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RNS
Tarsus Group PLC  -  TRS   

Half-year Report

Released 07:00 26-Jul-2018

RNS Number : 7900V
Tarsus Group PLC
26 July 2018
 

Tarsus Group plc

("Tarsus", the "Company" or the "Group") 

Interim results for six months to 30 June 2018

Strong organic growth, led by China

Financial results

 

H1 2018

H1 2017

H1 2016

Revenue (£m)

35.6

39.8

27.0

Like-for-like revenue growth

12%

4%

11%

Adjusted profit before tax* (£m)

5.8

6.8

4.0

Loss before tax (£m)

(1.3)

(1.4)

(3.1)

Adjusted EPS (pence)

2.8

3.5

2.8

Basic EPS (pence)

(3.2)

(3.2)

(3.1)

Dividend (pence)

3.3

3.0

2.7

Net Debt (£m)

94.7

85.3

57.3

 

Financial highlights

·    Revenue of £35.6m up 32% against 2016

·    Group like-for-like revenues* up 12%

·    Adjusted profit before tax of £5.8m up 45% against 2016 (statutory loss before tax £1.3m)

·    Adjusted earnings per share of 2.8p unchanged against 2016 (statutory loss per share 3.2p)

·    Interim dividend of 3.3p per share up 10% on 2017

Operational highlights

·    Buyer/visitor growth across the portfolio of 13%, led by Chinese events in first half

·      Launch of Labelexpo Southeast Asia - one of the Group's strongest ever launches and profitable in its first edition

·      Bolt-on acquisitions in Mexico and the US (Connect) and the purchase of an additional 25% minority interest in SIUF (China)

·      Strong replications programme delivering accelerated returns

Current trading and outlook

·      Forward bookings for 2018 up 10% on a like-for-like basis (adjusted for biennials and acquisitions)

·    43 launch portfolio events scheduled to be held in 2018, of which 17 are new this year

·    Well positioned to deliver encouraging growth in 2018, in line with expectations 

 

Douglas Emslie, Group Managing Director, said:

"An integral part of our strategy for organic growth is to invest in and expand our leading brands globally through our growing launch programme. We are delighted by the performance of the first edition of Labelexpo Southeast Asia, demonstrating the strength of the Labelexpo brand.

"We have traded well in the first half, forward bookings are well up and we remain confident of delivering a strong performance in 2018 in line with the Board's expectations."

Overview

2018 has seen the launch of the next phase of the Quickening the Pace strategy - "QTP2: driving scale and momentum", a programme that builds on the original QTP strategy.  The Group will deepen its presence in higher growth markets, look to maximise the scale of existing events and acquire new platforms for growth with the aim of continuing to drive strong shareholder returns.

Financial review

Group revenue for the period was £35.6m (2017: £39.8m). Adjusting for acquisitions and biennial events, underlying organic revenue growth of 12% was achieved in the smaller first half.

Adjusted profit before tax was £5.8m (2017: £6.8m; 2016: £4.0m), reflecting strong revenue growth, primarily in our Chinese portfolio. The Group incurred exceptional costs of £0.4m (2017: £0.6m) in respect of completed and pending corporate transactions. The Group also incurred an amortisation charge of £3.3m (2017: £3.7m). Other adjusting items are set out in note 6 to the financial statements below. Loss before tax was £1.3m (2017: £1.4m; 2016 £3.1m).

Adjusted earnings per share were 2.8p (2017: 3.5p). Basic loss per share was 3.2p (2017: 3.2p).

An interim dividend of 3.3p per share (2017: 3.0p) has been declared and will be paid on 11 January 2019 to Shareholders on the Register on 30 November 2018. The Group will continue to offer a scrip alternative to qualifying shareholders.

Operating cash inflow in the first half was £2.4m (2017: £16.1m). As expected net debt at 30 June 2018 increased to £94.7 million (2017: £85.3m), driven primarily by acquisitions. The Group remains on target to return to its stated long-term target range of 1.5 - 2.0x net debt: EBITDA by the end of the year.

Corporate activity 

Tarsus and EJ Krause jointly acquired 60% of Expo Restaurantes, the leading restaurant show in Mexico which successfully ran its first event under our ownership in June.

In the US, Connect acquired 80% of eTourism Summit, an event linking travel destination marketing executives with the latest products and services in digital marketing. The travel industry is one of the largest consumers of digital media.

In China, Tarsus has acquired a further 25% in SIUF, taking its overall stake to 75%, in line with our strategy to acquire minorities where appropriate.

 

Operating review

Geographic breakdown of results

 

Asia

Americas

EMEA

£'m

2018

2017

2016

2018

2017

2016

2018

2017

2016

Revenue

15.3

13.1

7.7

15.2

16.3

12.2

5.2

10.5

7.1

Adjusted Profit before tax

6.5

5.0

1.9

2.9

3.0

4.3

0.1

2.2

0.5

 

Asia

In the Group's Chinese portfolio, which is heavily first half weighted, performance was strong and our Shenzhen events all performed well - in particular Hometex. The outlook for the second half events in China remains positive.

Labelexpo Southeast Asia, held in Bangkok in May was one of the Group's most successful launches ever, attracting nearly 8,000 attendees from 62 countries.  The majority of other events in South-East Asia fall in the second half of the year.

Americas

Connect held 13 events in the first half and these performed in line with expectations. The Medical portfolio continues to perform well, including a strong launch of the Cardiometabolic West event. Off Price February 2018 performed in line with the previous edition.

In Mexico, trading was positive with another strong performance from Expo Manufactura. Plastimagen (the Group's largest event in Mexico) takes place on an 18 month cycle and did not occur in the period.

EMEA

Dubai saw a good performance across the events in the first half and the outlook for the second half is in line with our expectations.

The pattern of trading in Turkey is similar to 2017. Trade in the first half has been affected by both political uncertainty around the election and by a further depreciation of the Turkish lira. The outlook for the large shows in the second half is good.

Launch portfolio

A key part of our strategy will be continued investment in Tarsus' organic growth programme, particularly the replication of our events, which drives the growth of the Group's leading brands around the world and provides a lower risk, lower cost approach to driving organic growth.  Tarsus has invested consistently in this portfolio over the last four years, leveraging strong brands including Labelexpo, GESS and Connect. The launch portfolio continues to be actively managed to ensure we focus on events that can scale in a reasonable timeframe. There are 17 new events planned for 2018 of which 8 were held in the first half. 14 previous events are not being repeated. Including 6 biennial events running next in 2019, the launch portfolio stands at 49.

With a growing launch portfolio the Group is confident of building on this progress going forward.

Outlook

Owing to the timing of the Group's events, revenues for the year as a whole are heavily weighted to the second half. Bookings for the full year are strong and are 10% ahead of 2017 on a like-for-like basis.

 

The Group is well placed to continue to deliver encouraging growth in 2018 and beyond.

 

Neville Buch

Douglas Emslie

Chairman

Group Managing Director

25 July 2018

 

 

For further information contact:

Tarsus Group plc:

 

Douglas Emslie, Group Managing Director

020 8846 2700

Dan O'Brien, Group Finance Director

 

 

 

IR Focus

 

Neville Harris

07909 976044

 

 

 

The Group will be hosting a presentation to analysts at 11.00am today at the offices of Deutsche Bank plc, Winchester House, 1 Great Winchester St, London EC2N 2DB. A webcast of the presentation will be available on Tarsus's website (www.tarsus.com) from 9.30am on 27 July 2018.

*Definitions can be found in note 17 to the financial statements

 

 

INDEPENDENT REVIEW REPORT TO TARSUS GROUP PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 which comprises the Condensed Consolidated Interim Income statement, Condensed Consolidated Interim Statement of Comprehensive Income, Condensed Consolidated Interim Statement of Financial Position, the Condensed Consolidated Interim Statement of Cash Flows, Condensed Consolidated Interim Statement of Changes in Equity and the related notes 1 to 16. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company 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 Financial Reporting Council.  Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

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 inquiries, 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.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Statutory Auditor

London, United Kingdom

25 July 2018

 

 


 

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

 

 

 

 

 

Period to 30 June 2018

 

Period to 30 June 2017

 

 

 

 

 

 

Unaudited

 

 

 

 

Unaudited

 

 

 

 

Note

Adjusted

Adjusting items *

Reported

Adjusted

Adjusting

 items *

Reported

 

 

 

£000

 

£000

 

£000

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group revenue

7

35,636

 

-

 

35,636

 

39,777

 

-

 

39,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

(28,927)

 

(5,237)

 

(34,164)

 

(32,761)

 

(6,266)

 

(39,027)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of profit of joint ventures

 

1,526

 

(444)

 

1,082

 

1,703

 

(464)

 

1,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group operating profit/(loss)

 

8,235

 

(5,681)

 

2,554

 

8,719

 

(6,730)

 

1,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance costs

 

(2,408)

 

(1,476)

 

(3,884)

 

(1,928)

 

(1,429)

 

(3,357)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before taxation

 

5,827

 

(7,157)

 

(1,330)

 

6,791

 

(8,159)

 

(1,368)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax on profit/(loss) on ordinary activities

8

(1,048)

 

401

 

(647)

 

(1,091)

 

667

 

(424)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) for the financial period

 

4,779

 

(6,756)

 

(1,977)

 

5,700

 

(7,492)

 

(1,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) for the financial period attributable to equity shareholders of the parent company

3,104

 

(6,756)

 

(3,652)

 

3,941

 

(7,492)

 

(3,551)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the financial period attributable to non-controlling interests

1,675

 

-

 

1,675

 

1,759

 

-

 

1,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,779

 

(6,756)

 

(1,977)

 

5,700

 

(7,492)

 

(1,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note

Headline

 

 

Reported

Headline

 

 

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- basic

9

2.8

 

 

 

(3.2)

 

3.5

 

 

 

(3.2)

 

- diluted

 

2.7

 

 

 

(3.2)

 

3.5

 

 

 

(3.2)

 

                                 

 

 

* See note 6 for adjusting item

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

 

For the six months ended 30 June

 

 

 

 

Period to

30 June 2018

Period to

30 June 2017

 

 

£000

 

£000

 

 

Unaudited

 

Unaudited

 

 

 

 

 

Loss for the financial period

 

(1,977)

 

(1,792)

 

 

 

 

 

Other comprehensive income/(expense) recognised directly in equity:

 

 

 

 

Cash flow hedge reserve - movement in fair value

 

1,045

 

525

Foreign exchange translation differences

 

(243)

 

(7,414)

 

 

 

 

 

 

 

 

 

 

Other comprehensive income/(expense)

 

802

 

(6,889)

 

 

 

 

 

Total comprehensive expense

 

(1,175)

 

(8,681)

 

 

 

 

 

Attributable to:

 

 

 

 

Equity shareholders of the parent company

 

(2,774)

 

(10,440)

Non-controlling interests

 

1,599

 

1,759

 

 

 

 

 

Total comprehensive expense for the period

 

(1,175)

 

(8,681)

 

 

 

Other comprehensive income relating to foreign exchange translation differences, fair value movements in cash flow hedges and the tax effects thereon may all subsequently be reclassified to profit and loss if certain conditions are met.

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

 

 

 

 

Note

At 30 June 2018

At 30 June 2017

At 31 December 2017

 

 

£000

 

£000

 

£000

 

 

Unaudited

 

Unaudited

Restated

Audited

Restated

NON-CURRENT ASSETS

 

 

 

 

 

 

Property, plant and equipment

 

1,072

 

1,241

 

1,082

Intangible assets

10

190,806

 

193,909

 

188,344

Investment in Joint Ventures

 

41,026

 

32,426

 

38,490

Deferred tax assets

 

1,851

 

2,928

 

3,003

 

 

 

 

 

 

 

 

 

234,755

 

230,504

 

230,919

CURRENT ASSETS

 

 

 

 

 

 

Trade and other receivables

 

32,995

 

31,620

 

28,909

Cash and cash equivalents

 

19,839

 

26,996

 

22,373

 

 

 

 

 

 

 

 

 

52,834

 

58,616

 

51,282

CURRENT LIABILITIES

 

 

 

 

 

 

Trade and other payables

 

(30,722)

 

(38,360)

 

(36,457)

Deferred income

 

(36,920)

 

(44,057)

 

(22,450)

Provisions

 

(139)

 

(134)

 

(120)

Liabilities for current tax

 

(2,807)

 

(1,306)

 

(3,155)

 

 

 

 

 

 

 

 

 

(70,588)

 

(83,857)

 

(62,182)

 

 

 

 

 

 

 

NET CURRENT LIABILITIES

 

(17,754)

 

(25,241)

 

(10,900)

 

 

 

 

 

 

 

TOTAL ASSETS LESS CURRENT LIABILITIES

 

217,001

 

205,263

 

220,019

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

Other payables

 

(23,521)

 

(22,056)

 

(27,981)

Deferred tax liabilities

 

(9,999)

 

(10,918)

 

(10,059)

Interest bearing loans and borrowings

 

(114,511)

 

(111,000)

 

(106,239)

 

 

 

 

 

 

 

 

 

(148,031)

 

(143,974)

 

(144,279)

 

 

 

 

 

 

 

NET ASSETS

 

68,970

 

61,289

 

75,740

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Share capital

 

5,670

 

5,650

 

5,654

Share premium account

 

73,762

 

73,200

 

73,303

Other reserves

 

(18,823)

 

(12,498)

 

(19,701)

Retained earnings

 

3,154

 

(9,388)

 

11,914

Issued capital and reserves attributable to equity shareholders of the parent

63,763

 

56,964

 

71,170

 

 

 

 

 

 

 

NON-CONTROLLING INTERESTS

 

5,207

 

4,325

 

4,570

 

 

 

 

 

 

 

TOTAL EQUITY

 

68,970

 

61,289

 

75,740

                   

 

The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and authorised for issue and signed on its behalf by:

                                                                                                                                                                                   

                                                                                                                                                                

Douglas Emslie                                                                          Daniel O'Brien

Group Managing Director                                                           Group Finance Director

25 July 2018

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 

 

 

 

 

 

Period to

30 June 2018

Period to

30 June 2017

 

 

 

 

 

 

 

Unaudited

 

Unaudited

 

 

£000

 

£000

Cash flows from operating activities

 

 

 

 

Loss for the period

 

(1,977)

 

(1,792)

Adjustments for:

 

 

 

 

Depreciation

 

234

 

269

Amortisation & impairment

 

4,208

 

4,642

Other losses

 

(265)

 

(925)

(Gain)/loss on disposal of tangible assets

 

(4)

 

29

Share option charge

 

1,376

 

1,328

Taxation charge/(credit)

 

647

 

424

Interest payable

 

3,884

 

3,357

Share of profit from joint ventures

 

(1,082)

 

(1,239)

Dividends received from joint venture company

 

-

 

2,533

 

 

 

 

 

Operating cash flow before changes in working capital

7,021

 

8,626

Decrease in trade and other receivables

 

4,379

 

1,100

(Decrease)/increase in trade and other payables

 

(9,060)

 

6,452

Increase/(decrease) in provisions

 

44

 

(45)

 

 

 

 

 

Cash generated from operations

 

2,384

 

16,133

Interest paid

 

(2,400)

 

(1,802)

Income taxes (paid)/received

 

(1,699)

 

632

 

 

 

 

 

Net cash from operating activities

 

(1,715)

 

14,963

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Proceeds from sale of tangible fixed assets

 

9

 

-

Acquisition of property, plant & equipment

 

(153)

 

(191)

Acquisition of intangible fixed assets

 

(403)

 

(509)

Acquisition of subsidiaries (net of cash acquired)

 

(1,094)

 

(15,896)

Acquisition of joint venture

 

(635)

 

-

Deferred and contingent consideration paid

 

(900)

 

(5,938)

Put call option liability paid

 

(1,841)

 

(5,073)

 

 

 

 

 

Net cash outflow from investing activities

 

(5,017)

 

(27,607)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Drawdown of borrowings

 

7,830

 

27,200

Dividends paid to shareholders in parent company

 

(3,352)

 

(2,736)

Dividends paid to non-controlling interests in subsidiaries

(312)

 

(24)

 

 

 

 

 

Net cash inflow from financing activities

 

4,166

 

24,440

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

(2,566)

 

11,796

Opening cash and cash equivalents

 

22,373

 

15,946

Foreign exchange movements

 

32

 

(746)

 

 

 

 

 

Closing cash and cash equivalents

 

19,839

 

26,996

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

 

   

                        

 

 

Attributable to equity holders of the parent

 

 

 

 

 

 

 

 

 

 

 

 

Share

Share

Reorganisation

Capital

Fair

Foreign

Retained

Non-

Total

 

Capital

Premium

Reserve

Redemption

Value

Exchange

Earnings

Controlling

 

Account

Reserve

 

Reserve

Reserve

Reserve

 

Interests

 

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

As at 1 January 2018

 

5,654

73,303

6,013

(443)

(1,624)

(23,647)

11,914

4,570

75,740

Recognised foreign exchange gains/(losses) for the period

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(167)

 

 

-

 

 

(76)

 

 

(243)

(Loss)/profit for the period:

 

 

 

 

 

 

 

 

 

- Attributable to equity shareholders

-

-

-

-

-

-

(3,652)

-

(3,652)

- Attributable to non-controlling interests

 

-

-

-

-

-

-

-

1,675

1,675

Cashflow hedge reserve

-

-

-

-

1,045

-

-

-

1,045

 

Total comprehensive income/(expense) for the period

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,045

 

 

(167)

 

 

(3,652)

 

 

1,599

 

 

(1,175)

Scrip dividend

 

-

18

-

-

-

-

-

-

18

New share capital subscribed

 

16

441

-

-

-

-

-

-

457

Share option charge

 

-

-

-

-

-

-

1,218

-

1,218

Movement in reserves relating to deferred tax

 

-

-

-

-

-

-

(1,331)

-

(1,331)

Other movements in reserves

 

-

-

-

-

-

-

(1,902)

-

(1,902)

Dividend paid

 

-

-

-

-

-

-

(3,371)

-

(3,371)

Dividend paid to non-controlling interests

 

-

-

-

-

-

-

-

(314)

(314)

Written Put options over non-controlling interests

 

-

-

-

-

-

-

(370)

-

(370)

Non-controlling interests arising on acquisition

 

-

-

-

-

-

-

648

(648)

0

Net change in shareholders' funds

16

459

-

-

1,045

(167)

(8,760)

637

(6,770)

As at 30 June 2018

5,670

73,762

6,013

(443)

(579)

(23,814)

3,154

5,207

68,970

                     

 

 

 

 

 

 

 

 

 

 

Attributable to equity holders of the parent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share

Share

Reorganisation-

Capital

Fair

Foreign

Retained

Non-

Total

 

Capital

Premium

Reserve

Redemption

Value

Exchange

Earnings

Controlling

 

Account

Reserve

 

Reserve

Reserve

Reserve

 

Interests

 

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

As at 1 January 2017

5,637

72,304

6,013

(443)

(2,434)

(8,754)

(3,047)

2,363

71,639

 

 

 

 

 

 

 

 

 

 

Recognised foreign exchange losses for the period

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,405)

 

 

-

 

 

(9)

 

 

(7,414)

(Loss)/profit for the period:

 

 

 

 

 

 

 

 

 

- Attributable to equity shareholders

-

-

-

-

-

-

(3,551)

-

(3,551)

- Attributable to non-controlling interests

 

-

-

-

-

-

-

-

1,759

1,759

Cashflow hedge reserve

 

-

-

-

-

525

-

-

-

525

 

Total comprehensive income/(expense) for the period

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

525

 

 

(7,405)

 

 

(3,551)

 

 

1,750

 

 

(8,681)

Scrip dividend

 

-

14

-

-

-

-

-

-

14

New share capital subscribed

 

13

882

-

-

-

-

-

-

895

Share option charge

 

-

-

-

-

-

-

1,163

-

1,163

Movement in reserves relating to deferred tax

 

-

-

-

-

-

-

198

-

198

Other movements in reserves

 

-

-

-

-

-

-

(1,407)

-

(1,407)

Dividend paid

 

-

-

-

-

-

-

(2,744)

-

(2,744)

Acquisition of non-controlling interests

 

-

-

-

-

-

-

-

212

212

Net change in shareholders' funds

13

896

-

-

525

(7,405)

(6,341)

1,962

(10,350)

As at 30 June 2017

5,650

73,200

6,013

(443)

(1,909)

(16,159)

(9,388)

4,325

61,289

                                       

 

 

 

 

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

1. REPORTING ENTITY

 

Tarsus Group plc (the "Company") is a company incorporated in Jersey and resident in Ireland. The condensed consolidated financial statements of the Company as at and for the six months ended 30 June 2018 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in jointly controlled entities.

 

The consolidated financial statements of the Group as at and for the year ended 31 December 2017 are available upon request from the Company Secretary at 15 Harcourt Street, Dublin 2, Ireland.

 

Having reviewed the Group's liquid resources, borrowing facilities and cash flow forecasts, the directors believe that the Group has adequate resources to continue as a going concern for the foreseeable future.

 

2. STATEMENT OF COMPLIANCE

 

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting. They do not constitute the Group's statutory accounts.

 

The interim financial statements should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2017 which were prepared under International Financial Reporting Standards, as adopted by the European Union, and have been reported on by the Company's auditor. The auditor report was unqualified.

 

The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and authorised for issue on 26 July 2018.

 

3. SIGNIFICANT ACCOUNTING POLICIES

 

Aside from the adoption of IFRS 9 and IFRS 15, which are described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2017.

 

IFRS 15

 

In the current financial year the Group has adopted IFRS 15 Revenue from Contracts with Customers. The Group has elected to restate comparative information from prior periods upon adoption of IFRS 15 and has applied the practical expedient under which contracts that began and ended in 2017 or that were completed prior to January 1st 2017 are not restated.

 

The core principle of IFRS 15 if that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

 

Under IFRS 15, deferred income and trade debtors may not both be recognised where neither the service has been performed or payment is due by the customer. The impact of this change on the balance sheets as at 30 June 2017 and 31 December 2017 is shown in the table below. There was no impact on the income statement for the six month period ended 30 June 2017 and year ended 31 December 2017.

 

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

IFRS 15 (CONTINUED)

 

31 December 2017

As previously reported

IFRS 15 reclassifications

Restated

Current assets

 

 

 

Trade and other receivables

44,452

(15,543)

28,909

Impact on total assets

44,452

(15,543)

34,766

 

 

 

 

Current liabilities

 

 

 

Deferred income

(37,993)

15,543

(22,450)

Impact on liabilities

(37,993)

15,543

(28,307)

 

 

30 June 2017

As previously reported

IFRS 15 reclassifications

Restated

Current assets

 

 

 

Trade and other receivables

37,874

(6,254)

31,620

Impact on total assets

37,874

(6,254)

31,620

 

 

 

 

Current liabilities

 

 

 

Deferred income

(50,311)

6,254

(44,057)

Impact on liabilities

(50,311)

6,254

(44,057)

 

IFRS 9

In the current period the Group has applied IFRS 9 Financial Instruments (as revised in July 2014) and the related consequential amendments to other IFRSs. IFRS 9 introduces new requirements for 1) the classification and measurement of financial assets and financial liabilities, 2) impairment for financial assets and 3) general hedge accounting. The only significant impact on the Group is in relation to the impairment of trade receivables and hedge accounting as detailed below.

 

In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred credit loss model under IAS 39. The expected credit loss model required the Group to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

 

As at 1 January 2018, the directors of the Company reviewed and assessed the Group's existing trade receivables for impairment using reasonable and supportable information that is available without undue cost of effort in accordance with the requirements of IFRS 9 to determine the credit risk of the respective items at the date they were initially recognised. No material adjustments were identified.

 

In accordance with IFRS 9's transition provisions for hedge accounting, the Group has applied the IFRS 9 hedge accounting requirements prospectively from the date of initial application on 1 January 2018. The Group's qualifying hedging relationships in place as at 1 January 2018 also qualified for hedge accounting in accordance with IFRS 9 and were therefore regarded as continuing hedge relationships. No rebalancing of any of the hedging relationships was necessary on 1 January 2018. As the critical terms of the hedging instruments match those of their corresponding hedged items, all hedging relationships continue to be effective under IFRS 9's effectiveness assessment requirements. The Group has also not designated any hedging relationships under IFRS 9 that would not have met the qualifying hedge accounting criteria under IAS 39.

 

Apart from this, the application of the IFRS 9 hedge accounting requirements has had no impact on the results and financial position of the Group at 1 January 2018 or in the current period. No accounting policy changes have been made as a result of the adoption of this standard.

 

4. ESTIMATES

 

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

 

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2017.

 

5. FINANCIAL RISK MANAGEMENT

 

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the end for the year ended 31 December 2017.

 

6. ADJUSTING ITEMS

 

The following analysis details the adjusting items in the consolidated interim income statement. Adjusted profit is prepared to provide a better indication of overall financial performance and to reflect how the business is managed and measured on a day to day basis. The adjusted profit excludes share option charges, amortisation of intangible assets arising from business combinations, unwinding of discount charges, changes in fair value of contingent consideration and put/call liabilities, acquisition related costs and the related taxation impact.

 

 

 

 

 

Six months to

 

Six months to

 

 

 

30 June 2018

 

30 June 2017

 

 

 

£000

 

£000

 

 

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

Operating items:

 

 

 

 

 

 

 

 

 

 

 

Operating costs:

 

 

 

 

 

Acquisition and potential acquisition costs

 

 

429

 

650

Changes in fair value of put/call and contingent consideration

 

114

 

514

Share option charge

 

 

1,376

 

1,328

Amortisation charge (excluding amounts charged to costs of sale)

 

3,322

 

3,745

(Profit)/loss on disposal of tangible fixed assets

 

 

(4)

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,237

 

6,266

Tax on joint venture profits

 

 

444

 

464

 

 

 

 

 

 

Total adjusting items in operating profit

 

 

5,681

 

6,730

Finance item - Unwinding of discount

 

 

1,476

 

1,429

 

 

 

 

 

 

Adjusting items before tax

 

 

7,157

 

8,159

 

 

 

 

 

 

Taxation:

 

 

 

 

 

Tax on joint venture profits

 

 

(444)

 

(464)

Tax relating to adjusting items

 

 

43

 

(203)

 

 

 

 

 

 

Total adjusting items

 

 

6,756

 

7,492

 

 

 

7. SEGMENTAL ANALYSIS

 

As at 30 June 2018, the Group is organised into three main operating segments - Americas, Asia and EMEA.

 

The main activities of all segments are the production of exhibitions, conferences, magazines, directories and online media.

 

The following table sets out the revenue and profit information and certain asset and liability information for the Group's reportable segments:

 

 

 

 

30 June 2018

 

 

 

 

 Unaudited

 

Central

 

 

Americas

Asia

EMEA

Costs

Group

Revenue by sector

£000

£000

£000

£000

£000

 

 

 

 

 

 

Group revenue

15,183

15,250

5,203

-

35,636

 

 

 

 

 

 

Profit/(loss) from operating activities

2,923

6,499

82

(6,950)

2,554

Net financing costs

-

-

-

(3,884)

(3,884)

Profit/(loss) before taxation

2,923

6,499

82

(10,834)

(1,330)

Adjusting items - see note 6

-

-

-

7,157

7,157

Adjusted profit/(loss) before tax

2,923

6,499

82

(3,677)

5,827

 

 

 

 

 

 

Segment non-current assets

117,664

71,695

43,545

-

232,904

Segment current assets

17,978

21,913

12,943

-

52,834

 

135,642

93,608

56,488

-

285,738

 

 

 

 

 

 

Deferred tax assets

 

 

 

 

1,851

Total assets

 

 

 

 

287,589

 

 

 

 

 

 

Segment liabilities

54,910

22,905

127,998

-

205,813

 

 

 

 

 

 

Liabilities for current tax

 

 

 

 

2,807

Deferred tax liabilities

 

 

 

 

9,999

Total liabilities

 

 

 

 

218,619

 

 

 

 

 

 

 

 

 

30 June 2017

 

 

 

 

Unaudited

Restated

 

 

 

Central

 

 

Americas

Asia

EMEA

Costs

Group

Revenue by sector

£000

£000

£000

£000

£000

 

 

 

 

 

 

Group revenue

16,251

13,056

10,470

-

39,777

 

 

 

 

 

 

Profit/(loss) from operating activities

2,959

4,978

2,175

(8,123)

1,989

Net financing costs

-

-

-

(3,357)

(3,357)

Profit/(loss) before taxation

2,959

4,978

2,175

(11,480)

(1,368)

Adjusting items - see note 6

-

-

-

8,159

8,159

Adjusted profit/(loss) before tax

2,959

4,978

2,175

(3,321)

6,791

 

 

 

 

 

 

Segment non-current assets

116,695

65,482

45,399

-

227,576

Segment current assets

14,304

19,480

24,832

-

58,616

 

130,999

84,962

70,231

-

286,192

 

 

 

 

 

 

Deferred tax assets

 

 

 

 

2,928

Total assets

 

 

 

 

289,120

 

 

 

 

 

 

Segment liabilities

(38,274)

(23,668)

(153,665)

-

(215,607)

 

 

 

 

 

 

Liabilities for current tax

 

 

 

 

(1,306)

Deferred tax liabilities

 

 

 

 

(10,918)

Total liabilities

 

 

 

 

(227,831)

 

 

 

 

8. TAXATION CHARGE

 

The taxation charge for the six months ended 30 June 2018 is based upon the estimated effective tax rate of 18.0% on adjusted profit before tax (2017: 16.0%) for the year ending 31 December 2018.

 

9. EARNINGS PER SHARE

 

 

Six months to

 

Six months to

 

 

30 June 2018

 

30 June 2017

 

 

Pence

 

Pence

 

 

Unaudited

 

Unaudited

 

 

 

 

 

Basic earnings per share

 

(3.2)

 

(3.2)

Diluted earnings per share

 

(3.2)

 

(3.2)

Adjusted earnings per share

 

2.8

 

3.5

Adjusted diluted earnings per share

 

2.7

 

3.5

 

 

 

Basic earnings per share

Basic earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months (as shown on the Consolidated Income Statement) and the weighted average number of ordinary in issue during the period (see below table).

 

Diluted earnings per share

Diluted earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months (as shown on the Consolidated Income Statement) and the diluted weighted average number of ordinary in issue during the period (see below table).

 

Adjusted earnings per share

Adjusted earnings per share is calculated using adjusted profit after tax as reconciled in note 6 and the weighted average number of ordinary shares (as below) in issue in the year.

 

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated using loss after tax as reconciled in note 6 and the weighted average number of diluted ordinary shares (as below) in issue in the year.

 

 

Weighted average number of ordinary shares (diluted):

 

 

 

Six months to

 

Six months to

 

 

30 June 2018

 

30 June 2017

 

 

Unaudited

 

Unaudited

 

 

 

 

 

Weighted average number of ordinary shares

 

112,851,730

 

112,249,882

Dilutive effect of share options

 

435,174

 

412,804

 

 

 

 

 

Weighted average number of ordinary shares (diluted)

 

113,286,904

 

112,662,686

 

 

 

10. INTANGIBLE FIXED ASSETS

 

 

Goodwill

Trademarks, lists and other

Total

 

 

£000

£000

£000

 

 

Unaudited

Unaudited

Unaudited

COST

 

 

 

 

As at 1 January 2018

 

142,751

92,342

235,093

Additions through business acquisition

 

664

848

1,512

Additions

 

-

4,626

4,626

Foreign exchange

 

(103)

1,379

1,276

At 30 June 2018

 

143,312

99,195

242,507

 

 

 

 

 

AMORTISATION

 

 

 

 

As at 1 January 2018

 

139

46,610

46,749

Charge for the year

 

-

4,208

4,208

Foreign exchange

 

2

742

744

At 30 June 2018

 

141

51,560

51,701

 

 

 

 

 

NET BOOK VALUE

 

 

 

 

At 30 June 2018

 

143,171

47,635

190,806

At 31 December 2017

 

142,612

45,732

188,344

At 30 June 2017

 

142,943

50,966

193,909

 

 

 

The additions not through business combinations primarily relate to the recognition of the DAC licence for the period from 2020 to 2027.

 

 

 

11. FINANCIAL INSTRUMENTS

 

The carrying value of all financial instruments held in the Statement of Financial Position equals their fair value.

 

Liabilities Measured At Fair Value

30 June 2018

Level 1

Level 2

Level 3

 

£000

£000

£000

£000

 

 

 

 

 

Interest rate swaps

(583)

-

(583)

-

Contingent consideration

(27,309)

-

-

(27,309)

Put and call option liabilities

(8,496)

-

-

(8,496)

 

 

 

 

 

 

(36,388)

-

(583)

(35,805)

 

 

 

 

 

 

 

 

 

 

 

30 June 2017

Level 1

Level 2

Level 3

 

£000

£000

£000

£000

 

 

 

 

 

Interest rate swaps

(1,909)

-

(1,909)

-

Contingent consideration

(28,944)

-

-

(28,944)

Put and call option liabilities

(9,568)

-

-

(9,568)

 

 

 

 

 

 

(40,421)

-

(1,909)

(38,512)

 

 

 

 

 

 

 

 

 

 

 

31 December 2017

Level 1

Level 2

Level 3

 

£000

£000

£000

£000

 

 

 

 

 

Interest rate swaps

(1,651)

-

(1,651)

-

Contingent consideration

(27,744)

-

-

(27,744)

Put and call option liabilities

(8,671)

-

-

(8,671)

 

 

 

 

 

 

(38,066)

-

(1,651)

(36,415)

 

 

 

 

 

Reconciliation of level 3 fair value measurements

 

 

 

 

 

 

 

 

 

        2018

       2017

 

Put and call option liabilities

Contingent consideration

Put and call option liabilities

Contingent consideration

 

£000

£000

£000

£000

At 1 January

(8,671)

(27,744)

(14,504)

(34,575)

Acquisitions

(370)

(424)

-

(805)

Consideration paid

-

900

-

5,938

Exercise of put option

1,841

-

5,073

-

Change in estimates

(1,183)

1,146

(457)

(90)

Unwinding of discount

(382)

(854)

(430)

(822)

Foreign exchange

269

(333)

750

1,410

At 30 June

(8,496)

(27,309)

(9,568)

(28,944)

 

 

Level 1 - fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2 - fair values measured using indicative market valuations provided by banks for the identifiable asset of liability.

 

Level 3 - fair values using inputs or liabilities that are not based on observable market data. These are measured by using the latest management forecasts and using a country specific WACC rate to discount to the present value.

 

12. ACQUISITIONS

 

The Group completed the acquisition of 64% of eTourism, an exhibition business during the first half of 2018, in line with the Group's "Quickening The Pace 2" strategy.

 

Consideration paid for this transaction was £1.3 million of which £0.4million is a current estimate of contingent consideration.

 

Goodwill of £0.6m was recognised on this transaction.

 

The values used in accounting for the identifiable assets and liabilities and related contingent consideration of this acquisition are estimates and therefore provisional in nature at the balance sheet date.

 

13. DIVIDENDS

 

The following dividends were paid and proposed by the Group:

 

 

 

2018

 

2017

 

 

£000

 

£000

 

 

Unaudited

 

Unaudited

 

 

 

 

 

Dividend paid in current period in cash or scrip

 

 

 

 

2017 interim dividend (3.0p per share)

 

3,372

 

2,751

 

 

 

 

 

 

 

3,372

 

2,751

 

 

 

 

 

Dividend paid and proposed post period end

 

 

 

 

2017 final dividend paid 7.0p per share (2016: 6.4p per share)

 

7,904

 

7,201

Dividend proposed in the period 3.3p per share (2017: 3.0p per share)

 

3,729

 

3,380

 

 

 

 

 

 

 

11,633

 

10,581

 

 

 

14. FOREIGN EXCHANGE TRANSLATION DIFFERENCES

 

Other Comprehensive Income includes foreign exchange translation losses of £0.2 million (June 2017: losses of £7.4 million) relating to the retranslation of foreign currency denominated net assets, including goodwill.

 

 

15. RELATED PARTIES

 

As at 30 June 2018, directors of the company controlled  9.8% (31 December 2017: 9.6%) of the voting shares of the company.

 

Executive officers also participate in the Group's share option programme and share acquisition plan.

 

 

16. POST BALANCE SHEET EVENTS

 

There have been no significant post balance sheet events.

 

 

17. DEFINITIONS

 

Organic revenues are on a constant currency basis and after adjusting for the impact of acquisitions, disposals and biennials.

Forward bookings:

Committed orders for future events, adjusted for biennials.

 

Like-for-like revenue:

Constant exchange rates adjusted for biennial events, excluding acquisitions impacting for the first time in 2018, prior year disposals and non-recurring products and items.

 

Adjusted profit before tax:

Profit before tax adjusted for exceptional items, share option charges / credits, movements in fair value measurement of derivatives, unsettled amortisation charges, impairment of intangibles, profit / loss on disposal of intangibles and tangible fixed assets, profit on sale of subsidiary and unwinding of discount for contingent consideration. See note 6.

 

Adjusted EPS:

Profit after tax attributable to equity shareholders adjusted for exceptional items, share option charges / credits, movements in fair value measurement of unsettled derivatives, amortisation charges, impairment of intangibles, profit / loss on disposal of intangibles and tangible fixed assets, profit on sale of subsidiary and unwinding of discount - contingent consideration. See note 9.

 

Adjusted operating cash:

Cash from operations adjusted for non-operating items and disposals.

 

 

 

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT

 

We confirm that to the best of our knowledge:

 

·      The condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;

·      The interim management report includes a fair review of the information required by:

(a)  DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)  DTR4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

 

Principal risks and uncertainties

 

The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as details in our last Annual Report and Accounts to 31 December 2017 and include:

 

·      Economic and financial uncertainties;

·      Events and exhibitions may be adversely affected by incidents which can curtail travel;

·      Expansion into new geographic regions subjects the group to new operating risks;

·      Fluctuation in exchange rates may affect the reported results;

·      The ability to implement and execute strategic plans depends on the ability to attract and retain key management.

 

The impact of "Brexit" has been considered and has not resulted in a change to these risks.

 

Full details of the risks and uncertainties are detailed in the Directors' Report of the 2017 accounts.

 

 

 

 

 

Douglas Emslie                                                                                                  Daniel O'Brien

Group Managing Director                                                                                   Group Finance Director

25 July 2018

 

 


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Half-year Report - RNS