Regulatory Story
Go to market news section View chart   Print
RNS

Interim Results

Released 07:00 18-May-2017

RNS Number : 4839F
Euromoney Institutional InvestorPLC
18 May 2017
 

                     

 

 

Euromoney

Institutional

Investor PLC

 

 

Interim Financial Report 2017

 

 

Euromoney Institutional Investor PLC

Interim results

Strategy on track

 

May 18 2017

 

 

 

 

 

Highlights

H1 2017


H1 2016


Change







Total revenue

£203.2

m

£194.2

m

5%

Adjusted results






• Adjusted operating profit

£49.0

m

£46.8

m

5%

• Adjusted profit before tax

£49.1

m

£46.9

m

5%

• Adjusted diluted earnings a share

32.7

p

29.9

p

9%

Statutory results






• Operating profit

£15.6

m

£26.0

m


• Profit before tax

£15.6

m

£23.4

m


• Diluted earnings a share

11.4

p

13.4

p


Net (debt)/cash

(£83.6)

m

£55.9

m

(£139.5m)

Interim dividend

8.8

p

7.0

p

26%







 

 

·      Strategy on track in this year of transition. The recent DMGT sell-down has allowed us to accelerate the strategy.

·      First-quarter revenues reflected, as expected, the continuation of the headwinds experienced last year. Second quarter shows some signs of the business turning.

·      Total revenues up 5%, underlying1 revenues down 2%.

·      Adjusted profit before tax up 5% to £49.1m.

·      Results continued to be boosted by a strong dollar compared to last year.

·      Statutory profit before tax reflects exceptional items of £24.6m and acquired intangible amortisation of £8.8m.

·      Net debt at March 31 of £83.6m, from net cash position at year-end, following the £193.6m share buyback in January.

·      Strong 12-month cash conversion of 120% (2016: 107%) continues to strengthen the balance sheet.

·      Active portfolio management continues. Four businesses sold and one acquisition made in first half together with two more acquisitions in April, including the US$125m purchase of RISI.

·      New dividend policy: interim dividend increased by 26% to 8.8p.

 

1 Underlying revenues are at constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals and significant event timing differences as reconciled on page 8.

 

Commenting on the results, Andrew Rashbass, CEO, said:

"The first-half results reflect good progress with our strategy: investing in strategic themes; creating a best-of-both-worlds operating model which combines Euromoney's well-known entrepreneurial culture with the benefits of a more corporate approach; and active portfolio management. DMGT's sell-down has helped us accelerate this strategy. We are already seeing payback from our investments last year. During the first half we continued to invest for growth and to address the drag from cyclically and structurally challenged businesses. Although headwinds remain for our customers and therefore for us, particularly in asset management, the commodities and banking & finance markets are showing signs of improving. The progress we are seeing gives us confidence that we will meet the board's expectations for the full year. It is in this context that the board has changed its dividend policy to increase the dividend to approximately 40% of adjusted earnings each year."

Strategy

 

Our strategy is to manage a portfolio of businesses in markets where information, data and convening market participants are valued. We deliver products and services that support our clients' critical activities.

In particular, we look to serve markets which are semi-opaque; that is, where there is information which organisations need in order to operate effectively but the information is hard to find. Price discovery is a good example.

B2B 3.0: How information markets are evolving

We characterise the business models of B2B information companies into three generations, which we call B2B Media 1.0, 2.0 and 3.0. Their characteristics are typically as follows:

B2B Media 1.0

B2B Media 2.0

B2B Media 3.0






Print

Digital

Embedded in workflow / platforms






Stand-alone events

Networking events

Trading events / memberships






Monologue

Dialogue

Part of the customer industry






Advertising central

Subscriptions

Licensing






Product-centric

Customer-centric

Solution-centric

 

 

Euromoney has been successful in becoming a 2.0 business over the past 10 or more years. We are becoming a 3.0 business, pacing the transition to meet and anticipate our customers' needs.

Quadrants: As we manage our portfolio to achieve our strategy, we categorise our businesses into four quadrants:


Y axis = Structure





+






Top Left Quadrant ("Prepare for upturn")

Top Right Quadrant ("Invest")





● Batten down the hatches

● New product development


● Protect and enhance competitive position

● Sales and marketing


● Careful, selective investment for when the cycle turns

● Acquisition


● Opportunistic on revenue opportunities

● Fix any operational deficit


● Tight cost control



● Fix any operational deficit





X axis = Cycle

-

+




Bottom Left Quadrant ("Disinvest")

Bottom Right Quadrant ("Use the time wisely")





● Maximise shorter-term profit and cash

● Modest investment to move to top-right quadrant above


● Divest

● Maximise shorter-term profit and cash


● Prevent future build-up

● Fix any operational deficit



● Consider divestment


-




 

 

Three pillars of strategic activity

This analysis results in three pillars of strategic activity:

1.     Invest around big themes. These include price discovery, post-trade activities, asset management and telecoms. Some examples from the half year:

 

a.     Price discovery: Following the acquisition of FastMarkets in September 2016 which confirmed Metal Bulletin as a leading metals price reporting agency, we purchased RISI in April 2017 for US$125m. RISI is the leading price reporting agency for the global forest-products market.

b.     We continue to invest in new products at, for instance, CEIC, BCA and Institutional Investor.

 

 

2.     Transform the operating model. There are two aspects to our model. One is our target business model:

 

Create once, sell many

Recurring revenues

High price

Low capital intensity

 

Leads to

 

High operating leverage

High margin

 

Results in

 

Strong, sustained earnings and cash generation

 

The second is what we call a "best-of-both-worlds" operating model. Euromoney is known for its entrepreneurial culture - our people are creative, action-oriented, close to their customers, passionate about their brands, knowledgeable about the industries they serve and accountable for their results. Over the past six months, we have reorganised the business into seven divisions: price reporting, investment research, Institutional Investor, banking and finance, specialist information, events and data. Alongside, we are building strong central functions to support the businesses and to ensure we take advantage of Euromoney's scale, share best practice, operate strategically and create career paths for staff across the whole company.

3.     Actively manage the portfolio. Acquisitions have always been, and remain, an important part of Euromoney's strategy. We have a record of identifying good businesses where our ownership adds value. In many cases, we buy founder-run businesses; and those founders often stay and grow their business within Euromoney. So far this year we have acquired the small telecoms events businesses BroadGroup (49% in March 2017) and Layer123 (61% in April 2017), as well as RISI (100% in April 2017)

 

We also sell businesses where we believe we are not the best owners, and to generate funds (alongside our strong cash-flows and debt capacity) to invest in the themes discussed above. During the period, we sold four businesses: HedgeFund Intelligence (December 2016), II Intelligence (December 2016), Euromoney Indices (March 2017) and LatinFinance (March 2017) for a combined exceptional profit on disposal of £4.8m.

Strategy overall. Our strategy is designed to develop the businesses we own and deliver strategic, timely, and well-executed acquisitions and disposals. We aim to allocate and recycle capital efficiently to good organic and inorganic opportunities via our "best-of-both-worlds" operating model. Our ambition is to generate consistent and meaningful returns for our shareholders at relatively low risk.

Outlook

The outlook for the commodities and banking markets is improving whereas the asset management sector is now facing headwinds. Currency remains a tailwind at the moment and we are seeing good progress from the strategic actions we are taking. Therefore, we expect to deliver a full year performance in line with the board's expectations.

 

 

Operating and Financial Review

 

Trading Review

Total revenue for the six months to March 31 increased by 5% to £203.2m. The group's businesses focused on price discovery, data and market intelligence improved. The commodity events and banking & finance segments, which together accounted for 24% of revenues, declined as we removed unprofitable events in the face of challenging trading conditions, particularly in the first quarter. Despite a tougher market outlook for asset management, the group modestly increased its subscription revenues from this segment, benefitting from the strategic actions initiated last year around new products, pricing and sales.

 

On a reported basis, the high-margin flow-through from the growth of the Invest quadrant and favourable exchange rates more than offset the drag from businesses in the Disinvest quadrant.

 

Revenue (£m)*

Subscriptions/

Content

Advertising

Sponsorship

Delegates

Other

Total














Asset management

69.1

1%

7.1

(8%)

6.1

4%

0.6

(99%)

0.0

62%

82.9

0%

Pricing, data & market intelligence

52.5

3%

5.0

(23%)

6.8

10%

8.9

-

0.6

(23%)

73.8

1%

Banking & finance

4.2

(8%)

4.1

(1%)

10.0

(12%)

10.9

(13%)

0.6

(25%)

29.8

(11%)

Commodity events

N/A


N/A


4.0

(10%)

14.6

(7%)

0.4

1%

19.0

(10%)


125.8

1%

16.2

(14%)

26.9

(3%)

35.0

(6%)

1.6

(18%)

205.5

-

Sold/closed businesses











4.7

-

Foreign exchange losses on forward contracts











(7.0)

-

Total revenue











203.2

(2%)^

 

 

 

* Figures are 2017 reported revenues and percentages are underlying growth rates.

^ Calculates the growth rate for underlying revenues of £198.5m for the six months to March 31 (i.e. total revenue of £203.2m less sold/closed businesses revenue of £4.7m) over the equivalent six month period in 2016.

 

Underlying revenue fell by 2% in the period, but with a marked difference in performance between the two quarters. After a 5% decline in the first quarter, underlying revenue increased by 1% in the second, with the return to growth largely due to a recovery in the events businesses, particularly in banking & finance and commodities (see table below). 

 

Revenue change by quarter

(underlying#) year-on-year % change

2016

2017


Q1

Q2

Q3

Q4

Q1

Q2

Subscriptions and content

2%

-

1%

2%

1%

2%

Advertising

(2%)

(16%)

(14%)

(12%)

(16%)

(10%)

Sponsorship

(7%)

(8%)

9%

(7%)

(14%)

5%

Delegates

(18%)

(17%)

(9%)

(12%)

(14%)

1%

Total

(6%)

(6%)

(1%)

(4%)

(5%)

1%

 

# At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals and significant event timing differences.

Includes other revenues but excludes revenues from sold/closed businesses. Foreign exchange hedging losses restated in prior year at current year level.

 

Underlying subscriptions and content revenues increased by 1%. Despite the cost and fee pressures facing the asset management sector, subscription revenues from this segment increased by 1% on an underlying basis, with some of the strategic initiatives undertaken in 2016 starting to bring benefits. Pricing, data and market intelligence subscription revenues increased by an underlying 3%, mainly due to a strong performance from Metal Bulletin including the successful integration of last year's FastMarkets acquisition.

Underlying advertising revenues remained weak and decreased by 14%, but advertising now represents less than 10% of revenues.  

Underlying event revenues fell by 5% (sponsorship fell by 3% and delegates by 6%), with the banking & finance and commodity events segments providing a significant drag. However, much of this revenue decline comes from strategic actions taken in 2016 to consolidate some of the group's event activities and cut out a significant number of low margin events and unprofitable training courses, which is now starting to improve profitability. There are also signs of a recovery in these segments as a first quarter revenue decline of 14% was followed by growth of 2% in the second quarter. Large events, particularly in the telecoms and structured finance sectors, have continued to perform well.

The adjusted operating margin was 24%, the same as last year, reflecting the benefit from the Invest quadrant businesses and the elimination of unprofitable events training courses, offset by some remaining drag from the Disinvest quadrant and increased costs attributable to the DMGT sell-down and the need to operate as a standalone group. Adjusted operating profit increased by 5% to £49.0m. 

Adjusted and statutory results

Adjusted profit before tax increased by 5% to £49.1m, with an increase in financing costs following the share buyback offset by an improvement in profits from the group's equity interest in associates and joint ventures, principally Dealogic. Adjusted diluted earnings per share increased by 9% to 32.7p (2016: 29.9p), largely reflecting the benefit from the reduction in the number of shares in issue following the share buyback.

The statutory profit before tax of £15.6m is lower than the adjusted profit before tax due to exceptional items of £24.6m and acquired intangible amortisation of £8.8m. The exceptional items largely arise from a goodwill impairment charge for one of the group's asset management businesses, following its disappointing financial performance in the face of tough market conditions and recent management changes. A detailed reconciliation of the group's adjusted and statutory results is set out in the appendix to this statement.

Tax

The adjusted effective tax rate based on adjusted profit before tax and excluding deferred tax movements on intangible assets, prior year items and exceptional items is 21% (2016: 19%). The group continues to benefit from reductions in the UK corporate tax rate and the tax effects of acquisitions. The tax rate in each year depends mainly on the geographic mix of profits and applicable local tax rates. The group's reported effective tax rate decreased to 12% compared to 26% in 2016. A reconciliation of the tax rate and a description of the group's uncertain tax positions are set out in note 6 to this statement.

DMGT sell-down

In December 2016, DMGT announced its intention to reduce its equity interest in Euromoney from 68% to 49% through a combination of a 15% share buyback by Euromoney and a 10% placing with institutional shareholders, which was completed in early January. The sell-down gives Euromoney balance sheet independence from DMGT and will enable Euromoney to accelerate its active portfolio management strategy. The £193.6m share buyback was funded by a mix of cash and new borrowing facilities arranged by Euromoney, and its borrowing facility with DMGT was terminated.

Following the DMGT sell-down, Euromoney has been investing in its operating model, including replacing the functions previously provided by DMGT and building a strong centre to support its growth strategy as a stand-alone entity.  Once complete, this investment is expected to increase costs by approximately £4m a year, of which £1m were incurred in the first half.   

Net debt and cash flow

Net debt at March 31 2017 was £83.6m compared with net cash of £55.9m at March 31 2016 and net cash of £83.8m at the last year end. The move to a net debt position reflects the share buyback completed in early January at a cost of £193.6m, funded by £75.4m of the group's cash and new bank term-loans of £118.2m. This was partly offset by strong operating cash flows of £73.7m and net cash proceeds of £2.9m from M&A activity in the period. The completion of the RISI and Layer123 acquisitions in April increased net debt by a further £103.3m.

 

The group's new five-year external borrowing facilities comprise term-loans of US$100m and £40m (total £119m) and a £130m multi-currency revolving credit facility. There is a further accordion facility of £130m should the group wish to request it. The term-loans and drawings under the revolving credit facility bear interest charged at LIBOR plus a margin, the applicable margin being based on the group's ratio of net debt to adjusted EBITDA. At March 2017, the group's ratio of net debt to adjusted EBITDA was 0.7 times and the committed undrawn facility available to the group was £130m. Following completion of the RISI acquisition, the group's net debt increased to approximately 1.5 times adjusted EBITDA.

The group's underlying operating cash conversion for the 12 months to March was 120% (2016: 107%), reflecting better working capital management and an increase in deferred revenue.

Dividend

When the DMGT sell-down was announced in December 2016, the board committed to reviewing the company's dividend policy. Following this review, the board has approved a new, progressive dividend policy with an increase in the dividend pay-out ratio from approximately 33% to approximately 40% (a reduction in the dividend cover from 3.0 to 2.5 times earnings), subject to the capital needs of the business. The interim dividend will be paid at a rate of approximately 33% of the previous year's total dividend. The 15% reduction in the number of shares in issue following the share buyback, combined with the increase in the dividend pay-out ratio, has enabled the board to approve a 26% increase in the interim dividend to 8.8p per share (2016: 7.0p), to be paid to shareholders on June 22.

Currency

The group generates approximately two thirds of both its revenues, including approximately a third of its UK revenues, and profit before tax in US dollars.  The exposure to US dollar revenues in its UK businesses is hedged using forward contracts to sell US dollars, which delays the impact of movements in exchange rates for at least a year.  However, the group does not hedge the foreign exchange risk on the translation of overseas profits.    

The average sterling-US dollar rate for the six months to March 31 was $1.25 (2016: $1.48). This improved headline revenue growth rates for the year by approximately ten percentage points and adjusted profit before tax by £6.4m.  Each one cent movement in the US dollar rate has an impact on profits on translation of approximately £0.6m on an annualised basis. The group also benefitted from the revaluation of non-sterling denominated balance sheet items resulting in a gain of £0.2m (2016: £1.7m gain). 

Further trading updates

Further coverage of these half-year results will be provided to analysts at a presentation starting at 9am on May 18 at the offices of UBS in London. The group intends to provide a brief third-quarter trading update on July 21.

END

 

For further information, please contact:

 

Euromoney Institutional Investor PLC

Colin Jones, Finance Director:                                +44 20 7779 8666; cjones@euromoneyplc.com 

 

FTI Consulting

Charles Palmer:                                                       +44 20 3727 1400; euromoney@fticonsulting.com 

 

 

CAUTIONARY STATEMENT

This Interim Financial Report (IFR) has been prepared solely to provide additional information to shareholders to assess the Euromoney group's results and strategy and the potential for that strategy to succeed.  The IFR should not be relied on by any other party for any other purpose.  This IFR contains certain forward-looking statements.  These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

 

NOTE TO EDITORS

Euromoney Institutional Investor PLC (www.euromoneyplc.com) is listed on the London Stock Exchange and is a member of the FTSE 250 share index. It is an international business-information group covering asset management, price discovery, data & market intelligence, and banking & finance under brands including Euromoney, Institutional Investor, BCA Research, Ned Davis Research and Metal Bulletin. The group also runs an extensive portfolio of events for the telecoms, financial and commodities markets. 

 


Appendix to Interim Statement

 

Reconciliation of Consolidated Income Statement to adjusted results for the six months ended March 31 2017

The directors believe that the adjusted profit and earnings per share measures provide additional useful information for shareholders to evaluate and to compare the performance of the business from period to period. These measures are used by management for budgeting, planning and monthly reporting purposes. The non-IFRS measures also enable the group to more easily and consistently track the underlying operational performance by separating out the following types of income, charges and non-cash items.

 

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, databases and customer relationships), exceptional items, share of associates and joint ventures' acquired intangibles amortisation, exceptional items and tax, and net movements in deferred consideration and acquisition commitments.  The amortisation of acquired intangible assets is excluded to allow an easier comparison of the results of organically developed businesses with acquired businesses.  In respect of earnings, adjusted amounts reflect a tax rate that includes the current tax effect of the goodwill and intangible assets.  Many of the group's acquisitions, particularly in the US, give rise to significant tax savings as the amortisation of goodwill and intangible assets on acquisition is deductible for tax purposes. The group considers that the resulting adjusted effective tax rate is therefore more representative of its tax payable position. Further analysis of the adjusting items is presented in notes 2, 4, 5, 6, 8, 10 and 11 to the Consolidated Condensed Interim Financial Report.

 

The group has consistently applied this definition of adjusted measures as it has reported on its financial performance in the past and it is the group's intention to continue to consistently apply this definition in the future.

 

The reconciliation below sets out the adjusted results of the group and the related adjustments to the Condensed Consolidated Income Statement.

 

 





Unaudited

 six months

 ended

 March 31



Unaudited

six months

 ended

 March 31



Audited year ended Sept 30




Adjust-

2017


Adjust-

2016


Adjust-

2016



Adjusted

ments

Total

Adjusted

ments

Total

Adjusted

ments

Total


Notes

£000

£000

£000

£000

£000

£000

£000

£000

£000












Total revenue

2

203,219

-

203,219

194,198

-

194,198

403,112

-

403,112












Adjusted operating profit

2

48,984

-

48,984

46,830

-

46,830

101,450

-

101,450

Acquired intangible amortisation

11

-

(8,824)

(8,824)

-

(7,850)

(7,850)

-

(16,733)

(16,733)

Exceptional items

4

-

(24,559)

(24,559)

-

(12,940)

(12,940)

-

(37,264)

(37,264)












Operating profit


48,984

(33,383)

15,601

46,830

(20,790)

26,040

101,450

(53,997)

47,453

Share of results in associates and joint ventures

10

1,168

(2,274)

(1,106)

641

(1,936)

(1,295)

2,186

(4,009)

(1,823)












Finance income

5

175

2,171

2,346

164

-

164

694

-

694

Finance expense

5

(1,247)

-

(1,247)

(763)

(789)

(1,552)

(1,801)

(601)

(2,402)

Net finance (costs)/income

5

(1,072)

2,171

1,099

(599)

(789)

(1,388)

(1,107)

(601)

(1,708)












Profit before tax


49,080

(33,486)

15,594

46,872

(23,515)

23,357

102,529

(58,607)

43,922

Tax expense on profit

6

(10,243)

8,299

(1,944)

(8,897)

2,744

(6,153)

(18,066)

5,157

(12,909)

Profit for the period


38,837

(25,187)

13,650

37,975

(20,771)

17,204

84,463

(53,450)

31,013












Attributable to:











Equity holders of the parent


38,556

(25,187)

13,369

37,773

(20,771)

17,002

84,194

(53,450)

30,744

Equity non-controlling interests


281

-

281

202

-

202

269

-

269



38,837

(25,187)

13,650

37,975

(20,771)

17,204

84,463

(53,450)

31,013












Diluted earnings per share

8

32.72p

(21.37)p

11.35p

29.86p

(16.42)p

13.44p

66.51p

(42.22)p

24.29p

 

 

 

Underlying results

When assessing the performance of our businesses, the board considers the adjusted results. The year-on-year change in adjusted results may not, however, be a fair like-for-like comparison as there are a number of factors which can influence growth rates but which do not reflect underlying performance.

 

When calculating underlying growth, adjustments are made to give a like-for-like comparison. For example, the adjusted results in 2017 benefitted from the strengthening of the US dollar relative to sterling. To calculate underlying growth, the prior year comparatives are restated using 2017 exchange rates.  Similarly, adjustments are made to exclude disposals from both years.  When businesses are acquired, the prior year comparatives are adjusted to include the acquisition.  The timing of events can also be a distortion. To give a fair like-for-like comparison when calculating underlying growth, significant timing event differences are excluded from the year in which they were held.

 

The group's adjusted and underlying measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS.  The adjusted and underlying measures used by the group are not necessarily comparable with those used by other companies.

 

The following table sets out the reconciliation from reported revenues to underlying revenues:

 

 


Unaudited

 six months

 ended

 March 31

Unaudited

six months

 ended

 March 31

Change


2017

2016

%


Total

Total



£000

£000






Reported revenue

203,219

   194,198

5%

M&A

(4,716)

(10,324)


Timing differences

-

(2,977)


Foreign exchange

-

      22,501


Underlying revenue

198,503

   203,398

(2%)

 

 

 

Cash conversion

Cash conversion measures the percentage by which cash generated from operations covers adjusted operating profit.

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Adjusted operating profit

48,984

46,830

101,450





Cash generated from operations

67,280

53,317

103,764

Exceptional items

6,432

-

3,734

Other working capital movements

(3,055)

(567)

(1,365)

Underlying cash generated from operations

70,657

52,750

106,133





Cash conversion %

137%

114%

102%

Underlying 12-month rolling cash conversion %

120%

107%

105%

 

 

The underlying basis is after adjusting for significant timing differences affecting the movement on working capital and exceptional items. For the period ended March 31 2017, exceptional items largely consist of cash payments for the 2016 restructuring costs, legal and professional fees and share buyback costs. The other working capital movements are largely the result of the landlord's one-off contribution to the fit-out of the New York office which will be amortised over the period of the lease. For the year ended September 30 2016, exceptional payments related to the strategic review in 2016 and the development of the group's new strategy. The other working capital movements in prior year related to the rent-free period of the new London offices. At the interim period an underlying 12-month rolling cash conversion percentage is used to eliminate any seasonality.

 

 

Condensed Consolidated Income Statement

for the six months ended March 31 2017

 



Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30



2017

2016

2016


Notes

£000

£000

£000






Total revenue

2

203,219

194,198

403,112






Operating profit before acquired intangible amortisation and exceptional items

2

48,984

46,830

101,450

Acquired intangible amortisation

11

(8,824)

(7,850)

(16,733)

Exceptional items

4

(24,559)

(12,940)

(37,264)






Operating profit

2

15,601

26,040

47,453

Share of results in associates and joint ventures

10

(1,106)

(1,295)

(1,823)






Finance income

5

2,346

164

694

Finance expense

5

(1,247)

(1,552)

(2,402)

Net finance income/(costs)

5

1,099

(1,388)

(1,708)






Profit before tax


15,594

23,357

43,922

Tax expense on profit

6

(1,944)

(6,153)

(12,909)

Profit for the period

2

13,650

17,204

31,013











Attributable to:





Equity holders of the parent


13,369

17,002

30,744

Equity non-controlling interests


281

202

269



13,650

17,204

31,013






Basic earnings per share

8

11.36p

13.45p

24.31p

Diluted earnings per share

8

11.35p

13.44p

24.29p

Adjusted basic earnings per share

8

32.76p

29.88p

66.57p

Adjusted diluted earnings per share

8

32.72p

29.86p

66.51p

Dividend per share (including proposed dividends)

7

8.80p

7.00p

23.40p

 

 

A detailed reconciliation of the group's statutory results to the adjusted results is set out in the appendix to the Interim Statement on pages 7 to 8.

 

Condensed Consolidated Statement of Comprehensive Income

for the six months ended March 31 2017

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Profit for the period

13,650

17,204

31,013





Items that may be reclassified subsequently to profit or loss:




Change in fair value of cash flow hedges

10,832

(2,267)

(5,202)

Transfer of gains on cash flow hedges from fair value reserves to Income Statement:




   Foreign exchange losses in total revenue

(5,901)

(1,457)

(819)

   Foreign exchange gains/(losses) in operating profit

33

913

(1,214)

Net exchange differences on translation of net investments in overseas subsidiary undertakings

28,241

27,115

86,984

Net exchange differences on foreign currency loans

(14,589)

(13,633)

(43,401)

Translation reserves recycled to Income Statement

(285)

-

(636)

Tax on items that may be reclassified

(869)

729

1,437





Items that will not be reclassified to profit or loss:




Actuarial gains/(losses) on defined benefit pension schemes

5,201

(1,565)

(7,215)

Tax (charge)/credit on actuarial losses/gains on defined benefit pension schemes

(884)

282

1,227





Other comprehensive income for the period

21,779

10,117

31,161





Total comprehensive income for the period

35,429

27,321

62,174





Attributable to:




Equity holders of the parent

34,806

26,924

60,575

Equity non-controlling interests

623

397

1,599


35,429

27,321

62,174

 

Condensed Consolidated Statement of Financial Position

as at March 31 2017

 



Unaudited

 as at

 March 31

Unaudited

 as at

 March 31

Audited

as at

Sept 30



2017

2016

2016


Notes

£000

£000

£000

Non-current assets





Intangible assets





Goodwill

11

381,162

377,072

396,105

Other intangible assets

11

149,299

146,248

155,034

Property, plant and equipment


17,438

9,852

10,472

Investment in associates

10

29,802

31,313

29,810

Investment in joint ventures

10

190

200

215

Available-for-sale investments

10

5,835

5,835

5,835

Deferred consideration

16

1,515

-

526

Deferred tax assets


1,059

3,159

3,886

Derivative financial instruments


36

122

9



586,336

573,801

601,892

Current assets





Trade and other receivables


71,652

69,036

73,491

Deferred consideration

16

1,554

192

-

Current income tax assets


7,871

6,123

7,112

Group relief receivable


-

-

121

Cash deposit with DMGT group company


-

43,727

73,639

Cash and cash equivalents (excluding bank overdrafts)


37,371

12,410

10,561

Derivative financial instruments


468

410

410

Total assets of businesses held for sale

9

-

6,578

5,013



118,916

138,476

170,347

Current liabilities





Acquisition commitments

16

(9,086)

-

(326)

Deferred consideration

16

-

-

(480)

Trade and other payables


(26,277)

(25,780)

(23,866)

Current income tax liabilities


(20,861)

(17,576)

(21,905)

Group relief payable


(172)

(787)

-

Accruals


(64,571)

(44,347)

(73,375)

Deferred income

12

(138,512)

(125,285)

(113,446)

Loan notes


-

(256)

(185)

Bank overdrafts


(2,050)

-

(233)

Derivative financial instruments


(5,499)

(5,265)

(9,671)

Provisions


(2,122)

(285)

(353)

Total liabilities of businesses held for sale

9

-

(1,917)

(5,549)



(269,150)

(221,498)

(249,389)

Net current liabilities


(150,234)

(83,022)

(79,042)

Total assets less current liabilities


436,102

490,779

522,850






Non-current liabilities





Acquisition commitments

16

(1,082)

(10,201)

(11,445)

Borrowings

14

(118,963)

-

-

Other non-current liabilities


(485)

(567)

(486)

Preference shares


-

(10)

(10)

Deferred income

12

(5,947)

(3,709)

(5,340)

Deferred tax liabilities


(4,099)

(17,147)

(14,179)

Net pension deficit


(4,641)

(3,316)

(9,995)

Derivative financial instruments


(70)

(873)

(778)

Provisions


(2,979)

(2,955)

(3,116)



(138,266)

(38,778)

(45,349)

Net assets


297,836

452,001

477,501

Shareholders' equity





Called up share capital

15

273

320

321

Share premium account


103,042

102,749

102,835

Other reserve


64,981

64,981

64,981

Capital redemption reserve


56

8

8

Investment in own shares


(21,005)

(21,582)

(21,005)

Reserve for share-based payments


37,873

37,750

37,334

Fair value reserve


(29,777)

(30,317)

(34,741)

Translation reserve


108,062

66,707

95,037

Retained earnings


26,108

224,618

224,218

Equity shareholders' surplus


289,613

445,234

468,988

Equity non-controlling interests


8,223

6,767

8,513

Total equity


297,836

452,001

477,501

 

 


Condensed Consolidated Statement of Changes in Equity

for the six months ended March 31 2017

 

 







Reserve













for











Capital


share-





Non-




Share


redemp-


based

Fair

Trans-



control-



Share

premium

Other

tion

Own

pay-

value

lation

Retained


ling



capital

account

reserve

reserve

shares

ments

reserve

reserve

earnings

Total

interests

Total


£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000














At September 30 2015

320

102,557

64,981

8

(21,582)

37,169

(27,506)

53,420

228,823

438,190

6,754

444,944

Profit for the year

-

-

-

-

-

-

-

-

30,744

30,744

269

31,013

Other comprehensive (expense)/income for the year

-

-

-

-

-

-

(7,235)

41,617

(4,551)

29,831

1,330

31,161

Total comprehensive income for the year

-

-

-

-

-

-

(7,235)

41,617

26,193

60,575

1,599

62,174

Recognition of acquisition commitments

-

-

-

-

-

-

-

-

(665)

(665)

-

(665)

Non-controlling interest recognised on acquisition

-

-

-

-

-

-

-

-

-

-

363

363

Exercise of acquisition option commitments

-

-

-

-

-

-

-

-

40

40

(40)

-

Adjustment arising from change in non-controlling interest

-

-

-

-

-

-

-

-

(356)

(356)

228

(128)

Charge for share-based payments

-

-

-

-

-

742

-

-

-

742

-

742

Cash dividend paid

-

-

-

-

-

-

-

-

(29,592)

(29,592)

(391)

(29,983)

Exercise of share options

1

278

-

-

577

(577)

-

-

-

279

-

279

Tax relating to items taken directly to equity

-

-

-

-

-

-

-

-

(225)

(225)

-

(225)

At September 30 2016

321

102,835

64,981

8

(21,005)

37,334

(34,741)

95,037

224,218

468,988

8,513

477,501

Profit for the period

-

-

-

-

-

-

-

-

13,369

13,369

281

13,650

Other comprehensive income for the period

-

-

-

-

-

-

4,964

13,025

3,448

21,437

342

21,779

Total comprehensive income for the period

-

-

-

-

-

-

4,964

13,025

16,817

34,806

623

35,429

Adjustment arising from change in non-controlling interest

-

-

-

-

-

-

-

-

(423)

(423)

(436)

(859)

Charge for share-based payments

-

-

-

-

-

539

-

-

-

539

-

539

Cash dividend paid

-

-

-

-

-

-

-

-

(20,755)

(20,755)

(477)

(21,232)

Exercise of share options

-

207

-

-

-

-

-

-

-

207

-

207

Share buyback

(48)

-

-

48

-

-

-

-

(193,657)

(193,657)

-

(193,657)

Tax relating to items taken directly to equity

-

-

-

-

-

-

-

-

(92)

(92)

-

(92)

At March 31 2017

273

103,042

64,981

56

(21,005)

37,873

(29,777)

108,062

26,108

289,613

8,223

297,836

 

 

 

Condensed Consolidated Statement of Changes in Equity

for the six months ended March 31 2016

 

 







Reserve













for











Capital


share-





Non-




Share


redemp-


based

Fair

Trans-



control-



Share

premium

Other

tion

Own

pay-

value

lation

Retained


ling



capital

account

reserve

reserve

shares

ments

reserve

reserve

earnings

Total

interests

Total


£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000














At September 30 2015

320

102,557

64,981

8

(21,582)

37,169

(27,506)

53,420

228,823

438,190

6,754

444,944

Profit for the period

-

-

-

-

-

-

-

-

17,002

17,002

202

17,204

Other comprehensive income/(expense) for the period

-

-

-

-

-

-

(2,811)

13,287

(554)

9,922

195

10,117

Total comprehensive income for the period

-

-

-

-

-

-

(2,811)

13,287

16,448

26,924

397

27,321

Exercise of acquisition commitments

-

-

-

-

-

-

-

-

(7)

(7)

7

-

Charge for share-based payments

-

-

-

-

-

581

-

-

-

581

-

581

Cash dividend paid

-

-

-

-

-

-

-

-

(20,737)

(20,737)

(391)

(21,128)

Exercise of share options

-

192

-

-

-

-

-

-

-

192

-

192

Tax relating to items taken directly to equity

-

-

-

-

-

-

-

-

91

91

-

91

At March 31 2016

320

102,749

64,981

8

(21,582)

37,750

(30,317)

66,707

224,618

445,234

6,767

452,001

 

The other reserve represents the share premium arising on the shares issued for the purchase of Metal Bulletin plc in October 2006.

 

The investment in own shares is held by the Euromoney Employees' Share Ownership Trust (ESOT) and Euromoney Employee Share Trust (EEST). The trusts waived the rights to receive dividends. Interest and administrative costs are charged to the profit and loss account of the trusts as incurred.

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016

Number of shares held:




Euromoney Employees' Share Ownership Trust

58,976

58,976

58,976

Euromoney Employee Share Trust

1,700,777

1,747,631

1,700,777

Total

1,759,753

1,806,607

1,759,753

Nominal cost per share (p)

0.25

0.25

0.25

Historical cost per share (£)

11.94

11.95

11.94

Market value (£000)

18,706

17,018

19,516

 

 

 


Condensed Consolidated Statement of Cash Flows

for the six months ended March 31 2017

 

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Cash flow from operating activities




Operating profit

15,601

26,040

47,453

Long-term incentive expense

539

581

1,198

Acquired intangible amortisation

8,824

7,850

16,733

Licences and software amortisation

1,801

1,487

3,675

Depreciation of property, plant and equipment

1,470

1,329

2,806

Loss/(profit) on disposal of property, plant and equipment

1

(13)

(4)

Goodwill impairment

27,360

12,940

26,987

Intangibles impairment

-

-

1,652

Investment in associate impairment

-

-

111

Recognition of deficit on defined benefit scheme

-

-

1,249

Profit on disposal/closure of businesses

(4,838)

-

(7,094)

Decrease in provisions

(528)

(387)

Operating cash flows before movements in working capital

50,488

49,686

94,379

Decrease in receivables

6,250

2,643

1,719

Increase in payables

988

7,666

Cash generated from operations

67,280

53,317

103,764

Income taxes paid

(13,029)

(6,967)

(17,242)

Group relief tax received

-

515

549

Net cash generated from operating activities

54,251

46,865

87,071





Investing activities




Dividends received from associate

-

-

83

Interest received

42

169

699

Purchase of intangible assets

(912)

(1,417)

(2,402)

Purchase of property, plant and equipment

(8,338)

(1,451)

(3,231)

Proceeds from disposal of property, plant and equipment

3

16

20

Purchase of subsidiary undertaking, net of cash acquired

-

-

(14,092)

Proceeds from disposal of businesses

4,358

-

10,796

Purchase of associates and joint venture

(552)

(180)

(180)

Proceeds from redemption of preference share capital

-

14,370

14,370

Net cash (used in)/generated from investing activities

(5,399)

11,507

6,063





Financing activities




Dividends paid to equity holders

(20,755)

(20,737)

(29,592)

Dividends paid to non-controlling interests

(477)

(391)

(391)

Interest paid

(2,131)

(294)

(1,121)

Issue of new share capital

207

192

279

Share buyback

(193,657)

-

-

Increase in borrowings

119,940

-

-

(Payment)/receipt of deferred consideration

(139)

406

662

Purchase of additional interest in subsidiary undertakings

(726)

(239)

(367)

Redemption of loan notes

(185)

(11)

(82)

Deposit received/(repaid) with DMGT group company

(33,834)

(62,326)

Net cash used in financing activities

(54,908)

(92,938)

Net increase in cash and cash equivalents

24,547

3,464

196

Cash and cash equivalents at beginning of period

10,328

8,148

8,148

Effect of foreign exchange rate movements

798

1,984

Cash and cash equivalents at end of period

12,410

10,328

 

 

Cash and cash equivalents include bank overdrafts.

 

 

Note to the Condensed Consolidated Statement of Cash Flows

 

 

Net (debt)/cash

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Net cash at beginning of period

83,782

17,680

17,680

Net increase in cash and cash equivalents

24,547

3,464

196

Increase in borrowings

(119,940)

-

-

Deposit (received)/repaid with DMGT group company

(73,618)

33,834

62,326

Redemption of loan notes

185

11

82

Effect of foreign exchange rate movements

1,402

892

3,498

Net (debt)/cash at end of period

(83,642)

55,881

83,782





Net (debt)/cash comprises:




Cash at bank and in hand

37,371

12,410

10,561

Bank overdrafts

(2,050)

-

(233)

Total cash and cash equivalents

35,321

12,410

10,328

Cash deposit with DMGT group company

-

43,727

73,639

Borrowings

(118,963)

-

-

Loan notes

-

(256)

(185)

Net (debt)/cash

(83,642)

55,881

83,782

 

 

Notes to the Condensed Consolidated Interim Financial Report

 

 

1 Basis of preparation

 

Euromoney Institutional Investor PLC (the 'company') is a company incorporated in the United Kingdom.

 

The group financial statements consolidate those of the company and its subsidiaries (together referred to as the 'group') and equity-account the group's interest in joint ventures and associates.

 

This Interim Financial Report was approved by the board of directors on May 17 2017.

 

These condensed consolidated financial statements have been prepared in accordance with the disclosure and transparency rules of the Financial Conduct Authority and using accounting policies consistent with International Financial Reporting Standards as adopted by the European Union and in accordance with International Accounting Standard (IAS) 34 'Interim Financial Reporting'.

 

The financial information for the year ended September 30 2016 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.

 

Accounting policies

The Condensed Consolidated Interim Financial Report has been prepared under the historical cost convention, except for the revaluation of certain financial instruments.

 

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the group's latest annual audited financial statements.

 

Retirement benefit schemes

The group operates the Metal Bulletin plc Pension Scheme and participates in the Harmsworth Pension Scheme, defined benefit schemes which are closed to new entrants. The assumptions for the discount rate and mortality rates have been reviewed and adjusted to reflect the latest market rates decreasing the net pension deficit from £10.0m at September 30 2016 to £4.6m at March 31 2017.

 

Going concern, debt covenants and liquidity 

The results of the group's business activities, together with the factors likely to affect its future development, performance and financial position, are set out in the Interim Statement on page 1 to 6.

 

The financial position of the group, its cash flows and liquidity position are set out in detail in this Condensed Consolidated Interim Financial Report. At March 31 2017 the group's net debt position was £83.6m. In addition, the group has access to a committed £130m multi-currency revolving credit facility which is available until December 2021. The facility's covenant requires the group's net debt to be no more than three times adjusted EBITDA and require minimum levels of interest cover of three times on a rolling 12-month basis.  The amounts and foreign exchange rates used in the covenant calculations are subject to adjustments as defined under the terms of the arrangement.  At March 31 2017 the group's net debt to adjusted EBITDA covenant was 0.7 times and the committed undrawn facility available was £130m.

 

The group's forecasts and projections, looking out to September 2020 and taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level and covenants of its current and available borrowing facilities.

 

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence. Accordingly, the directors continue to adopt the going concern basis in preparing this Condensed Consolidated Interim Financial Report.

 

 

Principal risks and uncertainties

The principal risks and uncertainties that affect the group are described in detail on pages 15 to 20 of the 2016 annual report available at www.euromoneyplc.com. In summary, they include: 

 

- Downturn in key geographic region or market sector;

- Product and market transformation/disruption;

- Exposure to US dollar exchange rate;

- Information security breach resulting in challenge to data integrity;

- Reputational damage or legal/regulatory challenge arising from price, benchmark and index reporting activities;

- Disruption to operations from a business continuity failure;

- Catastrophic or high impact risk affecting key events or wider business;

- Acquisition or disposal fails to generate expected returns;

- Unforeseen tax liabilities or losses from treasury operations.

 

These are still considered to be the most relevant risks and uncertainties at this time. A number of these risks and uncertainties could have an impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ from expected and historical results. Where a risk that was disclosed in the annual report is unchanged, or is not expected to have a specific impact in the remaining period, further disclosure in this report is considered unnecessary.

 

2 Segmental analysis

 

Segmental information is presented in respect of the group's business divisions and reflects the group's management and internal reporting structure.  The group is organised into four business divisions: Asset management; Pricing, data & market intelligence; Banking & finance; and Commodity events.

 

Asset management and pricing, data & market intelligence consist primarily of subscription revenue. Banking & finance consists mainly of both sponsorship income and delegates revenue. Commodity events consists primarily of delegates revenue. A breakdown of the group's revenue by type is set out below.

 

During the period to March 31 2017, the group sold/closed HedgeFund Intelligence, II Intelligence, Euromoney Indices and LatinFinance (note 9).  As a result segment information of these businesses has been reclassified as sold/closed businesses and the comparative split of divisional revenues, revenue by type and operating profits has been restated.

 

The period to March 31 2016 has been restated to reflect the changes in the group's operations following the implementation of the new group strategy in the 2016 Annual Report and Accounts.

 

Analysis of the group's three main geographical areas is also set out to provide additional information on the trading performance of the businesses.

 

Inter-segment sales are charged at prevailing market rates and shown in the eliminations columns.

 

 


Unaudited six months ended March 31


Subscriptions and content

Advertising

Sponsorship

Delegates

Other

Total revenue

2017

£000

£000

£000

£000

£000

£000

Revenue







by division and type:







Asset management

69,081

7,066

6,117

640

26

82,930

Pricing, data & market intelligence

52,507

5,032

6,817

8,839

575

73,770

Banking & finance

4,165

4,087

10,043

10,881

618

29,794

Commodity events

16

4

3,929

14,630

405

18,984


125,769

16,189

26,906

34,990

1,624

205,478

Sold/closed businesses






4,716

Foreign exchange losses on forward contracts






(6,975)

Total revenue






203,219

 

 

 

 


Unaudited six months ended March 31


Subscriptions and content

Advertising

Sponsorship

Delegates

Other

Total revenue

2016

£000

£000

£000

£000

£000

£000

Revenue







by division and type:







Asset management

58,376

6,628

5,012

293

15

70,324

Pricing, data & market intelligence

43,434

5,412

5,150

7,767

691

62,454

Banking & finance

3,926

3,672

9,834

11,287

776

29,495

Commodity events

38

10

3,812

16,279

377

20,516


105,774

15,722

23,808

35,626

1,859

182,789

Sold/closed businesses






12,758

Foreign exchange losses on forward contracts






(1,349)

Total revenue






194,198

 

 

 


Unaudited six months ended March 31


United Kingdom

North America

Rest of World

Eliminations

Total


2017

2016

2017

2016

2017

2016

2017

2016

2017

2016


£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

Revenue











by division and source:











Asset management

1,214

1,310

80,830

68,524

1,066

902

(180)

(412)

82,930

70,324

Pricing, data & market intelligence

47,752

42,660

11,685

10,198

16,396

12,320

(2,063)

(2,724)

73,770

62,454

Banking & finance

17,102

17,761

11,226

9,433

1,683

2,706

(217)

(405)

29,794

29,495

Commodity events

12,546

13,470

-

-

6,438

7,046

-

-

18,984

20,516

Sold/closed businesses

2,429

6,297

2,302

6,718

-

-

(15)

(257)

4,716

12,758

Foreign exchange losses on forward contracts

(6,975)

(1,349)

-

-

-

-

-

-

(6,975)

(1,349)

Total revenue

74,068

80,149

106,043

94,873

25,583

22,974

(2,475)

(3,798)

203,219

194,198

Revenue by destination

19,724

25,366

94,884

86,909

88,611

81,923

-

-

203,219

194,198

 

 

 

 




Unaudited six months ended March 31




United Kingdom

North America

Rest of World

Total




2017

2016

2017

2016

2017

2016

2017

2016




£000

£000

£000

£000

£000

£000

£000

£000

Adjusted operating profit











by division and source:











Asset management



65

128

29,056

22,345

99

(424)

29,220

22,049

Pricing, data & market intelligence



13,470

12,754

4,872

3,230

4,809

3,069

23,151

19,053

Banking & finance



744

(563)

3,389

3,078

(5)

79

4,128

2,594

Commodity events



5,889

5,665

-

-

1,107

2,802

6,996

8,467

Sold/closed businesses



83

461

(48)

348

-

-

35

809

Unallocated corporate costs



(12,089)

(4,295)

(1,117)

(1,629)

(1,340)

(218)

(14,546)

(6,142)

Operating profit before acquired intangible amortisation and exceptional items

8,162

14,150

36,152

27,372

4,670

5,308

48,984

46,830

Acquired intangible amortisation (note 11)



(3,607)

(3,173)

(5,058)

(4,569)

(159)

(108)

(8,824)

(7,850)

Exceptional items (note 4)



(3,454)

-

(19,862)

-

(1,243)

(12,940)

(24,559)

(12,940)

Operating profit



1,101

10,977

11,232

22,803

3,268

(7,740)

15,601

26,040

Share of results in associates and joint ventures (note 10)









(1,106)

(1,295)

Finance income (note 5)









2,346

164

Finance expense (note 5)









(1,247)

(1,552)

Profit before tax









15,594

23,357

Tax expense on profit (note 6)









(1,944)

(6,153)

Profit for the period









13,650

17,204

 

 

 

 


Unaudited six months ended March 31


Acquired intangible

Exceptional

Depreciation and


amortisation

items

amortisation


2017

2016

2017

2016

2017

2016


£000

£000

£000

£000

£000

£000

Other segmental information







by division:







Asset management

(4,824)

(5,004)

(28,514)

-

(924)

(644)

Pricing, data & market intelligence

(2,403)

(1,732)

(1,089)

-

(221)

(132)

Banking & finance

(120)

(101)

-

-

-

-

Commodity events

(1,337)

(869)

(89)

(12,940)

(70)

(19)

Sold/closed businesses

(140)

(144)

4,838

-

(1)

(17)

Unallocated corporate income/(costs)

-

-

295

-

(2,055)

(2,004)


(8,824)

(7,850)

(24,559)

(12,940)

(3,271)

(2,816)

 

 


United Kingdom

North America

Rest of World

Total


Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2017

2016

2017

2016

2017

2016


£000

£000

£000

£000

£000

£000

£000

£000

Non-current assets (excluding derivative financial instruments, deferred consideration and deferred tax assets)









by location:









Goodwill

99,786

99,751

273,586

288,680

7,790

7,674

381,162

396,105

Other intangible assets

63,102

66,519

85,455

86,972

742

1,543

149,299

155,034

Property, plant and equipment

6,337

6,894

10,029

2,785

1,072

793

17,438

10,472

Investments

35,827

35,860

-

-

-

-

35,827

35,860

Non-current assets

205,052

209,024

369,070

378,437

9,604

10,010

583,726

597,471

Additions to property, plant and equipment

(102)

(993)

(7,722)

(2,275)

(514)

(494)

(8,338)

(3,762)

 

 

The group has taken advantage of paragraph 23 of IFRS 8 'Operating Segments' and does not provide segmental analysis of net assets as this information is not used by the directors in operational decision making or monitoring of business performance.

 

3 Seasonality of results

 

The group's results are not materially affected by seasonal or cyclical trading. For the year ended September 30 2016 the group earned 47% of both its revenues and adjusted operating profits in the first six months of the year (2015: 49% of both its revenues and adjusted operating profits).

 

4 Exceptional items

 

Exceptional items are items of income or expense considered by the directors, either individually or if of a similar type in aggregate, as being significant and which require additional disclosure in order to provide an indication of the underlying trading performance of the group.

 



Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30



2017

2016

2016


Note

£000

£000

£000






Profit on disposal/closure of businesses and recycled cumulative translation differences

a

4,838

-

7,094

Goodwill impairment

b

(27,360)

(12,940)

(26,987)

Intangibles impairment

e

-

-

(1,652)

Investment in associate impairment

e

-

-

(111)

Release/(provision) for overseas sales tax

c

3,888

-

(7,851)

Recognition of deficit on defined benefit scheme

e

-

-

(1,249)

Restructuring and other exceptional costs

d

(5,925)

-

(6,508)



(24,559)

(12,940)

(37,264)

 

 

a.     During the period ended March 31 2017 the group sold/closed HedgeFund Intelligence (loss £4k), II Intelligence (profit £2.1m), Euromoney Indices (loss £0.9m) and LatinFinance (profit £3.6m), resulting in a net profit on disposal/closure of £4.8m (note 9).  For the year ended September 30 2016, the group sold 100% of its equity shareholding of Gulf Publishing. and Petroleum Economist which gave rise to a profit on disposal of £7.1m.

 

b.     The goodwill impairment charge consists of:

-       March 2017: Ned Davis Research (NDR) (£27.4m)

-       March 2016: Mining Indaba (£12.9m)

-       September 2016: Total of £27m includes Mining Indaba (£12.9m), HedgeFund Intelligence (£5.9m) and Total Derivatives (£8.2m)

 

The impairment of NDR stems from a disappointing financial performance of the business in the face of tough market conditions and recent management changes.

 

c.     For the period ended March 31 2017, an element of the provision for overseas sales tax was released resulting in a credit of £3.9m, following settlement of the sales tax exposure (including interest).  For the year ended September 30 2016, the group recognised a provision of £7.9m following an adverse tax ruling in June 2016.  Given that the provision was classified as exceptional in 2016, the release of the surplus provision has been consistently treated as exceptional in 2017.

 

d.     Restructuring and other exceptional costs for the period ended March 31 2017 consist of professional fees associated with the share buyback transaction with Daily Mail and General Trust plc (DMGT); professional fees from the legal dispute with the previous owners of Centre for Investor Education (CIE); non-recurring costs relating to the relocation of the New York office; and one-off costs for the acquisition of RISI (note 19).  For the year ended September 30 2016, the costs mostly comprised one-off costs incurred as a result of the strategic review undertaken during the year and professional fees from the CIE legal dispute.

 

e.     For the year ended September 30 2016, the other exceptional items included an intangibles impairment charge of £1.7m for Euromoney Indices; the group increased its equity shareholding of World Bulk Wine to 57% whereby the transfer from associate to a subsidiary resulted in an impairment of associate of £0.1m; and the group recognised its share of the deficit in the Harmsworth Pension Scheme (HPS), a defined benefit scheme, of £1.2m.

 

The group's tax charge includes a related tax charge on exceptional items of £9.6m (March 2016: £2.4m, September 2016: £5.3m) (note 6).

 

5 Finance income and expense

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Finance income




Interest on cash deposit with DMGT group company

137

81

391

Interest receivable from short-term investments

38

83

303

Movements in acquisition commitments

2,077

-

-

Movements in deferred consideration

94

-

-


2,346

164

694

Finance expense




Interest payable on committed borrowings with DMGT group company

(152)

(429)

(1,346)

Interest payable on borrowings

(920)

-

-

Net interest expense on defined benefit liability

(101)

(32)

(66)

Movements in acquisition commitments

-

(789)

(601)

Interest on tax

(74)

(302)

(389)


(1,247)

(1,552)

(2,402)

Net finance income/(costs)

1,099

(1,388)

(1,708)

 

 

 

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Reconciliation of net finance income/(costs) in Income Statement to adjusted net finance costs




Total net finance income/(costs) in Income Statement

1,099

(1,388)

(1,708)

Add back:




Movements in acquisition commitments

(2,077)

789

601

Movements in deferred consideration

(94)

-

-


(2,171)

789

601

Adjusted net finance costs

(599)

(1,107)

 

The reconciliation of net finance income/(costs) in the Income Statement has been provided since the directors consider it necessary in order to provide an indication of the adjusted net finance costs.  Refer to the appendix to the Interim Statement.

 

Charges and credits relating to the movements in acquisition commitments and deferred consideration reflect future payments and receipts expected on historical transactions that do not directly relate to the current year results.

 

6 Tax expense on profit

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Current tax expense




UK corporation tax expense

1,184

1,898

2,350

Foreign tax expense

8,629

6,805

20,682

Adjustments in respect of prior years

1,656

1,749

(14)


11,469

10,452

23,018

Deferred tax expense




Current year

(9,607)

(3,973)

(11,076)

Adjustments in respect of prior years

82

(326)

967


(9,525)

(4,299)

(10,109)

Total tax expense in Income Statement

1,944

6,153

12,909

Effective tax rate

12%

26%

29%

 

As set out below the adjusted effective tax rate for the 2017 interim period is 21% (2016: 19%).  The forecast adjusted effective tax rate for 2017 full year is 20% (2016: 18%).  

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Reconciliation of tax expense in Income Statement to adjusted tax expense




Total tax expense in Income Statement

1,944

6,153

12,909

Add back:




Tax on acquired intangible amortisation

2,018

2,417

4,397

Tax on exceptional items

9,550

2,396

5,267


11,568

4,813

9,664

Tax on goodwill and intangible amortisation

(1,881)

(838)

(4,210)

Share of tax on associates and joint ventures

350

192

656

Adjustments in respect of prior years

(1,738)

(1,423)

(953)


8,299

2,744

5,157

Adjusted tax expense

10,243

8,897

18,066





Adjusted profit before tax (refer to the appendix to the Interim Statement)

49,080

46,872

102,529

Adjusted effective tax rate

21%

19%

18%

 

 

The group presents the adjusted effective tax rate to help users of this report better understand its tax charge. In arriving at this rate, the group removes the tax effect of items which are adjusted for in arriving at the adjusted profit disclosed in the appendix to the Interim Statement. However, the current tax effect of goodwill and intangible items is not removed. The current tax benefit of tax deductible goodwill and intangibles amounting to £1.9m is recognised in the adjusted effective tax rate as the group considers that the resulting adjusted effective tax rate is more representative of its tax payable position, as the deferred tax effect on the goodwill and intangible items is not expected to crystallise. The deferred tax effect on goodwill and intangible items would only crystallise in the event of a disposal, and that is not the current intention.  Adjustments in respect of prior years are excluded from the adjusted tax expense as they do not relate to current year trading.

 

The movement in net deferred tax liabilities since year-end is largely attributable to the impact of the NDR goodwill impairment (note 4).

 

Uncertain tax positions

 

At March 31 2017 the group held provisions for uncertain tax of £11.7m (September 2016: £12.5m) relating to permanent establishment risk and challenges by tax authorities. The maximum potential additional exposure for the group in relation to challenges by tax authorities not provided for is approximately £29m if all cases were to be settled at the maximum potential liability. These additional exposures include challenges by: the Canadian Revenue Agency on a foreign currency trade in 2009, which has a maximum exposure of £21m; and the UK's HMRC on a share-for-share exchange with the group's investment in Dealogic, which has a maximum exposure of £11m of which £2.8m has been provided.  The group considers each uncertain tax matter on the technical merits of the case law, taking into account all relevant evidence, including the known attitude of tax authorities in making an assessment of the likelihood a matter will crystallise. The provisions for uncertain tax are calculated by determining the directors' best estimate of the single most likely cash flow for each issue.

 

7 Dividends

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Amounts recognisable as distributable to equity holders in period




Final dividend for the year ended September 30 2016 of 16.40p (2015: 16.40p)

21,044

21,033

21,033

Interim dividend for the year ended September 30 2016 of 7.00p

-

-

8,981


21,044

21,033

30,014

Employee share trust dividends

(289)

(296)

(422)


20,755

20,737

29,592





Interim dividend for the period ended March 31 2017 of 8.80p (2016: 7.00p)

9,600

8,980


Employee share trust dividends waived

(155)

(126)



9,445

8,854


 

The final dividend for the year to September 30 2016 was approved by shareholders at the AGM held on January 26 2017 and paid on February 9 2017.

 

It is anticipated that the interim dividend of 8.80p (2016: 7.00p) per share will be paid on June 22 2017 to shareholders on the register on May 26 2017. It is expected that the shares will be marked ex-dividend on May 25 2017. The interim dividend has not been included as a liability in this Interim Financial Report in accordance with IAS 10 'Events after the Reporting Period'.

 

8 Earnings per share

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Basic earnings attributable to equity holders of the parent

13,369

17,002

30,744

Adjustments (refer to the appendix to the Interim Statement)

25,187

20,771

53,450

Adjusted earnings

38,556

37,773

84,194

 

 

 


Number

Number

Number


000

000

000





Weighted average number of shares

119,436

128,259

128,280

Shares held by the employee share trusts

(1,760)

(1,807)

(1,807)

Weighted average number of shares

117,676

126,452

126,473

Effect of dilutive share options

159

79

111

Diluted weighted average number of shares

117,835

126,531

126,584

 

 

 

 

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016






Pence

Pence

Pence

Basic earnings per share

11.36

              13.45

              24.31

Adjustments per share

21.40

              16.43

              42.26

Adjusted basic earnings per share

32.76

              29.88

              66.57





Diluted earnings per share

11.35

              13.44

              24.29

Adjustments per share

21.37

              16.42

              42.22

Adjusted diluted earnings per share

32.72

              29.86

              66.51

 

 

 

The adjusted diluted earnings per share figure has been disclosed since the directors consider it necessary in order to give an indication of the underlying trading performance.  Refer to the appendix to the Interim Statement.

 

All of the above earnings per share figures relate to continuing operations.

 

9 Acquisitions and disposals

 

INCREASE IN EQUITY HOLDINGS

Euromoney Consortium Limited

On December 8 2016, the group acquired 0.3% of the equity of Euromoney Consortium Limited for a cash consideration of £0.7m.  This transaction was enacted by purchasing 7,258,408 Ordinary Class B shares of £0.10 each from DMG Charles Limited.  The group's equity shareholding in Euromoney Consortium Limited increased to 100%.

 

SALE/CLOSURE OF BUSINESSES

HFI Media Limited (HedgeFund Intelligence)

On December 30 2016, the group sold 100% of the equity share capital of HedgeFund Intelligence, part of the asset management division, for a consideration of £2.2m, offset by a working capital settlement of £0.1m. At the date of disposal deferred consideration receivable of £1.9m was recognised which included the working capital settlement of £0.1m (note 16).  The disposal of HedgeFund Intelligence gave rise to a loss on disposal of £4k, after deducting disposal costs incurred, which was recognised as an exceptional item (note 4) in the Income Statement.

 

Institutional Investor Intelligence (II Intelligence)

On December 30 2016, the group completed the sale of the assets of II Intelligence, part of the asset management division, for a consideration of US$0.9m (£0.7m). Deferred consideration receivable of US$0.5m (£0.4m) was recognised (note 16).  The disposal gave rise to a profit on disposal of US$2.7m (£2.2m), after deducting disposal costs incurred, which was recognised as an exceptional item (note 4) in the Income Statement.

 

Euromoney Indices

On March 13 2017, the group completed the sale/closure of the Euromoney Indices business, part of the asset management division, for a consideration of £2.0m, offset by a working capital settlement of £0.1m. At the date of disposal deferred consideration receivable of £0.4m was recognised which included the working capital settlement of £0.1m (note 16).  The disposal/closure of Euromoney Indices gave rise to a loss on disposal/closure of £0.9m, after deducting disposal/closure costs incurred which include the costs associated with the transitional service agreement.  The loss on disposal/closure was recognised as an exceptional item (note 4) in the Income Statement.

 

Latin American Financial Publications, Inc. (LatinFinance)

On March 31 2017, the group sold 100% of the equity share capital of LatinFinance, which formed part of the banking & finance division. The consideration for this transaction was US$3.9m (£3.1m), offset by a working capital adjustment of US$0.9m (£0.7m) (note 16). The disposal of LatinFinance gave rise to a profit on disposal of US$4.5m (£3.6m), after deducting disposal costs incurred, which were recognised as an exceptional item (note 4) in the Income Statement.

 

The assets and liabilities of the businesses held for sale and disclosed separately on the face of the Condensed Consolidated Statement of Financial Position for the year ended September 30 2016, included HedgeFund Intelligence, II Intelligence and Euromoney Indices; and for the period ended March 31 2016, Gulf Publishing Company, Inc. and The Petroleum Economist Limited.

 

The net assets of the businesses at the date of disposal were as follows:


HedgeFund


Euromoney

Latin



Intelligence

II Intelligence

Indices

Finance

Total


£000

£000

£000

£000

£000

Net assets/(liabilities):






Goodwill

4,020

-

-

-

4,020

Intangible assets

-

-

294

-

294

Property, plant and equipment

-

-

-

2

2

Trade and other receivables

389

-

472

374

1,235

Cash at bank and in hand/(bank overdraft)

46

-

-

(76)

(30)

Trade and other payables

(100)

-

(27)

(158)

(285)

Deferred income

(2,232)

(1,495)

(445)

(1,097)

(5,269)


2,123

(1,495)

294

(955)

(33)







Net assets/(liabilities) disposed

2,123

(1,495)

294

(955)

(33)

Directly attributable costs

60

50

2,573

32

2,715

Recycled cumulative translation differences

-

-

-

(285)

(285)

(Loss)/profit on disposal/closure (note 4)

(4)

2,166

(931)

3,607

4,838

Total consideration

2,179

721

1,936

2,399

7,235

Consideration satisfied by:






Cash

250

321

1,500

3,086

5,157

Deferred consideration

1,929

400

436

-

2,765

Working capital adjustments

-

-

-

(687)

(687)


2,179

721

1,936

2,399

7,235

Net cash inflow arising on disposal:






Cash consideration (net of directly attributable costs paid and working capital adjustments)

190

271

1,500

2,367

4,328

Cash and cash equivalent balances disposed

(46)

-

-

76

30


144

271

1,500

2,443

4,358

 

 

10 Investments

 



Investment

Available-



Investment

in joint

for-sale



in associates

ventures

investments

Total


£000

£000

£000

£000






At September 30 2015

32,437

30

5,835

38,302

Repayment/additions

(52)

180

-

128

Impairment

(111)

-

-

(111)

Transfer to subsidiary

(629)

-

-

(629)

Revaluation

-

12

-

12

Provision against investment losses

-

64

-

64

Share of losses after tax retained

(1,752)

(71)

-

(1,823)

Dividends

(83)

-

-

(83)

At September 30 2016

29,810

215

5,835

35,860

Additions

552

-

-

552

Revaluation

34

8

-

42

Provisions against investment losses

-

479

-

479

Share of losses after tax retained

(594)

(512)

-

(1,106)

At March 31 2017

29,802

190

5,835

35,827

 



Investment

Available-



Investment

in joint

for-sale



in associates

ventures

investments

Total


£000

£000

£000

£000






At September 30 2015

32,437

30

            5,835

38,302

Additions

-

180

                     -

180

Provisions against investment losses

-

167

                     -

167

Share of losses after tax retained

(1,124)

(171)

-

(1,295)

Exchange difference

-

(6)

                     -

(6)

At March 31 2016

31,313

200

5,835

37,348

 

 

All of the above investments in associates and joint ventures are accounted for using the equity method in these condensed consolidated financial statements.


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Reconciliation of share of results in associates and joint ventures in Income Statement to adjusted share of results in associates and joint ventures




Total share of results in associates and joint ventures in Income Statement

(1,106)

(1,295)

(1,823)

Add back:




Share of tax on profits

350

192

                     656

Share of tax on acquired intangible amortisation and exceptional items

(823)

(746)

(1,437)

Share of acquired intangible amortisation

2,431

2,220

                  4,427

Share of exceptional items1

316

270

                     363


2,274

1,936

4,009

Adjusted share of results in associates and joint ventures

1,168

641

2,186

 

 

1 The share of exceptional items relates to one-off restructuring and earn-out costs in Dealogic.  IFRS requires that earn-out payments to selling shareholders retained in the acquired business for a contractual time period are treated as a compensation cost. These payments are in substance part of the cost of an investment and are thus excluded from the share of adjusted profit.

 

The reconciliation of share of results in associates and joint ventures in the Income Statement has been provided since the directors consider it necessary in order to provide an indication of the adjusted share of results in associates and joint ventures.  Refer to the appendix to the Interim Statement.

 

The share of losses after tax retained includes a finance expense of £1.2m (March 2016: £1.0m, September 2016: £2.1m).

 

Information on investment in associates, investment in joint ventures and available-for-sale investments:



Year

Date of

Type

Group

Country of


Principal activity

ended

acquisition

of holding

interest

incorporation

Investment in associates







Diamond TopCo Limited (Dealogic)

Capital market software solutions

Dec 31

Dec 2014

Ordinary

15.5%

UK

Broadmedia Communications Limited (BroadGroup)2

Events and publishing business

Sep 30

Mar 2017

Ordinary

49.0%

UK

Investment in joint ventures







Institutional Investor Zanbato Limited (II Zanbato)

Hedge fund manager trading signals

Sep 30

Nov 2014

Ordinary

50.0%

UK

Sanostro Institutional AG (Sanostro)

Hedge fund manager trading signals

Dec 31

Dec 2014

Ordinary

50.0%

Switzerland

EIIZ Discovery LLC

Private capital placement and workflow

Sep 30

Nov 2015

Ordinary

50.0%

Delaware, US

Available-for-sale investments







Estimize, Inc (Estimize)

Financial estimates platform

Dec 31

July 2015

Ordinary

10.0%

Delaware, US

Zanbato, Inc (Zanbato)

Private capital placement and workflow

Dec 31

Sept 2015

Ordinary

9.9%

California, US

 

2 In March 2017 the group acquired 49% of the equity share capital of BroadGroup for a cash consideration of £0.6m.

 

The group interests in the above investments remained unchanged since their respective dates of acquisition.

 

 

11 Goodwill and other intangibles

 


Acquired intangible assets









Total


Intangible





Customer


acquired


assets in




Trademarks

relation-


intangible

Licences &

develop-



As at March 2017

& brands

ships

Databases

assets

software

ment

Goodwill

Total


2017

2017

2017

2017

2017

2017

2017

2017


£000

£000

£000

£000

£000

£000

£000

£000

Cost/carrying amount









At October 1 2016

193,879

116,759

14,773

325,411

17,715

980

464,313

808,419

Additions

-

-

-

-

236

676

-

912

Transfer

-

-

-

-

282

(282)

-

-

Exchange differences

5,697

3,124

388

9,209

376

24

13,450

23,059

At March 31 2017

199,576

119,883

15,161

334,620

18,609

1,398

477,763

832,390

Amortisation and impairment









At October 1 2016

90,934

75,185

11,030

177,149

11,923

-

68,208

257,280

Amortisation charge

4,433

4,113

278

8,824

1,801

-

-

10,625

Impairment (note 4)

-

-

-

-

-

-

27,360

27,360

Exchange differences

2,911

2,080

388

5,379

252

-

1,033

6,664

At March 31 2017

98,278

81,378

11,696

191,352

13,976

-

96,601

301,929

Net book value/carrying amount at March 31 2017

101,298

38,505

3,465

143,268

4,633

1,398

381,162

530,461

 

 


Acquired intangible assets









Total


Intangible





Customer


acquired


assets in




Trademarks

relation-


intangible

Licences &

develop-



As at September 2016

& brands

ships

Databases

assets

software

ment

Goodwill

Total


2016

2016

2016

2016

2016

2016

2016

2016


£000

£000

£000

£000

£000

£000

£000

£000

Cost/carrying amount









At October 1 2015

171,861

102,777

12,616

287,254

15,165

-

429,272

731,691

Additions

3,834

6,874

886

11,594

1,445

957

8,919

22,915

Disposals

-

-

-

-

(69)

-

-

(69)

Balance at disposal of company

-

-

-

-

(33)

-

(7,217)

(7,250)

Exchange differences

19,387

10,477

1,271

31,135

1,207

23

45,155

77,520

Classified as held-for-sale

(1,203)

(3,369)

-

(4,572)

-

-

(11,816)

(16,388)

September 30 2016

193,879

116,759

14,773

325,411

17,715

980

464,313

808,419

Amortisation and impairment









At October 1 2015

73,510

63,147

8,769

145,426

7,607

-

47,279

200,312

Amortisation charge

7,956

7,764

1,013

16,733

3,675

-

-

20,408

Impairment (note 4)

1,022

630

-

1,652

-

-

26,987

28,639

Disposals

-

-

-

-

(62)

-

-

(62)

Balance at disposal of company

-

-

-

-

(33)

-

(1,935)

(1,968)

Exchange differences

9,649

6,700

1,248

17,597

736

-

3,673

22,006

Classified as held-for-sale

(1,203)

(3,056)

-

(4,259)

-

-

(7,796)

(12,055)

September 30 2016

90,934

75,185

11,030

177,149

11,923

-

68,208

257,280

Net book value/carrying amount at September 30 2016

102,945

41,574

3,743

148,262

5,792

980

396,105

551,139

 

 

 


Acquired intangible assets





 





Total




 



Customer


acquired





Trademarks

relation-


intangible

Licences &



As at March 2016

& brands

ships

Databases

assets

software

Goodwill

Total


2016

2016

2016

2016

2016

2016

2016


£000

£000

£000

£000

£000

£000

£000

Cost/carrying amount








At October 1 2015

171,861

102,777

12,616

287,254

15,165

429,272

731,691

Additions

-

-

-

-

1,417

-

1,417

Disposals

-

-

-

-

(68)

-

(68)

Exchange differences

6,405

3,368

402

10,175

366

15,895

26,436

Classified as held-for-sale

-

-

-

-

(34)

(7,475)

(7,509)

At March 31 2016

178,266

106,145

13,018

297,429

16,846

437,692

751,967


Amortisation and impairment








At October 1 2015

73,510

63,147

8,769

145,426

7,607

47,279

200,312

Amortisation charge

3,733

3,563

554

7,850

1,487

-

9,337

Disposals

-

-

-

-

(62)

-

(62)

Impairment (note 4)

-

-

-

-

-

12,940

12,940

Exchange differences

3,088

2,068

382

5,538

215

2,336

8,089

Classified as held-for-sale

-

-

-

-

(34)

(1,935)

(1,969)

At March 31 2016

80,331

68,778

9,705

158,814

9,213

60,620

228,647


Net book value/carrying amount at March 31 2016

97,935

37,367

3,313

138,615

7,633

377,072

523,320


 

Intangible assets, other than goodwill, have a finite life and are amortised over their expected useful lives at the rates set out in the accounting policies in note 1 of the September 2016 annual report.

 

12 Deferred income

 

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Deferred subscription income

106,722

95,382

93,518

Other deferred income

37,737

33,612

25,268


144,459

128,994

118,786





Within one year

138,512

125,285

113,446

In more than one year

5,947

3,709

5,340


144,459

128,994

118,786

 

 

13 Financial instruments

 

The group's financial assets and liabilities are as follows:

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Financial assets




Derivative instruments in designated hedge accounting relationships

504

532

                 419

Available-for-sale investments (note 10)

5,835

5,835

              5,835

Deferred consideration (note 16)

3,069

192

                 526

Loans and receivables (including cash at bank and short-term deposits)

109,023

          115,700

         147,478


118,431

122,259

154,258

Financial liabilities




Derivative instruments in designated hedge accounting relationships

(5,569)

(6,138)

(10,449)

Deferred consideration (note 16)

-

-

(480)

Acquisition commitments (note 16)

(10,168)

(10,201)

(11,771)

Borrowings and payables (including bank overdrafts)

(211,861)

(70,383)

(97,659)


(227,598)

(86,722)

(120,359)

 

There have been no transfers of assets or liabilities between levels of the fair value hierarchy and there are no non-recurring fair value measurements.

 

The fair value of the financial assets and liabilities above are classified as level 2 in the fair value hierarchy other than acquisition commitments and deferred consideration (which are classified as level 3) and available-for-sale investments (which are measured at cost less any identified impairment losses as they do not have a quoted market price in an active market and the fair value cannot be reliably measured). The directors consider that the carrying value amounts of financial assets and liabilities are equal to their fair value.

 

Fair value of financial instruments

The fair values of financial assets and financial liabilities are determined as follows:

 

Level 1

·     The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets is determined with reference to quoted market prices.

 

Level 2

·     The fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments.

·     Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.

 

Level 3

·   If one or more significant inputs are not based on observable market data, the instrument is included in level 3.

 

 

Other financial instruments not recorded at fair value

The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values. Such financial assets and financial liabilities include cash and cash equivalents, receivables, accrued income, payables and loans. 

 

14 Borrowings

 

 

Unaudited

 as at

March 31

Unaudited

as at

 March 31

Audited

 as at

 Sept 30

 

2017

2016

2016

 

£000

£000

£000

 




Borrowings

(118,963)

-

-





Undrawn available committed facilities

130,000

111,266

122,954

 

 

The group's principal source of borrowings are provided through committed bank facilities available to the group until December 2021. These syndicated facilities include two five-year term-loans of US$100m and £40m (total £119m) and a £130m multi-currency revolving credit facility which was undrawn as at March 31 2017.  There is a further accordion facility of £130m should the group wish to request it.  The term-loans and drawings under the revolving credit facility bear interest charged at LIBOR plus a margin, the applicable margin being based on the group's ratio of net debt to adjusted EBITDA.  These facilities contain covenants based on a maximum 3.0 times net debt to adjusted EBITDA and a minimum interest cover ratio of 3.0 times.  The amounts and foreign exchange rates used in the covenant calculations are subject to adjustments as defined under the terms of the arrangement.  Management regularly monitors the covenants and prepares detailed cash flow forecasts to ensure that sufficient headroom is available and that the covenants are not close or potentially close to breach.  At March 2017, the group's net debt to adjusted EBITDA was 0.7 times.

 

In 2016, the group had access to a committed multi-currency credit facility from DMGT.  This facility was terminated as part of the share buyback transaction.

 

15 Called up share capital

 


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Allotted, called up and fully paid




109,087,969 ordinary shares of 0.25p each

(March 2016: 128,289,086 ordinary shares of 0.25p each)

(September 2016: 128,313,356 ordinary shares of 0.25p each)

273

320

321

 

During the period, 21,786 ordinary shares of 0.25p each with an aggregate nominal value of £54 were issued following the exercise of share options granted under the company's share option schemes for a cash consideration of £207,211.  On January 6 2017, the group completed the purchase for cancellation of 19,247,173 ordinary shares from its then majority shareholder DMG Charles Limited, a DMGT group company.  The aggregate nominal value of the shares cancelled was £48,118. 

 

16 Acquisition commitments and deferred consideration

 

The group is party to contingent consideration arrangements in the form of acquisition commitments, acquisition deferred consideration payments and deferred consideration receipts on disposals. The group recognises the discounted present value of the contingent consideration. This discount is unwound as a notional interest charge to the Income Statement. The group regularly performs a review of the underlying businesses to assess the impact on the fair value of the contingent consideration. Any resultant change in these fair values is reported as a finance income or expense in the Income Statement.

 


Acquisition commitments

Deferred consideration payments


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30

Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016

2017

2016

2016


£000

£000

£000

£000

£000

£000

Liability







At October 1

(11,771)

(9,171)

(9,171)

(480)

-

-

Net movements in finance income and expense during the period (note 5)

2,077

(789)

(601)

15

-

-

Exercise of commitments

-

239

239

-

-

-

Additions from acquisitions during the year

-

-

(665)

-

-

(480)

Payment during the year

-

-

-

465

-

-

Exchange differences to reserves

(474)

(480)

(1,573)

-

-

-

At end of period

(10,168)

(10,201)

(11,771)

-

-

(480)








Within one year

(9,086)

-

(326)

-

-

(480)

In more than one year

(1,082)

(10,201)

(11,445)

-

-

-


(10,168)

(10,201)

(11,771)

-

-

(480)

 

 


Deferred consideration receipts


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000

Asset




At October 1

526

589

589

Additions from disposals during the period

2,765

-

450

Net movements in finance income and expense during the period (note 5)

79

-

-

Receipts during the year

(326)

(406)

(662)

Exchange differences to reserves

25

9

149

At end of period

3,069

192

526





Within one year

1,554

192

-

In more than one year

1,515

-

526


3,069

192

526

 

Reconciliation of finance income and expense (note 5):

 


Acquisition commitments

Deferred consideration payments


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30

Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016

2017

2016

2016


£000

£000

£000

£000

£000

£000








Fair value adjustment

2,618

(375)

258

15

-

-

Imputed interest

(541)

(414)

(859)

-

-

-

Net movements in finance income and expense during the period

2,077

(789)

(601)

15

-

-

 

 


Deferred consideration receipts


Unaudited

 six months

 ended

 March 31

Unaudited

 six months

 ended

 March 31

Audited

 year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Fair value adjustment

79

-

-

Net movements in finance income and expense during the period

79

-

-

 

 

The non-controlling interest of Ned Davis Research (NDR) have exercised their put options over the remaining 15% stake in NDR.  The liability has been re-measured using the contractual mechanism which has resulted in a fair value adjustment.

 

The value of the acquisition commitments, acquisition deferred consideration payments and deferred consideration receipts on disposal is subject to a number of assumptions. The potential undiscounted amount of all future payments that the group could be required to make under the acquisition contingent consideration arrangements is as follows:

 


Unaudited six months ended March 31

Unaudited six months ended March 31

Audited year ended Sept 30


2017

2017

2016

2016

2016

2016


Maximum

Minimum

Maximum

Minimum

Maximum

Minimum


£000

£000

£000

£000

£000

£000








NDR

48,277

-

41,912

-

46,314

-

World Bulk Wine

15,811

-

-

-

672

-

FastMarkets

-

-

-

-

480

-

ReSec

398

-

-

-

-

-


64,486

-

41,912

-

47,466

-

 

The potential undiscounted amount of all future receipts that the group could receive under the disposal contingent consideration arrangement is as follows:

 


Unaudited six months ended March 31

Unaudited six months ended March 31

Audited year ended Sept 30


2017

2017

2016

2016

2016

2016


Maximum

Minimum

Maximum

Minimum

Maximum

Minimum


£000

£000

£000

£000

£000

£000








II Newsletters

-

-

192

-

142

-

Gulf Publishing

312

-

-

-

312

-

Petroleum Economist

72

-

-

-

72

-

HFI

2,084

-

-

-

-

-

II Searches

303

-

-

-

-

-

Euromoney Indices

500

-

-

-

-

-


3,271

-

192

-

526

-

 

 

The discounted acquisition commitments, acquisition deferred consideration payments and deferred consideration receipts on disposal are based on predetermined multiples of future profits of the businesses, and have been estimated on an acquisition-by-acquisition basis using available performance forecasts.

 

A one percentage point increase or decrease in growth rate in estimating the expected profits, results in the acquisition commitment at March 31 2017 increasing or decreasing by £0.1m with the corresponding change to the value charged or credited to the Income Statement in future periods.

 

 

17 Contingent liabilities

 

Claims in Malaysia

Four writs claiming damages for libel were issued in Malaysia against the company and three of its employees in respect of an article published in one of the company's magazines, International Commercial Litigation, in November 1995. The writs were served on the company on October 22 1996. Two of these writs have been discontinued. The total outstanding amount claimed on the two remaining writs is Malaysian ringgits 83.1m (£15.1m). No provision has been made for these claims in these financial statements as the directors do not believe the company has any material liability in respect of these writs.

 

18 Related party transactions

 

The group has taken advantage of the exemption allowed under IAS 24 'Related Party Disclosures' not to disclose transactions and balances between group companies that have been eliminated on consolidation. Other related party transactions and balances are detailed below:

 

(i)      The group had borrowings under a US$160m multi-currency facility with Daily Mail and General Holdings Limited (DMGH), a Daily Mail and General Trust plc (DMGT) group company:

 


Unaudited

 six months

 ended

March 31

Unaudited

six months

 ended

 March 31

Audited

year

 ended

 Sept 30


2017

2016

2016


£000

£000

£000





Fees on the available facility for the period

153

263

525

 

 

This facility was terminated on December 29 2016.

 

(ii)     The group had a deposit agreement with DMGH and DMGB Limited, a DMGT group company:

 

 

 

Unaudited

 as at

March 31

Unaudited

as at

 March 31

Audited

 as at

 Sept 30

 

2017

2016

2016

 

£000

£000

£000

 




Deposits at end of period

-

43,727

73,639

 

 

This agreement was terminated on January 6 2017.

 

(iii)    During the period the group expensed services provided by DMGT, and other fellow group companies, as follows:

 





Unaudited

 six months

 ended

March 31

Unaudited

six months

 ended

 March 31

Audited

year

 ended

 Sept 30





2017

2016

2016





£000

£000

£000








Services expensed




209

290

960

 

From January 2017 the services expensed include a charge under the transitional service agreement with DMGT signed on January 3 2017.

(iv)    During the period DMGT group companies surrendered tax losses to Euromoney Consortium Limited under an agreement between the two groups. These tax losses are relievable against UK taxable profits of the group under HMRC's consortium relief rules:

 



Unaudited

 as at

March 31

Unaudited

as at

 March 31

Audited

 as at

 Sept 30



2017

2016

2016



£000

£000

£000






Amounts payable


172

787

1,633

Tax losses with tax value


229

1,049

2,177

Amounts owed by DMGT group at end of period


172

787

(121)

 

(v)     On January 6 2017, the group completed the off-market purchase of 19,247,173 ordinary shares from the DMGT group for cancellation at a price of £9.75 per share.  The transaction was approved by shareholders at the company's general meeting held on December 29 2016.

 

(vi)    The group participates in the Harmsworth Pension Scheme (HPS), a defined benefit scheme operated by DMGT, which up to September 30 2016 was accounted for as a defined contribution scheme. The scheme is now closed to new entrants.  The group's share of the HPS deficit is:

 

 



Unaudited

 six months

 ended

March 31

Unaudited

six months

 ended

 March 31

Audited

year

 ended

 Sept 30



2017

2016

2016



£000

£000

£000






Deficit on defined benefit scheme


1,260

-

1,249

 

 

(vii)   During the period the group received dividends from its associate undertaking:

 

 



Unaudited

 six months

 ended

March 31

Unaudited

six months

 ended

 March 31

Audited

year

 ended

 Sept 30



2017

2016

2016



£000

£000

£000












-

83

 

 

 

(viii)  During the period, Ned Davis Research (NDR), a subsidiary undertaking, leased office space at market rates from a separate entity, Bird Bay Properties, LLC, which is owned by a minority shareholder of NDR:

 

 



Unaudited

 six months

 ended

March 31

Unaudited

six months

 ended

 March 31

Audited

year

 ended

 Sept 30



2017

2016

2016



US$000

US$000

US$000











Amount expensed


194

190

382

 

 

 

19 Events after the balance sheet date

 

Purchase of new business

RISI US (Holdco) Inc, (RISI)

On April 6 2017, the group acquired 100% of the equity share capital of RISI, the leading price reporting agency for the global forest products market, for US$125m (£100m).

 

Layer123 Events & Training Limited (Layer123)

On April 13 2017, the group acquired 61% of the ordinary share capital of Layer123, a content and sponsorship-led events business focusing on innovation in the rapidly-evolving space of telecoms network strategy. The initial consideration paid was £6.4m.

 

World Bulk Wine Exhibition, S.L (World Bulk Wine)

On May 3 2017, the group acquired a further 17% of the equity share capital of World Bulk Wine, increasing the group's equity shareholding to 74%, for a consideration of €0.6m (£0.5m).

 

Responsibility Statement

 

 

We confirm that to the best of our knowledge:

 

(a)    these Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting';

(b)    this Interim Financial Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c)     this Interim Financial Report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

 

 

By order of the board,

 

 

 

Andrew Rashbass

Chief Executive

May 17 2017

 

 

 

Colin Jones

Finance Director

May 17 2017

 

 

Independent review report to Euromoney Institutional Investor PLC

 

Report on the condensed consolidated financial statements

 

Our conclusion

We have reviewed Euromoney Institutional Investor PLC's condensed consolidated financial statements (the "interim financial statements") in the Interim Financial Report of Euromoney Institutional Investor PLC for the six month period ended March 31 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 condensed consolidated statement of financial position as at March 31 2017;

·        the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;

·        the condensed consolidated statement of changes in equity for the period then ended;

·        the condensed consolidated statement of cash flows for the period then ended; and

·        the explanatory notes to the interim financial statements.

 

The interim financial statements included in the Interim Financial 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 interim financial statements and the review

 

Our responsibilities and those of the directors

The Interim Financial 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 Financial 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 Financial 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 the 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 Ireland) 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 Financial 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

May 17 2017

 

Notes:

(a)   The maintenance and integrity of the Euromoney Institutional Investor 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.

 

Directors

 

Executive Directors

A Rashbass (Chief Executive Officer) ‡

CR Jones (Finance Director)


Non-executive Directors

JC Botts (Chairman) †‡§

The Viscount Rothermere ‡

Sir Patrick Sergeant (President) ‡

DP Pritchard §

ART Ballingal

TP Hillgarth §

PA Zwillenberg †‡


† member of the remuneration committee

‡ member of the nominations committee

§ member of the audit committee

 

Shareholder Information

 

Financial calendar

2017 interim results announcement

Thursday May 18 2017

Interim dividend ex-dividend date

Thursday May 25 2017

Interim dividend record date

Friday May 26 2017

Payment of 2017 interim dividend

Thursday June 22 2017

Trading update

Friday July 21 2017*

2017 final results announcement

Thursday November 23 2017

Final dividend ex-dividend date

Thursday November 30 2017*

Final dividend record date

Friday December 1 2017*

Trading update

Thursday January 25 2018*

2018 AGM (approval of final dividend)

Thursday February 1 2018*

Payment of final dividend

Thursday February 15 2018*

 

* Provisional dates and subject to change.

 

Shareholder enquiries

Administrative enquiries about a holding of Euromoney Institutional Investor PLC shares should be directed in the first instance to the company's registrars, Equiniti.

 

Telephone: 0371 384 2951 Lines are open 8:30am to 5:30pm (UK time), Monday to Friday, excluding English public holidays.

Overseas Telephone: (00) 44 121 415 0246

 

A number of facilities are available to shareholders through the secure online site: www.shareview.co.uk.

 

Company secretary and registered office

Tim Bratton

8 Bouverie Street

London

EC4Y 8AX

England registered number: 954730

 

Advisors

Auditor

PricewaterhouseCoopers LLP

1 Embankment Place

London

WC2N 6RH

Broker

UBS

5 Broadgate

London

EC2M 2QS

 

Solicitor

Nabarro

125 London Wall

London

EC2Y 5AL

Registrars

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR FDLLFDEFLBBB
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Interim Results - RNS