newsbox.ch/ Informa plc: Interim Results for the -4-

27th Jul 2010 07:01

adjusted profit for the period increased by 17.9% to GBP100.0m from GBP84.8m. Taxation Across the Group, tax has been provided at an adjusted rate of 25.0% (2009: 27.9%). This adjusted tax rate benefits from profit generated in low tax jurisdictions. The reported Group tax charge was 27.3% (2009: 28.5%). Earnings and Dividend Adjusted diluted EPS of 16.7 pence is 3.1% ahead of the same period in 2009. In line with the Group's dividend policy, the Board has recommended an interim dividend of 4.5 pence (2009: 3.6 pence) which will be payable on 17 September 2010 to ordinary shareholders registered as of the close of business on 20 August 2010. Cash Flow The Group continues to generate strong cash flows. The cash conversion rate, expressed as a ratio of operating cash flow (as calculated below) to adjusted operating profit, is 64.6% (2009: 78.2%). The reduction is principally caused by IPEX, a quadrennial event, where the majority of this years revenue was received in 2009, and other timing issues. +--------------+--------+----------+----------+ | |Six months to 30 |Year to 31| | |June |December | +--------------+--------+----------+----------+ | |2010 |2009 |2009 | +--------------+--------+----------+----------+ |GBPm |GBPm |GBPm | | +--------------+--------+----------+----------+ |Adjusted |152.7 |146.6 |309.5 | |operating | | | | |profit | | | | +--------------+--------+----------+----------+ |Depreciation |3.8 |8.0 |9.2 | |of property | | | | |and equipment | | | | +--------------+--------+----------+----------+ |Software |7.3 |5.0 |13.5 | |amortisation | | | | +--------------+--------+----------+----------+ |Share-based |0.9 |0.1 |0.6 | |payments | | | | +--------------+--------+----------+----------+ |EBITDA |164.7 |159.7 |332.8 | +--------------+--------+----------+----------+ |Net capital |(11.9) |(11.1) |(22.0) | |expenditure | | | | +--------------+--------+----------+----------+ |Working |(54.1) |(34.0) |14.2 | |capital | | | | |movement (net | | | | |of | | | | |restructuring | | | | |and | | | | |reorganisation| | | | |accruals) | | | | +--------------+--------+----------+----------+ |Operating cash|98.7 |114.6 |325.0 | |flow | | | | +--------------+--------+----------+----------+ |Restructuring |(6.8) |(13.1) |(26.3) | |and | | | | |reorganisation| | | | |cash flow | | | | +--------------+--------+----------+----------+ |Net interest |(18.6) |(23.4) |(46.4) | +--------------+--------+----------+----------+ |Taxation |(25.9) |(9.1) |(27.3) | +--------------+--------+----------+----------+ |Free cash flow|47.4 |69.0 |225.0 | +--------------+--------+----------+----------+ |Acquisitions |(17.0) |(25.3) |(38.5) | |less disposals| | | | +--------------+--------+----------+----------+ |Dividends |(48.0) |(17.6) |(39.4) | +--------------+--------+----------+----------+ |Net issue of |4.1 |243.1 |252.3 | |shares | | | | +--------------+--------+----------+----------+ |Net funds flow|(13.5) |269.2 |399.4 | +--------------+--------+----------+----------+ |Opening net |(872.6) |(1,341.8) |(1,341.8) | |debt | | | | +--------------+--------+----------+----------+ |Non-cash items|(1.1) |(0.9) |(2.0) | +--------------+--------+----------+----------+ |Foreign |(18.5) |89.0 |71.8 | |exchange | | | | +--------------+--------+----------+----------+ |Closing net |(905.7) |(984.5) |(872.6) | |debt | | | | +--------------+--------+----------+----------+ | | | | | +--------------+--------+----------+----------+ In the six months ended 30 June 2010, before taking into account financing activities, spend on acquisitions or proceeds from the sale of assets, the Group generated free cash flow of GBP47.4m (2009: GBP69.0m). The change to net debt arising from acquisitions (net of disposals) was a GBP17.0m outflow (2009: GBP25.3m) which comprises current year acquisitions of GBP12.0m (2009: GBP0.3m) and consideration in respect of acquisitions completed in prior years of GBP5.0m (2009: GBP25.0m). There were no material disposals during the period. In the prior year the Group disposed of its interest in Mark Two Communications B.V. for nil consideration, generating a loss on disposal of GBP1.0m. We have robust criteria for assessing acquisitions and we target acquisitions that accelerate our strategic development and meet our financial criteria. Net debt increased by GBP33.1m from GBP872.6m to GBP905.7m reflecting funds outflow of GBP13.5m and adverse exchange movements of GBP18.5m. In May 2009, cash inflow included the rights issue net proceeds of GBP242m. During the period the Group paid GBP47.1m in relation to the 2009 second interim dividend. Financing and Bank Covenants The Group has in place a single credit agreement which comprises an amortising term loan facility, fully drawn in three currency tranches, and a non-amortising GBP500m multicurrency revolving credit facility. The term loan balances at 30 June 2010 were GBP845.7m, drawn in US dollar 630.0m, Euro 135.0m, and Sterling 316.2m. The term loan and revolving credit facilities mature in May 2012 and we expect there to be sufficient headroom on our facilities through to that date. The principal financial covenant ratios under these facilities are maximum net debt to EBITDA of 3.5 times and minimum EBITDA interest cover of 4.0 times, tested semi-annually. At 30 June 2010 both financial covenants were sufficiently achieved, with the ratio of net debt (using average exchange rates) to EBITDA staying constant at 2.7 times at 30 June 2010 and at 31 December 2009. Balance Sheet Deferred income, which represents income received in advance, was down 2.3% on an organic basis at 30 June 2010 compared to the same date in 2009. Deferred income arises primarily from advance subscriptions or forward bookings for trade shows, exhibitions or conferences. Subscriptions generated by our academic journal business renew annually a year in advance and many trade shows and exhibitions, because of their market leading status, receive commitments up to a year in advance. Pensions The Group's financial obligations to its pension schemes remain relatively small compared to the size of the Group, with net pension liabilities at 30 June 2010 of GBP11.4m. Related Party Transactions There are no related party transactions, other than those relating to Directors' remuneration in the six months ended 30 June 2010 and as referred in Note 17 to the condensed set of consolidated financial statements for the six months ended 30 June 2010. Also, there have been no changes in related party transactions described in the Annual Report and Financial Statements of the Group for the financial year ended 31 December 2009 that could have a material effect on the financial position or performance on the Group in the six months ended 30 June 2010. Risks and Uncertainties The principal risks and uncertainties affecting the business activities of the Group were identified on pages 31-36 of the 2009 Annual Report. This document is available on the Company's website at www.informa.com. Some of these risks and uncertainties are similar to those faced by many other businesses such as the effect of general economic conditions, operating in competitive markets, reliance on recruitment and retention of key employees, risks in doing business internationally, dependence on the strength of the Group's brands, dependence on the internet and electronic platforms, being affected by changes in legislation and litigious environments. The other risks and uncertainties more specifically relating to the Group are as follows: · The Group's intellectual property rights may not be adequately protected and may be challenged. · The revenues of the Group's academic division could be adversely affected by changes in the purchasing behaviour of academic institutions. · The revenues of the Group could be adversely affected by reductions in spending by governments around the world but particularly in relation to the US and UK governments and particularly in respect of the Group's academic and training businesses. · Currency fluctuations may have a significant impact on the reported revenue and profit of the Group. · The Group has exposure to various risks arising from its indebtedness including: (1) its debt service obligations; (2) ongoing compliance with the covenants in its credit facilities; and (3) its ability to refinance its debt on reasonable terms. · The Group has exposure to other financial risks including from its use of financial instruments. · Changes in tax laws or their application or interpretation may (MORE TO FOLLOW) Dow Jones Newswires July 27, 2010 02:01 ET (06:01 GMT)