Final Results
Press Release
23 February 2012
Informa plc
Full Year Results
For the Year Ended 31 December 2011
Strong operating and financial performance demonstrating resilience and
delivering growth
Key Highlights
Financial
· Revenue increased - GBP1.28bn (2010: GBP1.23bn); organic revenue growth
of 3.9% (excluding IPEX)
· Profit increased - adjusted operating profit up 7.3% to GBP336.2m
(2010: GBP313.2m); organic growth of 7.9% (excluding IPEX)
· Margin increased - adjusted operating margin of 26.4% (2010: 25.5%)
· Adjusted profit before tax of GBP295.9m up 7% (2010: GBP276.4m)
· Statutory profit before tax decreased to GBP88.6m (2010: GBP125.0m)
because of non-cash impairment
· Earnings increased - adjusted diluted earnings per share up 8.6% to
37.8p (2010: 34.8p)
· Strong cash generation - operating cash flow of GBP311.2m (2010:
GBP319.8m)
· Balance sheet strengthened - net debt/EBITDA ratio of 2.1 times
(2010: 2.3 times)
· Full year dividend increased by 20% reflecting strong performance
and confidence in the business - second interim dividend of 11.8p giving a
total 2011 dividend of 16.8p (2010:14.0p)
Operational
· 67% of publishing revenues from subscriptions (2010: 65%)
· 74% of publishing revenues fully digitised (2010: 74%)
· Recent acquisitions performing well
· Datamonitor integration into IBI delivering cost savings
· Successful launch of new digital platforms within AI and PCI
· Emerging market growth continues - now 14% of Group revenue (2010:
12%)
Peter Rigby, Chief Executive, said:
"Informa has delivered another set of strong results, in line with the
expectations we set at the beginning of 2011 despite the challenging macro
economic backdrop. These results further underline the Group's resilient and
high quality earnings streams.
This performance has been achieved through our clear strategy of focusing on
growth in the Group's subscription income, improving product reach and quality
through digital delivery, increasing the number of higher quality, resilient and
larger scale events and driving growth through geo-cloning and expanding in
emerging markets. We have continued to deliver on all of these objectives. We
are pleased with how they have driven the financial performance in each of our
three divisions.
Our academic division has again displayed resilience and growth, outperforming
expectations. It is encouraging to see both the books and the journals
continuing to make significant contributions with good organic growth and more
progress in emerging markets. The long standing nature and depth of our client
relationships, combined with the quality of our product portfolio are central to
the consistent performance of this business.
The professional and commercial division has performed well with good progress
made in content delivery and we look forward to reaping the rewards of the
integration of Datamonitor and IBI which is now largely complete.
Our efforts to grow our events business organically have paid off with a number
of exhibition launches which along with the acquisitions in 2011 have further
strengthened our events platform. In particular, the acquisitions we completed
in Brazil last year are already benefitting from being part of a broader group.
This progress made across the Group, combined with strong underlying cash flows,
visibility of earnings and a robust financial position has allowed us to
increase our 2011 dividend by 20%, while also providing sufficient flexibility
for us to continue investing for future growth.
2012 has started in line with our expectations, with a number of our large
events showing strong forward bookings and the journal renewal in the Academic
business largely complete. Given the continued uncertainty in the macro
environment we will continue to manage the business carefully. However we
believe that the strong foundations we have already built, supplemented by a
combination of targeted investment and selective acquisitions, will support yet
another year of growth."
Financial Highlights
+-----+-----+--------+--------+---+-------+--------+-------+
| | |2011 |2010 |Actual |Organic |Organic|
| | | | | | | |
| | | | | | |(ex |
| | | | | | |IPEX)4 |
+-----+-----+--------+--------+---+-------+--------+-------+
| | |GBPm |GBPm |% |% |% |
+-----+-----+--------+--------+---+-------+--------+-------+
|Revenue |1,275.3 |1,226.5 |4.0 |2.5 |3.9 |
+-----+-----+--------+--------+---+-------+--------+-------+
|Operating |130.3 |164.0 | | | |
|profit | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Adjusted |336.2 |313.2 |7.3 |5.7 |7.9 |
|operating | | | | | |
|profit 1 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Operating |311.2 |319.8 | | | |
|cash flow | | | | | |
|2 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Profit |88.6 |125.0 | | | |
|before tax | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Adjusted |295.9 |276.4 | | | |
|profit | | | | | |
|before tax | | | | | |
|1 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Profit for |74.3 |98.9 | | | |
|year | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Adjusted |226.7 |209.0 | | | |
|profit for | | | | | |
|year 1 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Basic |12.5 |16.5 | | | |
|earnings | | | | | |
|per share | | | | | |
|(p) | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Diluted |12.5 |16.5 | | | |
|earnings | | | | | |
|per share | | | | | |
|(p) | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Adjusted |37.8 |34.8 | | | |
|diluted | | | | | |
|earnings | | | | | |
|per share | | | | | |
|(p) 1 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Dividend |16.8 |14.0 | | | |
|per share | | | | | |
|(p) | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Free cash |203.4 |231.4 | | | |
|flow 2 | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
|Net debt 3 |784.0 |779.1 | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
| | | | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
| | | | | | | | |
+-----+-----+--------+--------+---+-------+--------+-------+
Notes:
In this document 'organic' refers to numbers adjusted for material acquisitions
and disposals and the effects of changes in foreign currency exchange rates.
1 Adjusted results exclude adjusting items as set out in the Consolidated Income
Statement and detailed in Note 2.
2 Operating cash flow and free cash flow are as calculated in the Financial
Review.
3 Net debt as calculated in Note 12.
4 IPEX is a quadrennial printing show that occurred in 2010
Enquiries
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Note to Editors
Bringing Knowledge to Life - Businesses, professionals and academics worldwide
turn to Informa for unparalleled knowledge, up-to-the minute information and
highly specialist skills and services. Our ability to deliver high quality
knowledge and services through multiple media channels, in dynamic and rapidly
changing environments, makes our offer unique and extremely valuable to
individuals and organisations.
Analyst Presentation
There will be a presentation to analysts at 9.30am on 23 February 2012 at The
King Edward Hall, Bank of America Merrill Lynch Financial Centre, 2 King Edward
Street, London, EC1A 1HQ. A simultaneous webcast of the analysts' presentation will be available via the Company's website at www.informa.com. Business Review Informa's portfolio of market leading niche products, have grown both organically and through acquisition over the past 12 years. During that time we have invested in the business to capitalise on digital opportunities and this has resulted in Informa today being a high value-add, resilient information provider with good exposure to growth markets - both geographically and by sector vertical. The positioning of Informa's quality assets within their numerous niches has enabled the Group's profits to remain highly resilient through times of austerity yet nimble enough to grow quickly as times improve. In 2011, we saw the robust academic division grow ahead of our initial expectations following a strong end to the year, including a large content deal in Russia. The PCI division has also grown as the benefits of earlier investment come through. Our publishing businesses now represent 54% of Group revenues and 69% of adjusted operating profits. Events and Training, which encompasses a wide range of products from large exhibitions to small training courses is growing organically and has benefited from some successful acquisitions in 2011. The strategic drivers underpinning Informa have improved the overall quality of earnings in these challenging times and have positioned us well for future growth. High Quality Subscription Income The predominant revenue stream across our publishing divisions is subscription income which provides resilience and visibility to this part of our business. We have grown the proportion of subscription revenues to 36% of Group revenues and 67% of publishing revenues. Contribution to this subscription revenue stream comes from the AI journals business and the numerous proprietary data, opinion and news services within the PCI division. The strength of the academic journals is supported by very high renewal rates and increased usage statistics. The continued introduction of society journals (60 for 2011) stimulates awareness for our portfolio of products within the specific academic niche. Proprietary, high value, niche information remains core to the PCI strategy as, increasingly, the sale of single subscriptions has been replaced by enterprise wide site licences embedding our content into the heart of our customers' business. Subscriptions now account for 78% of this divisions revenues (2010: 74%) which along with consistently high renewal rates and improved operating margins demonstrate the high quality of earnings in this division. Digital Excellence We have embraced digital developments across all of our product areas, most notably within the publishing divisions, where the advent of digital delivery and online marketing has been transformational over recent years. In 2011, 74% of all publishing revenues were derived from digital activities. 2011 saw the launch of Taylor & Francis Online, the new delivery platform for the digital content of over 1,600 academic journals. This platform provides faster access, better search capability, greater reliability and intuitive use for the librarian, academic, researcher or student. In 2012 this platform will be utilised for our book catalogue. E-book sales have grown by 11%, now representing 12% of academic book sales. E-book delivery, as well as the increasing use of print on demand services and online marketing of back catalogues, has been a significant driver in improving the quality of the books business. The transition of PCI from the traditional B2B publishing model into a high quality subscription business has been greatly facilitated by the various enabling digital technologies. A notable early benefit of the Datamonitor integration into IBI is the utilisation of existing technologies to accelerate electronic product development. IBI's new content delivery platform has been used for the next generation of the Datamonitor Knowledge Centres. Utilising this leading technology enables the business to respond rapidly to changing customer needs without the need for expensive development for each new product offering. Resilient Events Smaller conferences and training courses are the most cyclical area of our business and, as such, most affected by volatile economic conditions. Consequently, we have focused on increasing the proportion of larger events within our portfolio which are more resilient and command higher margins. We now have over 250 large events which represent 38% of Event and Training revenues (2010: 34%). We have been able to enhance further the quality of the portfolio though successful launches and selective acquisitions. The acquisitions of BTS and Ibratexpo in Brazil exemplify our commitment to growing the strength of our events portfolio. Our efforts to achieve longer term organic growth through exhibition and confex launches as well as geo-cloning are apparent throughout the group as we develop a robust platform for sustained, profitable revenue growth. New launches in 2011 included Vitafoods Asia and Africa Health. Geographic Expansion We have been increasingly focused on geographic expansion in emerging markets across all divisions and have seen organic growth throughout the business as the investment in local sales forces has generated new customers. Emerging Markets now represent 14% of overall Group revenues (2010: 12%). In particular we have seen specific success in Russia for our academic products as well as growth in our Com series in Africa. Aggressive geo-cloning of our events continues with 20% of the larger events delivered by this expansion model. In addition to this organic growth, the acquisitions in Brazil have enabled us to achieve critical mass in this region and provide a good platform for organic growth into the future. This has also strengthened our sector presence in the important food and printing sectors. Financial Excellence We remain vigilant on costs and have not reintroduced marginal product simply to increase our top line. We are delighted that we have managed to achieve a further increase in the adjusted operating margin to 26.4%. The Group remains highly cash generative and continues to convert close to 100% of profits into cash on an underlying basis. Cash conversion during 2011 was 93% after the impact of certain non-recurring payments, as highlighted at the half year. We have strict financial criteria against which all acquisitions are measured. We will continue to look for bolt-on assets within the publishing divisions with digital potential, quality proprietary content and high levels of repeat business or small portfolios of exhibitions within Events and Training. The bolt-on acquisitions completed in 2010 have performed well with a return on invested capital of 12.5%. Whilst 2011 has been a challenging year from a global economic perspective, we have grown all three of our divisions. The quality of our assets has improved, supported by the acquisitions and we expect further improvements in 2012 following the integration of Datamonitor into the IBI group. With a significant proportion of the events contribution generated by the larger events, we have started 2012 with a good degree of visibility which gives comfort in what remains an uncertain economic environment. Financial Results Revenue for the year ended 31 December 2011 grew by 4.0% to GBP1,275.3m. Adjusted operating profits were GBP336.2m up 7.3% on 2010. The adjusted operating margin improved accordingly from 25.5% to 26.4%. These results are particularly pleasing given the negative year on year impact of a weakening US dollar. On an organic basis, revenue increased by 2.5% with Publishing up 4.2% and Events and Training up 0.4%. Excluding the impact of IPEX in 2010, Events and Training grew by 3.6%. Organic adjusted operating profits increased by 5.7% with Publishing growing by 6.4% and Events and Training up 4.2% (11.7% excluding IPEX). Statutory operating profit decreased to GBP130.3m (2010: GBP164.0m), resulting principally from the impairment recognised in the year for Robbins-Gioia (RG) of GBP50.7m. RG is a consulting company principally to the US Government. Adjusted diluted earnings per share increased by 8.6% to 37.8p (2010: 34.8p). Operating cash flow reduced to GBP311.2m (2010: GBP319.8m) reflecting an outflow of working capital as a result of non-recurring payments as highlighted at the half year. This progress made across the Group, combined with strong underlying cash flows, visibility of earnings and a robust financial position has allowed us to grow our 2011 dividend by 20%, while at the same time leaving sufficient flexibility for us to continue investing for future growth. We ended the year with net debt of GBP784.0m and a net debt to EBITDA multiple of 2.1 times, well within our stated target range of between 2 and 2.5 times. Academic Information (AI) +---------+------+------+-------+--------+ | |2011 |2010 |Actual |Organic | +---------+------+------+-------+--------+ | |GBPm |GBPm |% |% | +---------+------+------+-------+--------+ |Revenue |323.6 |310.2 |4.3 |6.1 | +---------+------+------+-------+--------+ |Adjusted |116.2 |109.3 |6.3 |8.3 | |Operating| | | | | |Profit | | | | | +---------+------+------+-------+--------+ |Adjusted |35.9 |35.2 | | | |Operating| | | | | |Margin | | | | | |(%) | | | | | +---------+------+------+-------+--------+ | | | | | | +---------+------+------+-------+--------+ Our academic division, providing books and journals to university libraries and the wider academic market, has performed extremely well once again delivering organic revenue and adjusted operating profit growth. This highly resilient division, which represents 25% of the Group's revenue and
35% of the adjusted operating profit, has benefited from the strength and quality of the journal and book portfolio which underpins growth in existing markets as well as the increased penetration into emerging markets where demand is growing. AI continues to grow organically. In addition to the 13 new titles and 60 society journals added in 2011, the division was successful in signing a further 46 society journals for publication in 2012 and beyond. In addition, over 3,500 new books were published in the year. In 2012, T&F Online will facilitate the sale of the ever increasing number of e-books available, now in excess of 38,000. Print on Demand plays an important role in the efficiency of the books operation and the business has engaged in many facets of digital evolution. Good progress was made in developing regions including some larger content deals into Russia, Asia and the Middle East, which supported the growth in the second half. Journal usage was up 18% in 2011 demonstrating the quality of the content and its importance to users. Journal renewal for 2012 continues to build on this theme and is well progressed with all indicators pointing to 2012 revenues in line with expectations. Professional and Commercial Information (PCI) +---------+------+------+-------+--------+ | |2011 |2010 |Actual |Organic | +---------+------+------+-------+--------+ | |GBPm |GBPm |% |% | +---------+------+------+-------+--------+ |Revenue |370.5 |364.9 |1.5 |2.6 | +---------+------+------+-------+--------+ |Adjusted |114.0 |110.4 |3.3 |4.5 | |Operating| | | | | |Profit | | | | | +---------+------+------+-------+--------+ |Adjusted |30.8 |30.3 | | | |Operating| | | | | |Margin | | | | | |(%) | | | | | +---------+------+------+-------+--------+ | | | | | | +---------+------+------+-------+--------+ The PCI division, encompassing Informa Business Information (IBI) and Informa Financial Information (IFI) delivers high value proprietary content to a number of industry verticals including the healthcare, pharmaceutical, financial services, maritime, commodities, telecoms, insurance and legal sectors. The division now accounts for 29% of Group revenues and 34% of adjusted operating profit. The majority of the PCI division's income is derived from high value subscription based income. The less resilient advertising revenues account for only 5% of the PCI division (2010: 6%). 89% of its revenue is delivered digitally (2010: 88%). 38% of PCI revenue is now derived from the healthcare and pharmaceutical sectors. Revenue from these markets has continued to increase from the niche specialised products we offer. The nature of the deep, highly targeted knowledge supports workflow integration and high customer retention whilst the continual feedback as to customers' needs supports our product development strategy. The objective for the integration of Datamonitor with IBI was to produce a unified, scalable, resilient publishing business across our core sectors and to build value for our customer base. The operational efficiencies resulted in annualised cost savings across the two businesses of GBP12m. Efficiencies included rationalisation of the combined property portfolio, savings from transfer of Finance and IT infrastructure operations into the Group's shared service centres together with migration of editorial support operations. The combined business is poised to deliver growth from a number of significant product synergies, including the use of Scrip news content to enhance the Healthcare Knowledge Centre proposition scheduled for launch in 2012. The financial publishing portfolio (IFI) representing 22% of the PCI divisional revenues performed well in a challenging environment with a small adjusted organic operating profit decline of 3%. This stability was achieved through product development across the portfolio as well as vigorously chasing sales in established and new markets. Following the restructuring carried out in PCI during 2011, we believe the division is well placed for growth in 2012 and beyond. Events and Training +---------+------+------+-------+--------+-------+ | |2011 |2010 |Actual |Organic |Organic| | | | | | |(ex | | | | | | |IPEX) | +---------+------+------+-------+--------+-------+ | |GBPm |GBPm |% |% |% | +---------+------+------+-------+--------+-------+ |Revenue |581.2 |551.4 |5.4 |0.4 |3.6 | +---------+------+------+-------+--------+-------+ |Adjusted |106.0 |93.5 |13.4 |4.2 |11.7 | |Operating| | | | | | |Profit | | | | | | +---------+------+------+-------+--------+-------+ |Adjusted |18.2 |17.0 | | | | |Operating| | | | | | |Margin | | | | | | |(%) | | | | | | +---------+------+------+-------+--------+-------+ | | | | | | | +---------+------+------+-------+--------+-------+ The quality of the Events and Training business, accounting for 46% of Group revenues and 31% of adjusted operating profit, continues to improve. Organically and adjusting for IPEX, our quadrennial printing show which we ran in May 2010, revenues have grown by 3.6% and adjusted operating profits by 11.7%. Although economic conditions have not assisted us, our strategy of focusing on large scale market leading events has resulted in our increasingly resilient portfolio performing well. As expected our larger events portfolio, now representing 38% of the overall Events and Training revenues, has grown. In 2011, we added 47 large events, reflecting an aggressive geo-cloning launch programme and new acquisitions, notably in Brazil. Notable successes within the larger events portfolio include Arab Health, Africa.com, the Broadband World Forum and AusRail. The Australian portfolio of events acquired in December 2010 has performed well as have the Brazilian and the Anti-ageing exhibitions. These new events have given us both the regional expertise to support structural growth as well as the product platforms for further geographic growth. Higher growth countries remain a key target for the Events business and 20% of the Events and Training revenue is now drawn from Emerging Markets (2010: 16%) where such events are the primary route to market for many sectors. We will continue to focus our acquisition and geo-cloning efforts to build the portfolio of larger events into these attractive markets. The volume of the more cyclical smaller, local conference businesses has been reduced further. These smaller conferences, as expected, have closely followed GDP and business confidence parameters within their specific regions. Informa has considerable experience of running this business profitably through the economic cycle and management monitors these events carefully. The revenue generated across Portugal, Italy, Greece and Spain is only 3% of the Events and Training division. Geographic expansion has been the primary growth driver for our corporate training businesses which have remained stable within the US and grown well outside of this market, delivering revenue growth of 6% in 2011 excluding Robbins-Gioia (RG), a consulting company principally to the US Government. RG, which was part of the IIR acquisition in 2005, had a difficult year with revenue falling by 15% resulting from a sustained policy by the US administration to bring more work in-house. The carrying value of the net assets of RG have been adjusted resulting in an impairment charge of GBP50.7m. The Events and Training division has made a good start to the year benefiting from the fact that we run some of our larger exhibitions in the first quarter. Arab Health, our largest show, took place in January and grew by 6% over 2011 as well as rebooking strongly for 2013. We expect the conference market in Europe to remain tough but hope that the improving US economic position will lead to a better environment for corporate training. Current Trading Although still early in the year, the amount of resilient subscription products within our publishing divisions and the increasing proportion of larger events within our events division, underpins our confidence in the Group's prospects. 2012 has started in line with our expectations, with a number of our large shows showing strong forward bookings and the journal renewal in the academic business in line with expectations. Given the continued uncertainty in the macro environment we will continue to manage the business carefully. However we believe that the strong foundations we have already built, supplemented by a combination of targeted investment and selective acquisitions, will support yet another year of growth. Financial Review Global economic conditions remained challenging in 2011 especially following the Eurozone crisis in the second half of the year. Nevertheless, we think these are an excellent set of financial results, especially given the weakening US dollar, with top line growth, improved adjusted operating margin, strong cash flow and an improved balance sheet. Group +---------+--------+--------+-------+--------+-------+ | |2011 |2010 |Actual |Organic |Organic| | | | | | |(ex | | | | | | |IPEX) | +---------+--------+--------+-------+--------+-------+ | |GBPm |GBPm |% |% |% | +---------+--------+--------+-------+--------+-------+ |Revenue |1,275.3 |1,226.5 |4.0 |2.5 |3.9 | +---------+--------+--------+-------+--------+-------+
|Adjusted |336.2 |313.2 |7.3 |5.7 |7.9 | |Operating| | | | | | |Profit | | | | | | +---------+--------+--------+-------+--------+-------+ |Adjusted |26.4 |25.5 | | | | |Operating| | | | | | |Margin | | | | | | |(%) | | | | | | +---------+--------+--------+-------+--------+-------+ | | | | | | | +---------+--------+--------+-------+--------+-------+ Adjusted and Statutory Results In this Financial Review we refer to adjusted and statutory results. Our statutory operating profit and profit before tax has reduced this year primarily because of the non-cash impairment for Robbins-Gioia. Adjusted results are prepared to provide a more comparable indication of the Group's underlying business performance. Translation Impact The Group receives approximately 47% of its revenues and incurs approximately 39% of its costs in USD or currencies pegged to USD. The Group is therefore sensitive to movements in the USD against the GBP. Each 1 cent movement in the USD to GBP exchange rate has a circa GBP3.6m impact on revenue and a circa GBP1.4m impact on operating profits. Offsetting this will be movements to USD interest and USD tax liabilities. This analysis assumes all other variables, including interest rates, remain constant. The Group receives approximately 12% of its revenues and incurs approximately 10% of its costs in Euros. The Group is therefore sensitive to movements in the Euro against the GBP. Each 1 cent movement in the Euro to GBP exchange rate has a circa GBP1.3m impact on revenue and a circa GBP0.5m impact on operating profits. Offsetting this will be movements to Euro interest and Euro tax liabilities. This analysis assumes all other variables, including interest rates, remain constant. For debt covenant testing purposes, profit and debt translation is calculated at the average rate of exchange throughout the relevant period. Revenue Organic revenue across the Group increased by 4% reflecting a strong performance in our Academic businesses, up 6%. Events and Training revenues also increased by 4% but excluding the impact of Robbins-Gioia, the US Government contractor, grew by 5%. This growth comes from increased delegate and exhibitor numbers in our Events and Training businesses and launching of new journals and titles in our Publishing businesses. Operating Profit Adjusted operating profit increased to GBP336.2m (2010: GBP313.2m). Organic adjusted operating profit increased by 8%, with an increase of 12% by the Events businesses and an increase of 6% at the Publishing businesses. Statutory operating profit decreased by 21% to GBP130.3m (2010: GBP164.0m), resulting principally from the impairment recognised in the year for Robbins-Gioia of GBP50.7m, which is partly offset by the increase in adjusted operating profit. Restructuring and Reorganisation Costs Restructuring and reorganisation costs for the year of GBP15.2m (2010: GBP8.3m) principally relate to the integration of IBI and Datamonitor. These include redundancy costs of GBP11.9m (2010: GBP4.6m), reorganisation costs of GBP2.8m (2010: GBP2.8m) and vacant property provisions of GBP0.5m (2010: GBP0.9m). Other Adjusting Items An impairment charge of GBP50.7m has been recognised in the year relating to impairing the net assets of Robbins-Gioia. With the number of acquisitions made during the year, acquisition related costs of GBP1.4m have been recognised in the income statement. The remaining charge of net GBP0.7m relates to the re-measurement in contingent consideration of GBP2.9m being offset by impairments to other intangible assets of GBP3.6m. Adjusted Net Finance Costs Adjusted net finance costs, which consist principally of interest costs net of interest receivable, increased by GBP3.5m from GBP36.8m to GBP40.3m, mainly as a result of higher average interest rates on borrowings, arising from the long term US private placement notes issued at the end of 2010. We maintain a balance of fixed and floating rate debt partly through utilising derivative financial instruments. The majority of the fixed interest swaps that were entered into at the time of the Datamonitor acquisition in 2007 expired during the year, with the remaining swaps expiring at the end of September 2012. This will result in a lower average fixed interest rate on borrowings in 2012. Profit Before Tax Adjusted profit before tax increased by 7% to GBP295.9m (2010: GBP276.4m) and adjusted profit for the year also increased by 8% to GBP226.7m (2010: GBP209.0m). Taxation Across the Group, tax has been provided on adjusted profits at an adjusted tax rate of 23.4% (2010: 24.4%). This adjusted tax rate benefits from profits generated in low tax jurisdictions, including Switzerland and is lower than for the previous year due to movements in the mix of profits between jurisdictions and lower tax rates in certain countries including the UK. The Group tax charge on statutory profit before tax was 16.1% (2010: 20.9%). Earnings and Dividend Adjusted diluted EPS of 37.8p (2010: 34.8p) is 9% ahead of 2010, but statutory diluted EPS of 12.5p (2010: 16.5p) is 24% below 2010 following the impairment. The Board has proposed a second interim dividend of 11.8p per share (2010: 9.5p per share). This dividend will be paid on 21 May 2012 to ordinary shareholders registered as of the close of business on 27 April 2012. This will result in a total dividend for the year of 16.8p per share (2010: 14.0p per share). Dividend cover has been reduced from 2.5 times to 2.25 times on an adjusted earnings basis. Cash Flow The Group continues to generate strong cash flows and this is reflected in a cash conversion rate, expressed as a ratio of operating cash flow (as calculated below) to adjusted operating profit, of 93% (2010: 102%). The reduction is principally due to certain non-recurring items such as long term incentive payments to vendors of acquired businesses and working capital movements on acquisitions. +--------------+--------+--------+ | |2011 |2010 | | | | | | |GBPm |GBPm | +--------------+--------+--------+ |Adjusted |336.2 |313.2 | |operating | | | |profit | | | +--------------+--------+--------+ |Depreciation |6.7 |7.7 | |of PP&E | | | +--------------+--------+--------+ |Software |13.1 |16.3 | |amortisation | | | +--------------+--------+--------+ |Share-based |3.0 |2.1 | |payments | | | +--------------+--------+--------+ |EBITDA |359.0 |339.3 | +--------------+--------+--------+ |Net capital |(23.9) |(27.2) | |expenditure | | | +--------------+--------+--------+ |Working |(23.9) |7.7 | |capital | | | |movement (net | | | |of | | | |restructuring | | | |and | | | |reorganisation| | | |accruals) | | | +--------------+--------+--------+ |Operating cash|311.2 |319.8 | |flow | | | +--------------+--------+--------+ |Restructuring |(19.3) |(14.1) | |and | | | |reorganisation| | | |cash flow | | | +--------------+--------+--------+ |Net interest |(44.5) |(36.8) | +--------------+--------+--------+ |Taxation |(44.0) |(37.5) | +--------------+--------+--------+ |Free cash flow|203.4 |231.4 | +--------------+--------+--------+ |Acquisitions |(112.9) |(53.3) | |less disposals| | | +--------------+--------+--------+ |Dividends |(87.3) |(75.0) | +--------------+--------+--------+ |Net issue of |0.3 |4.6 | |shares | | | +--------------+--------+--------+ |Net funds flow|3.5 |107.7 | +--------------+--------+--------+ |Opening net |(779.1) |(872.6) | |debt | | | +--------------+--------+--------+ |Non-cash items|(2.7) |(3.1) | +--------------+--------+--------+ |Foreign |(5.7) |(11.1) | |exchange | | | +--------------+--------+--------+ |Closing net |(784.0) |(779.1) | |debt | | | +--------------+--------+--------+ | | | | +--------------+--------+--------+ In the year ended 31 December 2011, before taking into account dividends, spend on acquisitions or proceeds from the sale of assets, the Group generated free cash flow of GBP203.4m (2010: GBP231.4m). The change to net debt arising from acquisitions (net of disposals) was a GBP112.9m outflow (2010: GBP53.3m outflow) which comprises current year acquisitions of GBP109.1m (2010: GBP48.0m) and consideration in respect of acquisitions completed in prior years of GBP3.8m (2010: GBP5.3m). The Group disposed of its interest in Nicholas Publishing International for total consideration of GBP0.6m, generating a profit on disposal of GBP0.1m. We have robust criteria for assessing acquisitions and we target acquisitions and alliances that accelerate our strategic development and meet our financial criteria. Net debt increased by GBP4.9m from GBP779.1m to GBP784.0m reflecting cash flow of GBP3.5m, offset by adverse exchange rate movements of GBP5.7m. During the year the Group paid dividends of GBP87.3m, of which GBP87.0m related to the 2010 second interim and the 2011 first interim dividends, and GBP0.3m to non-controlling interest. Financing and Bank Covenants During April 2011 the Group refinanced its existing term loan and revolving credit bank facilities with a new GBP625.0m five year revolving credit facility
provided by a group of core banks, supplementing the private placement loan
notes which were issued in December 2010 and in January 2011. As part of the
refinancing of the bank facilities, an amortising term loan was fully repaid in
April 2011. The Group maintains the following significant facilities:
· Private placement loan notes drawn in three currency tranches of USD
597.5m, GBP 40.0m and EUR 50.0m. The note maturities range between five and
ten years, with an average duration of 7.3 years, at a weighted average
interest rate of 4.3%.
· GBP625.0m (2010: GBP500.0m) revolving credit facility, of which GBP343.5m
has been drawn down at 31 December 2011. Interest is payable at the rate of
LIBOR plus a margin based on the ratio of net debt to EBITDA.
· GBP44.6m (2010: GBP43.9m) comprising a number of bilateral bank
facilities that can be drawn down to meet short-term financing needs. These
facilities consist of GBP 16.0m (2010: GBP 16.0m), USD 15.0m (2010: USD
15.0m), EUR 18.0m (2010: EUR 18.0m), AUD 2.3m (2010: AUD 3.0m), CAD 1.0m
(2010: CAD 1.0m) and BRL 4.9m (2010: BRL nil). Interest is payable at the
local base rate plus margins that vary between 1% and 6%.
The principal financial covenant ratios under the private placement and
revolving credit facilities are maximum net debt to EBITDA of 3.5 times and
minimum EBITDA interest cover of 4.0 times, tested semi-annually. At 31 December
2011 both financial covenants were comfortably achieved, with the ratio of net
debt (using average exchange rates) to EBITDA reduced from 2.3 times at 31
December 2010 to 2.1 times at 31 December 2011. The ratio of EBITDA to net
interest payable in the year ended 31 December 2011 was 8.9 times (2010: 9.3
times).
Return on Capital Employed
During 2011 we have completed a number of bolt-on acquisitions and we
strengthened our events platform with the acquisitions of Brazil Trade Shows
Partners Participacoes S.A. and Ibratexpo Feiras E Eventos LTDA. in Brazil.
Acquisitions have to meet our acquisition criteria which include delivering
returns in excess of the Group's WACC in the first full year, being earnings
enhancing in the first full year and achieving a cash payback within seven
years.
The return on investment from acquisitions completed in 2010 was 12.5%.
Balance Sheet
Deferred income, which represents income received in advance, was up 6% on a
constant currency basis at 31 December 2011 compared to the same date in 2010.
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 31 December
2011 of GBP12.1m (2010: GBP10.5m).
Following the completion of the triennial valuations of the main defined benefit
schemes, a revised deficit funding plan has been agreed with the trustees to
eliminate the deficits in the three schemes. The contributions for the ongoing
service will be GBPnil in 2012 as all three schemes are closed to future accrual
of benefits. In addition, the contributions paid towards reducing the scheme
deficits will increase from GBP3.4m in 2011 to GBP3.8m in 2012 and GBP4.5m in 2013.
Related Party Transactions
Related party transactions, other than those relating to Directors'
remuneration, are disclosed in the Annual Report and Consolidated Financial
Statements for the financial year ended 31 December 2011. Also, there have been
no changes in related party transactions from those described in the Group's
Annual Report and Financial Statements for the financial year ended 31 December
2010 that could have a material effect on the financial position or performance
of the Group in the financial year ended 31 December 2011.
Post balance sheet events
On 1 February 2012, the Group completed the acquisition of 100% of the shares of
Fertecon Limited ("Fertecon"), a leading provider of Fertiliser Commodities
pricing data and market intelligence, for initial consideration of GBP17.3m and
further performance-related consideration estimated at GBP2.1m payable in two
years. The acquisition of Fertecon is an excellent fit with our existing Agra
group. The combination of Fertecon's fertiliser industry knowledge with Agra's
insight into the agrifoodsector will create a unique resource of information and
analysis.
Eurozone risk
Recent guidance released by the FRC requires the Group to comment on its
exposure to risks from the Eurozone crisis.
The Group's liquidity risk (its ability to service short term liabilities) is
considered low in all scenarios bar a fundamental collapse of the financial
markets. Whilst the Group's revolving credit facility is normally at least
partially drawn in Euros (EUR 25m at 31 December 2011) this could alternatively
be drawn in other currencies, and there is headroom of GBP281.5m on the Group's
borrowing facilities at 31 December 2011. At 31 December 2011, EUR 50m of the
Group's GBP467m private placement financing and EUR 16m of the Group's GBP24.8m of
cash and cash equivalents are denominated in Euros. The Group's treasury policy
imposes ratings based limits on the quantum of deposits that may be held with
any financial institution at any time.
Just under 3.5% of Group revenues are generated from customers located in
Portugal, Italy, Greece and Spain. There is a close correlation between the
Group revenues denominated in Euros (12% of the Group total in 2011) and costs
denominated in Euros (10%).
Conclusion
It is frustrating that yet again we need to assess these results against the
backdrop of uncertain economic market conditions. Perhaps instead of thinking
about a cycle, low growth or no growth will be the medium term norm. Over the
past four years, we have changed the structure of the Group to enable it to
perform better in these tougher economic times. Marginal revenue streams across
our publishing divisions have been eliminated and a few thousand smaller
conferences and training courses have been removed from the Events portfolio.
Whilst this may limit some growth in any up cycle it produces a more resilient,
high quality set of earnings. Our Group revenue is back to the heights it
reached in 2008 but at a significantly higher margin of 26.4% (2008: 23.9%).
During 2011, we spent over GBP110m on acquisitions - more than the last three
years combined. This reflects the efforts we have made to reduce our net debt
ratios as well as a slightly better M&A environment. We have maintained our
rigour when assessing acquisitions, applying strict financial criteria and I am
pleased with the returns we have seen on the acquisitions completed in 2009 and
2010 as well as the first results from our acquisitions this year, particularly
those in Brazil.
We refinanced the Group in April, putting in place a new five year facility
until 2016. I am pleased with the support we received from our core group of
banks which supplemented the funds raised in the US private placement market in
2010. The discipline we have shown around our balance sheet has contributed to
the relatively low cost of funding.
There was a significant amount of work undertaken integrating the back office of
Datamonitor into our shared service centre structure. I am pleased that this
structure was able to absorb over GBP120m of annual revenues and that the cost
savings originally identified were delivered. We created more scale in Singapore
by relocating and merging three smaller shared service centres to support our
Middle East and Far East businesses. We are on a path of continuous improvement
across the shared service centre structure and although we have more to do I am
pleased with the progress to date. I would like to thank all the finance teams
around the world for all their hard work in 2011.
We enter 2012 in a stronger financial position than we were a year ago -
refinanced, a more integrated structure, a lower net debt to EBITDA ratio and an
overall improvement in our return on capital employed.
Annual Report and Financial Statements 2011
The Annual Report and Financial Statements for the financial year ended 31
December 2011 will be sent to shareholders and published on www.informa.com at
the end of March 2012.
Copies of this announcement may be obtained during normal business hours from
the Company Secretary at the Company's office at Gubelstrasse, 11, CH-6300, Zug,
Switzerland.
Cautionary Statements
This preliminary announcement contains forward looking statements. These
statements are subject to a number of risk and uncertainties and actual results
and events could differ materially from those currently being anticipated as
reflected in such forward looking statements. The terms 'expect', 'should be',
'will be' and similar expressions identify forward looking statements. Factors
which may cause future outcomes to differ from those foreseen in forward looking
statements include, but are not limited to: general economic conditions and
business conditions in Informa's markets; exchange rate fluctuations, customers'
acceptance of its products and services; the actions of competitors;
legislative, fiscal and regulatory developments; changes in law and legal
interpretation affecting Informa's intellectual property rights and internet
communications; and the impact of technological change. These forward looking
statements speak only as of the date of this announcement. Except as required by
any applicable law or regulation, the Group expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any forward
looking statements contained in this document to reflect any change in the Group's expectations or any change in events, conditions or circumstances on which any such statement is based. Consolidated Income Statement For the year ended 31 December 2011 +----------------+------+--------+---------+----------+--------+---------+----------+ | |Notes |Adjusted|Adjusting|Statutory |Adjusted|Adjusting|Statutory | | | | | | | | | | | | |results |items |results |results |items |results | | | | | | | | | | | | |2011 |2011 |2011 |2010 |2010 |2010 | | | | | | | | | | | | |GBPm |GBPm |GBPm |GBPm |GBPm |GBPm | +----------------+------+--------+---------+----------+--------+---------+----------+ |Revenue from | |1,275.3 |- |1,275.3 |1,226.5 |- |1,226.5 | |continuing | | | | | | | | |operations | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Net operating | |(939.1) |(205.9) |(1,145.0) |(913.3) |(149.2) |(1,062.5) | |expenses | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Operating profit| |336.2 |(205.9) |130.3 |313.2 |(149.2) |164.0 | +----------------+------+--------+---------+----------+--------+---------+----------+ |Profit on | |- |0.1 |0.1 |- |- |- | |disposal of | | | | | | | | |business | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Finance costs |5 |(46.1) |(1.5) |(47.6) |(41.8) |(2.2) |(44.0) | +----------------+------+--------+---------+----------+--------+---------+----------+ |Investment |6 |5.8 |- |5.8 |5.0 |- |5.0 | |income | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Profit before | |295.9 |(207.3) |88.6 |276.4 |(151.4) |125.0 | |tax | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Tax |7 |(69.2) |54.9 |(14.3) |(67.4) |41.3 |(26.1) | |(charge)/credit | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Profit for the | |226.7 |(152.4) |74.3 |209.0 |(110.1) |98.9 | |year | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ | | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Attributable to:| | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |- Equity holders| | | |75.4 | | |98.9 | |of the parent | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |- | | | |(1.1) | | |- | |Non-controlling | | | | | | | | |interest | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ | | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Earnings per share from | | | | | | |continuing operations | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |- Basic (p) |9 | | |12.5 | | |16.5 | +----------------+------+--------+---------+----------+--------+---------+----------+ |- Diluted (p) |9 | | |12.5 | | |16.5 | +----------------+------+--------+---------+----------+--------+---------+----------+ | | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |Adjusted earnings per share from | | | | | |continuing operations | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |- Basic (p) |9 |37.9 | | |34.8 | | | +----------------+------+--------+---------+----------+--------+---------+----------+ |- Diluted (p) |9 |37.8 | | |34.8 | | | +----------------+------+--------+---------+----------+--------+---------+----------+ | | | | | | | | | +----------------+------+--------+---------+----------+--------+---------+----------+ Consolidated Statement of Comprehensive Income For the year ended 31 December 2011 +----------------+-----+-------+------+ | | |2011 |2010 | | | | | | | |Notes|GBPm |GBPm | +----------------+-----+-------+------+ |Profit for the | |74.3 |98.9 | |year | | | | +----------------+-----+-------+------+ |Decrease in fair| |11.6 |15.2 | |value of cash | | | | |flow hedges | | | | +----------------+-----+-------+------+ |(Loss)/gain on | |(13.1) |34.6 | |translation of | | | | |foreign | | | | |operations | | | | +----------------+-----+-------+------+ |Actuarial loss | |(5.1) |(1.0) | |on defined | | | | |benefit pension | | | | |schemes | | | | +----------------+-----+-------+------+ |Tax on income | |(3.6) |(4.0) | |and expenses | | | | |taken directly | | | | |to equity | | | | +----------------+-----+-------+------+ |Transfer from | |- |(0.6) | |profit or loss | | | | |on cash flow | | | | |hedges | | | | +----------------+-----+-------+------+ |De-designation |5 |- |1.1 | |of hedge | | | | |accounting | | | | +----------------+-----+-------+------+ |Other | |(10.2) |45.3 | |comprehensive | | | | |(expense)/income| | | | |for the year | | | | +----------------+-----+-------+------+ |Total | |64.1 |144.2 | |comprehensive | | | | |income for the | | | | |year | | | | +----------------+-----+-------+------+ |Attributable to:| | | | +----------------+-----+-------+------+ |- Equity holders| |65.2 |144.2 | |of the parent | | | | +----------------+-----+-------+------+ |- | |(1.1) |- | |Non-controlling | | | | |interest | | | | +----------------+-----+-------+------+ | | | | | +----------------+-----+-------+------+ CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2011 +----------------+-------+-------+----------+--------+--------+---------------+--------+ | |Share | |Other |Retained|Total |Non-controlling|Total | | |capital| | | | | | | | | |Share |reserves |earnings|GBPm |interest |equity | | | | | | | | | | | | |premium|GBPm |GBPm | |GBPm |GBPm | | |GBPm | | | | | | | | | |account| | | | | | | | | | | | | | | | | |GBPm | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |At 1 January |0.6 |0.4 |(1,225.0) |2,552.6 |1,328.6 |0.9 |1,329.5 | |2010 | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Profit for the |- |- |- |98.9 |98.9 |- |98.9 | |year | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Decrease in fair|- |- |15.2 |- |15.2 |- |15.2 |
|value of cash | | | | | | | | |flow hedges | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Gain on |- |- |34.6 |- |34.6 |- |34.6 | |translation of | | | | | | | | |foreign | | | | | | | | |operations | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Actuarial loss |- |- |- |(1.0) |(1.0) |- |(1.0) | |on defined | | | | | | | | |benefit pension | | | | | | | | |schemes | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Tax on income |- |- |(4.3) |0.3 |(4.0) |- |(4.0) | |and expenses | | | | | | | | |taken directly | | | | | | | | |to equity | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Transfer from |- |- |(0.6) |- |(0.6) |- |(0.6) | |profit or loss | | | | | | | | |on cash flow | | | | | | | | |hedges | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |De-designation |- |- |1.1 |- |1.1 |- |1.1 | |of hedge | | | | | | | | |accounting | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Total |- |- |46.0 |98.2 |144.2 |- |144.2 | |comprehensive | | | | | | | | |income for the | | | | | | | | |year | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Dividends to |- |- |- |(74.1) |(74.1) |(0.9) |(75.0) | |shareholders | | | | | | | | |(Note 8) | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Share award |- |- |2.1 |- |2.1 |- |2.1 | |expense | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Own shares sold |- |- |- |3.7 |3.7 |- |3.7 | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Share options |- |0.9 |- |- |0.9 |- |0.9 | |exercised | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Purchase of |- |- |- |(4.5) |(4.5) |- |(4.5) | |non-controlling | | | | | | | | |interest | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Transfer of |- |- |(1.5) |1.5 |- |- |- | |vested LTIPS | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |At 1 January |0.6 |1.3 |(1,178.4) |2,577.4 |1,400.9 |- |1, 400.9| |2011 | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Profit/(loss) |- |- |- |75.4 |75.4 |(1.1) |74.3 | |for the year | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Decrease in fair|- |- |11.6 |- |11.6 |- |11.6 | |value of cash | | | | | | | | |flow hedges | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Loss on |- |- |(13.1) |- |(13.1) |- |(13.1) | |translation of | | | | | | | | |foreign | | | | | | | | |operations | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Actuarial loss |- |- |- |(5.1) |(5.1) |- |(5.1) | |on defined | | | | | | | | |benefit pension | | | | | | | | |schemes | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Tax on income |- |- |(4.7) |1.1 |(3.6) |- |(3.6) | |and expenses | | | | | | | | |taken directly | | | | | | | | |to equity | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Total |- |- |(6.2) |71.4 |65.2 |(1.1) |64.1 | |comprehensive | | | | | | | | |(expense)/income| | | | | | | | |for the year | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Dividends to |- |- |- |(87.2) |(87.2) |(0.3) |(87.5) | |shareholders | | | | | | | | |(Note 8) | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Share award |- |- |3.0 |- |3.0 |- |3.0 | |expense | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Own shares |- |- |(0.1) |- |(0.1) |- |(0.1) | |purchased | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Share options |- |0.3 |- |- |0.3 |- |0.3 | |exercised | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Purchase of |- |- |- |- |- |(0.6) |(0.6) | |non-controlling | | | | | | | | |interest | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Disposal of |- |- |- |- |- |0.3 |0.3 | |non-controlling | | | | | | | | |interest | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |Transfer of |- |- |(1.3) |1.3 |- |- |- | |vested LTIPS | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ |At 31 December |0.6 |1.6 |(1,183.0) |2,562.9 |1,382.1 |(1.7) |1,380.4 | |2011 | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ | | | | | | | | | +----------------+-------+-------+----------+--------+--------+---------------+--------+ Consolidated Statement of Financial Position As at 31 December 2011 +---------------+------+----------+----------+ | |Notes |2011 |2010 | | | | | | | | |GBPm |GBPm |
+---------------+------+----------+----------+ |ASSETS | | | | +---------------+------+----------+----------+ |Non-current | | | | |assets | | | | +---------------+------+----------+----------+ |Goodwill | |1,764.8 |1,753.7 | +---------------+------+----------+----------+ |Other | |969.8 |1,047.0 | |intangible | | | | |assets | | | | +---------------+------+----------+----------+ |Property and | |19.7 |19.0 | |equipment | | | | +---------------+------+----------+----------+ |Deferred tax | |- |1.2 | |assets | | | | +---------------+------+----------+----------+ |Derivative | |1.3 |- | |financial | | | | |instruments | | | | +---------------+------+----------+----------+ | | |2,755.6 |2,820.9 | +---------------+------+----------+----------+ |Current assets | | | | +---------------+------+----------+----------+ |Inventory | |33.9 |33.4 | +---------------+------+----------+----------+ |Trade and other| |251.4 |235.0 | |receivables | | | | +---------------+------+----------+----------+ |Current tax | |9.1 |3.3 | |asset | | | | +---------------+------+----------+----------+ |Cash at bank | |25.0 |27.8 | |and in hand | | | | +---------------+------+----------+----------+ |Derivative | |0.7 |- | |financial | | | | |instruments | | | | +---------------+------+----------+----------+ | | |320.1 |299.5 | +---------------+------+----------+----------+ |Total assets | |3,075.7 |3,120.4 | +---------------+------+----------+----------+ | | | | | +---------------+------+----------+----------+ |EQUITY AND | | | | |LIABILITIES | | | | +---------------+------+----------+----------+ |Capital and | | | | |reserves | | | | +---------------+------+----------+----------+ |Called up share|11 |0.6 |0.6 | |capital | | | | +---------------+------+----------+----------+ |Share premium | |1.6 |1.3 | |account | | | | +---------------+------+----------+----------+ |Reserve for | |6.2 |4.8 | |shares to be | | | | |issued | | | | +---------------+------+----------+----------+ |Merger reserve | |496.4 |496.4 | +---------------+------+----------+----------+ |Other reserve | |(1,718.6) |(1,718.6) | +---------------+------+----------+----------+ |ESOP Trust | |(0.2) |(0.4) | |shares | | | | +---------------+------+----------+----------+ |Hedging reserve| |(3.0) |(9.9) | +---------------+------+----------+----------+ |Translation | |36.2 |49.3 | |reserve | | | | +---------------+------+----------+----------+ |Retained | |2,562.9 |2,577.4 | |earnings | | | | +---------------+------+----------+----------+ |Equity | |1,382.1 |1,400.9 | |attributable to| | | | |equity holders | | | | |of the parent | | | | +---------------+------+----------+----------+ |Non-controlling| |(1.7) |- | |interest | | | | +---------------+------+----------+----------+ |Total equity | |1,380.4 |1,400.9 | +---------------+------+----------+----------+ | | | | | +---------------+------+----------+----------+ | | | | | +---------------+------+----------+----------+ Consolidated Statement of Financial Position (continued) As at 31 December 2011 +------------+---+--------+--------+ |Non-current | | | | |liabilities | | | | +------------+---+--------+--------+ |Long-term |10 |806.9 |639.8 | |borrowings | | | | +------------+---+--------+--------+ |Deferred tax| |164.7 |189.3 | |liabilities | | | | +------------+---+--------+--------+ |Retirement | |12.1 |10.5 | |benefit | | | | |obligation | | | | +------------+---+--------+--------+ |Provisions | |12.2 |19.8 | +------------+---+--------+--------+ |Trade and | |7.1 |4.6 | |other | | | | |payables | | | | +------------+---+--------+--------+ |Derivative | |- |3.8 | |financial | | | | |instruments | | | | +------------+---+--------+--------+ | | |1,003.0 |867.8 | +------------+---+--------+--------+ | | | | | +------------+---+--------+--------+ |Current | | | | |liabilities | | | | +------------+---+--------+--------+ |Short-term |10 |2.1 |167.1 | |borrowings | | | | +------------+---+--------+--------+ |Current tax | |140.8 |142.1 | |liabilities | | | | +------------+---+--------+--------+ |Provisions | |10.4 |6.9 | +------------+---+--------+--------+ |Trade and | |206.9 |206.9 | |other | | | | |payables | | | | +------------+---+--------+--------+ |Deferred | |327.0 |309.8 | |income | | | | +------------+---+--------+--------+ |Derivative | |5.1 |18.9 | |financial | | | | |instruments | | | | +------------+---+--------+--------+ | | |692.3 |851.7 | +------------+---+--------+--------+ |Total | |1,695.3 |1,719.5 | |liabilities | | | | +------------+---+--------+--------+ |Total equity| |3,075.7 |3,120.4 | |and | | | | |liabilities | | | | +------------+---+--------+--------+ | | | | | +------------+---+--------+--------+ The Board of Directors approved these financial statements on 23 February 2012. Consolidated Cash Flow Statement For the year ended 31 December 2011 +-------------------+------+--------+--------+ | |Notes |2011 |2010 | | | | | | | | |GBPm |GBPm | +-------------------+------+--------+--------+ |Operating | | | | |activities | | | | +-------------------+------+--------+--------+ |Cash generated by |12 |315.6 |333.0 | |operations | | | | +-------------------+------+--------+--------+ |Income taxes paid | |(44.0) |(37.5) | +-------------------+------+--------+--------+ |Interest paid | |(51.9) |(37.5) | +-------------------+------+--------+--------+ |Net cash inflow | |219.7 |258.0 | |from operating | | | | |activities | | | | +-------------------+------+--------+--------+ |Investing | | | | |activities | | | | +-------------------+------+--------+--------+ |Investment income | |1.4 |0.7 | +-------------------+------+--------+--------+ |Proceeds on | |0.4 |0.8 | |disposal of | | | | |property and | | | | |equipment | | | | +-------------------+------+--------+--------+ |Purchases of | |(12.6) |(10.7) | |intangible software| | | | |assets | | | | +-------------------+------+--------+--------+ |Purchases of | |(7.7) |(7.7) | |property and | | | | |equipment | | | | +-------------------+------+--------+--------+ |Purchase of other | |(26.2) |(8.1) | |intangible assets | | | | +-------------------+------+--------+--------+ |Acquisition of | |(83.4) |(40.9) | |subsidiaries and | | | | |businesses | | | | +-------------------+------+--------+--------+ |Acquisition of | |(0.3) |(4.3) | |non-controlling | | | | |interest | | | | +-------------------+------+--------+--------+ |Product development| |(4.0) |(9.6) | |costs | | | | +-------------------+------+--------+--------+ |Proceeds on | |0.6 |- | |disposal of | | | | |subsidiaries | | | | +-------------------+------+--------+--------+ |Proceeds on | |0.7 |- | |disposal of other | | | | |intangible assets | | | | +-------------------+------+--------+--------+ |Net cash outflow | |(131.1) |(79.8) | |from investing | | | | |activities | | | | +-------------------+------+--------+--------+ |Financing | | | | |activities | | | | +-------------------+------+--------+--------+
|Dividends paid to | |(87.0) |(74.1) |
|shareholders | | | |
+-------------------+------+--------+--------+
|Dividends paid to | |(0.3) |(0.9) |
|non-controlling | | | |
|interest | | | |
+-------------------+------+--------+--------+
|Repayments of |12 |(368.3) |(783.6) |
|borrowings | | | |
+-------------------+------+--------+--------+
|Loans drawn |12 |366.4 |686.0 |
|down/new bank loans| | | |
|raised | | | |
+-------------------+------+--------+--------+
|Proceeds from the | |0.3 |4.6 |
|issue of share | | | |
|capital | | | |
+-------------------+------+--------+--------+
|Net cash outflow | |(88.9) |(168.0) |
|from financing | | | |
|activities | | | |
+-------------------+------+--------+--------+
| | | | |
+-------------------+------+--------+--------+
|Net | |(0.3) |10.2 |
|(decrease)/increase| | | |
|in cash and cash | | | |
|equivalents | | | |
+-------------------+------+--------+--------+
|Effect of foreign | |(2.7) |1.1 |
|exchange rate | | | |
|changes | | | |
+-------------------+------+--------+--------+
|Cash and cash | |27.8 |16.5 |
|equivalents at | | | |
|beginning of the | | | |
|year | | | |
+-------------------+------+--------+--------+
|Cash and cash | |24.8 |27.8 |
|equivalents at end | | | |
|of the year | | | |
+-------------------+------+--------+--------+
| | | | |
+-------------------+------+--------+--------+
Notes to the Full Year Results
For the year ended 31 December 2011
1 General information
The Company is incorporated in Jersey under the Companies (Jersey) Law 1991 and
headquartered in Switzerland. The address of the registered office is given on
page 14. The consolidated financial statements as at 31 December 2011 and for
year then ended comprise those of the Company and its subsidiaries and its
interests in associates and jointly controlled entities (together referred to as
the Group).
2 Basis of preparation
The financial information for the year ended 31 December 2011 does not
constitute the statutory financial statements for that year, but is derived from
those financial statements. While the financial information in these Full Year
Results has been prepared in accordance with International Financial Reporting
Standards (IFRS), these results do not in isolation contain sufficient
information to comply with IFRS. Those financial statements have not yet been
delivered to the Jersey Registrar of Companies, but include the auditors' report
which was unqualified and did not contain a statement under Article 113B(3) or
Article 113B(6) of the Companies (Jersey) Law 1991.
The directors of Informa plc, having made appropriate enquiries, consider that
adequate resources exist for the Group to continue in operational existence for
the foreseeable future and that, therefore, it is appropriate to adopt the going
concern basis in preparing the Annual Report and Financial Statements for the
year ended 31 December 2011.
Adjusted results
Management believes that adjusted results and adjusted earnings per share (Note
9) provide additional useful information on underlying trends to shareholders.
These measures are used for internal performance analysis and incentive
compensation arrangements for employees. The term "adjusted" is not a defined
term under IFRS and may not therefore be comparable with similarly titled profit
measurements reported by other companies. It is not intended to be a substitute
for, or superior to, IFRS measurements of profit.
The following charges were presented as adjusting items:
+--------------+------+-------+-------+
| |Notes |2011 |2010 |
| | | | |
| | |GBPm |GBPm |
+--------------+------+-------+-------+
|Restructuring |4 |15.2 |8.3 |
|and | | | |
|reorganisation| | | |
|costs | | | |
+--------------+------+-------+-------+
|Acquisition |4 |1.4 |1.3 |
|related costs | | | |
+--------------+------+-------+-------+
|Amortisation |4 |137.9 |133.8 |
|of other | | | |
|intangible | | | |
|assets | | | |
+--------------+------+-------+-------+
|Impairment - |4 |50.7 |- |
|Robbins Gioia | | | |
+--------------+------+-------+-------+
|Impairment - |4 |- |5.0 |
|Counsel on | | | |
|Education in | | | |
|Management | | | |
+--------------+------+-------+-------+
|Impairment - |4 |3.6 |- |
|Other | | | |
+--------------+------+-------+-------+
|Subsequent |4 |(2.9) |0.8 |
|re-measurement| | | |
|of contingent | | | |
|consideration | | | |
+--------------+------+-------+-------+
|Profit on | |(0.1) |- |
|disposal of | | | |
|business | | | |
+--------------+------+-------+-------+
|De-designation|5 |- |1.1 |
|of hedge | | | |
|accounting | | | |
+--------------+------+-------+-------+
|Excess |5 |1.5 |1.1 |
|interest on | | | |
|early | | | |
|repayment of | | | |
|syndicated | | | |
|loans | | | |
+--------------+------+-------+-------+
| | |207.3 |151.4 |
+--------------+------+-------+-------+
|Tax related to|7 |(54.9) |(41.3) |
|adjusting | | | |
|items | | | |
+--------------+------+-------+-------+
| | |152.4 |110.1 |
+--------------+------+-------+-------+
| | | | |
+--------------+------+-------+-------+
The principal adjustments made are in respect of:
· restructuring and reorganisation costs - the costs incurred by the
Group in reorganising and integrating acquired businesses, non-recurring
business restructuring and the closure or disposal of businesses;
· amortisation of other intangible assets - the Group continues to
amortise other intangible assets. The amortisation charge in respect of
intangible software assets is included in the adjusted results. The
amortisation charge in respect of all remaining other intangible assets is
excluded from the adjusted results as management does not see these charges
as integral to underlying trading;
· impairment - the Group tests for impairment on an annual basis or
more frequently when an indicator exists. The impairment charge in respect
of material acquisitions is individually disclosed. The impairment charge
for those other separately identified intangible assets has been linked with
subsequent re-measurement of contingent consideration of those acquisitions;
· de-designation of hedge accounting - where syndicated loan
facilities have been terminated early the fixed interest rate swaps are of a
greater value than the remaining borrowings. As the swap cannot be
re-designated, the over hedged element of the swaps has been charged to the
income statement as an exceptional interest charge; and
· excess interest on early repayment of syndicated loans - capitalised
facility fees are amortised over the loan periods but where syndicated loan
facilities have been terminated early, the unamortised fees are immediately
expensed. This accelerated expense is not viewed as being part of the
underlying results and is thus excluded from the adjusted results.
The tax related to adjusting items is the tax effect of the items above and in
2011 it also includes the effect of the reduction in the UK deferred tax rate
from 27% to 25% (Note 7).
Significant exchange rates
The following significant exchange rates versus GBP were applied during the
year:
+----+-------+-------+-------+-------+
| |Average rate |Closing rate |
+----+-------+-------+-------+-------+
| |2011 |2010 |2011 |2010 |
+----+-------+-------+-------+-------+
|USD |1.6047 |1.5447 |1.5439 |1.5472 |
+----+-------+-------+-------+-------+
|EUR |1.1461 |1.1676 |1.1934 |1.1586 |
+----+-------+-------+-------+-------+
| | | | | |
+----+-------+-------+-------+-------+
3 Business segments
Business segments
Management has identified reportable segments based on financial information
used by the Board of Directors in allocating resources and making strategic
decisions.
The only change in the basis of segmentation or in the basis of measurement of
segment profit or loss in the period is with regards to the Events and Training
segment.
The Group's three identified reportable segments under IFRS 8 are therefore as
follows:
Academic Information (AI)
This division, which includes the Taylor & Francis publishing business, provides
a portfolio of online and print publications, primarily for academic users
across the spectrum of Science, Technology, Humanities and Social Sciences.
Professional and Commercial Information (PCI)
This division, which includes Datamonitor, Informa Business Information and Informa Financial Information provides information, across a range of formats and on a global basis, to a variety of sectors including Medical, Pharmaceutical, Financial, Law, Commerce, Commodities, Maritime and Telecoms. Events and Training The Events and Training business consists of trade shows and exhibitions, large and small conferences and training courses. From January 2011, the three geographical divisions of Events and Training were reported to the Board of Directors as one segment and therefore will be disclosed as one reportable segment. Information regarding the Group's reportable segments is disclosed below and has been prepared consistently with the Group's accounting policies. The comparatives have been updated to reflect the change in reportable segments. Segment revenue and results 31 December 2011 +--------------+-------+-------+--------+--------+ | |AI |PCI |Events |Total | | | | |and | | | |GBPm |GBPm |Training|GBPm | | | | | | | | | | |GBPm | | +--------------+-------+-------+--------+--------+ |Revenue |323.6 |370.5 |581.2 |1,275.3 | +--------------+-------+-------+--------+--------+ |Adjusted |116.2 |114.0 |106.0 |336.2 | |operating | | | | | |profit | | | | | +--------------+-------+-------+--------+--------+ |Restructuring |(1.3) |(10.4) |(3.5) |(15.2) | |and | | | | | |reorganisation| | | | | |costs (Note 2)| | | | | +--------------+-------+-------+--------+--------+ |Acquisition |(0.1) |(0.2) |(1.1) |(1.4) | |related costs | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Subsequent |- |2.6 |0.3 |2.9 | |re-measurement| | | | | |of contingent | | | | | |consideration | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Intangible |(27.9) |(47.9) |(62.1) |(137.9) | |asset | | | | | |amortisation1 | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Impairment |- |(2.4) |(51.9) |(54.3) | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Operating |86.9 |55.7 |(12.3) |130.3 | |profit/(loss) | | | | | +--------------+-------+-------+--------+--------+ |Profit on | | | |0.1 | |disposal of | | | | | |business | | | | | +--------------+-------+-------+--------+--------+ |Finance costs | | | |(47.6) | |(Note 5) | | | | | +--------------+-------+-------+--------+--------+ |Investment | | | |5.8 | |income (Note | | | | | |6) | | | | | +--------------+-------+-------+--------+--------+ |Profit before | | | |88.6 | |tax | | | | | +--------------+-------+-------+--------+--------+ | | | | | | +--------------+-------+-------+--------+--------+ 1 Excludes software amortisation. Segment revenue and results 31 December 2010 +--------------+-------+-------+--------+--------+ | |AI |PCI |Events |Total | | | | |and | | | |GBPm |GBPm |training|GBPm | | | | | | | | | | |GBPm | | +--------------+-------+-------+--------+--------+ |Revenue |310.2 |364.9 |551.4 |1,226.5 | +--------------+-------+-------+--------+--------+ |Adjusted |109.3 |110.4 |93.5 |313.2 | |operating | | | | | |profit | | | | | +--------------+-------+-------+--------+--------+ |Restructuring |(1.2) |(1.0) |(6.1) |(8.3) | |and | | | | | |reorganisation| | | | | |costs (Note 2)| | | | | +--------------+-------+-------+--------+--------+ |Acquisition |- |(0.7) |(0.6) |(1.3) | |related costs | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Subsequent |- |- |(0.8) |(0.8) | |re-measurement| | | | | |of contingent | | | | | |consideration | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Intangible |(22.3) |(56.0) |(55.5) |(133.8) | |asset | | | | | |amortisation1 | | | | | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Impairment |- |- |(5.0) |(5.0) | |(Note 2) | | | | | +--------------+-------+-------+--------+--------+ |Operating |85.8 |52.7 |25.5 |164.0 | |profit | | | | | +--------------+-------+-------+--------+--------+ |Finance costs | | | |(44.0) | |(Note 5) | | | | | +--------------+-------+-------+--------+--------+ |Investment | | | |5.0 | |income (Note | | | | | |6) | | | | | +--------------+-------+-------+--------+--------+ |Profit before | | | |125.0 | |tax | | | | | +--------------+-------+-------+--------+--------+ | | | | | | +--------------+-------+-------+--------+--------+ 1 Excludes software amortisation. Adjusted operating result by operating segment is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance. Finance costs and investment income are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash positions of the Group. Segment assets +-----------+--------+--------+ | |2011 |2010 | | | | | | |GBPm |GBPm | +-----------+--------+--------+ |AI |939.1 |931.3 | +-----------+--------+--------+ |PCI |1,037.4 |1,057.5 | +-----------+--------+--------+ |Events and |1,063.0 |1,071.0 | |Training | | | +-----------+--------+--------+ |Total |3,039.5 |3,059.8 | |segment | | | |assets | | | +-----------+--------+--------+ |Unallocated|36.2 |60.6 | |assets | | | +-----------+--------+--------+ |Total |3,075.7 |3,120.4 | |assets | | | +-----------+--------+--------+ | | | | +-----------+--------+--------+ For the purpose of monitoring segment performance and allocating resources between segments, management monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments except for corporate balances, including taxation (current and deferred). Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segment. The Group's revenues from its major products and services were as follows: +--------------+--------+--------+ | |2011 |2010 | | | | | | |GBPm |GBPm | +--------------+--------+--------+ |AI | | | +--------------+--------+--------+ |Subscriptions |176.6 |169.6 | +--------------+--------+--------+ |Copy sales |147.0 |140.6 | +--------------+--------+--------+ |Total AI |323.6 |310.2 | +--------------+--------+--------+ | | | | +--------------+--------+--------+ |PCI | | | +--------------+--------+--------+ |Subscriptions |287.5 |271.7 | +--------------+--------+--------+ |Copy sales |63.1 |71.8 | +--------------+--------+--------+ |Advertising |19.9 |21.4 | +--------------+--------+--------+ |Total PCI |370.5 |364.9 | +--------------+--------+--------+ | | | | +--------------+--------+--------+ |Events and | | | |Training | | | +--------------+--------+--------+ |Delegates |319.6 |319.7 | +--------------+--------+--------+ |Exhibition |134.0 |107.4 | +--------------+--------+--------+ |Sponsorship |63.2 |51.3 | +--------------+--------+--------+ |Consulting |55.2 |64.0 | +--------------+--------+--------+ |Advertising |9.2 |9.0 | +--------------+--------+--------+ |Total Events |581.2 |551.4 | |and Training | | | +--------------+--------+--------+ |Total revenue |1,275.3 |1,226.5 | +--------------+--------+--------+ | | | | +--------------+--------+--------+ Information about major customers The Group's revenue by location of customer and information about its segment assets by geographical location are detailed below: +------------+--------+--------+--------+--------+ | |Revenue |Segment assets |
+------------+--------+--------+--------+--------+ | |2011 |2010 |2011 |2010 | | | | | | | |Geographical|GBPm |GBPm |GBPm |GBPm | |information | | | | | +------------+--------+--------+--------+--------+ |United |172.7 |164.2 |1,325.6 |1,334.1 | |Kingdom | | | | | +------------+--------+--------+--------+--------+ |North |446.7 |472.6 |1,053.9 |1,133.0 | |America | | | | | +------------+--------+--------+--------+--------+ |Continental |317.7 |308.0 |316.0 |360.0 | |Europe | | | | | +------------+--------+--------+--------+--------+ |Rest of |338.2 |281.7 |380.2 |293.3 | |World | | | | | +------------+--------+--------+--------+--------+ | |1,275.3 |1,226.5 |3,075.7 |3,120.4 | +------------+--------+--------+--------+--------+ | | | | | | +------------+--------+--------+--------+--------+ No individual customer amounts to more than 10% of the Group's revenue. 4 Net operating expenses Operating profit has been arrived at after charging/(crediting): +--------------+------+--------+---------+---------+--------+---------+---------+ | |Notes |Adjusted|Adjusting|Statutory|Adjusted|Adjusting|Statutory| | | | | | | | | | | | |results |items |results |results |items |results | | | | | | | | | | | | |2011 |2011 |2011 |2010 |2010 |2010 | | | | | | | | | | | | |GBPm |GBPm |GBPm |GBPm |GBPm |GBPm | +--------------+------+--------+---------+---------+--------+---------+---------+ |Cost of sales | |446.3 |- |446.3 |430.4 |- |430.4 | +--------------+------+--------+---------+---------+--------+---------+---------+ |Staff costs | |355.5 |- |355.5 |344.6 |- |344.6 | |(excluding | | | | | | | | |redundancy | | | | | | | | |costs) | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Amortisation | |13.1 |137.9 |151.0 |16.3 |133.8 |150.1 | |of other | | | | | | | | |intangible | | | | | | | | |assets | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Depreciation | |6.7 |- |6.7 |7.7 |- |7.7 | +--------------+------+--------+---------+---------+--------+---------+---------+ |Impairment |2 |- |54.3 |54.3 |- |5.0 |5.0 | +--------------+------+--------+---------+---------+--------+---------+---------+ |Net foreign | |0.8 |- |0.8 |3.2 |- |3.2 | |exchange loss | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Auditor's | |1.3 |- |1.3 |1.2 |- |1.2 | |remuneration | | | | | | | | |for audit | | | | | | | | |services (see | | | | | | | | |below) | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Operating | | | | | | | | |lease expenses| | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |- Land and | |24.8 |- |24.8 |24.8 |- |24.8 | |buildings | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |- Other | |1.2 |- |1.2 |1.3 |- |1.3 | +--------------+------+--------+---------+---------+--------+---------+---------+ |Restructuring |2 |- |15.2 |15.2 |- |8.3 |8.3 | |and | | | | | | | | |reorganisation| | | | | | | | |costs | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Acquisition |2 |- |1.4 |1.4 |- |1.3 |1.3 | |related costs | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Subsequent |2 |- |(2.9) |(2.9) |- |0.8 |0.8 | |re-measurement| | | | | | | | |of contingent | | | | | | | | |consideration | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Other | |89.4 |- |89.4 |83.8 |- |83.8 | |operating | | | | | | | | |expenses | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ |Total net | |939.1 |205.9 |1,145.0 |913.3 |149.2 |1,062.5 | |operating | | | | | | | | |expenses | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ | | | | | | | | | +--------------+------+--------+---------+---------+--------+---------+---------+ 5 Finance costs +--------------+-----+-----+-----+ | |Note |2011 |2010 | | | | | | | | |GBPm |GBPm | +--------------+-----+-----+-----+ |Interest | |41.8 |37.5 | |expense on | | | | |financial | | | | |liabilities | | | | |measured at | | | | |amortised cost| | | | +--------------+-----+-----+-----+ |Interest cost | |4.3 |4.3 | |on pension | | | | |scheme | | | | |liabilities | | | | +--------------+-----+-----+-----+ |Total interest| |46.1 |41.8 | |expense | | | | +--------------+-----+-----+-----+ |De-designation|2 |- |1.1 | |of hedge | | | | |accounting | | | | +--------------+-----+-----+-----+ |Excess |2 |1.5 |1.1 | |interest on | | | | |early | | | | |repayment of | | | | |syndicated | | | | |loans | | | | +--------------+-----+-----+-----+ | | |47.6 |44.0 | +--------------+-----+-----+-----+ | | | | | +--------------+-----+-----+-----+ 6 Investment income +---------------+-+----+----+ | | |2011|2010| | | | | | | | |GBPm |GBPm | +---------------+-+----+----+ |Loans and | | | | |receivables: | | | | +---------------+-+----+----+ |Interest income| |1.4 |0.7 | |on bank | | | | |deposits | | | | +---------------+-+----+----+ |Cash flow hedge| |- |0.6 | |ineffectiveness| | | | |gain | | | | +---------------+-+----+----+ |Expected return| |4.4 |3.7 | |on pension | | | | |scheme assets | | | | +---------------+-+----+----+ | | |5.8 |5.0 | +---------------+-+----+----+ | | | | | +---------------+-+----+----+ 7 Taxation The tax charge/(credit) comprises: +-----------+-+-------+-------+ | | |2011 |2010 | | | | | | | | |GBPm |GBPm | +-----------+-+-------+-------+ |Current tax| |44.5 |58.6 | +-----------+-+-------+-------+ | | | | | +-----------+-+-------+-------+ |Deferred | | | | |tax: | | | | +-----------+-+-------+-------+ |Current | |(18.9) |(28.5) | |year | | | | +-----------+-+-------+-------+ |Credit | |(6.0) |(4.0) | |arising | | | | |from UK | | | | |corporation| | | | |tax rate | | | | |change | | | | +-----------+-+-------+-------+ |Deferred | |(5.3) |- | |tax credit | | | | |in respect | | | | |of prior | | | | |years | | | | +-----------+-+-------+-------+ |Total tax | |14.3 |26.1 | |charge on | | | | |profit on | | | | |ordinary | | | | |activities | | | | +-----------+-+-------+-------+ | | | | | +-----------+-+-------+-------+ The tax related to adjusting items within the Consolidated Income Statement relates to the following: +--------------+--------+-----+--------+-----+
| |Gross |Tax |Gross |Tax |
| | | | | |
| |2011 |2011 |2010 |2010 |
| | | | | |
| |GBPm |GBPm |GBPm |GBPm |
+--------------+--------+-----+--------+-----+
|Amortisation |(137.9) |35.7 |(133.8) |34.7 |
|of other | | | | |
|intangible | | | | |
|assets (Note | | | | |
|2) | | | | |
+--------------+--------+-----+--------+-----+
|Impairment |(54.3) |3.1 |(5.0) |- |
|(Note 2) | | | | |
+--------------+--------+-----+--------+-----+
|Restructuring |(15.2) |4.4 |(8.3) |2.0 |
|and | | | | |
|reorganisation| | | | |
|costs (Note 2)| | | | |
+--------------+--------+-----+--------+-----+
|Acquisition |(1.4) |- |(1.3) |- |
|related costs | | | | |
|(Note 2) | | | | |
+--------------+--------+-----+--------+-----+
|Subsequent |2.9 |- |(0.8) |- |
|re-measurement| | | | |
|of contingent | | | | |
|consideration | | | | |
|(Note 2) | | | | |
+--------------+--------+-----+--------+-----+
|Profit on |0.1 |- |- |- |
|disposal of | | | | |
|business (Note| | | | |
|2) | | | | |
+--------------+--------+-----+--------+-----+
|De-designation|- |- |(1.1) |0.3 |
|of hedge | | | | |
|accounting | | | | |
|(Note 5) | | | | |
+--------------+--------+-----+--------+-----+
|Excess |(1.5) |0.4 |(1.1) |0.3 |
|interest on | | | | |
|early | | | | |
|repayment of | | | | |
|syndicated | | | | |
|loans (Note 5)| | | | |
+--------------+--------+-----+--------+-----+
|Deferred tax |- |6.0 |- |4.0 |
|credit arising| | | | |
|from UK | | | | |
|corporation | | | | |
|tax rate | | | | |
|change | | | | |
+--------------+--------+-----+--------+-----+
|Deferred tax |- |5.3 |- |- |
|credit in | | | | |
|respect of | | | | |
|prior years | | | | |
+--------------+--------+-----+--------+-----+
| |(207.3) |54.9 |(151.4) |41.3 |
+--------------+--------+-----+--------+-----+
| | | | | |
+--------------+--------+-----+--------+-----+
The current and deferred tax is calculated on the estimated assessable profit
for the year. Taxation is calculated on each jurisdiction based on the
prevailing rates of that jurisdiction.
The total tax charge for the year can be reconciled to the accounting profit as
follows:
+-------------+------+------+------+------+
| |2011 |2010 |
+-------------+------+------+------+------+
| |GBPm |% |GBPm |% |
+-------------+------+------+------+------+
|Profit before|88.6 | |125.0 | |
|tax | | | | |
+-------------+------+------+------+------+
| | | | | |
+-------------+------+------+------+------+
|Tax charge at|16.8 |19.0 |28.0 |22.4 |
|weighted | | | | |
|average rate | | | | |
+-------------+------+------+------+------+
|Permanent |3.7 |4.1 |0.4 |0.3 |
|differences | | | | |
+-------------+------+------+------+------+
|Losses in |5.1 |5.8 |1.7 |1.4 |
|certain | | | | |
|jurisdictions| | | | |
|that have not| | | | |
|been | | | | |
|recognised | | | | |
+-------------+------+------+------+------+
|Deferred tax |(6.0) |(6.8) |(4.0) |(3.2) |
|credit | | | | |
|arising from | | | | |
|UK | | | | |
|corporation | | | | |
|tax rate | | | | |
|change | | | | |
+-------------+------+------+------+------+
|Deferred tax |(5.3) |(6.0) |- |- |
|credit in | | | | |
|respect of | | | | |
|prior years | | | | |
+-------------+------+------+------+------+
|Tax charge |14.3 |16.1 |26.1 |20.9 |
|and effective| | | | |
|rate for the | | | | |
|year | | | | |
+-------------+------+------+------+------+
| | | | | |
+-------------+------+------+------+------+
The weighted average tax rate for 2011 has been adjusted for the impairment of
Robbins Gioia which is not allowable for tax purposes. Inclusion of this amount
would unduly distort the weighted average tax rate for the period.
In addition to the income tax charge to the Consolidated Income Statement, a tax
charge of GBP3.6m (2010: GBP4.0m) all of which relates to deferred tax has been
recognised directly in the Consolidated Statement of Comprehensive Income during
the year.
8 Dividends
+-------------+-----+-----+
| |2011 |2010 |
| | | |
| |GBPm |GBPm |
+-------------+-----+-----+
|Amounts | | |
|recognised as| | |
|distributions| | |
|to equity | | |
|holders in | | |
|the year: | | |
+-------------+-----+-----+
|Second |- |47.0 |
|interim | | |
|dividend for | | |
|the year | | |
|ended 31 | | |
|December 2009| | |
|of 7.85p per | | |
|share | | |
+-------------+-----+-----+
|First interim|- |27.1 |
|dividend for | | |
|the year | | |
|ended 31 | | |
|December 2010| | |
|of 4.50p per | | |
|share | | |
+-------------+-----+-----+
|Second |57.1 |- |
|interim | | |
|dividend for | | |
|the year | | |
|ended 31 | | |
|December 2010| | |
|of 9.50p per | | |
|share | | |
+-------------+-----+-----+
|First interim|30.1 |- |
|dividend for | | |
|the year | | |
|ended 31 | | |
|December 2011| | |
|of 5.00p per | | |
|share | | |
+-------------+-----+-----+
| |87.2 |74.1 |
+-------------+-----+-----+
| | | |
+-------------+-----+-----+
|Proposed |70.9 | |
|second | | |
|interim | |57.1 |
|dividend for | | |
|the year | | |
|ended 31 | | |
|December 2011| | |
|of 11.80p per| | |
|share (2010: | | |
|9.50p per | | |
|share) | | |
+-------------+-----+-----+
| | | |
+-------------+-----+-----+
As at 31 December 2011 GBP0.2m (2010: GBPnil) of dividends are still to be paid.
Holders of 70,348 (2010: 49,237) ordinary shares of 0.1 pence each have waived
their rights to receive dividends.
Pursuant to the Dividend Access Plan ("DAP") arrangements put in place in 2009
as part of the Scheme of Arrangement, shareholders in the Company are able to
elect to receive their dividends from a UK source (a DAP election). Shareholders
who (i) held 100,000 or fewer shares on the date of admission of the Company's
shares to the London Stock Exchange and (ii) in the case of shareholders who did
not own the shares at that time, on the first dividend record date after they
become shareholders in the Company, unless they elect otherwise, are deemed to
have elected to receive their dividends under the DAP arrangements. Shareholders
who hold more than 100,000 shares and who wish to receive their dividends from a
UK source must make a DAP election. All elections remain in force indefinitely
unless revoked. Unless shareholders have made a DAP election, or are deemed to
have made a DAP election, dividends will be received directly from the Company,
domiciled in Switzerland, and will be taxed accordingly.
9 Earnings per share
Basic
The basic earnings per share calculation is based on a profit attributable to
equity shareholders of the parent of GBP75.4m (2010: GBP98.9m). This profit on
ordinary activities after taxation is divided by the weighted average number of
shares in issue (less those non-vested shares held by employee share ownership
trusts) which is 601,047,454 (2010: 600,421,797).
Diluted
The diluted earnings per share calculation is based on the basic earnings per
share calculation above except that the weighted average number of shares
includes all potentially dilutive options granted by the reporting date as if
those options had been exercised on the first day of the accounting period or
the date of the grant, if later, giving a weighted average of 602,928,726 (2010:
600,627,044).
The table below sets out the adjustment in respect of diluted potential ordinary
shares:
+------------+------------+------------+
| |2011 |2010 |
+------------+------------+------------+
|Weighted |601,047,454 |600,421,797 |
|average | | |
|number of | | |
|shares used | | |
|in basic | | |
|earnings per| | |
|share | | |
|calculation | | |
+------------+------------+------------+
|Effect of |1,881,272 |205,247 |
|dilutive | | |
|share | | |
|options | | |
+------------+------------+------------+
|Weighted |602,928,726 |600,627,044 |
|average | | |
|number of | | |
|shares used | | |
|in diluted | | |
|earnings per| | |
|share | | |
|calculation | | |
+------------+------------+------------+
| | | |
+------------+------------+------------+
Adjusted earnings per share
The basic and diluted adjusted earnings per share calculations have been made to
allow shareholders to gain a further understanding of the trading performance of
the Group. They are based on the basic and diluted earnings per share
calculations above except that profits are based on continuing operations
attributable to equity shareholders and are adjusted for items that are not
perceived by management to be part of the underlying trends in the business, and
the tax effect of those adjusting items, as follows:
+---------------+------+------+
| |2011 |2010 |
| | | |
| |GBPm |GBPm |
+---------------+------+------+
|Profit for the |74.3 |98.9 |
|year | | |
+---------------+------+------+
|Non-controlling|1.1 |- |
|interest | | |
+---------------+------+------+
|Adjusting items|152.4 |110.1 |
|net of | | |
|attributable | | |
|taxation (Note | | |
|2) | | |
+---------------+------+------+
|Adjusted profit|227.8 |209.0 |
|for the year | | |
|attributable to| | |
|equity | | |
|shareholders | | |
+---------------+------+------+
| | | |
+---------------+------+------+
|Earnings per | | |
|share: | | |
+---------------+------+------+
|- Adjusted |37.9 |34.8 |
|basic (p) | | |
+---------------+------+------+
|- Adjusted |37.8 |34.8 |
|diluted (p) | | |
+---------------+------+------+
| | | |
+---------------+------+------+
10 Borrowings
+------------+------+------+
| |2011 |2010 |
| | | |
| |GBPm |GBPm |
+------------+------+------+
|Non-current | | |
+------------+------+------+
|Bank |339.9 |199.8 |
|borrowings | | |
+------------+------+------+
|Private |467.0 |440.0 |
|placement | | |
|loan notes | | |
+------------+------+------+
|Total |806.9 |639.8 |
|non-current | | |
|borrowings | | |
+------------+------+------+
|Current | | |
+------------+------+------+
|Bank |1.9 |167.1 |
|borrowings | | |
+------------+------+------+
|Bank |0.2 |- |
|overdraft | | |
+------------+------+------+
| |809.0 |806.9 |
+------------+------+------+
| | | |
+------------+------+------+
There have been no breaches of bank covenants during the year. The bank
borrowings are guaranteed by material subsidiaries of the Group. The Group does
not have any of its property and equipment and other intangible assets pledged
as security over bank loans.
The Group maintains the following significant lines of credit:
· Private placement loan notes drawn in three currency tranches of USD
597.5m, GBP 40.0m and EUR 50.0m. The note maturities range between five and
ten years, with an average duration of 7.3 years, at a weighted average
interest rate of 4.3%.
· GBP625.0m (2010: GBP500.0m) revolving credit facility, of which GBP343.5m
has been drawn down at 31 December 2011. Interest is payable at the rate of
LIBOR plus a margin based on the ratio of net debt to EBITDA.
As part of the refinancing of the bank facilities, an amortising term loan was
fully repaid in April 2011.
· GBP44.6m (2010: GBP43.9m) comprising a number of bilateral bank
facilities that can be drawn down to meet short-term financing needs. These
facilities consist of GBP 16.0m (2010: GBP 16.0m), USD 15.0m (2010: USD
15.0m), EUR 18.0m (2010: EUR 18.0m), AUD 2.3m (2010: AUD 3.0m), CAD 1.0m
(2010: CAD 1.0m) and BRL 4.9m (2010: BRL nil). Interest is payable at the
local base rate plus margins that vary between 1% and 6%.
The effective interest rate as at 31 December 2011 is 4.1% (2010: 5.1%).
The Group had the following committed undrawn borrowing facilities at 31
December:
+------+------+------+
|Expiry|2011 |2010 |
|date | | |
| |GBPm |GBPm |
+------+------+------+
|Within|- |471.7 |
|one to| | |
|two | | |
|years | | |
+------+------+------+
|In |281.5 |29.1 |
|more | | |
|than | | |
|two | | |
|years | | |
+------+------+------+
| |281.5 |500.8 |
+------+------+------+
| | | |
+------+------+------+
11 Share Capital
+---------------+------+------+
| |2011 |2010 |
| | | |
| |GBPm |GBPm |
+---------------+------+------+
|Authorised | | |
+---------------+------+------+
|202,500,000,000|202.5 |202.5 |
|ordinary shares| | |
|of 0.1p each | | |
|(2010: | | |
|202,500,000,000| | |
|of 0.1p each) | | |
+---------------+------+------+
| | | |
+---------------+------+------+
+-----------+----+----+
| |2011|2010|
| | | |
| |GBPm |GBPm |
+-----------+----+----+
|Issued and | | |
|fully paid | | |
+-----------+----+----+
|601,202,853|0.6 |0.6 |
|ordinary | | |
|shares of | | |
|0.1p each | | |
|(2010: | | |
|600,927,884| | |
|of 0.1p | | |
|each) | | |
+-----------+----+----+
| | | |
+-----------+----+----+
+-------------+------------+----+
| |Number of | |
| | | |
| |shares |GBPm |
+-------------+------------+----+
|At 31 |600,927,884 |0.6 |
|December 2010| | |
+-------------+------------+----+
|Issued in |274,969 |- |
|respect of | | |
|share option | | |
|schemes and | | |
|other | | |
|entitlements | | |
+-------------+------------+----+
|At 31 |601,202,853 |0.6 |
|December 2011| | |
+-------------+------------+----+
| | | |
+-------------+------------+----+
12 Notes to the cash flow statement
+-------------+------+-------+------+
| |Notes |2011 |2010 |
| | | | |
| | |GBPm |GBPm |
+-------------+------+-------+------+
|Profit before| |88.6 |125.0 |
|tax | | | |
+-------------+------+-------+------+
| | | | |
+-------------+------+-------+------+
|Adjustments | | | |
|for: | | | |
+-------------+------+-------+------+
|Depreciation | |6.7 |7.7 |
|of property | | | |
|and equipment| | | |
+-------------+------+-------+------+
|Amortisation | |151.0 |150.1 |
|of other | | | |
|intangible | | | |
|assets | | | |
+-------------+------+-------+------+
|Share-based | |3.0 |2.1 |
|payment | | | |
+-------------+------+-------+------+
|Profit on | |(0.1) |- |
|disposal of | | | |
|business | | | |
+-------------+------+-------+------+
|Loss/(profit)| |0.3 |(0.2) |
|on disposal | | | |
|of property | | | |
|and equipment| | | |
+-------------+------+-------+------+
|Loss on | |0.3 |- |
|disposal of | | | |
|software | | | |
+-------------+------+-------+------+
|Finance costs|5 |47.6 |44.0 |
+-------------+------+-------+------+
|Investment |6 |(5.8) |(5.0) |
|income | | | |
+-------------+------+-------+------+
|Impairment |2 |54.3 |5.0 |
+-------------+------+-------+------+
|Decrease in | |0.2 |6.9 |
|inventories | | | |
+-------------+------+-------+------+
|Increase in | |(0.9) |(1.4) |
|receivables | | | |
+-------------+------+-------+------+
|Decrease in | |(29.6) |(1.2) |
|payables | | | |
+-------------+------+-------+------+
|Cash | |315.6 |333.0 |
|generated by | | | |
|operations | | | |
+-------------+------+-------+------+
| | | | |
+-------------+------+-------+------+
Analysis of net debt
+------------+--------+--------+--------+--------+--------+
| |At |Non-cash|Cash |Exchange|At |
| | | | | | |
| |1 |items |flow |movement|31 |
| |January | | | |December|
| | |GBPm |GBPm |GBPm | |
| |2011 | | | |2011 |
| | | | | | | | |GBPm | | | |GBPm | +------------+--------+--------+--------+--------+--------+ |Cash at bank|27.8 |- |(0.1) |(2.7) |25.0 | |and in hand | | | | | | +------------+--------+--------+--------+--------+--------+ |Bank |- |- |(0.2) |- |(0.2) | |overdraft | | | | | | +------------+--------+--------+--------+--------+--------+ |Cash and |27.8 |- |(0.3) |(2.7) |24.8 | |cash | | | | | | |equivalents | | | | | | +------------+--------+--------+--------+--------+--------+ |Bank loans |(167.1) |(2.9) |165.5 |2.6 |(1.9) | |due in less | | | | | | |than one | | | | | | |year | | | | | | +------------+--------+--------+--------+--------+--------+ |Bank loans |(199.8) |0.3 |(134.5) |(5.9) |(339.9) | |due in more | | | | | | |than one | | | | | | |year | | | | | | +------------+--------+--------+--------+--------+--------+ |Private |(440.0) |(0.1) |(27.2) |0.3 |(467.0) | |placement | | | | | | |loan notes | | | | | | |due in more | | | | | | |than one | | | | | | |year | | | | | | +------------+--------+--------+--------+--------+--------+ | |(779.1) |(2.7) |3.5 |(5.7) |(784.0) | +------------+--------+--------+--------+--------+--------+ | | | | | | | +------------+--------+--------+--------+--------+--------+ Included within the cash flow movement of GBP3.5m is GBP368.3m (2010: GBP783.6m) of repayment of borrowings and GBP366.4m (2010: GBP686.0m) of loans drawn down. The net movement caused by non-cash items arises from arrangement fee amortisation of GBP2.7m (2010: GBP3.1m). £££ END £££ +-------------++--------------++----------------+ |Provider ||Channel ||Contact | +-------------++--------------++----------------+ |Tensid Ltd., ||newsbox.ch ||Provider/Channel| |Switzerland ||www.newsbox.ch||related | |www.tensid.ch|| ||enquiries | | || ||marco@tensid.ch | | || ||+41 41 763 00 50| +-------------++--------------++----------------+ | || || | +-------------++--------------++----------------+
(END) Dow Jones Newswires
February 23, 2012 02:00 ET (07:00 GMT)