 (Accounting for ESOP trusts) in these
interim financial statements. This abstract requires an entity's own shares held
through an ESOP trust to be deducted from shareholders' funds rather than being
shown as an asset. As required by the Abstract, the comparative information has
been restated, with amounts shown as 'Other investments' and 'Shareholders'
funds' both being reduced by £4m at 30 September 2003 and £3m at 31 March 2004.
Brought forward Shareholders' funds at 1 April 2003 have been reduced by £5m.
The Group has also adopted UITF Abstract 17 (Employee share schemes) in these
financial statements. The adoption of these Abstracts has had no material
impact on the prior period Consolidated profit and loss account.
'Normalised' results are presented to provide a better indication of overall
financial performance and to reflect how the business is managed on a day-to-day
basis. The 'normalised' results exclude the amortisation and impairment of
goodwill and intangible fixed assets, any profit or loss on the disposal or
closure of businesses and fixed asset investments, other exceptional items
including exceptional reorganisation costs, financing costs and the tax impact
of all these items. A reconciliation of 'normalised' profit before taxation to
profit before taxation is provided in Note 2(c).
2 Segmental analysis
Turnover and operating profit are reported for each of the Group's four
operating divisions. Analysis is reported for operating profit rather than
profit before tax in order to reflect the fact that the following areas are
managed by the corporate team and therefore not allocated to the divisions:
share of operating profit of joint ventures and associated undertakings, profit
on business disposals and net interest payable and other financing costs.
Proforma figures are also given for each media type to allow easier market and
peer group comparisons. The two analyses cross reference as follows:
Emap Consumer Media comprises UK, US and International consumer magazines
(excluding France) and automotive B2B activities. Emap Communications comprises
the majority of the Group's B2B activities plus healthcare related UK consumer
magazines. Emap Performance comprises all analogue and digital radio stations,
music TV and music related consumer magazines and events. Emap France comprises
the Group's French consumer magazines.
(a) Analysis of turnover by origin
(i) By division
-----------------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------------------------
355 Emap Consumer Media 189 178
213 Emap Communications 108 98
160 Emap Performance 78 80
322 Emap France 147 153
-----------------------------------------------------------------------------------------------------
1,050 Total turnover 522 509
-----------------------------------------------------------------------------------------------------
(ii) By category
-----------------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------------------------
457 Advertising 221 223
467 Circulation 238 230
79 Events 38 34
47 Other 25 22
-----------------------------------------------------------------------------------------------------
1,050 Total turnover 522 509
-----------------------------------------------------------------------------------------------------
(iii) By media type
-----------------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------------------------
352 Consumer magazines - 185 179
UK
322 Consumer magazines - 147 153
France
48 Consumer magazines - 24 23
International
211 Business-to-business 107 97
96 Radio 47 47
21 TV 12 10
-----------------------------------------------------------------------------------------------------
1,050 Total turnover 522 509
-----------------------------------------------------------------------------------------------------
(iv) By geographical origin
-----------------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------------------------
668 United Kingdom 344 328
331 France 153 158
51 Rest of the World 25 23
-----------------------------------------------------------------------------------------------------
1,050 Total turnover 522 509
-----------------------------------------------------------------------------------------------------
The year on year impact of currency movements is to decrease turnover by £9m.
(b) Analysis of Group operating profit
(i) By division
--------------------------------------------------------------------------------------------------------
Year Half year Half year
Total 'Normalised' Total
03/04 04/05 03/04 04/05 03/04
£m £m £m £m £m
53 Emap Consumer Media 34 29 32 26
46 Emap Communications 30 24 23 18
27 Emap Performance 15 19 10 14
34 Emap France 27 31 16 21
--------------------------------------------------------------------------------------------------------
160 Group operating profit 106 103 81 79
--------------------------------------------------------------------------------------------------------
(ii) By
media
type
--------------------------------------------------------------------------------------------------------
Year Half year Half year
Total 'Normalised' Total
03/04 04/05 03/04 04/05 03/04
£m £m £m £m £m
--------------------------------------------------------------------------------------------------------
58 Consumer magazines - UK 35 31 33 28
34 Consumer magazines - France 27 31 16 21
- Consumer magazines - 1 - 1 -
International
47 Business-to-business 31 26 24 20
15 Radio 9 12 4 7
6 TV 3 3 3 3
--------------------------------------------------------------------------------------------------------
160 Group operating profit 106 103 81 79
--------------------------------------------------------------------------------------------------------
(iii) By geographical origin
--------------------------------------------------------------------------------------------------------
Year Half year Half year
Total 'Normalised' Total
03/04 04/05 03/04 04/05 03/04
£m £m £m £m £m
--------------------------------------------------------------------------------------------------------
122 United Kingdom 77 70 63 56
38 France 29 33 18 23
--------------------------------------------------------------------------------------------------------
160 Group operating profit 106 103 81 79
--------------------------------------------------------------------------------------------------------
Group operating profit for the Rest of the World was nil in all periods.
The year on year impact of currency movements is to decrease 'normalised' Group
operating by £2m and total operating profit by £1m.
(c) Reconciliation of 'normalised' profit before
taxation to profit before taxation
--------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
--------------------------------------------------------------------------------------
196 'Normalised' profit on ordinary 96 94
activities before tax
(47) Amortisation of intangible fixed (25) (24)
assets
(1) Impairment of intangible fixed - -
assets
(1) Amortisation of goodwill on (3) -
associated undertakings
1 Profit on business disposals - 1
(4) Post acquisition reorganisation - -
costs
--------------------------------------------------------------------------------------
144 Profit on ordinary activities 68 71
before tax
--------------------------------------------------------------------------------------
3 Net interest payable
-------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-------------------------------------------------------------------------------------------
(15) 6.25% Sterling Eurobond (8) (8)
(4) Bank loans & overdrafts, wholly (4) (1)
repayable within five years
1 Hedging instruments receivable/ - -
(payable)
- Write off of unamortised bank (2) -
facility costs
-------------------------------------------------------------------------------------------
(18) Net interest payable (14) (9)
-------------------------------------------------------------------------------------------
4 Tax on profit on ordinary activities
-------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
-------------------------------------------------------------------------------------------
25% 'Normalised' tax rate 25% 25%
30% UK nominal tax rate 30% 30%
-------------------------------------------------------------------------------------------
The table below shows the reconciliation of the tax in the
profit & loss account to tax at the nominal rate.
-------------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-------------------------------------------------------------------------------------------
47 Taxes as shown in the financial 24 23
statements
2 Less: Deferred tax movement in the - -
period
-------------------------------------------------------------------------------------------
49 Total current tax 24 23
(43) Less: Corporation tax on pre-tax 20 21
profit at nominal rate of 30%
-------------------------------------------------------------------------------------------
6 Difference 4 2
-------------------------------------------------------------------------------------------
The difference is principally due
to:
14 Non-deductible amortisation of 7 7
intangible fixed assets
(8) Permanent disallowables, prior year (3) (5)
& other items
-------------------------------------------------------------------------------------------
6 4 2
-------------------------------------------------------------------------------------------
5 Dividends
The interim dividend of 8.0p (2003 - 7.6p), will be paid on 10 January 2005 to
shareholders on the Register at 10 December 2004.
6 Earnings per share
Earnings per share is calculated as profit attributable to shareholders divided
by the weighted average number of Ordinary Shares (WANS) in issue during the
period and ranking for dividend. Shares held in Trust in respect of Executive
Share Schemes and in the Qualifying Employee Share Ownership Trust (QUEST) are
excluded from the basic WANS but included in calculating the diluted WANS. The
WANS for the half year ended 30 September 2004 was 256m (half year ended 30
September 2003 - 256m).
-----------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
-----------------------------------------------------------------------------------------
36.3p Basic - attributable to 16.3p 18.0p
shareholders
(0.3p) Effect of dilutive shares & (0.2p) (0.1p)
share options
-----------------------------------------------------------------------------------------
36.0p Diluted 16.1p 17.9p
-----------------------------------------------------------------------------------------
'Normalised' earnings per Ordinary Share is based on 'normalised' profit
attributable to shareholders. Earnings per Ordinary Share can be reconciled to
'normalised' earnings per Ordinary Share as follows:
-----------------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
-----------------------------------------------------------------------------------------
36.3p Basic - attributable to 16.3p 18.0p
shareholders
18.5p Amortisation of intangible fixed 9.7p 9.1p
assets
0.3p Impairment of intangible fixed - -
assets
0.5p Amortisation of goodwill on 1.0p -
associated undertakings
(0.7p) Profit on business disposals - (0.4p)
1.5p Post acquisition reorganisation - -
costs
(0.6p) Tax relief on exceptional - -
reorganisation costs
-----------------------------------------------------------------------------------------
55.8p 'Normalised' 27.0p 26.7p
-----------------------------------------------------------------------------------------
7 Cash flow information
(a) Reconciliation of Group operating profit to net cash inflow from operating
activities
-----------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------
160 Group operating profit 81 79
47 Amortisation of intangible 25 24
fixed assets
1 Impairment of intangible fixed - -
assets
4 Post acquisition reorganisation - -
costs
15 Depreciation of tangible fixed 6 6
assets
1 Net loss on disposal of - 1
tangible fixed assets
13 (Increase)/decrease in (26) (28)
debtors
(16) Decrease in creditors (9) (11)
(6) Decrease in provisions (4) (4)
-----------------------------------------------------------------------------------
219 Net cash inflow from operating 73 67
activities
-----------------------------------------------------------------------------------
(b) Operating profit into cash
The Group uses the conversion ratio of 'normalised' operating profit into cash
as its key measure of working capital management. In calculating 'profit into
cash', operating cash flow, net of capital expenditure, is adjusted to exclude
expenditure on non 'normalised' transactions or events such as exceptional
reorganisation and acquisition restructuring provisions and is then compared to
'normalised' Group operating profit.
-----------------------------------------------------------------------------------
Year Half year Half year
03/04 04/05 03/04
£m £m £m
-----------------------------------------------------------------------------------
219 Net cash inflow from operating 73 67
activities
(15) Capital expenditure (7) (5)
1 Expenditure against exceptional - -
reorganisation provisions
-----------------------------------------------------------------------------------
205 Adjusted operating cash flow 66 62
-----------------------------------------------------------------------------------
212 'Normalised' Group operating 106 103
profit
-----------------------------------------------------------------------------------
97% Operating profit into cash 62% 60%
-----------------------------------------------------------------------------------
Operating profit into cash on a rolling twelve month basis was 97% for the year
ended 30 September 2004 (year ended 30 September 2003 - 97%).
8 Acquisitions
On 6 August 2004 Emap Communications Ltd completed the acquisition of the
world's largest advertising festival, Cannes Lions International Advertising
Festival, from WJB Chiltern Trust Company (Jersey) Ltd. The purchase price was
£82m, including £31m of cash within the company acquired, giving a net purchase
price of £51m.
On 5 May 2004 Emap Communications Ltd completed the acquisition of ABI Building
Data Limited, from ICW Publications Limited, part of the Springer Science and
Business Media group owned by Cinven and Candover, for £14m. ABI Building Data
Limited is a leading provider of construction sales and marketing information
services. This acquisition has been provisionally ruled as anti-competitive by
the Competition Commission. Further discussions on this decision and on
possible remedies are expected to conclude in the near future.
On 7 July 2004 Emap Communications Ltd completed the purchase of the remaining
50% shareholding of the Interbuild exhibition from Montgomery Exhibitions
Limited for a cash consideration of £1m.
A provisional fair value exercise has been performed on the acquired balance
sheets of ABI Building Data Limited and Cannes Lions International Advertising
Festival resulting in a £1m adjustment primarily in respect of the write off of
capitalised web development costs in accordance with the accounting policies of
Emap Plc.
The impact of all acquisitions on the consolidated balance sheet was:
Provisional Provisional
Net book fair value fair value
values adjustments to Group
£m £m £m
--------------------------------------------------------------------------
Fixed assets 3 (1) 2
Current assets 3 - 3
Current liabilities (8) - (8)
Cash and overdrafts 31 - 31
--------------------------------------------------------------------------
Fair value of assets acquired 29 (1) 28
Goodwill 69
--------------------------------------------------------------------------
Fair value of consideration 97
--------------------------------------------------------------------------
Comprising:
Cash paid during the year 97
--------------------------------------------------------------------------
9 Intangible fixed assets
--------------------------------------------------------------------------
£m
--------------------------------------------------------------------------
Cost
At 1 April 2004 993
Exchange movements 12
Businesses acquired 71
--------------------------------------------------------------------------
At 30 September 2004 1,076
--------------------------------------------------------------------------
Amortisation
At 1 April 2004 (417)
Exchange movements (3)
Provided during the period (25)
--------------------------------------------------------------------------
At 30 September 2004 (445)
--------------------------------------------------------------------------
Net book value at 30 September 2004 631
--------------------------------------------------------------------------
Net book value at 31 March 2004 576
--------------------------------------------------------------------------
10 Fixed asset investments - Joint ventures and associated undertakings
The share of operating profit of joint ventures and associated undertakings
includes Emap's share of the results, on a basis consistent with Emap's
accounting policies, of C.E. Digital Ltd, EMW SNC, Uppercase Media (Pty) Ltd,
Seymour Distribution Ltd, USM Magazine Distribution Ltd and Scottish Radio
Holdings Plc. The 'normalised' results exclude the amortisation of goodwill and
intangible fixed assets.
11 Provisions for
liabilities & charges
--------------------------------------------------------------------------------------------------
Reorganisation Property Other Total
provisions provisions provisions provisions
£m £m £m £m
--------------------------------------------------------------------------------------------------
At 1 April 2004 2 4 10 16
Utilised in the period (2) (1) (1) (4)
--------------------------------------------------------------------------------------------------
- 3 9 12
--------------------------------------------------------------------------------------------------
Reorganisation provisions comprise ongoing redundancy and reorganisation costs
and have been paid during the year.
The property provision relates to ongoing commitments on empty properties,
largely arising from the sale of Emap Newspapers in 1997. Some of these
commitments extend to 2015.
Other provisions comprise a provision for employer's National Insurance
Contributions in respect of Executive share schemes, the Group's share of net
liabilities of joint ventures and associated undertakings and amounts arising
on the acquisition of Excelsior Publications SA. The provisions relating to
Excelsior Publications SA arise from the rights of journalists to take
redundancy on the change of ownership and to an obligation on the Company's
funding of pension costs.
In the six months ending 31 March 2005, Emap expects to incur approximately £5m
in reorganisation costs relating to those acquisitions made in the six months
ended 30 September 2004. No significant reorganisation costs relating to these
acquisitions were incurred in the six months ended 30 September 2004.
12 Profits available for distribution
Profits available for distribution at 30 September 2004 amount to £335m (31
March 2004 - £210m).
13 Interim Report
Copies of the Interim Report will be sent to all shareholders on or before 1
December 2004, and will be available from the Company's registered office at
Wentworth House, Wentworth Street, Peterborough, PE1 1DS, or on the internet at
www.emap.com.
This information is provided by RNS
The company news service from the London Stock Exchange
