RNS Number : 9240D
Expomedia Group PLC
22 September 2008
22 September 2008
EXPOMEDIA GROUP PLC
("Expomedia" or "the Group")
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2008
The Board of Expomedia, the AIM quoted media group with interests in exhibitions, conferences, venue management and related publishing,
is pleased to announce its Interim Results for the six months ended 30 June 2008.
FINANCIAL HIGHLIGHTS
* Turnover up 19 per cent on continuing activities, excluding share of joint ventures, to EUR18.5 million (2007: EUR15.5 million); *
Adjusted EBITDA * profit of EUR2.0 million (2007: adjusted EBITDA profit EUR2.1 million); * Operating profit on continuing activities for
the period of EUR0.4 million (2007: EUR0.9 million); * Increase in profit before taxation to EUR0.6 million (2007: EUR0.1 million); *
Basic and diluted earnings per share on continuing operations per share 1 cent (2007: loss 1 cent); and * Net debt of EUR6.7 million
excluding finance lease obligations and non bank debt; (2007: EUR3.7 million). OPERATIONAL HIGHLIGHTS
* Significant fully expensed investment in additional exhibition sales teams for Indian and Russian markets; * The Group is second
half weighted and there has been strong performance from repeat business with forward bookings for 2008 up 19 per cent; * Continuing
progress in emerging markets of Russia, Poland and India in core business units: exhibitions and conferences; * Disposal of German assets
in progress; * Additional venue space available in Warsaw.
* Adjusted EBITDA is calculated by taking profit before tax on continuing activities and adding back amortisation, depreciation, share
option costs, net financing costs and loss on joint ventures and exceptional items.
Commenting on today's results, Chief Executive, Mark Shashoua, stated:
"We are pleased to have increased turnover and profit before tax during the period under review. Strategically, the Group continues to
focus on its events and conference businesses in the emerging markets of Poland, Russia and India. Each of these territories has
demonstrated strong growth in the period and we expect that this will continue in the second half of the year. The outlook for the rest of
the year is positive and we look forward to continued growth."
--END--
Enquiries:
Expomedia Group Plc
Mark Shashoua
Tel: 020 8386 0070
Bishopsgate Communications Ltd.
Maxine Barnes
Gemma O'Hara
Tel: 020 7562 3350
Charles Stanley Securities (Nominated Adviser)
Mark Taylor
Tel: 020 7149 6000
CHIEF EXECUTIVE'S STATEMENT
Financials
Group turnover on continuing activities, excluding share of joint ventures, for the period was up 19 per cent to EUR18.5 million (2007:
EUR15.5 million). Turnover growth is continuing in the second half of 2008, with contracted revenue for 2008 currently 19 per cent ahead of
the same period in 2007.
EBITDA on continuing activities and share option costs ("adjusted EBITDA") was EUR2.0 million (2007: adjusted EBITDA EUR2.1 million) and
the operating profit on continuing activities was EUR0.4 million (2007: EUR0.9million). The profit before tax on continuing ordinary
activities was EUR0.6 million (2007: EUR0.1 million).
The loss before tax on discontinued activities was EUR0.7 million (2007: EUR0.1 million). The Group is currently in discussions with
third parties relating to the disposal of these businesses. Proceeds from the prospective sales are not included in these figures and it is
expected that the discontinued loss will be reversed for the full year.
Basic and diluted earnings per share from continuing operations were 1 cent (2007: loss 1 cent).
Review of Operations
India
The Board has continued its stated strategy for India as there are a significant opportunities for Expomedia in the medium to long term.
The market is evolving and the demand for exhibitions and conferences is expected to grow as quickly as recent years in other emerging
markets such as Russia and China.
Expomedia aims to be a leading player in the Indian market and the investments made to date are designed to achieve this.
Exhibitions
Expomedia's Indian exhibition business continues to make good progress. During the first half of 2008 two exhibitions were held, with a
further four events being held in the second half of the year.
Key events such as "MMMM", the 7th International Exhibition on Minerals, Metals, Metallurgy and Materials, which is being held in
November this year, is scheduled to increase in size by 150 per cent from 3,250 square metres of sold space last year to 8,000 square metres
of sold space this year.
Other event topics include some of the key growth industries for the Indian economy including construction, paper and pulp, home
interiors, lighting, packaging and mining. We continue the strategy of working closely with local trade associations and have recently won
the contract to run the main lighting event, Lighting South Asia 2009, with the local trade association. This contract win demonstrates the
effectiveness of our strategy to work closely with these organisations. The Group has also won the contract to run the trade association-led
packaging show, IndiaPack, in 2008.
As a result of this strategy, the Board expects that further events will be added to our portfolio in due course and that these events
can be cloned within India itself. The Group's strategy is to clone existing and new events across the main Indian cities of Delhi, Mumbai,
Chennai, Bangalore and Calcutta during 2009.
We have further strengthened our partnership with Tafcon, with whom we organised "IME" - the international mining exhibition and entered
into an agreement with them for further new events.
Conferences
The Indian conference division is operated from Mumbai and has recorded a 54 per cent increase in revenue in the period. The growth of
this division has been deliberately slow as we continue to build the right teams and infrastructure locally. We are confident that our
continued investment will lead to the creation of a significant business, enjoying a similar position in the Indian market as we have
achieved in Russia and Poland.
Despite the Indian market being immature and underdeveloped the Board believes that this market represents the Group's greatest
opportunity in the long term. The efforts of the past few years and additional investment in 2008 gives Expomedia an ideal platform and
position in the market from which to grow and capitalise in the future.
Venue
Despite the venue operation in Greater Noida having been instrumental in securing the long term future tenancies for our events, the
scale of profit we can achieve from this is limited and therefore not the best use of our resources. As a result we are currently working
with a new management company that is willing to invest further in the infrastructure locally, which will allow Expomedia to concentrate
only on its exhibitions and conferences, whilst having secured its long term tenancies for its exhibitions on favourable terms.
Russia
The Group's Russian conference business continues to grow substantially with a 44 per cent increase in revenues in the period and a 35
per cent increase in the number of delegates. This business is continuing its growth to achieve the level of synergies required to maximise
profits and to capitalise on its leading position in the Moscow conference market. In the first half of the year we have expended additional
funds, when compared to 2007, amounting to EUR0.8 million on new personnel and other expensed infrastructure costs. This investment
comprises predominantly of additional resources for new industry sector conferences, such as energy.
The strategy of the Russian conference business is to continue to focus on growing annual repeat events that are industry leaders -
"Large Scale Events". An example of these leading events is "Retail Director", which has grown to 700 delegates in 2008, an increase of 55
per cent when compared with 2007. Our strategy is to convert a high percentage of our current events into Large Scale Events, eventually
replicating these across other Russian and central Asian markets.
The Board believes that the Group has now established itself as the main conference company in Russia with significant growth still to
be achieved. The Group will continue to focus on both developing this business through organic growth as well as seeking further targeted
acquisitions in the conference field.
Poland
Conferences
The Group's subsidiary, Infor-media Poland, has continued its strong growth in the period, with a 28 per cent increase in revenues in
the first half and a modest increase in delegates reflecting a focus on higher yielding events. The business continued to increase its
profitability despite ongoing investment in personnel and infrastructure.
We believe that Infor-media has now established itself as the main conference organiser in Poland, both in terms of size and number of
events in the market.
Venue
Revenue from our venue operation in Warsaw for the first half of 2008 increased by 18 per cent. The venue is almost fully booked at
peak periods and the utilisation level is relatively stable at 42 per cent. We are pleased to report that the construction of the extension
to the existing venue has commenced and once completed this will increase the capacity of the venue by 40 per cent to 14,000 square metres.
We anticipate that the impact on revenue and profit for 2009 will be limited, with the full impact seen in 2010.
United Kingdom
The Group's operations in the UK have been the most affected by the problems in the credit markets and its consequent impact on our
subsidiary, Homebuyer Events Limited, which organises the largest portfolio of property investment events in the UK market. Despite the
extremely challenging market conditions, we are confident that our events can remain the premier events in the sector, while other
competitor events have been cancelled. We expect that once the property market begins to improve, these events will again show the strong
growth that made them the leading events in the market.
Following consultation with our customers, we expect to launch editions of these property events in Russia and Dubai in June and
December 2009 respectively. It is expected that these will offset the current slow down in the UK market.
We held two other events in the UK in the period and both of these performed well. With continued and strong cost control we aim to
maximise the profitability of the UK operation.
Germany
The Group currently has two operations in Germany.
Our venue in Cologne has been successful, yet following the Board's decision to focus on exhibitions and conferences, the Group is
currently finalising discussions relating to the future of the German venue business.
The Board has also been discussing the future of the joint venture with our partners, Gruner & Jahr. This business is looking to expand
its number of titles and therefore will require additional investment over the next 12-18 months. It is our opinion that these resources
would be better deployed in our core emerging markets and therefore we are considering our options with regard to this business.
Capital Reduction
A resolution was passed at the Annual General Meeting (AGM) to carry out a restructure of Expomedia's capital structure, by way of a
reduction of its share premium account. On 25 June 2008, we received confirmation from the High Court that an amount of �20 million, which
formed part of the credit on the share premium account was credited to the Company's profit and loss account. This process was subject to an
undertaking from Expomedia to the High Court to protect the Company's creditors, which is standard for a company in the position of
Expomedia. As a consequence of the restructure, the Group expects to be in a position to pay dividends from future profits earlier than
would have been possible otherwise.
Outlook
There is no doubt that the problems emerging for the financial and property markets have created challenges for our UK Homebuyer Events
businesses. We expect this to continue into 2009.
With the planned disposal of some of our non core business as outlined above, we will be able to significantly decrease our overheads,
and the Group will focus on its events and conference businesses in the emerging markets of Poland, Russia and India. Each of these
territories has demonstrated strong growth in the period and we expect that this will continue in the second half of the year.
The Group's trading, which is historically second half weighted, is showing a strong performance from repeat business and forward
bookings for 2008 are up 19 per cent compared to the prior year period.
By focusing on high growth areas of the world economy, the Group should see the profitable benefits of this strategy in 2009 and
beyond.
Chief Executive
Mark Shashoua
22 September 2008
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Notes 2008 2007 2007
EUR'000 EUR'000 EUR'000
Revenue including share of joint 18,674 15,979 36,326
ventures
Less: share of joint ventures' (213) (441) (1,345)
revenue
Group revenue 18,461 15,538 34,981
Cost of sales (10,121) (7,463) (19,827)
Gross profit 8,340 8,075 15,154
Net administrative expenses (6,612) (6,195) (11,055)
before amortisation and
depreciation
Amortisation of intangible (640) (286) (1,039)
assets
Depreciation of property, plant (658) (708) (1,217)
and equipment
Group administrative expenses (7,910) (7,189) (13,311)
Profit/(loss) from operations 430 886 1,843
Finance income 1,874 439 2,454
Financing cost (987) (779) (1,953)
Net financing income/(costs) 887 (340) 501
Share of loss of joint ventures (747) (471) (488)
Profit before taxation 570 75 1,856
Income tax (expense)/income 133 (55) 1,221
Profit after taxation 703 20 3,077
Discontinued operations
Profit/(loss) from discontinued [4] (656) 87 (2,523)
operations (net of taxation)
Profit after discontinued 47 107 554
operations for the period
Attributable to:
Equity holders of the parent 175 419 804
Minority interests (equity (169) (312) (250)
interests)
Profit for the period 6 107 554
Earnings per share
Basic and diluted loss per share [2] 0.01 0.002 0.01
(EUR)
Earnings per share from
continuing operations
Basic and diluted 0.01 (0.01) 0.06
earnings/(loss) per share (EUR)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
EUR'000 EUR'000 EUR'000
Foreign exchange translation (2,164) 218 (179)
differences
Fair value of hedging reserve 96 - (159)
Tax on income and expenses - 234
recognized directly in equity
Net income recognised directly in (2,068) 452 (338)
equity
Profit for the year 6 107 554
Recognised income and expense (2,062) 559 216
Recognised income and expense for the period is attributable
to:
Equity holders of the parent (1,893) 871 466
Minority interest (169) (312) (250)
(2,062) 559 216
CONSOLIDATED BALANCE SHEET (UNAUDITED)
30 June 30 June 31 December
2008 2007 2007
EUR'000 EUR'000 EUR'000
Non-current assets
Goodwill 15,364 22,150 17,064
Other intangible assets 11,626 11,919 13,160
Property, plant and equipment 28,712 28,651 27,405
Investments accounted for using the equity - 291 572
method
Lease prepayment 2,835 1,396 2,486
Deferred tax assets 2,743 444 2,295
Total non-current assets 61,280 64,851 62,982
Current assets
Trade and other receivables 8,989 11,799 10,542
Cash and cash equivalents 2,681 8,210 5,876
Assets classified as held for sale 645 1,225 1,050
Total current assets 12,315 21,234 17,468
Total assets 73,595 86,085 80,450
Current liabilities
Loans and borrowings (1,676) (2,716) (3,973)
Trade and other payables (9,396) (15'600) (12,485)
Obligation under finance lease and (730) (686) (707)
hire-purchase contract
Provisions (200) (692) (214)
Investments accounted for using the equity (156) - -
method
Liabilities classified as held for sale (876) (1,147) (885)
Total current liabilities (13,034) (20,841) (18,264)
Non-current liabilities
Loans and borrowings (8,619) (9,210) (7,955)
Obligation under finance lease and (18,780) (17,073) (19,083)
hire-purchase contract
Provisions (3,448) (8,422) (3,711)
Deferred tax liabilities (4,014) (3,292) (3,969)
Total non-current liabilities (34,861) (37,997) (34,718)
Total liabilities (47,895) (58,838) (52,982)
Net assets 25,700 27,247 27,468
Equity
Issued capital 3,972 3,972 3,972
Share premium 3,322 34,973 33,732
Other reserves 15,556 12,315 15,397
Retained earnings 3,405 (23,415) (25,223)
Equity attributable to equity holders of 26,255 27,845 27,878
parent
Minority interests (555) (598) (410)
Total equity 25,700 27,247 27,468
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
EUR'000 EUR'000 EUR'000
Cash flows from operating activities
Profit for the period 6 108 554
Share of operating loss in joint 747 471 488
ventures
Foreign exchange gains (1,843) (306) (2,244)
Interest income (32) (141) (210)
Interest expense 924 779 1,953
(Profit)/loss from discontinued 697 (401) 2,523
operations (net of tax)
Income tax expense/(income) (133) 55 (1,221)
Depreciation of property, plant and 658 738 1,217
equipment
Amortisation of intangible assets 640 286 1,039
Amortisation of loan costs capitalised 18 - -
Share option charge 294 207 500
Operating profit before changes in 1,976 1,796 4,599
working capital
Decrease/(increase) in trade and other 1,803 1,247 (1,024)
receivables
(Decrease)/increase in trade and other (2,797) (1,205) 287
payables
Cash generated from operations 982 1,838 3,862
Interest paid (924) (768) (1,953)
Income tax paid (670) (164) (238)
Net cash used in operating activities (612) 906 1,671
Cash flows from investing activities
Interest received 32 101 210
Disposal of subsidiary net of cash (288) - 80
disposed of
Acquisition of subsidiary undertaking - (12,784) (13,568)
net of cash acquired
Purchase of other intangible assets (303) (815) (2,962)
Purchase of property, plant and (322) (172) (981)
equipment
Joint venture funding (250) - (200)
Funding of discontinued activities - (713) (934)
Net cash from investing activities (1,131) (14,383) (18,355)
Cash flows from financing activities
Own shares purchased - (109) (158)
New long term loan - 8,584 7,575
Repayment of borrowings (871) (739) (1,967)
Proceeds of finance lease - - 2,370
Net cash (outflow)/inflow from financing (871) 7,736 7,820
activities
Net increase/(decrease) in cash and cash (2,614) (5,741) (8,864)
equivalents
Cash and cash equivalents at 1 January 5,163 14,164 13,903
Effect of exchange rate fluctuations on 50 (332) 124
cash held
Cash and cash equivalents at 30 June 2,599 8,091 5,163
Comprised of:
Cash and cash equivalents 2,681 8,210 5,876
Bank overdrafts (82) (119) (713)
2,599 8,091 5,163
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) CONTINUED
1 Basis of preparation
Expomedia Group plc has prepared these Interim statements in accordance with International Financial Reporting Standards as adopted by the
EU ("Adopted IFRSs") including International Accounting Standards ('IAS') and interpretations published by the International Accounting
Standards Board ('IASB') and its committees.
2 Earnings per share
Basic earnings per share have been based on the profit for the financial period divided by the weighted average number of actual shares in
issue of 48,490,177 (June 2007: 48,572,795; December 2007: 48,536,911). Diluted earnings per share have been based on the profit for the
financial period divided by the weighted average number of actual shares in issue of 48,799,700 (June 2007: 51,254,044; December 2007:
50,765,665).
3 Reconciliation of Loss on activities before taxation to adjusted EBITDA
Six months ended 30 Six months ended 30 June
June Continuing Continuing 2007
2008 EUR'000
EUR'000
Operating profit 430 886
Depreciation & amortisation 1,298 994
Share option costs 294 208
Adjusted EBITDA 2,022 2,088
4 Discontinued operations
Discontinued operations in the current period relate to operations held for sale in Hungary and Germany.
In 2007, the Group began the process of selling the following subsidiaries, Budapest Nemzetkozi Rendezveny es Kiallitasszervezo Kft in
Hungary and Expocenter K GmbH in Germany. As at 30 June 2008, the directors are confident that the sale of both subsidiaries are highly
probable during 2008, and an active marketing plan has been initiated and negotiations commenced with potential buyers. In both cases the
businesses are regarded as separate cash generating units.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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