Centaur Media PLC Interim Management Statement

 
TIDMCAU 
 
19 November 2009 
 
                          Centaur Media plc 
                     ('Centaur' or 'the Group') 
 
                    INTERIM MANAGEMENT STATEMENT 
 
Centaur Media plc, the specialist business publishing and information 
group, today issues  an interim management  statement for the  period 
from 30 June 2009 to the  date of this announcement, incorporating  a 
trading update for the four month period to 31 October 2009. 
 
Overall trading performance 
 
At the time of our  preliminary results announcement on 17  September 
2009 we reported some evidence of stabilisation in our markets and  a 
reduction in the rate of year-on-year revenue decline since the start 
of  the  new  financial  year.  Since  that  time  we  have  seen   a 
continuation  of   this  trend.   In  particular,   average   monthly 
advertising revenues  were approximately  10%  ahead of  the  average 
monthly level reported during January  to June 2009, with both  print 
and online products delivering similar levels of recovery. 
 
Nevertheless, due in part to the relative strength of revenues in the 
prior year, the Group has experienced  a 28% year-on year decline  in 
revenues during the four month period to 31 October 2009, this  being 
in line with the Board's expectations. This represents a slower  rate 
of decline than the 32% reduction experienced in the January to  June 
2009 period. This  four month period  includes the seasonally  weaker 
trading months  of July  and August.  The stabilisation  of  revenues 
referred to  above  has been  more  pronounced during  September  and 
October, as  reflected in  the  relative improvement  in  advertising 
revenues from levels achieved in the six months to June 2009. 
 
The Events portfolio, which is largely second half weighted, has also 
had an  encouraging  start  to  the  new  financial  year.  The  main 
established exhibition  staged during  the four  month period  to  31 
October 2009 was Employee Benefits Live, where revenues were strongly 
ahead year-on-year. In addition,  we had a  successful launch of  the 
National Home  Improvement Show  ("NHIS") which  replaced the  London 
Homebuilding Show. NHIS attracted 13,000  visitors to Earls Court  in 
early  October  2009  and  received  positive  exhibitor  endorsement 
through an  80%  onsite  re-book for  next  year's  show.  Meanwhile, 
forward sponsorship bookings within the Group's conference  portfolio 
also  showed  some  year-on-year  improvement  at  31  October  2009, 
although delegate sales remained patchy. 
 
The revenue reduction  in the four  month period to  31 October  2009 
continued to  be  partly mitigated  by  the effect  of  cost  savings 
arising from initiatives  completed in  the last  financial year.  In 
total Group costs in this period were 21% below the same period  last 
year with a further 3% reduction in Group headcount achieved since 30 
June 2009  over  the  headcount  reduction of  18%  achieved  in  the 
financial year to 30 June 2009. 
 
There have  been no  material changes  to trading  conditions in  the 
period from 31 October 2009 to the date of this announcement. 
 
Cash flow and balance sheet 
 
The Group continues to maintain  a strong balance sheet and  although 
working capital requirements are traditionally high at this stage  in 
our financial year,  the Group's banking  facilities, in place  until 
2012, adequately cover any short term borrowing requirements. 
 
 Fundamental strengths of Group unchanged 
 
The continued  investment  through the  downturn  has resulted  in  a 
strengthening of  many  fundamental aspects  of  the Group  and  this 
presents an exceptional opportunity for growth as markets continue to 
recover. 
 
The fundamental strengths of the Group include: 
 
  * Market leading brands - we have increased the market share of our 
    major brands across our communities over the past year. 
  * Improved fixed cost base - as a result of initiatives completed 
    in the last financial year annualised Group expenditure has 
    reduced by around GBP12 million, a large proportion of which 
    represents a reduction in the fixed cost base of the business 
    that will contribute strongly to margin improvement as revenues 
    return. 
  * Strong organic growth record - new product development was 
    maintained through the downturn with a continuing strong pipeline 
    of new product initiatives including the development of our 
    online sales lead generation model (Pro-talk), further roll out 
    of our B2B online platform, workflow products at Perfect 
    Information and further new event launches. 
  * Strong balance sheet - beyond short term working capital funding 
    we remain debt free and the Group is well positioned to take 
    advantage of future investment and acquisition opportunities. 
  * Cyclical recovery - as in previous cycles the recovery is 
    expected to drive strong revenue growth for the Group, which 
    should attract a high level of marginal profitability enhanced by 
    the investments we have made in our online businesses. 
  * Experienced management - the strength of our management team is a 
    key success criterion in driving organic growth and identifying 
    relevant acquisition opportunities. 
 
 Rejection of unsolicited approach 
 
On 20 October 2009, Centaur announced, in response to an announcement 
the same day from Critical Information Group plc ("CIG"), that it had 
received an unsolicited approach from CIG regarding a possible  offer 
for the Group which was conditional on, inter alia, financing and due 
diligence. 
 
The Board reviewed CIG's approach  with its advisers, and, given  the 
fundamental strengths of the Group outlined above, had no  hesitation 
in concluding that their  indicative proposal materially  undervalued 
Centaur and was not in the best interests of its shareholders. 
 
Subsequently, on 12 November 2009, CIG announced that it did not wish 
to proceed with an offer for the Group. 
 
Board changes 
 
On 22  October  2009,  the  Company  announced  that  Graham  Sherren 
intended to step  down as  Chairman at the  Company's Annual  General 
Meeting on 10 December 2009.  He intends to remain on the Board as  a 
non-executive director for a further  12 months and will put  himself 
forward for election in that capacity  at this year's AGM. The  Board 
has decided to appoint senior non-executive director, Patrick Taylor, 
as Chairman and his re-election as a director will be proposed at the 
AGM. 
 
Outlook 
 
In summary, while levels of forward visibility remain low, the  Board 
is confident that the Group is well positioned to take advantage of a 
continued recovery with  the prospect  of a return  to growth  during 
2010. 
 
Enquiries: 
 
 
Centaur Media plc                        Tel: 020 7970 4000 
Geoff Wilmot, CEO; Mike Lally, GFD 
 
Kreab Gavin Anderson                     Tel: 020 7554 1400 
Robert Speed, Anthony Hughes 
 
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This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement. 
 

(END) Dow Jones Newswires

November 19, 2009 02:03 ET (07:03 GMT)