EMAP PLC
23 May 2005
24 May 2005
Emap plc
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2005
Business Performance - 'normalised'
• Turnover - up 2% to £1,068 million
• Total group operating profit - up 7% to £229 million
• Pre-tax profit - up 5% to £205 million
• EPS - up 4% to 57.9 pence
• Dividend per share - up 6% to 24.9 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.
Statutory Results
• Turnover - up 2% to £1,068 million
• Total group operating profit - down 12% to £142 million
• Pre-tax profit - down 22% to £112 million
• EPS - down 40% to 21.6 pence
• Dividend per share - up 6% to 24.9 pence
A non-cash impairment charge of £30 million (2004: £1 million) is the main
reason why operating profit, pre-tax profit and EPS is down year-on-year on a
statutory basis. This impairment, which is a result of the annual review of all
the Group's carrying values, is not included in the normalised results. The
other items not included in the normalised results are the non-cash amortisation
of goodwill, including goodwill on associates, of £55 million (2004: £48
million), loss on business disposals or closures of £6 million (2004: profit of
£1 million), and post acquisition reorganisation costs of £2 million (2004: £4
million). These items are explained in the following commentary.
Operating Highlights
Consumer Media
• Grazia on target, in sales and audience profile
• Closer moves into profit
• ZOO joins heat, Closer and FHM in UK top 20
• Further ABC share gains across the portfolio
Communications
• Exhibitions remain strong
• MEED Projects launched in Middle East
• Cannes Lions integrated and trading well
• Number of conferences up from 168 to 246
Performance
• Magic 105.4 joins London 'big three'
• Strong launch for Kerrang! 105.2
• Advertisers support digital stations
• New Sky airtime sales deal drives TV revenues
France
• Weekly magazine launch confirmed
• Tele Star successfully relaunched
• Tele Star/ Tele Poche newsstand sales stabilised
• Trading environment remains volatile
Current Trading
• UK consumer circ. GOOD • UK radio airtime REASONABLE
• UK consumer adv. GOOD • Television airtime WEAK
• UK B2B display adv. STRONG • France newsstand WEAK
• UK B2B rec'ment adv. MIXED • France subscriptions STABLE
• UK B2B exhibitions STRONG • France consumer adv WEAK
Commenting on the results Tom Moloney, Emap Group Chief Executive, said:
'Even in a tough year for Emap, we've achieved normalised EPS growth of 4%. Our
UK consumer magazine and B2B businesses have performed well, but trading
conditions have been more difficult in radio and in France. We have started the
new financial year well, and although the economic outlook is uncertain, we are
in line to deliver against our full year expectations.'
Enquiries to:
Emap plc 020-7278-1452
Tom Moloney, Chief Executive
Ian Griffiths, Acting Finance Director
Amelia Ashton, Investor Relations Director
Sarah Taylor, Communications Manager
Brunswick Group 020-7404-5959
Patrick Handley
Ed Williams
Fiona Laffan
Visit Emap's website on www.emap.com
Emap plc
PRELIMINARY STATEMENT 2005
Strategic Overview
Emap has built a diverse spread of high quality media businesses with different
degrees of cyclicality. This gives the Group resilience, minimising risk and
allowing it the flexibility to invest in its core brands at the point, in their
different cycles, most likely to gain the maximum strategic advantage, and
create the best return.
There are three key elements to Emap's strategy, which aims to deliver
consistent growth and create sustainable shareholder value.
Focused Investment In The Core Business
The first element of Emap's strategy is to accelerate growth in the core
business by: increasing top line revenues, market shares and margins; keeping
the fixed cost base low; and investing in those products and businesses which
are likely to give the best returns. Investment is made in editorial and
programming, marketing, promotions or in upgrading sales teams.
There have been many successes this year. FHM in the UK, for example, responded
to the launch of men's weeklies ZOO (Emap) and Nuts (IPC) by relaunching in
August 2004 with revitalised monthly content. It now has the highest ever share
of the men's monthly market, at 56% (ABC July-December 2004), while its
competitors have suffered disproportionately from the changing competitive
environment.
In radio, Magic 105.4 in London has responded magnificently to last year's
investment in programming and reformatting. It is now established as one of the
'big three' commercial stations fighting for leadership in the all important
London market, and is already benefiting from the revenue upside that this
changing market dynamic brings.
In B2B, investment in improved sales and visitor promotion for the garden and
leisure equipment show, GLEE, resulted in the best, most international show to
date. GAFA in Germany, its key competitor, has recently announced its decision
to go biennial.
Emap's portfolio of strong brands provides good opportunities to create new
products by extending those brands onto new media platforms. Emap
Communications' media neutral strategy in B2B media, serving significant markets
such as construction, retail and the public sector with magazines, exhibitions,
conferences, directories and information products, ensures we deliver our
customers a rich mix of media, enabling them to create integrated market-facing
solutions.
Over the last five years, Emap Performance has successfully extended its music
brands across magazines, radio and television, and continues to make good
progress in multi-channel television, events, branded music, brand extensions,
ticketing, mobile, interactive and on-line. These businesses now contribute
good revenues and profits to the whole Group.
In order to create opportunities for more collaboration across Emap's broad
range of UK consumer-facing businesses, Emap Performance and Emap Consumer Media
have been brought together under the leadership of Paul Keenan, Chief Executive
of Emap Consumer Media. Emap Radio has become a separate division under the
leadership of Dee Ford, Group Managing Director of Radio. Emap Communications
and Emap France are unchanged.
New Product Development
The second element of Emap's strategy is the development of new products, an
area in which it has an exceptionally strong track record. Emap holds centrally
a budget of approximately 2-21/2% of its annual turnover to fund launch
projects, with funds being allocated to those projects offering the most
attractive returns.
Emap's UK consumer magazine business has benefited most consistently from this
in recent years with the successful launches of heat, Closer, ZOO and now
Grazia. This has proved the most effective way of accelerating growth ahead of
its competitors. Funds have also been invested in developing Emap's digital
radio business, its new West Midlands Kerrang! 105.2 analogue radio licence and
The Hits TV on the rapidly growing Freeview platform.
There has also been investment in a new B2B information business, MEED Projects,
which looks extremely promising. Many new B2B products have also been developed
over the years without the need for significant net investment, such as Emap's
successful conference business and new exhibitions including Glass Processing &
Technology and Plastics Design & Moulding.
Today Emap confirms the launch of a new weekly magazine in France in the next
few months, with a budgeted investment in 2005/06 of £9 million, to be funded
from the central launch budget. Investment will also be made in Grazia (£9
million), Kerrang 105.2 (£2 million) and digital radio (£3 million).
Bolt-On Acquisitions
The third element of Emap's strategy is to make bolt-on acquisitions, targeting
businesses which fit well into the Group's existing portfolio and provide an
attractive return through a combination of cost savings and revenue synergies.
This year, Emap has acquired the Cannes Lions International Advertising
Festival, which has been integrated into Emap Communications' existing media
business, transforming it into a major vertical B2B market for the Group. Early
signs are that the Festival is likely to deliver good growth. The outstanding
50% of Interbuild, the UK's largest construction exhibition, was acquired,
strengthening Emap's construction business.
Financial Review
Normalised Results
Total turnover for the year increased by 2% to £1,068 million (2004: £1,050
million).
Total group operating profit, increased by 7% to £229 million (2004: £214
million). Within this, associates, including Emap's 27% stake in Scottish Radio
Holdings for the full year, contributed £7 million (2004: £2 million). Total
group operating margin increased to 21% (2004: 20%).
A total of £20 million (2004: £17 million) was invested in launches during the
period, principally on Grazia, ZOO, Kerrang 105.2 FM, digital radio
distribution, The Hits on Freeview and MEED Projects.
Net interest in the period amounted to £24 million (2004: £18 million),
including interest relating to the acquisitions of Cannes Lions and SRH. Cannes
Lions will be earnings dilutive for the current financial year but is expected
to be significantly earnings enhancing in 2005/06, its first full year under
Emap's ownership.
Pre-tax profit, was up 5% to £205 million (2004: £196 million).
Normalised tax in the period was £52 million (2004: £49 million). The normalised
tax rate was 25% (2004: 25%), and remains lower than the nominal rate due to
ongoing tax efficient debt structuring and the successful resolution of prior
year claims. This tax rate is expected to be maintained in 2005/06. Minority
interests were £5 million (2004: £4 million).
Normalised earnings per share were up 4% to 57.9 pence (2004: 55.8 pence).
The Board is recommending a final dividend of 16.9 pence a share (2004: 15.9
pence), making a total for the year of 24.9 pence a share (2004: 23.5 pence), an
increase of 6%. Dividend cover is 2.3x, comfortably within the Group's stated
target range of 2.0-2.5x. Dividends will be paid on 2 August 2005 to
shareholders on the Register as at 2 July 2005.
Statutory Results
Reconciliation of normalised pre-tax profit to statutory pre-tax profit
2005 2004
£m £m
Normalised pre-tax profit 205 196
Amortisation of intangible assets (50) (47)
Impairment of tangible fixed assets (30) (1)
Amortisation of goodwill on associates (5) (1)
(Loss)/profit on business disposals (6) 1
Post acquisition reorganisation costs (2) (4)
Statutory pre-tax profit 112 144
Amortisation of goodwill and intangible assets amounted to £55 million (2004:
£48 million), including £5 million on associated undertakings (2004: £1
million). Impairment of intangible assets, primarily on Tele Poche, Biba and 20
Ans in France, was £30 million (2004: £1 million). After post acquisition
reorganisation costs of £2 million incurred on the Cannes Lions acquisition
(2004: £4 million), and a net loss on business disposals of £6 million,
primarily relating to the ABI acquisition (2004: net profit of £1 million), Emap
generated a statutory pre-tax profit of £112 million (2004: £144 million).
Total earnings per share, inclusive of amortisation, were down 40% to 21.6 pence
(2004: 36.3 pence).
Cash and Net Debt
As at 31 March 2005, the Group had net debt of £264 million (2004: £268
million), after the acquisitions of Cannes Lions and of ABI, which was
subsequently disposed of, post year-end, following a ruling from the Competition
Commission. The Group continues to be highly cash generative with 99% (2004:
97%) of operating profit converted into operating cash flow.
Operating Review
Emap Performance, the Division that contained all of the music related assets
including television, radio and magazines, has been split into two parts. Emap
Radio becomes a new division, which will enable it to consolidate the strong
performance seen in radio in the last six months. Music television and music
magazines has become an operating business within Emap Consumer Media, retaining
the Emap Performance name. This new structure will create opportunities for
more collaboration across Emap's broad range of UK consumer-facing businesses.
The review below follows the divisional structure in place throughout 2004/05.
From 2005/06 onwards this will be replaced by the new structure.
The review is based on normalised results, which reflect how the business is
managed and measured on a day-to-day basis.
Emap Consumer Media
2005 2004 Absolute Change Underlying* Change
£m £m
Turnover 376 355 6% 6%
Operating Profit 67 59 14% 20%
Margin 18% 17%
* Like-for-like or underlying, are activities owned and operated for two
financial periods, therefore excluding foreign exchange, acquisitions and
disposals, launches and closures.
Emap Consumer Media mainly publishes consumer magazines in the UK, but also has
magazines in 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 the launches of ZOO and
Grazia. Underlying turnover was also up 6%, with growth of the non-underlying
ZOO and Grazia offsetting the impact of closure of J17, The Face and a number of
smaller titles. Operating profit increased by 14% (20% underlying) and the
operating profit margin increased again to 18%.
New titles launched by Emap within the last few years continue to accelerate
growth. heat is still contributing well to advertising growth, while Closer's
circulation was up 30% year-on-year to 504,000 in the last ABCs, and advertising
revenues increased by 79% year-on-year. heat and Closer together now sell in
excess of one million copies every week, and Closer, launched in September 2002,
moved into profit this year. ZOO increased its circulation by 20% period on
period in the last ABCs to 240,000, and is already approaching break-even after
less than 18 months, benefiting from a flourishing new weekly men's market.
Grazia, launched in February 2005, has started in line with expectations, with
circulation of around 150,000, and is on track to achieve its business plan with
good support from advertisers.
UK Circulation: In the ABCs for July to December 2004 Emap's total consumer
magazine portfolio again increased market share year-on-year from 16.4% to
17.7%. Newsstand retail sales value for Emap's portfolio was up 9%
year-on-year, a significant outperformance of the overall market which was up
1.2% (ABC). Emap now has four titles in the industry's top 20 by retail sales
value - heat, Closer, FHM and ZOO. All of Emap's top five men's brands - ZOO,
FHM, Arena, Empire and Q - increased their circulation period-on-period.
Consumer magazine circulation revenues for the UK increased by 7% (4%
underlying). Again Match has been a star performer, along with Bliss, Closer,
Yours, Empire, Arena and Q. Two notable areas of weakness however have been the
automotive and music markets, in particular Max Power, Parkers and Kerrang!
UK Advertising: consumer magazine advertising revenues grew by 3%, and 4% on an
underlying basis, in line with a total consumer magazine advertising market
which is forecast to have grown by 4% (Advertising Association March 2005).
Closer has seen significant increases in advertising this year, supported by
heat, Yours, Empire, Arena, Angling Times, Your Horse and Parkers. Particularly
strong advertising categories have been toiletries & cosmetics, entertainment
and food, while telecoms was down year-on-year.
International: Following the sale of FHM Malaysia, FHM Singapore and Asian Diver
to MediaCorp Publishing, Emap's international publishing business is now focused
on a portfolio of wholly-owned titles in Australia, FHM in the US, and a series
of joint venture and licence operations around the world, mainly based around
FHM. Emap Australia grew profits by around 60% this year to £4 million, while
FHM in the USA is now profitable, growing circulation revenues by 12% and
advertising revenues by 6%.
Emap Communications
2005 2004 Absolute Change Underlying* Change
£m £m
Turnover 231 213 8% 7%
Operating Profit 70 59 19% 13%
Margin 30% 28%
* Like-for-like or underlying, are activities owned and operated for two
financial periods, therefore 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, public sector, healthcare and media. It has
been Emap's fastest-growing division this year in both turnover and operating
profits. Turnover grew by 8%, with good organic growth across the business
enhanced by new exhibitions and conferences. Underlying turnover grew by 7%.
Operating profit grew strongly by 19% (13% underlying) and the operating margin
increased from 28% to 30%, amongst the highest in the industry, with higher
advertising yields converting strongly to profit and the closure of a number of
small, unprofitable magazines and exhibitions.
B2B on-line and information services are a key area of development for Emap
Communications, and this year MEED Projects, a construction information service
for the Middle East, was successfully launched. Nursing Times and Health
Service Journal have extended their strong brands on-line and are generating
recruitment revenues, while the on-line Careers in Construction continues to
develop.
Circulation: circulation revenues for Emap's B2B business as a whole increased
by 17%, and 6% on an underlying basis. Over 60% of subscriptions are paid-for
and these have shown steady growth, accelerated by a strong performance from
Glenigan's subscriptions and, in the non-underlying figures, by the acquisition
of ABI.
Display advertising: B2B display advertising grew by 6%, and 8% on an underlying
basis (which excludes some small closures), in a business and professional
magazine display advertising market which is forecast to be up 4% (Advertising
Association March 2005). There were strong performances across the portfolio,
particularly at MEED, Retail Week, Broadcast, Screen International and
Construction News, as well as good growth in conference sponsorship revenues.
Recruitment advertising: B2B recruitment advertising was down 3% on a total and
underlying basis. There was good growth across smaller recruitment titles such
as Drapers, Retail Week and Broadcast, but there were volume declines at all of
Emap's top five recruitment titles - Health Service Journal, Nursing Times,
Local Government Chronicle, Construction News and New Civil Engineer, especially
towards the end of the period. Markets have been volatile, with particular
weakness in health service and nursing recruitment, although yield management
reflecting Emap Communications' premium brands has helped to offset falling
volumes.
Exhibitions: revenues from B2B exhibitions and events grew by 13%, and 11% on an
underlying basis. Two of Emap's biggest shows, The Autumn Fair and Glee, saw
strong double-digit revenue growth, while The Spring Fair, although full to
capacity, still achieved revenue growth from a changing mix of exhibitors.
Other notable successes were the bi-annual Pure Womenswear, now wholly owned by
Emap, and the Tradexpo shows in Paris, acquired as Agor in February 2003.
Emap's conference unit also continues to grow strongly, with a total of nearly
246 conferences and delegate revenues up over 45% year-on-year.
Emap Performance
2005 2004 Absolute Change Underlying* Change
£m £m
Turnover 161 160 1% -
Operating Profit 35 37 (5%) 3%
Margin 22% 23%
* Like-for-like or underlying, are activities owned and operated for two
financial periods, therefore excluding foreign exchange, acquisitions and
disposals, launches and closures.
Emap Performance's collection of music brands extends across radio, music
magazines and music television. Turnover increased by 1%, with a recovery in
radio advertising in the second half and a strong performance in music
television offset by continuing weakness in music magazines. Underlying
turnover, which excludes the newly launched Kerrang 105.2 FM radio station in
the West Midlands and digital radio advertising revenues, was level. Operating
profits increased by 3% underlying, but declined by 5% in absolute terms after a
£3 million investment in the launch of Kerrang 105.2 FM. Operating margins
declined from 23% to 22%.
Total radio revenues, including digital multiplex income, were up £2 million
(2%) to £98 million while profits reduced by £2 million (8%) to £22 million,
largely reflecting the investment in Kerrang 105.2 FM mentioned above. Radio
margins also reduced from 25% to 22%, although this reflects an improvement in
the second half after margins of 19% at the half year.
Emap's digital network continues to grow, with 86 digital radio stations on DAB
and 8 national stations on Freeview, cable, satellite and on-line. This
comprehensive network, together with a portfolio of strong, well-established
brands such as Kiss, Magic, Smash Hits and Kerrang, has made Emap number one in
digital radio with around 16 million listening hours and £4 million of revenues
this year, up from £1 million last year.
Radio audiences: for January to March 2005, Emap's share of commercial listening
hours was 15.4%, up from 15.3% the previous quarter. London's Kiss 100 and
Magic 105.4 retained their combined share of 10%, giving them a strong advantage
in this competitive market. Magic 105.4 increased its share to 6.0% from 4.6%
this time last year and is now one of the three top stations fighting for market
leadership. Across Emap's Big City stations in the North, market share
increased slightly quarter-on-quarter from 11.6% to 11.7%, with a good
performance from Key 103 in Manchester in particular. New launch Kerrang 105.2
in the West Midlands consolidated its successful launch with an increase in
share from 2.6% to 2.7%. Emap's national digital radio stations delivered
around 16 million hours out of an Emap total of 71 million (Rajar Q1:05).
Radio advertising: total radio advertising revenues increased by 2% during the
period, but decreased by 2% on an underlying basis. Emap underperformed the
market which increased by 4% (Radio Advertising Bureau). A significant
underperformance by Emap in the first quarter was offset by a strong
outperformance in the second half as expected, with national revenues boosted by
strong audiences. Growth categories this year have been food, magazines/TV/
books, finance and travel, while motors, retail and pharmaceuticals have
declined year-on-year. Local revenues remained reasonably strong, up 4%
year-on-year, and accounted for around 28% of total radio airtime revenues
(2004: 27%). London accounted for 27% of total radio advertising revenues and
increased by 5%, with Magic 105.4 particularly strong, up 18%. Big City
revenues decreased by 5% as increased competition eroded audiences further.
Music and teen magazines: total revenues for Emap Performance's music magazines
declined by 3%, and profits declined by 7%. Circulation revenues were level,
with strong revenue growth at the successfully relaunched Q offsetting declines
at Kerrang! in particular. However, advertising declined by 10%, with the teen
market continuing to be tough and only Mojo showing significant growth.
Music television: Emap's music television channels have had a successful year,
with a share of music TV audience in multi-channel homes of 37% (2004: 38%)
(BARB April 03-March 04 v April 04-March 05 16-24 adults). A new contract under
which Sky Media is selling increased volumes of airtime across all of Emap's
channels - including The Hits on Freeview - has helped to drive total revenues
up 14%, and airtime and sponsorship revenues up 25%. Airtime and sponsorship
accounted for 63% of TV revenues, with the remainder coming from subscriptions
and interactivity.
Emap France
2005 2004 Absolute Change Underlying* Change
£m £m
Turnover 300 322 (7%) (7%)
Operating Profit 50 57 (12%) (12%)
Margin 17% 18%
* Like-for-like or underlying, are activities owned and operated for two
financial periods, therefore 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, with continuing competitive pressures compounded by advertising weakness
which increased during the second half. Against this backdrop, total and
underlying turnover decreased by 7%. Operating profit was down 12% on a total
and underlying basis, and operating margins fell from 18% to 17%, due to margin
erosion at Tele Star and Tele Poche and the loss of high margin advertising
revenues, although they remain the highest in the industry. The negative
currency impact was £6 million on turnover and £1 million on profits
year-on-year.
Emap France's year has been coloured by the aggressive launch of two low price
fortnightly TV listings magazines from Prisma, which impacted on the performance
of both Tele Star and Tele Poche. Tele Star was relaunched in September 2004
with more TV-related news and features, and a stronger female bias. Both titles
have been promoted successfully with cover-mounted DVDs, and newsstand sales
have been stable since last September. Elsewhere in the portfolio, a new weekly
title has been developed for launch in the next few months, in close
collaboration with the experienced launch teams at Emap Consumer Media in the
UK.
Circulation: In the OJD audited circulation figures for the 12 months of 2004
the retail sales value of Emap's French portfolio declined by 6%, reflecting
declines at Tele Star and Tele Poche. This compares with a market which was
down 1%. Emap's market share declined from 12.8% to 12.1%. FHM and ADDX, both
launched in the last few years, grew their circulation and Auto Plus was strong,
but the women's titles were weaker.
Newsstand revenues: newsstand revenues were down 8%, and 10% on an underlying
basis. Within this, Tele Star and Tele Poche accounted for 37% of underlying
newsstand revenues and were down 25%. The rest of the portfolio increased by 2%
on an underlying basis, weakening towards the end of the year, but with Auto
Plus, ADDX and FHM showing good growth.
Subscription revenues increased by 3%, but declined by 1% on an underlying
basis. Tele Star and Tele Poche remain fairly robust, declining by only 5%, and
there were some successes across the rest of the portfolio, particularly Auto
Plus and Top Sante, both of which showed healthy increases. Subscriptions
marketing for Pleine Vie has been reduced, resulting in a slight circulation
decline but making the magazine more profitable.
Advertising: total advertising revenues declined by 8%, while underlying
advertising revenues decreased by 9% in a market which is forecast to be up 2%
(company estimates). Tele Star and Tele Poche accounted for 39% of underlying
advertising revenues and were down 17%; advertising revenues for the rest of the
underlying portfolio were down 3%. The automotive titles again performed
strongly, offset by less strong performances at women's and men's titles,
particularly Top Sante, Biba, 20 Ans, Max, and FHM - largely reflecting a marked
slowdown in beauty and healthcare advertising. Growth categories were
automotive and tourism, while retail, services and clothing declined
year-on-year.
Current Trading and Full Year Expectations
In the UK, consumer magazine circulation revenues are continuing to show good
growth into the new financial year, with strong performances from the weekly
titles. Consumer magazine advertising is also showing good overall year-on-year
growth for the first quarter.
B2B display advertising and sponsorship is continuing to grow in line with the
strong growth seen in the second half of last year, while recruitment across
Emap's key titles has started the year a little better than expected. The
outlook for the Group's B2B exhibitions in 2005/06 remains strong.
In radio advertising, Emap is outperforming a weak market, with a modest
year-on-year decline in April but growth expected for the Group across the first
quarter as a whole. Television revenue growth has weakened in line with the
wider television advertising market.
French newsstand revenues are still being affected by year-on-year declines in
the TV listings titles, although sales are now more stable week to week. There
is some weakness across the rest of the portfolio. Subscriptions are generally
stable, and advertising continues to suffer from a weak overall advertising
market, but trading in France is broadly as anticipated.
In the round, the Group has started the new financial year well. Although the
economic outlook is uncertain, the Group is in line to deliver against its full
year expectations.
Emap plc
Consolidated profit and loss account
For the year ended 31 March 2005
2005 2004
Notes £m £m Growth
_____________________________________________________________________________________________________________________
Turnover 2(a) 1,068 1,050 2%
_____________________________________________________________________________________________________________________
Operating costs
Operating costs (846) (838)
Post acquisition reorganisation costs 10 (2) (4)
Amortisation of intangible fixed assets 11 (50) (47)
Impairment of intangible fixed assets 11 (30) (1)
_____________________________________________________________________________________________________________________
Net operating costs (928) (890) (4%)
_____________________________________________________________________________________________________________________
Group operating profit 2(b) 140 160 (13%)
Share of operating profit of joint ventures
and associated undertakings 2 1
_____________________________________________________________________________________________________________________
Total Group operating profit 142 161 (12%)
(Loss)/profit on business disposals 4 (6) 1
Net interest payable and other financing costs 5 (24) (18)
_____________________________________________________________________________________________________________________
Profit on ordinary activities before tax 3(b) 112 144 (22%)
Tax on profit on ordinary activities 6 (52) (47)
_____________________________________________________________________________________________________________________
Profit on ordinary activities after tax 60 97 (38%)
Minority interests (all equity) 14 (5) (4)
_____________________________________________________________________________________________________________________
Profit attributable to shareholders 55 93
Dividends 7 (64) (60)
_____________________________________________________________________________________________________________________
(Deficit absorbed)/retained profit (9) 33
_____________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________
Earnings per share 8 21.6p 36.3p (40%)
Diluted earnings per share 8 21.5p 36.0p (40%)
Dividend per share 7 24.9p 23.5p 6%
_____________________________________________________________________________________________________________________
All turnover and operating profit for 2005 and 2004 relates to continuing operations.
Business performance
In addition to the statutory profit and loss account presented above,
'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.
2005 2004
Notes £m £m
_____________________________________________________________________________________________________________________
'Normalised' results
Turnover 3 1,068 1,050 2%
Group operating 3(a),(c) 222 212 5%
profit
Total group operating profit 229 214 7%
Profit on ordinary activities before tax 3(b) 205 196 5%
Earnings per share 8 57.9p 55.8p 4%
_____________________________________________________________________________________________________________________
Emap plc
Consolidated cash flow statement
For the year ended 31 March 2005
_______________________________________________________________________________________________________________________
As restated
2005 2004
Notes £m £m
_______________________________________________________________________________________________________________________
Net cash inflow from operating activities 9(a) 229 219
_______________________________________________________________________________________________________________________
Dividends from associated undertakings 3 1
_______________________________________________________________________________________________________________________
Returns on investments and servicing of finance
Interest received - 2
Interest paid (22) (14)
Issue costs on 6.25% Sterling Eurobond - (2)
Dividends paid to minority shareholders (8) (2)
_______________________________________________________________________________________________________________________
Net cash outflow from returns on investments and servicing of finance (30) (16)
_______________________________________________________________________________________________________________________
Taxation (49) (44)
_______________________________________________________________________________________________________________________
Capital expenditure and financial investment
Purchase of tangible fixed assets (12) (15)
Increase in loans to joint ventures and associated undertakings (1) (3)
_______________________________________________________________________________________________________________________
Net cash outflow from capital expenditure and financial investment (13) (18)
_______________________________________________________________________________________________________________________
Acquisitions and disposals
Acquisition of businesses 10 (99) (95)
Net cash acquired with subsidiaries 10 31 33
Disposal of businesses - 5
Costs of business disposals (2) (1)
Acquisition of joint ventures and associated undertakings - (92)
_______________________________________________________________________________________________________________________
Net cash outflow from acquisitions and disposals (70) (150)
_______________________________________________________________________________________________________________________
Equity dividends paid (61) (57)
_______________________________________________________________________________________________________________________
Cash inflow/(outflow) before financing 9 (65)
_______________________________________________________________________________________________________________________
Financing
Issue of ordinary share capital 4 -
Purchase of own shares for employee trust (1) -
Sale of own shares from employee trust 1 2
Repayment of bank loans (9) (167)
Issue of 6.25% Sterling Eurobond 9(c) - 250
Repayment of loan notes (4) -
Increase/(decrease) in loans from associated undertakings 2 (6)
Loss on rollover of foreign currency swaps (2) (2)
_______________________________________________________________________________________________________________________
Net cash (outflow)/inflow from financing (9) 77
_______________________________________________________________________________________________________________________
Increase in net cash - 12
_______________________________________________________________________________________________________________________
Emap plc
Consolidated balance sheet
At 31 March 2005
_______________________________________________________________________________________________________________________
As restated
2005 2004
Notes £m £m
_______________________________________________________________________________________________________________________
Fixed assets
Intangible fixed assets 11 561 576
Tangible fixed assets 31 31
Investments
- Joint ventures and associated undertakings 12 102 96
- Other investments 12 2 2
_______________________________________________________________________________________________________________________
696 705
_______________________________________________________________________________________________________________________
Current assets
Stocks 11 10
Debtors - amounts falling due within one year 260 238
Debtors - amounts falling due after more than one year 8 7
Cash at bank and in hand 38 38
_______________________________________________________________________________________________________________________
317 293
Creditors - amounts falling due within one year (456) (428)
_______________________________________________________________________________________________________________________
Net current liabilities (139) (135)
_______________________________________________________________________________________________________________________
Total assets less current liabilities 557 570
Creditors - amounts falling due after more than one year (268) (272)
Provisions for liabilities and charges 13 (6) (16)
_______________________________________________________________________________________________________________________
Net assets 283 282
_______________________________________________________________________________________________________________________
Capital and reserves
Called up share capital 64 64
Share premium account 595 589
Revaluation reserve 6 7
Profit and loss account 15 (386) (381)
_______________________________________________________________________________________________________________________
Shareholders' funds (all equity) 279 279
Minority interests (all equity) 14 4 3
_______________________________________________________________________________________________________________________
Capital employed 283 282
_______________________________________________________________________________________________________________________
Approved by the Board of Directors on 24 May 2005
T C Moloney
I W Griffiths
Emap plc
Consolidated statement of total recognised gains and losses
For the year ended 31 March 2005
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Profit attributable to shareholders 55 93
Foreign exchange translation differences 1 (3)
_______________________________________________________________________________________________________________________
Total recognised gains and losses relating to the year 56 90
_______________________________________________________________________________________________________________________
Profit on a historical cost basis is £1m (2004 - £1m) higher than as reported. This is due to amortisation being
charged on intangible assets revalued in financial year 2002/03.
Reconciliation of movement in shareholders' funds
For the year ended 31 March 2005
_______________________________________________________________________________________________________________________
As restated
2005 2004
Notes £m £m
_______________________________________________________________________________________________________________________
Profit attributable to shareholders 55 93
Dividends 7 (64) (60)
_______________________________________________________________________________________________________________________
(Deficit absorbed)/retained profit (9) 33
Shares issued 6 3
Shares issued to Employee Share Ownership Plan (8) (2)
Sale of shares in Employee Share Ownership Plan 5 2
Adjustment in respect of employee share schemes 5 3
Foreign exchange translation differences 1 (3)
_______________________________________________________________________________________________________________________
Net addition to shareholders' funds - 36
Opening shareholders' funds (all equity) 279 248
Prior year adjustment - implementation of UITF 38 1 - (5)
_______________________________________________________________________________________________________________________
Opening shareholders' funds (all equity) as restated 279 243
_______________________________________________________________________________________________________________________
Closing shareholders' funds (all equity) 279 279
_______________________________________________________________________________________________________________________
Reconciliation of movement in net debt
For the year ended 31 March 2005
_______________________________________________________________________________________________________________________
Net Borrowings Net debt
cash
£m £m £m
_______________________________________________________________________________________________________________________
At 1 April 2004 38 (306) (268)
Exchange differences - (6) (6)
Non cash movement - (3) (3)
Net cash movement - 13 13
_______________________________________________________________________________________________________________________
At 31 March 2005 38 (302) (264)
_______________________________________________________________________________________________________________________
Emap plc
Notes
For the year ended 31 March 2005
1 Basis of preparation
The preceding financial information does not constitute statutory accounts as
defined in Section 240 of the United Kingdom Companies Act 1985. The
information contained in these financial statements is based on the statutory
accounts for the financial year ended 31 March 2005. These accounts, upon which
the auditors have issued an unqualified opinion, have not yet been delivered to
the Registrar of Companies.
The Group has adopted UITF Abstract 38 (Accounting for ESOP trusts) in these
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 £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. The cash flow statement has been restated accordingly.
2 Segmental analysis
Turnover and operating profit are reported for each of the Group's four
operating divisions. 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
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Emap Consumer Media 376 355
Emap Communications 231 213
Emap Performance 161 160
Emap France 300 322
_______________________________________________________________________________________________________________________
Total turnover 1,068 1,050
_______________________________________________________________________________________________________________________
(ii) By category
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Advertising 455 457
Circulation 476 467
Events 88 79
Other 49 47
_______________________________________________________________________________________________________________________
Total turnover 1,068 1,050
_______________________________________________________________________________________________________________________
(iii) By media type
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Consumer magazines - UK 371 352
Consumer magazines - France 300 322
Consumer magazines - International 47 48
Business-to-business 228 211
Radio 98 96
TV 24 21
_______________________________________________________________________________________________________________________
Total turnover 1,068 1,050
_______________________________________________________________________________________________________________________
Digital activities, which were previously shown separately, are included in the media type to which
they relate.
(iv) By geographical origin
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
United Kingdom 709 668
France 310 331
Rest of the World 49 51
_______________________________________________________________________________________________________________________
Total turnover 1,068 1,050
_______________________________________________________________________________________________________________________
The year-on-year impact of currency movements was to decrease turnover by £9m (2004 - increase of
£26m).
(b) Analysis of Group operating profit
(i) By division
_______________________________________________________________________________________________________________________
Total
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Emap Consumer Media 62 53
Emap Communications 51 46
Emap Performance 25 27
Emap France 2 34
_______________________________________________________________________________________________________________________
Group operating profit 140 160
_______________________________________________________________________________________________________________________
(ii) By media type
_______________________________________________________________________________________________________________________
Total
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Consumer magazines - UK 67 58
Consumer magazines - France 2 34
Consumer magazines - International 3 -
Business-to-business 50 47
Radio 12 15
TV 6 6
_______________________________________________________________________________________________________________________
Group operating profit 140 160
_______________________________________________________________________________________________________________________
Digital activities, which were previously shown separately, are included in the
media type to which they relate.
(iii) By geographical origin
_______________________________________________________________________________________________________________________
Total
2005 2004
£m £m
_______________________________________________________________________________________________________________________
United Kingdom 136 122
France 2 38
Rest of the World 2 -
_______________________________________________________________________________________________________________________
Group operating profit 140 160
_______________________________________________________________________________________________________________________
The year-on-year impact of currency movements was to increase Group operating profit by £nil (2004 - increase of
£4m).
3 Non-statutory disclosures - 'normalised results'
'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 Group operating profit to 'normalised'
Group operating profit is provided below, as is a reconciliation of profit on
ordinary activities before tax to 'normalised' profit on ordinary activities
before tax.
There is no difference between statutory and 'normalised' turnover.
(a) Reconciliation of Group operating profit to 'normalised' Group operating profit
_______________________________________________________________________________________________________________________
2005 2004
Notes £m £m
_______________________________________________________________________________________________________________________
Group operating profit 140 160
Post acquisition reorganisation costs 10 2 4
Amortisation of intangible fixed assets 11 50 47
Impairment of intangible fixed assets 11 30 1
_______________________________________________________________________________________________________________________
'Normalised' Group operating profit 222 212
_______________________________________________________________________________________________________________________
(b) Reconciliation of Group profit before taxation to 'normalised' profit before taxation
_______________________________________________________________________________________________________________________
2005 2004
Notes £m £m
_______________________________________________________________________________________________________________________
Profit on ordinary activities before tax 112 144
Post acquisition reorganisation costs 10 2 4
Amortisation of intangible fixed assets 11 50 47
Impairment of intangible fixed assets 11 30 1
Amortisation of goodwill on associated undertakings 12 5 1
Loss/(profit) on business disposals 4 6 (1)
_______________________________________________________________________________________________________________________
'Normalised' profit on ordinary activities before tax 205 196
_______________________________________________________________________________________________________________________
(c) 'Normalised' segmental analysis
The 'normalised' segmental analysis below reflects how the business is managed on a day-to-day basis.
(i) 'Normalised' Group operating profit by division
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Emap Consumer Media 67 59
Emap Communications 70 59
Emap Performance 35 37
Emap France 50 57
_______________________________________________________________________________________________________________________
Group operating profit 222 212
_______________________________________________________________________________________________________________________
(ii) By media type
_______________________________________________________________________________________________________________________
2005 2004
£m £m
_______________________________________________________________________________________________________________________
Consumer magazines - UK 72 63
Consumer magazines - France 50 57
Consumer magazines - International 3 1
Business-to-business 69 60
Radio 22 24
TV 6 7
_______________________________________________________________________________________________________________________
Group operating profit 222 212
_______________________________________________________________________________________________________________________
Digital activities, which were previously shown separately, are included in the
media type to which they relate.
(iii) By geographical origin
________________________________________________________________________________
2005 2004
£m £m
________________________________________________________________________________
United Kingdom 167 150
France 53 61
Rest of the World 2 1
________________________________________________________________________________
Group operating profit 222 212
________________________________________________________________________________
The year-on-year impact of currency movements is to decrease 'normalised' group
operating profit by £1m (2004 - increase of £5).
4 Business disposals and closures
The £6m loss on business disposals (2004 - profit of £1m) and closures includes
a provision for the loss on disposal of ABI Building Data Ltd (see note 10). The
remaining balance includes the loss on disposal and costs related to the closure
of various activities across Emap France, Emap Communications and Emap Consumer
Media.
5 Net interest payable and other financing costs
_________________________________________________________________________________________
2005 2004
£m £m
_________________________________________________________________________________________
6.25% Sterling Eurobond (16) (15)
Bank loans and overdrafts, wholly repayable within five years (5) (4)
Amortisation of issue costs relating to bank loans and bond issues (3) (2)
Share of joint venture and associated undertaking interest payable (1) -
Total interest payable (25) (21)
Hedging instruments 1 1
Interest received on tax repayments - 2
Total interest receivable 1 3
_________________________________________________________________________________________
Net interest payable (24) (18)
_________________________________________________________________________________________
6 Tax on profit on ordinary activities
_________________________________________________________________________________________
2005 2004
_________________________________________________________________________________________
'Normalised' tax rate 25% 25%
UK nominal tax rate 30% 30%
_________________________________________________________________________________________
The 'normalised' tax rate of 25% is significantly lower than the nominal rate as
a result of tax efficient debt structuring and the resolution of prior year
matters.
The table below shows the reconciliation of the tax in the profit and loss
account to tax at the nominal rate.
_________________________________________________________________________________
2005 2004
£m £m
_________________________________________________________________________________
Tax charge as shown in the Consolidated profit and loss account 52 47
Deferred tax (2) 2
_________________________________________________________________________________
Total current tax 50 49
Less: Corporation tax on pre-tax profit at nominal rate of 30% (34) (43)
_________________________________________________________________________________
Difference 16 6
_________________________________________________________________________________
The difference is principally due to:
Non-deductible impairment of intangible fixed assets 9 -
Non-deductible amortisation of intangible fixed assets 15 14
Non-deductible loss on business disposals 2 -
Permanent disallowables, prior year and other items (10) (8)
________________________________________________________________________________
16 6
_________________________________________________________________________________
7 Dividends
The final proposed dividend of 16.9p (2004 - 15.9p), making a total for
the year of 24.9p (2004 - 23.5p), will be paid, subject to shareholder approval,
on 1 August 2005 to shareholders on the Register as at 1 July 2005.
8 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
year 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 WANS but included in calculating the diluted WANS. The WANS
for the year ended 31 March 2005 was 256m (2004 - 256m).
________________________________________________________________________________________
2005 2004
________________________________________________________________________________________
Basic earnings per share - attributable to shareholders 21.6p 36.3p
Effect of dilutive shares and share options (0.1p) (0.3p)
________________________________________________________________________________________
Diluted earnings per share 21.5p 36.0p
________________________________________________________________________________________
'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:
_________________________________________________________________________________________
2005 2004
_________________________________________________________________________________________
Basic earnings per share - attributable to shareholders 21.6p 36.3p
Amortisation of intangible fixed assets 19.6p 18.5p
Impairment of intangible fixed assets 11.8p 0.3p
Amortisation of goodwill on associated undertakings 2.0p 0.5p
Loss/(profit) on business disposals 2.0p (0.7p)
Post acquisition reorganisation costs 0.8p 1.5p
Taxation on non-'normalised' items 0.1p (0.6p)
_________________________________________________________________________________________
'Normalised' earnings per share 57.9p 55.8p
_________________________________________________________________________________________
9 Cash flow information
(a) Reconciliation of Group operating profit to net cash inflow from operating activities
______________________________________________________________________________
As restated
2005 2004
Notes £m £m
______________________________________________________________________________
Group operating profit 140 160
Amortisation of intangible fixed assets 11 50 47
Impairment of intangible fixed assets 11 30 1
Post acquisition reorganisation costs 2 4
Depreciation of tangible fixed assets 13 15
Net loss on disposal of tangible fixed assets - 1
Adjustment in respect of employee share schemes 5 3
(Increase)/decrease in debtors (10) 13
Increase/(decrease) in creditors 5 (19)
Decrease in provisions (6) (6)
______________________________________________________________________________
Net cash inflow from operating activities 229 219
______________________________________________________________________________
(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 against exceptional reorganisation and acquisition restructuring
provisions. It is then compared to 'normalised' Group operating profit.
_________________________________________________________________________________
2005 2004
Notes £m £m
_________________________________________________________________________________
Net cash inflow from operating activities 9(a) 229 219
Capital expenditure (12) (15)
Expenditure against exceptional reorganisation provisions 2 1
_________________________________________________________________________________
Adjusted operating cash flow 219 205
_________________________________________________________________________________
'Normalised' Group operating profit 222 212
_________________________________________________________________________________
Operating profit into cash 99% 97%
_________________________________________________________________________________
(c) Issue of 6.25% Sterling Eurobond
On 7 April 2003 Emap issued a £250m, 6.25% Sterling Eurobond maturing 9 December
2013. The proceeds were used to repay existing debt at the time. In August
2004 the Group's revolving credit facility was re-financed and the maturity
extended. At 31 March 2005, the Group had a £500m syndicated multi-currency
revolving facilty which matures in August 2009 (2004 - £525m maturing in May
2006).
10 Acquisitions
On 6 August 2004 Emap Communications completed the acquisition of one of the
world's largest advertising festivals, Cannes Lions International Advertising
Festival ('Cannes Lions'). Advertising Film Festival Financing Ltd was acquired
from WJB Chiltern Trust Company (Jersey) Ltd for a purchase price of £82m,
including £31m of cash within the company, giving a net purchase price of £51m.
On 5 May 2004 Emap Communications completed, for £14m cash consideration and
costs of £1m, the acquisition of ABI Building Data Limited ('ABI'), from ICW
Publications Limited, part of the Springer Science and Business Media group
owned by Cinven and Candover. On 1 July 2004, the acquisition was referred to
the Competition Commission by the Office of Fair Trading. On 11 November 2004,
the Competition Commission published its provisional findings report and
concluded that the merger may be expected to result in a 'Substantial Lessening
of Competition' in the market for the supply of Project Information and Contact
Data. From this date, we ceased consolidating the results of ABI, and have
accounted for it as an associated undertaking. This resulted in a transfer of
goodwill of £15m from subsidiary undertakings to investments in associated
undertakings (see Notes 11 and 12). In January 2005, the Competition Commission
confirmed its provisional findings and as a result of this ruling, Emap agreed
to dispose of this business. On 10 May 2005 Emap Communications announced the
sale of ABI to United Business Media plc (see Note 16) resulting in a provision
for a loss on disposal of the investment by £4m to reflect the sales proceeds of
£12m and costs of disposal of £1m.
A provisional fair value exercise was performed on the acquired balance sheets
of Cannes Lions and ABI, resulting in a £1m adjustment primarily in respect of
the write off of previously capitalised web development costs, which have been
expensed in accordance with Emap's accounting policies. In addition, post
acquisition reorganisation costs of £2m have been expensed since the
acquisitions, £1m in respect of property and £1m relating to restructuring.
On 7 July 2004 Emap Communications completed the purchase of the remaining 50%
shareholding of the Interbuild exhibition from Montgomery Exhibitions Limited
for a cash consideration of £1m. Other small acquisitions by Emap Communications
during the year amounted to £1m cash consideration; these include National House
Building Awards and CareExpo Exhibition.
The impact of all acquisitions on the consolidated balance sheet was:
Net Fair value Fair
book value
values adjustment to
Group
Notes £m £m £m
_________________________________________________________________________
Fixed assets 1 (1) -
Current assets 3 - 3
Current liabilities (6) - (6)
Cash and overdrafts 31 - 31
_________________________________________________________________________
Fair value of assets acquired 29 (1) 28
Goodwill 11 71
_________________________________________________________________________
Fair value of consideration 99
_________________________________________________________________________
Comprising:
Cash paid during the year 98
Related costs of acquisition 1
_________________________________________________________________________
11 Intangible fixed assets
________________________________________________________________________________
Publishing
rights,
titles
& Goodwill Total
exhibitions
Notes £m £m £m
________________________________________________________________________________
Cost
At 1 April 2004 636 357 993
Exchange movements 9 3 12
Businesses acquired 10 - 71 71
Transfer to associated 10 & 12 - (15) (15)
undertakings
________________________________________________________________________________
At 31 March 2005 645 416 1,061
________________________________________________________________________________
Amortisation
At 1 April 2004 (239) (178) (417)
Exchange movements (3) - (3)
Provided during the year (32) (18) (50)
Provision for impairment (29) (1) (30)
________________________________________________________________________________
At 31 March 2005 (303) (197) (500)
________________________________________________________________________________
Net book value at 31 March 2005 342 219 561
________________________________________________________________________________
Net book value at 31 March 2004 397 179 576
________________________________________________________________________________
The directors have considered the value of all intangible fixed assets at 31
March 2005 and have made provisions for impairment in value where appropriate.
Valuations have been measured by reference to the greater of net realisable
value or value in use. Value in use has been calculated with reference to future
expected pre-tax cash flows, discounted at a rate of 13%, the Group's pre-tax
weighted average cost of capital.
12 Fixed asset investments
________________________________________________________________________________
Joint Other
ventures &
associated fixed asset
undertakings investments Total
£m £m £m
________________________________________________________________________________
Cost
At 1 April 2004 (as restated for UITF 38) 14 2 16
Increase in loan 1 - 1
________________________________________________________________________________
At 31 March 2005 15 2 17
________________________________________________________________________________
Goodwill
At 1 April 2004 79 - 79
Transfer from intangible fixed 10 & 11 15 - 15
assets
Amortisation (5) - (5)
Provision for loss on disposal (4) - (4)
________________________________________________________________________________
At 31 March 2005 85 - 85
________________________________________________________________________________
Post acquisition reserves &
provisions
At 1 April 2004 3 - 3
Share of retained profits 2 - 2
Transfer from provisions 13 (3) - (3)
________________________________________________________________________________
At 31 March 2005 2 - 2
________________________________________________________________________________
Net book value at 31 March 2005 102 2 104
________________________________________________________________________________
Net book value at 31 March 2004 96 2 98
________________________________________________________________________________
13 Provisions for liabilities and charges
___________________________________________________________________________________________________________________
Reorganisation Property Other Total
provisions provisions provisions provisions
Notes £m £m £m £m
___________________________________________________________________________________________________________________
At 1 April 2004 2 4 10 16
Operating losses of joint ventures and associates 12 - - (3) (3)
Arising on acquisition 10 - 1 1 2
Released during the year - - (3) (3)
Utilised in the year (2) (1) (3) (6)
___________________________________________________________________________________________________________________
At 31 March 2005 - 4 2 6
___________________________________________________________________________________________________________________
The property provisions relate to ongoing commitments on empty properties. Some
of these commitments extend to 2015. Other provisions relate to a provision for
employer's National Insurance contributions in respect of Executive share
schemes and the Group's share of net liabilities of joint ventures and
associated undertakings.
During the year, we have reviewed the provisional fair value exercise performed
on last year's acquisition of Excelsior Publications SA ('Excelsior'). This has
resulted in an adjustment of £2m to other provisions, resulting from reduced
deficit on the Company's funding of pension obligations. This release has been
offset against goodwill arising on the acquisition of Excelsior and has not
impacted the profit and loss account.
The provisions arising during the year relate to the acquisition of Cannes
Lions. These relate to an onerous empty property lease, redundancy and other
sundry integration costs.
14 Minority interests
Minority interests relate mainly to the Group's holdings in Frontline Ltd,
Seymour International Ltd, EG Digital Ltd and EMAS SNC, publisher of the Auto
Plus title.
15 Profits available for distribution
Although the consolidated profit and loss reserve at 31 March 2005 is a deficit
balance of £386m (2004 - £381m deficit), the profit and loss reserve of the
parent company Emap plc amounts to £1,050m (2004 - £901m) including
distributable profits of £359m (2004 - £207m) enabling the Group to meet its
obligations to pay dividends for the foreseeable future.
16 Post balance sheet events
On 14 April 2005, Emap plc and certain of its subsidiaries completed the sale of
the material assets of Emap (Malaysia) Sdn Bhd, Bounty Services Sdn Bhd, Bounty
Services (S) Pte Ltd and Emap Singapore Pte Ltd, and granted licenses to publish
certain titles, to MediaCorp Pte Ltd for a cash consideration of SGD$4.25m
(£1.4m).
On 10 May 2005, Emap Communications announced the sale of ABI to United Business
Media plc for an aggregate consideration (including £1.3m cash within the
business) of £13.3m. This follows the announcement by the Competition
Commission on 26 January 2005 requiring the disposal by Emap of ABI. ABI is a
construction information business which provides contract leads primarily to
construction contractors and material suppliers. The disposal of ABI, which has
been approved by the Competition Commission, does not have a material impact on
the earnings or net assets of Emap.
17 Annual report
Copies of the Annual Report will be sent to all shareholders on or before 16
June 2005, and will be available from the Company's registered office, 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
