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RNS
Centaur Media PLC  -  CAU   

Interim Results

Released 07:00 26-Jul-2017

RNS Number : 0825M
Centaur Media PLC
26 July 2017
 

26 July 2017

Centaur Media Plc

 

Interim results for the 6 months ended 30 June 2017

 

Results in line with expectations; further operational progress

Transactions accelerate transformation into pure B2B media group

 

Under IFRS 5, the intended disposal of the Home Interest portfolio, is required to be shown as a discontinued operation. In order to make year-on-year group performance more comparable, we have presented parts of this report and commented on the results as if the Home Interest segment had been a continuing operation.

 

Financial Highlights

 


Existing business

(inc Home Interest)

Continuing operations

(exc Home Interest)


HY 2017

HY 2016

% Change

HY 2017

HY2016

% Change

Revenue

40.0

39.9

0.3

33.9

33.1

2.4

Underlying Revenue

39.8

39.3

1.3

33.7

33.1

1.8

Adjusted2 operating profit

4.2

5.0

(16.0)

2.0

2.6

(23.1)

Adjusted2 operating margin

10.5%

12.5%


5.9%

7.9%


(Loss) / profit after taxation

(0.9)

2.2


(1.0)

0.4


 

·     Reported revenues up 0.3% to £40.0m; underlying1 increase in revenues 1%

Premium content revenues up 1%, with digital premium content revenues up by 4%

Underlying live events revenues up 16.3%; reported live events revenues up 14%

Premium content and live events revenues now 78% of total revenues (2016: 71%)

Advertising revenues down 22% in line with expectations

 

·     Adjusted operating profit2 of £4.2m (2016: £5.0m) with adjusted2 operating margin of 10.5% (2016: 12.5%) reflecting the impact of the decline in advertising revenues, partly mitigated by Oystercatchers which has delivered a strong revenue performance.

 

·     Reported operating loss of £0.1m (2016: profit £3.1m) with £2.8m of exceptional costs relating to transaction costs (£2.1m) and Oystercatchers earn-out consideration (£0.6m).

 

·     Cash flow performance continuing to improve:

£4.3m positive adjusted working capital

Net debt5 reduced by £4m (28%) to £10.1m from £14.1m at December 2016

Adjusted operating cash flow3 of £9.0m (2016: £8.8m) with cash conversion4 of 214% (2016: 176%) and strong growth in working capital inflows.

 

·     Interim dividend maintained at 1.5p (2016: 1.5p)

Operational Highlights

Continued progress in simplifying and focusing the core business:

·     Proposed transactions (post period end) to accelerate Group's B2B focus:

Sale of Home Interest division agreed for enterprise value of £32m

Agreement to acquire MarketMakers for initial consideration of £13.4m plus working capital and further potential earn-out consideration of up to £3.6m

Completion of both transactions expected August 2017. Surplus proceeds post completion to further strengthen balance sheet

·     Reduced print exposure and digital migration on track.

·     Strengthened balance sheet is allowing us to invest further in our products and acquisitions.

 

Andria Vidler, Chief Executive, commented:

"We are pleased to report results in line with our expectations despite the on-going pressures on advertising revenues. We are making good progress in reshaping Centaur into a pure B2B media group. The disposal of Home Interest and acquisition of MarketMakers will accelerate our transformation." 

 

Conference call

There will be a conference call hosted by management for analysts and investors at 0800hrs this morning.  If you would like to participate, please contact Tulchan Communications at: centaurmedia@tulchangroup.com 

Enquiries

 

Centaur Media Plc                                                                                                                              

Andria Vidler, Chief Executive Officer                                                                   020 7970 4000

Swag Mukerji, Chief Financial Officer

 

Investor relations                                                                                                                                                   

James Macey White, Will Smith, Tulchan Communications                          020 7353 4200

 

 

Note to editors

 

Centaur Media is an award winning UK-based multi-platform content group that inspires and enables people to excel at what they do, raising the standard for market insight, interaction and impact.

 

Leading brands include: Econsultancy, Marketing Week, Festival of Marketing, Creative Review, Celebrity Intelligence, Fashion & Beauty Monitor, Money Marketing, Platforum, The Lawyer, Employee Benefits, The Engineer, Subcon, Oystercatchers, the Business Travel Show and The Meetings Show.

 

 

1 Underlying growth rates adjust for the impact of the phasing of The Southern Homebuilding and Renovation Show which occurred in June

 
in 2016 but will occur in July in 2017 and the biennial contribution from AMS in 2017.

2 Adjusted results exclude adjusting items, as detailed in note 4.

3 For reconciliation of adjusted operating cash flow see page 5.

4 Cash conversion is calculated as adjusted operating cash flow / adjusted operating profit

5 For reconciliation of net debt to statutory measures see Consolidated Cash Flow Statement on page 19.

 

Overview of Group Performance

Centaur Media has made good progress in its transformation to become a business to business media company that informs, advises and connects business professionals through insight, data and events. This has been achieved through the Group's development of market-leading products and services combined with selective acquisitions that broaden and improve the customer proposition.  This strategy has strengthened Centaur Media and leaves the Group well-placed to support our clients in accelerating their business performance.

The structural decline of advertising revenues has been well publicised.  The strategy is to build a core of high value digital premium content products and to progressively reduce our exposure to volatile and declining advertising revenues. Centaur is focused on the delivery of valuable insight, data and events which enable us to improve the quality and growth of our earnings. The pressure on advertising revenues continued in the half year with recruitment and display advertising declining 25% and 21% respectively, with this being experienced across both print 28% and digital 18% formats. As we approach the close of the current financial year, we expect Centaur's exposure to be c.5% print advertising and c.15% digital advertising.

 

Trading summary

On an Existing Group basis, the Group's trading results are as follows: -


Six months ended

Six months ended

Reported

Underlying1

 Existing Group

30 June 2017

30 June 2016

growth

growth


Unaudited

Unaudited

%

%






Revenue (£m)

40.0

39.9

 0.3

 1.3






Operating (loss) / profit (£m)

 (0.1)

3.1

 (103.2)







Adjusted1 operating profit (£m)

4.2

5.0

 (16.0)

 (24.5)






Adjusted2 operating profit margin

10.5%

12.5%








Adjusted2 profit before tax (£m)

4.0

4.7

 (14.9)







(Loss) / profit before tax (£m)

(0.3)

2.8








Diluted (loss) / earnings per share (pence)

      (0.6)

1.5








Adjusted2 diluted EPS (pence)

2.1  

2.5

(16.0)







Dividend per share (pence)

1.5

1.5








Adjusted operating cash flow3 (£m)

9.0

8.8

 







Cash conversion4

214%

176%



1 Underlying growth rates adjust for the impact of the phasing of The Southern Homebuilding and Renovation Show which occurred in June in 2016 but will occur in July in 2017 and the biennial contribution from AMS in 2017

2 Adjusted results exclude adjusting items, as detailed in note 4.

3 For reconciliation of adjusted operating cash flow see page 5.

4 Cash conversion is calculated as adjusted operating cash flow / adjusted operating profit

 

Revenue grew by £0.1m in the period with the continued decline in advertising of £2.4m and the planned cessation of unprofitable events. This was offset by the benefit of a full six months of revenue from the Oystercatchers' acquisition (£2.8m) and the increased revenues from The Meetings Show. The deferral of the Southern Homebuilding & Renovating Show to July 2017 (from June in 2016) has pushed £0.6m of 2016 revenue back into H2. On an underlying basis, revenue was 1.3% up on H1 2016.

The Group's adjusted operating profit margin fell from 12.5% to 10.5% due to the continued decline in advertising which has a high margin. Centaur is continuing to focus on cost reduction across the Group. Significant savings have been achieved and these are being re-invested in enhancing our products and services. This strategy will continue into 2018. The net effect is that overheads have remained relatively flat compared to 2016.

Deferred revenues at 30 June 2017 of £16.4m were in line with the same time last year.  Adjusting for the impact of event phasing, underlying deferred income was 6% lower over half of which was due to changes in billing scheduling around the Business Travel Show and the Travel Technology Show.

Adjusted operating profits of £4.2m (2016: £5.0m) declined by £0.8m reflecting continuing declines in advertising revenue across the Group as a result of the planned withdrawal from print and weaker digital advertising trends in the market. The decline in adjusted operating profit margins to 10.5% (2016: 12.5%) reflects these trends with a high level of operational gearing attached to advertising revenues.

Net debt has fallen to £10.1m from £14.1m at the end of December 2016 and operating cash conversion for the half was 214% (2016: 176%).  Trade receivables are steadily reducing and the rate of cash collection for invoices has been strong.  There was a £1m positive swing in adjusted working capital in H1 2017 compared to the same period in 2016.  The Group has good covenant headroom within its £25m banking facilities. After the completion of its disposal of the Home Interest portfolio and acquisition of MarketMakers, the Group will be in a positive cash position.


Six months ended
30 June 2017

 Six months ended
30 June 2016


Unaudited

Unaudited


£m

£m

Adjusted operating profit1

4.2

5.0

Depreciation and amortisation

 1.8

1.5

Movement in working capital

 4.3

3.3

Capital expenditure

  (1.3)

(1.0)

Adjusted operating cash flow2

 9.0

8.8

Cash impact of exceptional items

 (0.3)

(0.5)

Taxation

 (1.1)

(1.0)

Interest and finance leases

 (0.2)

(0.3)

Free cash flow

 7.4

7.0

Repayment of loan notes

 -

(1.1)

Acquisitions

(1.2)

-

Dividends

  (2.2)

(2.1)

Net cash flow

 4.0

3.8

Opening net debt

 (14.1)

(17.9)

Closing net debt

 (10.1)

(14.1)

1 Adjusted results exclude adjusting items, as detailed in note 4.

2 For reconciliation of adjusted operating cash flow see page 5.

 

Exceptional costs in the first six months of the year were £2.8m (2016: £0.4m), primarily relating to transaction costs and the earn-out consideration for Oystercatchers.

Adjusted diluted EPS for the reporting period was 2.1 pence (2016: 2.5 pence).  Diluted EPS for the reporting period was (0.6) pence (2016: 1.5 pence).

Segmental review

 

Revenue and adjusted operating profit for the six months ended 30 June, together with reported and underlying growth rates across each segment, are set out below.

 Existing Group
(Statutory result)

Six months ended
30 June 2017

 Six months ended
30 June 2016

Reported growth

Underlying1 growth


Unaudited

Restated & Unaudited




£m

£m

%

%

Marketing





Revenue

15.5

14.0

 10.7

10.7

Adjusted2 operating profit

0.8

0.8



Adjusted2 operating margin

5.2%

5.7%

 (0.5)


Professional





Revenue

13.4

13.0

3.1

 1.5

Adjusted1 operating profit

1.0

1.3

 (23.1)


Adjusted1 operating margin

7.5%

10.0%

(2.5)


Financial Services





Revenue

5.0

6.1

 (18.0)

 (18.0)

Adjusted2 operating profit

                                                 0.2

0.5

 (60.0)


Adjusted2 operating margin

4.0%

8.2%

(4.2)


Home Interest (Discontinued)





Revenue

6.1

6.8

(10.3)

(1.6)

Adjusted2 operating profit

2.2

2.4

(8.3)


Adjusted2 operating margin

36.1%

35.3%

0.8


Total





Revenue

40.0

39.9

0.3

 1.3

Adjusted2 operating profit

4.2

5.0

 (16.0)


Adjusted2 operating margin

10.5%

12.5%

(2.0)


1 Underlying growth rates adjust for the impact of the phasing of The Southern Homebuilding and Renovation Show which occurred in June in 2016 but will occur in July in 2017 and the biennial contribution from AMS in 2017

 2 Adjusted results exclude adjusting items as detailed in note 4

 

 

Segmental analysis for the Existing Group as shown above has been impacted by the decision to dispose of the Home Interest segment. IFRS 5 states that any centrally allocated costs and income may not be allocated to discontinued segments and that prior year comparatives need to be reallocated. Consequently, no centrally allocated costs have to be allocated to Home Interest. Had Home Interest not been discontinued, the segmental results would have been as shown in the table on page six.

 

The results below are an alternative performance measure and are not statutory and are presented merely to demonstrate year-on-year performance for the Existing Group. These are undistorted by the change in allocation of overhead expenses as a result of the intended disposal of the Home Interest segment.

 

 Alternative presentation of results

Six months ended
30 June 2017

 Six months ended
30 June 2016

Reported growth


Unaudited

Unaudited



£m

£m

%

Marketing




Revenue

15.5

13.8

 12.3

Adjusted1 operating profit

1.5

2.0

(25)

Adjusted1 operating margin

9.7%

14.5%

 (4.8)

Professional




Revenue

13.4

13.1

2.3

Adjusted1 operating profit

1.5

1.1

 36.4

Adjusted1 operating margin

11.2%

8.4%

2.8

Financial Services




Revenue

5.0

6.1

 (18.0)

Adjusted1 operating profit

                                                 0.5

0.7

 (28.6)

Adjusted1 operating margin

10.0%

11.5%

(1.5)

Home Interest




Revenue

6.1

6.9

(11.6)

Adjusted1 operating profit

0.7

1.2

(41.7)

Adjusted1 operating margin

11.5%

17.4%

(5.9)

Total




Revenue

40.0

39.9

0.3

Adjusted1 operating profit

4.2

5.0

 (16.0)

Adjusted1 operating margin

10.5%

12.5%

(2.0)

1 Adjusted results exclude adjusting items as detailed in note 4

 

Marketing's operating result has fallen from £2.0 to £1.5m primarily due to lower operating margins.

Professional's operating result has improved by £0.4m due to strong growth in the Meeting Show which saw a 14% year on year growth in revenue.

 

Financial Services' operating result of £0.5m was down £0.2m on 2016 due to continuing declines in advertising.

Home Interest was down £0.5m on the prior year primarily due to the deferral of the Southern Homebuilding and Renovation Show till July 2017 from June in 2016.

 

Reconciliation of Existing Group Results to Results Reported in Interim Statement

The below table shows the results of the Existing Group, Discontinued Operations and Continuing Operations.



Continuing Operations

Discontinued Operations

Existing Group



Adjusted

Adjusting

Statutory

Adjusted

Adjusting

Statutory

Adjusted

Adjusting

Statutory



results

items

results

results

items

results

results

items

results



6 months

6 months

6 months

6 months

6 months

6 months

6 months

6 months

6 months



ended

ended

ended

ended

ended

ended

ended

ended

ended



30 June

30 June

30 June

30 June

30 June

30 June

30 June

30 June

30 June



2017

2017

2017

2017

2017

2017

2017

2017

2017


Note

£m

£m

£m

£m

£m

£m

£m

£m

£m












Revenue

2

33.9

-

33.9

6.1

-

6.1

40.0

-

40.0









Net operating expenses

3

(31.9)

(2.6)

(34.5)

(3.9)

(1.7)

(5.6)

(35.8)

(4.3)

(40.1)












Operating profit / (loss)


2.0

(2.6)

(0.6)

2.2

(1.7)

0.5

4.2

(4.3)

(0.1)












Finance costs


(0.2)

-

(0.2)

-

-

-

(0.2)

-

(0.2)












Profit / (loss) before tax


1.8

(2.6)

(0.8)

2.2

(1.7)

0.5

4.0

(4.3)

(0.3)












Taxation

5

(0.4)

0.2

(0.2)

(0.4)

-

(0.4)

(0.8)

0.2

(0.6)












Total comprehensive income / (loss) attributable to owners of the parent


1.4

(2.4)

(1.0)

1.8

(1.7)

0.1

3.2

(4.1)

(0.9)












Earnings / (loss) per share attributable to owners of the parent

6










Basic


1.0p

(1.7p)

(0.7)p

1.2p

(1.1p)

0.1p

2.2p

(2.8p)

(0.6)p

Fully diluted


0.9p

(1.6p)

(0.7)p

1.2p

(1.1p)

0.1p

2.1p

(2.7p)

(0.6)p












Operating margin


5.8%


-1.8%

36.1%


8.2%

10.5%


-0.3%

 

Segmental Reviews

Marketing

This segment includes all of the Group's brands that serve the marketing and creative professions, including Econsultancy, Marketing Week, Festival of Marketing, Celebrity Intelligence, Fashion & Beauty Monitor, Design Week, Creative Review and the newly acquired Oystercatchers business.

Reported revenues grew by 11% driven by good momentum in live events revenues despite a 26% decline in advertising revenues.  Around 42% of this segment's revenues are derived from digital premium content, with 42% from live events and 16% from advertising.  Digital premium content revenues contributed £6.2m (41%) to reported revenues of £15.5m.  This year we are investing in Celebrity Intelligence, Fashion and Beauty Monitor and Econsultancy subscription products to build new data aggregation capability, identity management and analytical features which will deliver revenue growth from 2018 onwards. The successful integration of Oystercatchers has contributed an additional £1.5m to Live Events revenue through consultancy and training.  Marketing Week Live & Insight was an operational and commercial success with almost 200 exhibitors meeting over 5,000 attendees over two days at Kensington Olympia, delivering 10% YoY revenue growth.  Mini MBA, launched in H2 2016, continued its positive momentum delivering c.£0.4m of revenue in H1.   

Whilst the weakness in advertising revenues was consistent with other parts of the Group, sponsored research revenue was up over 50% YoY.

The decline in adjusted operating profits and margin reflects the impact of weaker advertising revenues and a higher depreciation charge reflecting the ongoing investment into the digital platforms across the Marketing segment.

 

Professional

 

The Professional segment includes four subsidiary markets: Legal, Engineering, HR and Travel & Meetings.  The broad revenue split across the segment is 71% live events, 19% advertising and 10% premium content.

Reported revenues of £13.4m, include a £2.4m contribution from The Meetings Show which grew by 14% and The Business Travel Show which had reported revenues of £3.3m, also up 14% on the prior year with visitor numbers up 10% and a re-book of 70%.

Travel & Meetings portfolio reported revenues of £5.7m (2016: £5.0m), up 14% year on year with The Meetings Show doubling its 2016 profits. 

Total H1 revenues for the Legal portfolio of £3.9m were 3% lower than in the same period last year, impacted by weaker recruitment advertising falling 22% and 10% fall on sponsored events. This advertising revenue fall was offset by an overall portfolio growth in premium content revenues of 31%. The Lawyer magazine successfully re-launched in Q2 as a monthly product and has been well received.

Across the Legal portfolio, the successful strategy last year to move The Lawyer's premium content behind a pay-wall has had continued uptake and, together with strong renewals this year, has contributed £0.4m revenue growth in H1. On corporate subscriptions the renewal rate by value averaged 123% with a volume renewal rate of 91%. Total premium content revenue on The Lawyer grew 40% to £1.1m (2016: £0.8m). Deferred revenues in the Legal portfolio were £1.7m at 30 June, £0.1m, 3%, increase on last year. 

The Engineering portfolio reported revenues of £2.0m (2016: £2.4m).  Adjusted for the closure of the MWP, underlying revenues declined by 5%. This year's Subcon included AMS and TEDIS, the show was an overall success with visitor numbers +31% YoY and a re-book for the 2018 show was 73%, the highest ever.   

Financial Services

 

Serving the financial services industry, this segment includes Money Marketing, Fund Strategy, Mortgage Strategy, Corporate Advisor, Taxbriefs, Headline Money and Platforum.

This segment's revenues are now more diversified with 36% of revenue from premium content, 30% from live events leaving advertising revenue with 33% of the revenue mix.  Advertising revenues of £1.7m (2016: £2.5m) declined by 32% in the first six months of the year. June advertising revenues were 24% lower than in June 2016, with weakness being seen across both print and digital formats. This weakness in advertising revenues masked good growth in digital premium content revenues, with Platforum transitioning from a report-based revenue stream to a digital subscription model. Platforum revenue of £0.7m grew 24% in the first six months of the year with renewal rate by value at 87% and renewal rate by volume at 74%.

The decline in adjusted operating profit margins reflects the impact of high levels of operational gearing attached to weaker advertising revenues.

Despite the weakness reported in H1, the Financial Services portfolio is well positioned to deliver content around the many changes likely to occur in financial markets. With an increasingly agile delivery platform, strong brands and premium content, this presents a clear opportunity for the segment.  

Home Interest

 

The Home Interest segment includes the live events and publishing assets across the Homebuilding & Renovating, Real Homes and Period Living brands.

The broad revenue split across the segment is 50% live events, 30% advertising and 20% premium content.  The Homebuilding & Renovating brand live events continues to demonstrate good momentum, with H1 live events revenues 4% higher. Like for Like forward bookings for the Southern Homebuilding & Renovating exhibition taking place in July are 18% ahead of last year. Premium content includes copy sales which declined by 14%.

Disposal and Acquisition

 

Post period-end saw the proposed disposal of the Group's B2C division, Home Interest, for an enterprise value of £32 million to Future plc, and the acquisition of MarketMakers, one of the premier B2B integrated marketing   services businesses for an initial consideration of £13.4 million with a deferred earn out amount based on EBITDA performance (maximum amount payable £17.0 million). An additional £3.1m is payable for working capital, including c.£2.8m of cash.

 

Both transactions are anticipated to complete in early August, with the net proceeds from the Disposal being used in part to provide all of the consideration for the acquisition.

 

These transactions enable the Group to become fully focused on accelerating the execution of its B2B strategy whilst reducing its reliance on print and advertising.

 

Specifically, MarketMakers is ranked as the number one telemarketing agency in the UK by B2B Marketing and has achieved growth in revenues of 27% over the last three years. It will bring sophisticated B2B telemarketing, data analytics, database enrichment and automated lead generation to the Centaur portfolio.

 

MarketMakers brings Centaur a new expert capability that helps grow some of its existing digital business intelligence products but also enables the Group to:

·     offer an end-to-end lead management and sales conversion service to clients

·     improve client media solution from 'simple' lead generation to results-driven marketing campaigns with stronger ROI

 

Through MarketMakers, there are also a number of immediate benefits available to existing Centaur clients:

·     Marketing automation to turn anonymous traffic into qualified leads

·     Exhibitors' return on investment can be improved significantly by reducing the standard 80% lead generation waste.

·     Simple data cleaning services to ensure GDPR compliance

·     Market segmentation and targeting analysis

 

Dividends

Following the half year trading performance, the Board has elected to maintain the interim dividend at 1.5p; it is expected that the final dividend will remain in line with the prior year at 3.0p.

 

Balance Sheet

 

Cash flow performance in the period continued to improve, with the Group recording a £4.3m positive adjusted working capital position at period end. Net debt reduced by £4m in the first half of the year to £10.1m, while adjusted operating cash flow was higher at £9.0m (2016: £8.8m) with cash conversion of 214% (2016: 176%). Underlying operating profits decline of £0.8m was mitigated by strong growth in working capital inflows. The Group remains well-financed with a £25m revolving credit facility and remains comfortably within the required banking covenants. Once the transactions have both completed, we expect the Group to be in a net cash position. However, we will maintain the RCF in order to assist with further acquisitions we identify.

 

Outlook

 

Centaur expects advertising market conditions to remain challenging. Against this, management remains focused on making further progress in diversifying the revenue mix and is confident in the Group's long-term B2B transformation strategy. Without the transactions, we would be maintaining our full year guidance for 2017 and 2018.

The financial impact of the transactions is that 2017 revenues will remain broadly in-line with expectations and there will be a c.£2m reduction in operating profit. From 2018 onwards, we expect an accelerated contribution from MarketMakers driven by a combination of organic revenue growth, two-way cross selling opportunities and cost synergies. We also plan to remove £0.8m of annualised costs which represent circa 50% of the central overheads historically attributable to Home Interest.

 

The cash position of the Group will significantly strengthen and this will allow the pursuit of further opportunities to grow the business in its chosen B2B sector.

 

Principal risks and uncertainties 

The principal risks and uncertainties facing the Group are:

·     Trends in print advertising and sales of print products mean that revenues from these sources continue to shrink and are not replaced like-for-like with online or digital products. The non-print media sector has high levels of competition from a wider group and low barriers to entry. This leads to different pressures on audience and customer retention as well as pricing.  The Board considers that our exposure to this risk has decreased since the prior year due to the specific actions we have taken to reduce our dependency on print advertising and sales of print products, including the creation of new products which are exclusively digital.

·     Failure to manage change effectively could exacerbate our difficulties in retaining and recruiting staff at an appropriate cost in parts of the business, and lead to loss of key senior staff, resulting in increased recruitment and training costs, loss of productivity, potential loss of clients and potential inability to maintain content quality and deliver our specific plans.  Due to increased change taking place across the business (caused by, among other things, initiatives aimed at reducing our reliance on print, together with more general cost-cutting measures) the Board considers this risk to have increased since the previous year.

·     Serious systems failure affecting our core systems and multiple products or business functions, or breach of network security controls (as a result of a deliberate cyber-attack or unintentional event), results in misappropriation of financial assets, proprietary or sensitive information or operational disruption, such as the unavailability of our websites and of our digital products to users or unavailability of support platforms, thereby directly affecting our revenues or collection activities and damaging our reputation with customers and audiences.  The Board considers this risk to be broadly the same as for the prior year.

·     Fraudulent or accidental breach of our security, or ineffective operation of IT and data management systems leads to loss, theft or misuse of confidential information or personal data or breach of data protection requirements resulting in increased regulatory supervision, damage to our reputation and / or direct financial impact.  The Board considers this risk to be broadly the same as for the prior year.

·     The Group runs events and exhibitions that gather large numbers of people in single venues and locations, often in large cities in the UK and elsewhere.  This results in operational health and safety risks including fire safety, food hygiene, crowd control, security and failure of equipment.  As the Group operates events and exhibitions in locations hired from third parties, including hotels and venue operators, it is generally not in control of safety policies for the locations and depends upon the third party venue operator to have adequate safety policies, processes and equipment in place and to comply with health and safety regulations.  If a serious physical incident occurred at an event, physical injury, death and other significant damage could occur.  The Board considers this risk to be broadly the same as for the prior year.

·     A serious force majeure event, such as a flood or terrorist attack, could affect the availability of a venue for one of our large events or exhibitions or of our central London office.  For the Group's larger events and exhibitions, there are only a small number of venues available for hire in the market from third parties such as hotels, and we have a majority of our staff and systems at a single central London location.  If a venue or our central London office becomes unavailable, it is unlikely that the Group would be able to transfer an event to a different venue, or our employees to a different office, at short notice. This could result in damage to our reputation and direct financial impact from revenues that we would be unable to collect (because, for example, commercial teams are unable to operate effectively), costs already incurred, refunds due to customers or legal claims from customers and suppliers.  The Board considers this risk to be broadly the same as for the prior year.

·     The Group's products could be vulnerable to replication by competitors in the UK or other markets including, potentially, those offering content under a different revenue model that reduces or eliminates costs for users.  The Board considers this risk to be broadly the same as for the prior year.  

·     Changes to regulations and legal requirements, including in relation to areas such as data protection and direct marketing, restrict or burden the Group's activities.  The Board considers this risk to be broadly the same as for the prior year.

·     As Centaur Media's products are primarily sold to specific sectors of the UK market, the Group's financial performance is highly sensitive to economic and political conditions affecting the UK market and/or the key sectors in which we operate. Uncertainty about the future economic and political stability of the UK and its impact on sectors including (but not limited to) the financial and real estate sectors following the UK's vote to leave the EU in 2016 has the potential to reduce customer demand for our products and thereby adversely affect the Group's revenues.  The Board considers this risk to have increased since the prior year due to diminished short and medium-term expectations for the UK economy following the referendum vote to leave the EU on 23 June 2016, meaning this risk has been included in the 2016 Annual Report as a principal risk facing the Group for the first time.

Further details of the Group's risk profile can be found in the 2016 Annual Report on pages 23-27

 

 

Forward looking statements

Certain statements in this interim report are forward looking.  Although the Group believes that the expectations reflected in these forward looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct.  Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward looking statements.  It undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

Statement of directors' responsibilities

The Directors confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

·     An indication of important events that have occurred during the period and their impact on the condensed financial statements, and a description of the principal risks and uncertainties for the remaining period of the financial year; and

·     Material related party transactions in the period and any material changes in the related party transactions described in the last annual report.

The Directors of Centaur Media Plc are listed in the Centaur Media Plc Annual report for the year ended 31 December 2016 and there have been no changes during the six months to 30 June 2017.  It was announced in July 2017 that Grainne Brankin was leaving as Company Secretary to be replaced by CFO, Swag Mukerji.

 

Going concern

 

In assessing the going concern status, the Directors considered the Group's activities, the financial position of the Group and the Group's financial risk management objectives and policies.  The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the date of this report and for this reason, they continue to adopt the going concern basis in preparing the financial statements.

 

Related party transactions

 

There have been no further changes to the reported related parties or nature of transactions with them as set out in the Annual Report for the year ended 31 December 2016.

 

The interim report was approved by the Board of Directors and authorised for issue on 25 July 2017 and signed on behalf of the Board by:

 

Andria Vidler, Chief Executive Officer

Swag Mukerji, Chief Financial Officer

 

 

 

Independent review report to Centaur Media Plc

Report on the condensed consolidated interim financial statements

 

Our conclusion

 

We have reviewed Centaur Media plc's consolidated interim financial statements (the "interim financial statements") in the Interim Report of Centaur Media plc for the 6-month period ended 30 June 2017. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

What we have reviewed

 

The interim financial statements comprise:

 

·           the Consolidated Statement of Financial Position as at 30 June 2017;

·           the Consolidated Statement of Comprehensive Income for the period then ended;

·           the Consolidated Cash Flow Statement for the period then ended;

·           the Consolidated Statement of Changes in Equity for the period then ended; and

·           the explanatory notes to the interim financial statements.

 

The interim financial statements included in the Interim Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

Responsibilities for the condensed consolidated interim financial statements and the review

 

Our responsibilities and those of the directors

The Interim Report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

Our responsibility is to express a conclusion on the interim financial statements in the Interim Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose.  We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

PricewaterhouseCoopers LLP

Chartered Accountants

London

25 July 2017

 

Notes:

(a)   The maintenance and integrity of the Centaur Media plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.

(b)  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

 

Consolidated Statement of Comprehensive Income for the six months ended 30 June 2017 

 



Six months ended 30 June (unaudited)






Restated*

Restated*

Restated*

 



Adjusted results1

Adjusting items1

Statutory results

Adjusted results1

Adjusting items1

Statutory results

 



2017

2017

2017

2016

2016

2016

 


Note

£m

£m

£m

£m

£m

£m

 

 Continuing operations
















Revenue

2

 33.9

           -

 33.9

33.1

           -  

33.1

Net operating expenses

3

(31.9)

 (2.6)

 (34.5)

(30.5)

(1.8)

(32.3)









Operating (loss) / profit


 2.0

(2.6)

 (0.6)

2.6

(1.8)

0.8









Finance costs


 (0.2)

          -

 (0.2)

(0.3)

           -  

(0.3)









(Loss) / profit before tax


 1.8

(2.6)

(0.8)

2.3

(1.8)

0.5









Taxation

5

 (0.4)

0.2

 (0.2)

(0.4)

0.3

(0.1)









(Loss) / profit for the period from continuing operations


1.4

 

 

(2.4)

(1.0)

1.9

 

 

(1.5)

0.4









Discontinued operations








Profit for the period  from discontinued operations

          10

 1.8

 

(1.7)

 0.1

1.9

 

 

(0.1)

1.8






 



Profit / (loss) for the period attributable to owners of the parent


 3.2

 

 

(4.1)

 (0.9)

3.8

 

 

(1.6)

2.2









Total comprehensive income / (loss) attributable to owners of the parent


 3.2

 

 


(4.1)

 (0.9)

3.8

 

 


(1.6)

2.2

















Earnings / (loss) per share attributable to owners of the parent

6







Basic from continuing operations


1.0p

 

(1.7p)

(0.7p)

1.3p

 

(1.0p)

0.3p

Basic from discontinuing


  






operations


1.2p

(1.1p)

0.1p

1.4p

(0.2p)

1.2p

Total


2.2p

(2.8p)

(0.6p)

2.7p

(1.2p)

1.5p









Fully diluted from continuing operations


0.9p

 

(1.6p)

(0.7p)

1.2p

 

(0.9p)

0.3p

Fully diluted from discontinuing


 






operations


1.2p

(1.1p)

0.1p

1.3p

(0.1p)

1.2p

Total


2.1p

(2.7p)

(0.6p)

2.5p

(1.0p)

1.5p

* Restated to reflect Home Interest as a discontinued operation

1 See note 4

 

 

 

 

Consolidated Statement of Changes in Equity for the six months ended 30 June 2017

 

Attributable to owners of the parent company

 





Reserve




 





for shares




 


Share

Own

Share

to be

Deferred

Retained

Total 

 


capital

shares

premium

issued

shares

earnings

equity

 


£m

£m

£m

£m

£m

£m

£m

 









 

Unaudited








 

At 1 January 2016

15.0         

(6.5)  

0.7

0.9  

0.1          

66.2       

76.4  

Profit for the period and








 

   total comprehensive income

-

-

-

-

-

2.2

2.2

 

Transactions with owners:








 

Dividends (note 13)

-

-

-

-

-

(2.1)

(2.1)

 

Exercise of share awards

-

0.3

-

(0.2)

-

(0.1)

-

 

Fair value of employee services

-

-

-

0.4

-

-

0.4

 









 

As at 30 June 2016

15.0

(6.2)

0.7

1.1

0.1

66.2

76.9

 









 

Unaudited








 

At 1 January 2017

15.1        

(6.4

1.1

0.8

0.1         

56.4       

67.1  

Loss for the period and








 

   total comprehensive income

-

-

-

-

-

 (0.9)

(0.9)

 

Transactions with owners:








 

Dividends (note 13)

-

-

-

-

-

(2.2)

(2.2)

 

Fair value of employee services

-

-

-

 0.1

-

-

 0.1

 









 

As at 30 June 2017

15.1

  (6.4)

1.1

0.9

0.1

53.3

64.1

 

 

 

Consolidated Statement of Financial Position as at 30 June 2017           

Registered number 04948078

 



30 June

30 June

31 December



2017

2016

2016



Unaudited

Unaudited

Audited


Note

£m

£m

£m






Non-current assets





Goodwill

7

 64.6

78.1

       72.1

Other intangible assets

8

 14.4

16.6

16.7

Property, plant and equipment


 1.7

2.2

2.0

Deferred income tax assets


 0.8

0.8

0.6



 81.5

 97.7

91.4






Current assets





Inventories


 0.9

1.3

2.5

Trade and other receivables

9

 11.0

22.1

15.7

Cash and cash equivalents


3.9

2.9

3.4

Assets held for sale as part of disposal group

10

 11.1

-

-



 26.9

26.3

21.6






Total assets


 108.4

124.0

113.0






Current liabilities





Trade and other payables


 (11.7)

(12.1)

(9.7)

Deferred income


 (12.8)

(16.5)

(16.9)

Current income tax liabilities


 (0.1)

(0.8)

(0.7)

Provisions


-

-

(0.4)

Liabilities held for sale as part of disposal group

10

(5.0)

-

-



 (29.6)

(29.4)

(27.7)

Net current liabilities


 (2.7)

(3.1)

(6.1)






Non-current liabilities





Borrowings

11

 (13.9)

(17.0)

(17.4)

Deferred income tax liabilities


 (0.8)

(0.7)

(0.8)



 (14.7)

(17.7)

(18.2)

Net assets


 64.1

76.9

67.1






Capital and reserves attributable to owners of the parent





Share capital


 15.1

15.0

15.1

Own shares


 (6.4)

(6.2)

(6.4)

Share premium


 1.1

0.7

1.1

Other reserves


 1.0

1.2

0.9

Retained earnings


 53.3

66.2

56.4

Total equity


 64.1

76.9

67.1

 

The notes are an integral part of these condensed consolidated interim financial statements.  The condensed consolidated interim financial statements were approved by the Board of Directors on 25 July 2017 and were signed on its behalf by:

 

Swag Mukerji

Chief Financial Officer

 

 

 

Consolidated Cash Flow Statement for the six months ended 30 June 2017

 



Six months ended 30 June (unaudited)



2017

2016


Note

£m

£m





Cash flows from operating activities




Cash generated from operations

14

9.9

9.3

Tax paid


 (1.1)

(1.0)

Net cash generated from operating activities


 8.8

8.3





Cash flows from investing activities




Other acquisitions - settlement of deferred consideration


(1.2)

-

Purchase of property, plant and equipment


 (0.1)

(0.2)

Purchase of intangible assets

8

 (1.1)

(0.8)

Net cash flows used in investing activities


 (2.4)

(1.0)





Cash flows from financing activities




Interest paid


 (0.2)

(0.3)

Dividends paid

13

 (2.2)

(2.1)

Proceeds of borrowings

11

 3.5

1.0

Repayment of borrowings

11

 (7.0)

(5.0)

Repayment of loan notes

11

 -

(1.1)

Net cash flows used in financing activities


 (5.9)

(7.5)





Net increase / (decrease) in cash and cash equivalents


 0.5

(0.2)





Cash and cash equivalents at beginning of period


3.4

3.1





Cash and cash equivalents at end of period


 3.9

2.9









Reconciliation of net debt:




Cash and cash equivalents


 3.9

2.9

Borrowings

11

 (14.0)

(17.0)







 (10.1)

(14.1)

 

 

Notes to the condensed consolidated interim financial statements

 

1 Summary of significant accounting policies

General information

Centaur Media Plc ('the Company') is a public company limited by shares and incorporated and domiciled in England and Wales.  The address of the Company's registered office is Wells Point, 79 Wells Street, London, W1T 3QN.  The Company is listed on the London Stock Exchange.

These condensed consolidated financial statements were approved for issue on 25 July 2017. 

These condensed consolidated financial statements are unaudited and do not constitute the statutory accounts within the meaning of Section 434 of the Companies Act 2006.  The Group's most recent statutory financial statements, which comprise the Annual Report and audited Financial Statements for the year ended 31 December 2016 were approved by the Board of Directors on 28 March 2017 and delivered to the Registrar of Companies.  The report of the auditors on those financial statements was not qualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

The consolidated financial statements of the Group as at, and for the year ended 31 December 2016, is available upon request from the Company's registered office or at www.centaurmedia.com

Accounting policies and estimates

The accounting policies adopted by the Group in the condensed consolidated financial statements are consistent with those applied by the Group in its consolidated financial statements for the year ended 31 December 2016, except as described below:

·     Amendments to IFRSs effective for the financial year ending 31 December 2017 are not expected to have a material impact on the Group.

·     Taxes on income in the interim periods are accrued using the tax rate that would be applicable to the expected total annual profit of loss.

·     The financial statements have been restated to show the Home Interest portfolio as a discontinued operation in accordance with IFRS 5 (see note 10).

The preparation of the condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.

IFRS 15: Revenue from Contracts with Customers is a new standard based on a five-step model framework, which replaces all existing revenue recognition standards and is effective for accounting periods commencing on or after 1 January 2018. Work is currently ongoing in analysing the potential impact on the Group's various revenue streams. The anticipated impact on the Group's reported revenue for future years will be disclosed with the announcement of the Group's 2017 preliminary results.

Basis of preparation

This condensed consolidated financial statements for the six-month period ended 30 June 2017 have been prepared in accordance with the Disclosure and Transparency rules of the Financial Conduct Authority and with International Financial Reporting Standards ('IFRSs') and IAS 34, 'Interim financial reporting', as adopted by the European Union.  The condensed consolidated financial statements should be read in conjunction with the Annual Report and Financial Statements for the year ended 31 December 2016, which have been prepared in accordance with IFRSs as adopted by the European Union.

The condensed consolidated financial statements have been prepared on a going concern basis.

Presentation of non-statutory measures

In addition to statutory measures, the Directors use various non-GAAP key financial measures to evaluate the Group's performance, and consider that presentation of these measures assist shareholders in understanding its core trading performance. The basis of the principal adjustments is consistent with that presented in the consolidated financial statements for the year ended 31 December 2016, and as described in those financial statements. The measures used are explained and reconciled to their equivalent statutory headings below.

The Directors believe that adjusted results and adjusted earnings per share provide additional useful information on the ongoing operations of the Group to shareholders.  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. 

Adjustments are made in respect of:

·     Exceptional items - the Group considers items of income and expense as exceptional and excludes them from the adjusted results where the nature of the item, or its size, is likely to be material and non-recurring in nature so as to assist the user of the financial statements to better understand the results of the core operations of the Group.  Details of exceptional items are shown in note 4.

·     Amortisation of acquired intangible assets - the amortisation charge for those intangible assets recognised on business combinations is excluded from the adjusted results of the Group since they are non-cash charges arising from non-trading investment activities.  As such, they are not considered reflective of the core trading performance of the Group.  Details of amortisation of intangible assets are shown in note 8.

·     Share-based payments - share-based payment expenses are excluded from the adjusted results of the Group as the Directors believe that the volatility of these charges can distort the user's view of the core trading performance of the Group.   

·     Impairment of goodwill - the Directors believe that as well generally being volatile and material, the impairment of goodwill relating to business combinations is reflective of past investment decisions as well as current trading performance, and therefore exclude any such charges from the adjusted results of the Group.  Details of goodwill impairment are shown in note 7.

·     Earn-out consideration - deferred or contingent consideration in relation to business combinations recognised in the income statement (as a result of being classified as remuneration under IFRS 3) is not considered reflective of the core trading of the Group since it results from investment activities and is volatile in nature.  As such, income statement items relating to business combinations are removed from adjusted results.  See note 4.

·     Profit or loss on disposal of assets or subsidiaries - profit or loss on disposals of businesses are excluded from adjusted results of the Group as they are unrelated to core trading, and can distort a user's understanding of the performance of the Group due to their infrequent and volatile nature.  See note 4.

·     Other separately reported items - certain other items are excluded from the adjusted results where they are considered large or unusual enough to distort the comparability of core trading results year on year.  Details of these separately disclosed items are shown in note 4.

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes (primarily exceptional items), calculated using the standard rate of corporation tax.

Further details of adjusting items are included in note 4. A reconciliation between adjusted and statutory earnings per share measures is shown in note 6

The following charges / (credits) were presented as adjusting items:




Six months ended 30 June (unaudited)




2017

£m

2016

£m

Continuing operations




Exceptional operating expenses


 0.1

0.4

Amortisation of acquired intangibles


 1.2

1.0

Share-based payments


 0.3

0.4

Costs relating to the acquisition of business


0.4

-

Earn-out consideration


0.6

-

Adjusting items to profit before tax


 2.6

1.8

Tax credit relating to adjusting items


 (0.2)

 (0.3)

Adjusting items to profit for the period


 2.4

1.5

 

Adjusted operating profit reconciles to profit before tax as follows:




Six months ended 30 June (unaudited)




2017

2016



Note

£m

£m

Continuing operations




Adjusted operating profit


 2.0

2.6

Finance costs



 (0.2)

(0.3)

Adjusted profit before tax


 1.8

2.3

Adjusting items

Exceptional operating expense

4

 (0.1)

(0.4)


Amortisation of acquired intangibles

4

 (1.2)

(1.0)


Share-based payments


 (0.3)

(0.4)


Costs relating to the acquisition of business

4

(0.4)

-


Earn-out consideration

4

(0.6)

-

(Loss) / profit before tax


 (0.8)

0.5

 

Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.

The condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements; they should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2016.

There have been no changes in risk management processes or policies since the year end.

Seasonality

The Group has deliberately sought to reduce the seasonality of its earnings through more even event phasing throughout the year.  Historically, the majority of the Group's revenues and operating profits were delivered in the period from January to June.  During the year ended 31 December 2016, 55% (2015: 52%) of revenues and 56% (2015: 58%) of adjusted operating profits occurred in the period January to June.

Discontinued operations

The results of the Home Interest portfolio have been reclassified as discontinued operations pending the disposal of these businesses.

 

2 Segmental reporting

The Executive Committee (comprising the Chief Executive, Chief Finance Officer, Chief Operating Officer, three Divisional Managing Directors and Company Secretary) has been identified as the chief operating decision maker, reviewing the Group's internal reporting on a monthly basis in order to assess performance and allocate resources.

The Group is organised around four market-facing segments: Marketing, Financial Services, Professional and Home Interest.  Corporate costs are allocated to these segments on an appropriate basis depending on the nature of the cost.

Segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, inventories and trade receivables. Segment liabilities comprise trade payables, accruals and deferred income.  Corporate assets and liabilities comprise current and deferred tax balances, cash and cash equivalents and borrowings.

Capital expenditure comprises additions to property, plant and equipment, intangible assets and includes additions resulting from acquisitions through business combinations.

 

2 Segmental reporting (continued)

 


Marketing

Financial Services

Professional

Continuing operations

Discontinued operations

Group


£m

£m

£m

£m

£m

£m

Six months ended 30 June 2017







Unaudited







Revenue

 15.5

5.0

13.4

33.9

6.1

 40.0








Adjusted operating profit

 0.8

0.2

1.0

2.0

2.2

4.2

Amortisation of acquired intangibles

(1.0)

(0.1)

(0.1)

(1.2)


-

(1.2)

Exceptional operating expense

(0.1)

-

-

(0.1)

-

 (0.1)

Share-based payments

(0.2)

-

(0.1)

(0.3)

-

(0.3)

Costs relating to the acquisition and disposal of businesses

(0.4)

-

-

(0.4)


(1.7)

(2.1)

Earn-out consideration

(0.6)

-

-

(0.6)

-

(0.6)

Operating (loss) / profit

(1.5)

0.1

0.8

(0.6)

0.5

 (0.1)

Finance costs




(0.2)

-

 (0.2)

 (Loss) / profit before tax




(0.8)

0.5

 (0.3)

Taxation




(0.2)

(0.4)

 (0.6)

(Loss) / profit for the period attributable to owners of the parent




(1.0)

 

 

0.1

 (0.9)








Segment assets

54.1

8.9

29.0

92.0

 11.1

103.1

Corporate assets




5.3

-

 5.3

Consolidated total assets




97.3

11.1

 108.4








Segment liabilities

  (13.1)

(2.7)

(8.7)

(24.5)

 (4.6)

(29.1)

Corporate liabilities




(14.8)

(0.4)

 (15.2)

Consolidated total liabilities




(39.3)

(5.0)

 (44.3)








Other items







Capital expenditure (tangibles and intangibles)

 0.8

0.1

0.2

1.1

 

-

1.1

 

 

 

 

2 Segmental reporting (continued)


Marketing

Financial Services

Professional

Continuing operations

Discontinued operations

Group


£m

£m

£m

£m

£m

£m

Six months ended 30 June 2016







Restated & Unaudited







Revenue

14.0

6.1

13.0

33.1

6.8

39.9








Adjusted operating profit

0.8

0.5

1.3

2.6

2.4

5.0

Amortisation of acquired intangibles

(0.8)

(0.1)

(0.1)

(1.0)


(0.1)

(1.1)

Exceptional operating expense

-

(0.1)

(0.3)

(0.4)

-

(0.4)

Share-based payments

-

(0.1)

(0.3)

(0.4)

-

(0.4)

Operating profit

-

0.2

0.6

0.8

2.3

3.1

Finance costs




(0.3)

-

(0.3)

Profit before tax




0.5

2.3

2.8

Taxation




(0.1)

(0.5)

(0.6)

Profit for the period attributable to owners of the parent




0.4

 

 

1.8

2.2








Segment assets

56.3

17.0

31.8

105.1

13.4

118.5

Corporate assets




5.5

-

5.5

Consolidated total assets




110.6

13.4

124.0








Segment liabilities

(11.1)

(2.4)

(8.6)

(22.1)

(4.3)

(26.4)

Corporate liabilities




(20.7)

-

(20.7)

Consolidated total liabilities




(42.8)

(4.3)

(47.1)








Other items







Capital expenditure (tangibles and intangibles)

0.3

0.1

0.2

0.6


0.2

0.8

 

 

 

3 Net operating expenses

 

Operating profit is stated after charging/(crediting):

 


Continuing operations



 




Six months ended 30 June (unaudited)

 




Adjusted

Adjusting

Statutory

Statutory

 




results1

items1

results

results1

items1

results

 




2017

2017

2017

2016

2016

2016

 


Note

£m

£m

£m

£m

£m

£m

 










 

Net foreign exchange gains


(0.2)

-

(0.2)

-

-

-


Employee benefits expense


14.3

0.1

14.4

14.2

0.2

14.4


Depreciation of property, plant and









   equipment


0.4

-

0.4

0.3

-

0.3

 

Amortisation of intangible assets

8

1.4

1.2

2.6

1.2

1.0

2.2


Exceptional operating expense

4




-

0.2

0.2


Costs relating to the acquisition of business


-

0.4

0.4

-

-

-


Earn-out consideration


-

0.6

0.6

-

-

-


Operating lease rentals


0.8

-

0.8

0.8

-

0.8


Repairs and maintenance

   expenditure


0.3

-

0.3

0.2

-

0.2


Trade receivables impairment

9 

0.2

-

0.2

0.1

-

0.1


Share-based payment expense


-

0.3

0.3

-

0.4

0.4


Other operating expenses*


14.7

-

14.7

13.7

-

13.7

 




31.9

2.6

34.5

30.5

1.8

32.3

 










 

Cost of sales


16.7

-

16.7

16.1

-

16.1


Distribution costs


0.4

-

0.4

0.5

-

0.5


Administrative expenses


14.8

2.6

17.4

13.9

1.8

15.7





31.9

 2.6

34.5

30.5

1.8

32.3

 

 

1 See note 4

* Within the other operating expenses category, rental income for the sub-lease of properties under leases totalled £0.3m (2016: £0.4m).

 

 

4 Adjusting items

Certain items are presented as adjusting.  These are detailed below. 

 



Six months ended 30 June (unaudited)



2017

2016



£m

£m

Continuing operations



Exceptional operating costs




Staff related restructuring costs

0.1

0.2


Costs relating to strategic corporate restructuring initiatives

-

0.2

Exceptional operating costs

0.1

0.4

Costs relating to the acquisition of business

0.4

-

Amortisation of acquired intangible assets

 1.2

1.0

Share-based payments

 0.3

0.4

Earn-out consideration

0.6

-

Adjusting items to profit before tax

 2.6

1.8

Tax relating to adjusting items

 (0.2)

(0.3)

Total adjusting items after tax

2.4

1.5

Discontinued operations

1.7

0.1

Total adjusting items after tax

 4.1

1.6

 

Exceptional costs

 

Staff related restructuring costs

During 2017, these costs were incurred as a result of the reorganisation of the HR function and the exit from print.

In 2016 these comprised redundancy costs of £0.2m as a result of specific restructuring activities and cost saving initiatives.

Costs relating to strategic corporate restructuring initiatives

In 2016 these costs relate to strategic restructuring initiatives (£0.1m) and non-trading costs arising on prior disposals (£0.1m).

Other adjusting items

Other adjusting items relate to the amortisation of acquired intangible assets (see note 8) and share-based payment costs as well as the items discussed below:

 

Earn-out consideration

In 2017, a charge of £0.6m has been recognised in relation to the Oystercatchers acquisition earn-out.

 

Costs relating to the acquisition of a business

These costs relate to the proposed acquisition of MarketMakers Limited (see note 15).

 

5 Taxation

 



Six months ended 30 June (unaudited)



2017

2016



£m

£m

Continuing operations






Analysis of charge/(credit) for the period







Current tax

 0.4

0.3

Deferred tax

 (0.2)

 (0.2)


 0.2

0.1

 

The tax charge is based on the estimated effective tax rate for the year ending 31 December 2017.

6 Earnings / (loss) per share

Basic earnings per share ('EPS') is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the year.  91,191 (2016: 91,191) shares held in the employee benefit trust and 6,870,437 (2016: 6,472,990) shares held in treasury have been excluded in arriving at the weighted average number of shares.

The calculations of earnings per share are based on the following profits and number of shares:

 



Six months ended 30 June (unaudited)



2017

2017

2017

2016

2016

2016



Earnings attributable to owners of the parent

Weighted average number of shares

Earnings per share

Earnings attributable to owners of the parent

Weighted average number of shares

Earnings per share



£m

millions

Pence

£m

millions

Pence

Basic







Continuing operations


(1.0)

144.4

(0.7)

0.4

143.3

0.3

Continuing and discontinued operations

(0.9)

144.4

(0.6)

2.2

143.3

1.5









Effect of dilutive securities






Options

-

 7.4

-

-

6.3

-









Diluted







Continuing operations

(1.0)

151.8

(0.7)

0.4

149.6

0.3

Continuing and discontinued operations

(0.9)

151.8

(0.6)

2.2

149.6

1.5









Adjusted







Continuing operations







Basic

 (1.0)

 144.4

(0.7)

0.4

143.3

0.3

Exceptional operating expense

 0.1

 -

0.1

0.4

-

0.3

Amortisation of acquired intangibles

1.2

-

0.8

1.0

-

0.6

Share-based payments

 0.3

-

0.2

0.4

-

 0.3

Costs relating to business acquisition

0.4

-

0.3

-

-

-

Earn-out consideration

0.6

-

0.4

-

-

-

Tax effect of above adjustments

 (0.2)

-

(0.1)

(0.3)

-

(0.2)








Discontinued operations







Basic

0.1

144.4

-

1.8

143.3

1.3

Amortisation of acquired intangibles

-

-

-

0.1

-

0.1

Costs relating to business disposal

1.7

-

1.2

-

-

-









Adjusted basic







Continuing operations

1.4

144.4

1.0

1.9

143.3

1.3

Continuing and discontinued operations

3.2

144.4

2.2

3.8

143.3

2.7



-






Effect of dilutive securities






Options







Continuing operations


7.4

(0.1)


6.3

(0.1)

Continuing and discontinued operations


7.4

(0.1)


6.3

(0.2)









Adjusted diluted







Continuing operations

1.4

151.8

0.9

1.9

149.6

1.2

Continuing and discontinued operations

3.2

151.8

2.1

3.8

149.6

2.5








 

 

7 Goodwill

 







 

Total

Net book value





 £m







At 1 January 2017





72.1

Transferred to disposal group classified as held for sale





(7.5)

At 30 June 2017 (unaudited)





64.6








At 1 January 2016





78.1

At 30 June 2016 (unaudited)





78.1

 

At the year-end 31 December 2016, the following sensitivity analysis was performed on the value-in-use calculations, holding all other variables constant, to:

(i)           apply a 5% reduction to forecast adjusted EBITDA in each year of the modelled cash flows.  This would have resulted in a further impairment of £0.6m in the Financial Services segment (2015: further impairment of £1.2m in the Professional segment).  No impairment would have occurred in any of the other segments.

(ii)          apply a 0.5% increase in discount rate from 12.6% to 13.1%.  This would have resulted in a further impairment of £0.4m in the Financial Services segment (2015: increase to 13.7% would result in a further impairment of £1.0m in the Professional segment).  No impairment would have occurred in any of the other segments.

(iii)         reduce the terminal value growth rate from 2.0% to 1.75%.  This would have resulted in a further impairment of £0.1m in the Financial Services segment (2015: 0.25% reduction to 2.0% would result in a further impairment of £0.4m in the Professional segment).  No impairment would have occurred in any of the other segments.

 

In the six months ended 31 December 2016, the goodwill relating to the Financial Services segment was reduced to its recoverable amount through recognition of an impairment loss of £7.2m.

 

 

8 Other intangible assets

 



 Computer software

 Brands and publishing rights*

 Customer relationships*

 Separately acquired websites and content*

Total

Net book value


£m

£m

£m

£m

£m








At 1 January 2017

6.3

3.7

6.2

0.5

16.7

Transferred to disposal group classified as held for sale

(0.1)

(0.6)

-

-

(0.7)


6.2

3.1

6.2

0.5

16.0

Additions






   Separately acquired

 0.9

-

-

-

0.9

   Internally generated

 0.1

-

-

-

0.1

Amortisation for the period

(1.4)

(0.2)

(0.5)

(0.5)

(2.6)

At 30 June 2017 (unaudited)

5.8

2.9

5.7

-

14.4







At 1 January 2016

6.7

3.9

6.4

1.3

18.3

Additions






   Separately acquired

0.1

-

-

-

0.1

   Internally generated

0.5

-

-

-

0.5

Amortisation for the period

(1.2)

(0.1)

(0.6)

(0.4)

(2.3)

At 30 June 2016 (unaudited)

6.1

3.8

5.8

0.9

16.6








* Amortisation of acquired intangibles is presented as an adjusting item.

 

9 Trade and other receivables

 





30 June

30 June

31 December

 





2017

2016

2016

 





Unaudited

Unaudited

Audited

 





£m

£m

£m

 








Amounts falling due within one year






Trade receivables



10.9

18.0

15.8

Less: provision for impairment of receivables



 (2.2)

(0.7)

(2.7)

Trade receivables - net



 8.7

17.3

13.1

Other receivables



 0.9

1.5

0.8

Prepayments



 1.2

1.7

1.2

Accrued income



 0.2

1.6

0.6





 11.0

22.1

15.7

 

The ageing of trade receivables according to their original due date is detailed below:



30 June

30 June

30 June

30 June

31 December

31 December



2017

2017

2016

2016

2016

2016



Gross

Provision

Gross

Provision

Gross

Provision



Unaudited

Unaudited

Unaudited

Unaudited

Audited

Audited



£m

£m

£m

£m

£m

£m









Not due

4.8

-

6.4

-

6.4

-

0-30 days

2.1

-

3.7

-

3.2

-

31-60 days

0.6

-

1.5

-

1.2

(0.1)

61-90 days

0.7

-

1.2

-

0.9

(0.1)

Over 90 days


2.7

(2.2)

5.2

(0.7)

4.1

(2.5)



10.9

(2.2)

18.0

(0.7)

15.8

(2.7)

 

 

The movement in the provision for impairment of receivables is detailed below:

 



Six months ended 30 June (unaudited)



2017

2016



£m

Analysis of charge for the period






Balance at start of period

2.7

0.9

Utilisation

 (0.3)

(0.4)

Additional provision charged to the statement of comprehensive income

 0.3

0.2

Transferred to disposal group classified as held for sale

(0.5)

-


 2.2

0.7

 

The Group's policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days from the date of invoice or, in the case of live events related revenue, no less than 30 days before the event.  A provision for impairment losses is established when there is objective evidence that the Group will not be able to collect all amounts due in accordance with the original terms of the receivables. Impairment losses are taken through administrative expenses in the statement of comprehensive income.

 

The Directors consider the carrying value of trade and other receivables approximates to their fair value.

 

 

10 Assets held for sale

 

During the period, the Group commenced the process to sell the Home Interest portfolio as the Board believed the Home Interest portfolio was no longer core to Centaur's B2B focus. On 7 July 2017 the sale of Home Interest was agreed pending shareholder approval for an enterprise value of £32m, with completion expected in August 2017. The profit on disposal is expected to be circa £22m.

 

At the 30 June 2017 the Home Interest portfolio met the criteria for and has been accounted for as a discontinued operation and held for sale under IFRS 5.

 

The results of the Home Interest discontinued operation are as follows: 

 




Six months ended 30 June (unaudited)




2017

£m

2016

£m





Revenue


6.1

6.8

Expenses


(3.9)

(4.3)

Operating profit before exceptional items


 2.2

2.5

Exceptional items (Note 4)


(1.7)

(0.1)

Profit before tax from discontinuing operations


 0.5

2.4

Tax  


 (0.4)

 (0.5)

Profit from discontinuing operations


 0.1

1.9

 

Basic EPS

Statutory


0.1p

1.2p

Adjusted


1.2p

1.4p

 

Diluted EPS

Statutory


0.1p

1.2p

Adjusted


1.2p

1.3p

 

The major classes of assets and liabilities classified as held for sale are as follows:







30 June







2017







Unaudited







£m








Goodwill




  

7.5

Other intangible assets




  

0.7

Inventories



  


0.6

Trade and other receivables





2.3

Assets held for sale





11.1







Trade and other payables





(1.0)

Deferred income





(3.6)

Current income tax liability





(0.4)

Disposal group liabilities





(5.0)






 







6.1

 

 

 








 

Cash flows from discontinued operations 











30 June

30 June






2017

2016






Unaudited

Unaudited






£m

£m

Operating cash flows




1.2

2.7

Investing cash flows




 -

 (0.2)

Financing cash flows




 -

 -

Total cash flows




1.2

2.5

 

 

11 Borrowings





30 June

30 June

31 December





2017

2016

2016





Unaudited

Unaudited

Audited





£m

£m

£m

Non-current liabilities






Revolving credit facility



 14.0

17.0

17.5

Finance lease payables



 -

0.1

-

Arrangement fee in respect of revolving credit facility



 (0.1)

(0.1)

(0.1)





 13.9

17.0

17.4

 

12 Provisions

 







     

Deferred consideration






 £m







At 1 January 2017





0.4

Charged to the statement of comprehensive income during the year





0.4

Reclassification of share-based payment charge on earn-out





0.4

Utilised during the period





(1.2)

At 30 June 2017 (unaudited)





-

Deferred consideration relates to Oystercatchers as disclosed in note 13 on pages 113-114 in the Group Annual report for the year ended 31 December 2016.

At 31 December 2016 and under the sales purchase agreement, the contingent consideration was to be settled in cash [75%] and shares [25%]. In the prior year, an expense and a provision of £0.4m was recognised under IAS 19 (for the cash element) and an expense and credit to equity of £0.2m was recognised under IFRS 2 (for the share-based payment element).

During the period a further expense and provision of £0.4m was recognised under IAS 19 (for the cash element) and an expense and credit to equity of £0.2m under IFRS 2 (for the share-based payment element).

The total amount of £1.2m was settled wholly in cash during the period and therefore an adjustment of £0.4m (£0.2m current period and £0.2m prior year) was made to reverse the share-based payment element under IFRS 2 and account for the whole transaction under IAS 19 appropriately.

 

13 Dividends

 






Six months ended 30 June (unaudited)






2017

2016






£m

£m

Equity dividends






Final dividend for 2015: 1.5p per 10p ordinary share

-

2.1

Final dividend for 2016: 1.5p per 10p ordinary share

2.2

-






2.2

2.1

 

An interim dividend for the six months ended 30 June 2017 of £2.2m (1.5p per ordinary share) is proposed by the Directors and will be paid on 5 October 2017 to all shareholders on the register as at 15 September 2017.

14 Cash flow generated from operating activities

 






Six months ended 30 June (unaudited)






2017

2016






£m

£m







(Loss) / Profit for the period




 (0.9)

2.2

Adjustments for:






   Tax




 0.6

0.6

   Depreciation of property, plant and equipment

 0.4

0.3

   Amortisation of intangible assets

 2.6

2.3

   Interest expense




 0.2

0.3

   Earn-out consideration

0.6

-

   Share-based payments

0.3

0.4

   Costs relating to business disposal

1.4

-

   Costs relating to business acquisition

0.4

-







Changes in working capital:






   Decrease in inventories

1.0

0.7

   Decrease in trade and other receivables

 2.4

3.0

   Increase in trade and other payables

1.4

-

   Decrease in deferred income

 (0.5)

(0.5)

Cash generated from operating activities

 9.9

9.3

 

15 Post balance sheet event

On 7 July 2017, Centaur Communications Limited, a Group company, entered into a conditional agreement to purchase the entire issued share capital of MarketMakers, one of the UK's leading integrated marketing services businesses for an initial consideration of £13.4 million with a deferred earn out amount based on EBITDA performance to a maximum amount payable of £17.0 million.

Additionally, on 7 July 2017 the sale of the Home Interest portfolio was agreed pending shareholder approval.  Further details are provided in note 10.


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