TIDMERM

RNS Number : 7543S

Euromoney Institutional InvestorPLC

18 November 2021

Euromoney Institutional Investor PLC

Full Year Results

18 November 2021

Strong momentum in subscriptions with events recovering well in H2

Euromoney Institutional Investor PLC ("Euromoney" or "The Group"), the global B2B information-services provider, announces results for the year ended 30 September 2021.

 
                                                             Underlying 
Financial summary                       2021   2020  Change   change(1) 
                                        GBPm   GBPm 
-------------------------------------  -----  -----  ------  ---------- 
Revenue                                336.1  335.3    -        (2%) 
Statutory operating profit              31.1   30.6   +2% 
Adjusted operating profit (1)           65.3   58.4   +12%      +8% 
Adjusted operating profit margin (1)     19%    17%  +2ppt 
 
Statutory profit before tax             26.6   29.9  (11%) 
Adjusted profit before tax (1) *        61.4   54.3   +13% 
Statutory diluted earnings per share   11.7p  26.6p  (56%) 
Adjusted diluted earnings per share 
 (1)                                   45.5p  40.5p   +12% 
 
Adjusted cash conversion (2)            123%   105%  +18ppt 
Net cash (1)                            32.5   28.1   +4.4 
Total dividend per share               18.2p  11.4p   +60% 
-------------------------------------  -----  -----  ------  ---------- 
 

*Adjusted profit before tax before the change in interpretation of IAS 38 "Intangible Assets"(5) was GBP65.2m (30 September 2020: GBP57.4m)

Highlights:

 
      --   Group revenue increased slightly reflecting: 
                o Strong underlying subscriptions growth in Fastmarkets(3) (+13%) 
                 and in Financial & Professional Services(3) ("FPS") (+5%) 
                o Covid-19 impact on physical events but a strong recovery of 
                 event revenue in H2 2021 
      --   Adjusted PBT increased 13% reflecting good cost control while 
            continuing to invest for future growth 
      --   Strong cash generation and balance sheet with net cash of GBP32.5m 
            at 30 September 2021 
      --   Final dividend of 12.5p resulting in a total dividend for the 
            year of 18.2p up 60% 
      --   Entering FY 2022 with strong momentum and confidence in the opportunity 
            for sustainable growth as we continue to execute our 3.0 strategy: 
                o Accelerating subscriptions growth - Book of Business(4) ("BoB") 
                 +6.6% at 30 September 2021 (30 September 2020: +0.7%). 
                o Highly complementary 3.0 acquisitions: The Jacobsen (Fastmarkets 
                 Agriculture), and WealthEngine and RelSci (People Intelligence) 
                o Asset Management - turnaround progressing ahead of plan in 
                 BCA Research and NDR 
                o Events - strong recovery in H2 2021 as physical events started 
                 to return 
 

Andrew Rashbass, CEO, said:

"We have made a step change towards being a fast-growing, high-margin, 3.0, information-services subscription business. Our Fastmarkets and Financial & Professional Services businesses delivered strong growth in subscriptions driven by increasing demand for our actionable data, analysis and intelligence. Within Asset Management our goal of returning our investment research businesses to growth is ahead of our plan.

"We have invested organically in each of our businesses at the same time as managing our costs carefully. We have also added scale to Fastmarkets Agriculture and People Intelligence through highly complementary acquisitions. The backdrop for events has been challenging but since the return of physical events in May we have seen a positive response from customers and a strong recovery in events revenue. In the year ahead we will continue to invest to drive subscriptions growth and we are confident in the sources of future growth."

 
 (1.)   Adjusted measures exclude the impact of the amortisation of 
         acquired intangible assets, exceptional items and other adjusting 
         items in accordance with the Group's policy. A detailed reconciliation 
         of the Group's adjusted and underlying results, adjusted cash 
         conversion and net cash is set out on pages 12 to 20 of this 
         statement. 
 (2.)   Adjusted 12-month cash conversion % as set out on page 19. 
 (3.)   Division names align with our previous reporting segments: Fastmarkets 
         (Pricing), FPS (Data & Market Intelligence) 
 (4.)   Book of business ("BoB") is the annual contracted values for 
         subscriptions. Like-for-like growth is calculated by adjusting 
         prior periods with a constant GBP/USD rate and the pro-forma 
         impact of net M&A. 
 (5.)   The financial impact of the change in interpretation of IAS 
         38 "Intangible Assets" was to decrease adjusted profit before 
         tax and adjusted operating profit by GBP3.8m (2020: decrease 
         by GBP3.0m). 
 (6.)   Certain figures included in this announcement have been subjected 
         to rounding adjustments. Accordingly, figures shown as totals 
         in certain tables may not be an arithmetic aggregation of figures 
         that precede them. 
 

Results presentation

A results presentation and Q&A will be hosted today, at 10.30 (UK time), for analysts and investors. A live audio webcast of the presentation and Q&A will be available via the Investors section of our website at www.euromoneyplc.com, and subsequently available on demand.

Our next announcement will be a trading update for the three months ended 31 December 2021 on 27 January 2022.

For further information, please contact:

Euromoney Institutional Investor PLC

Wendy Pallot, Chief Financial Officer: +44 20 7779 8866; wendy.pallot@euromoneyplc.com

Christian Cowley, Investor Relations: +44 (0)7408 863420; christian.cowley@euromoneyplc.com

FTI Consulting

Jamie Ricketts / Tom Blundell / Lucy Highland: +44 20 3727 1000; euromoney@fticonsulting.com

NOTE TO EDITORS

Euromoney Institutional Investor PLC ("Euromoney") is a global B2B information-services business. We provide actionable data, analysis, intelligence and access through three divisions in markets where information and convening market participants are valued. Euromoney is listed on the London Stock Exchange and is a member of the FTSE 250 share index. ( www.euromoneyplc.com )

Group summary

The Group delivered a strong performance against the backdrop of the global pandemic with our subscriptions revenue strengthening across the year and our events businesses returning to strong year-on-year growth in the second half of the year. We have made a step change towards being a fast-growing, high margin, 3.0 information-services subscription business.

Euromoney is a majority-subscriptions business. 70% of Group revenue during the year was generated from subscriptions which grew by 5% underlying and 7% on a reported basis. Underlying subscriptions revenue growth in Fastmarkets and FPS was 13% and 5% respectively. Within Asset Management, the turnaround of BCA Research and NDR continues ahead of plan. Across the Group, our subscriptions revenue continues to achieve high renewal rates.

Events revenue, which accounted for 18% of Group revenue, declined by GBP20.1m or 27% underlying and 25% on a reported basis reflecting the reduction in physical events compared to the prior year. During the year we hosted a total of 432 events, of which 382 were virtual and 50 were blended (i.e. physical events with digital elements). All events in the first half of the year were virtual and we were able to start regularly hosting blended events from May 2021 onwards. The return of in-person events led to a significant improvement in revenue performance in H2 2021 with total events revenue of GBP35.1m which was an GBP18.3m increase on H2 2020.

Other revenue which includes research, thought leadership and advertising grew by 10% underlying and 6% on a reported basis.

Overall, Group revenue increased slightly. The Group benefited during the period from the restructuring and cost-reduction programme announced in September 2020 which mainly focused on our events businesses and delivered GBP15m of annualised savings, before investment in other areas. As a result of good cost control, adjusted operating profit increased by 12% and adjusted pre-tax profit increased by 13%. Cash generation and conversion were strong and after the completion of three acquisitions and dividend payments, net cash at 30 September 2021 was GBP32.5m (30 September 2020: GBP28.1m).

Revenue and adjusted operating profit

 
                                            2021    2020  Change  Underlying(1) 
                                                                      change 
                                          ------  ------ 
Revenue by division                         GBPm    GBPm 
Fastmarkets                                 85.4    83.7   +2%         +5% 
FPS                                        138.4   134.1   +3%        (7%) 
Asset Management                           109.8   118.8   (8%)       (2%) 
Foreign exchange gains/(losses) on 
 forward contracts                           2.4   (1.3) 
 
Revenue by type 
Subscriptions                              234.5   219.5    7%         +5% 
Events                                      60.9    81.0  (25%)       (27%) 
Other                                       38.2    36.1    6%        +10% 
Foreign exchange gains/(losses) on 
 forward contracts                           2.4   (1.3) 
Total                                      336.1   335.3    -         (2%) 
                                          ------  ------ 
Divisional adjusted operating profit(1)     97.5    96.4   +1%         +4% 
Foreign exchange gains/(losses) on 
 forward contracts                           2.4   (1.3) 
Central costs                             (34.6)  (36.7)   +6%         +2% 
 
Adjusted operating profit (1)               65.3    58.4   +12%        +8% 
Adjusted operating profit margin % 
 (1)                                         19%     17%  +2ppt 
----------------------------------------  ------  ------  ------  ------------- 
 

Adjusted operating profit before the change in interpretation of IAS 38 "Intangible Assets"(5) was GBP69.1m (30 September 2020: GBP61.5m)

Outlook

We have entered FY 2022 with strong momentum. Demand for price reporting and essential market intelligence remains strong with good visibility on Fastmarkets and FPS subscriptions. In Asset Management, the turnaround of BCA Research and NDR is progressing ahead of plan. The Group BoB(4) , which is a key leading indicator for our subscriptions revenue, improved to 6.6% at 30 September 2021 (30 September 2020: 0.7%). During FY 2022 we will continue to invest to drive long-term sustainable subscriptions growth.

In FY 2022, as travel restrictions ease, we are planning more and larger physical events. As a result we expect further recovery in events revenue in FY 2022. Timing remains uncertain however and favours regional events in the short term.

Overall, we expect FY 2022 to be another year of progress. Looking further out we are confident in the sources of future growth and are committed to delivering high margins in the medium term. There is further summary guidance for FY 2022 on page 11.

Strategy update

We help our customers compete successfully by providing clarity in opaque markets. We provide actionable data, analysis, intelligence and access to markets covering commodities, telecoms, financial and professional services, and asset management. Our 3.0 strategy is to provide information services embedded in customers' critical workflow. These are characterised by resilient and robust recurring subscriptions revenue. We have a record of successful organic investment and of acquiring good 3.0 businesses where our ownership adds significant value. Our ESG focus areas are also integral to our strategy and we are progressively embedding them across the Group. We deliver our strategy through three divisions and we use our group scale to share capabilities and platforms across our divisions to increase efficiency and enable our divisions to focus on customers. The strength of our business model and our subscriptions business is shown by our subscription performance during the pandemic. Our goal is to become a fast-growing, high margin, 3.0 information-services subscription business.

The Group has five short-term strategic priorities to enable the delivery of the 3.0 strategy:

   1)    Organic investment in 3.0 opportunities 
   2)    3.0 acquisitions 
   3)    Return Investment Research to growth 
   4)    Strong post-covid blended events, moving towards a 3.0 membership model 

5) Standardise platforms, processes and policies for an efficient, inclusive, and diverse company

The following section provides updates on each of the five priorities:

   1)    Organic investment in 3.0 opportunities 

In Fastmarkets, following investment, we have accelerated the rollout of the platform to Metals and Mining customers. We continue to invest in new products such as short-term forecasts, and market data from commodities exchanges. These products complement our daily price assessments. We have expanded our agriculture team to cover more prices in both existing and new commodity areas. We have a strong position in prices for renewable-energy raw materials. We are developing a suite of renewable-specific products and will invest further in FY2022, expanding coverage in Battery (with a particular focus on electric vehicles), Wind and Solar markets.

During the year, seven more exchange traded contracts were launched which are settled against Fastmarkets' benchmarks prices. This included two cash-settled contracts on the CME: cobalt and lithium hydroxide; three pulp and paper futures on the Norexeco Exchange; and a lithium hydroxide and an aluminium premium contract on the London Metal Exchange. The number of prices that are externally audited for their compliance with the IOSCO Principles for price reporting agencies has grown by a third to 43 prices this year, up from 32 in FY 2020, while Fastmarkets is now also regulated under the EU Benchmarks Regulation (BMR). Across the year we saw an acceleration in the Fastmarkets BoB(4) .

In FPS we continued to invest to drive growth in subscriptions. Areas of investment include people (eg market specialists and sales and marketing), technology (eg rollout of a single publishing platform) and new products (eg content delivery via API and data visualisation tools). We continue to create efficiency and scale across the division and delivered an acceleration in the FPS BoB(4) across the year. In FY 2022 we will continue to invest in initiatives to further embed our products into customer workflow.

In Asset Management we have invested in sales and marketing, CRM technology, new products and back-office systems which is helping to drive the recovery in BCA and NDR. We appointed our first CEO of Asset Management, Fran Cashman, who is responsible for Institutional Investor, BCA Research and NDR. Fran joined the business in May 2021 having held senior sales and marketing roles at Legg Mason.

Under combined leadership BCA Research, NDR and Institutional Investor will work more closely together delivering exclusive access, essential market intelligence and in-depth investment research to the asset-management community. In FY 2022 we will invest in access and intelligence solutions for the Wealth Management industry including research, networking, education, communications support and model portfolios (Investment Solutions).

   2)    3.0 acquisitions 

Acquisitions are a core part of the Group's strategy. We further strengthened our People Intelligence business with the acquisition of WealthEngine in December 2020 and RelSci in May 2021. WealthEngine provides data -- driven intelligence and predictive analytics to financial services, luxury brands and not -- for -- profit organisations. RelSci is a global relationship-mapping data provider serving financial and professional services and not-for-profit organisations. Revenue is derived predominantly from subscriptions, which attract high renewal levels. WealthEngine and RelSci are performing ahead of our expectations.

The acquisition of AgriCensus in March 2020 established Fastmarkets Agriculture, joining Fastmarkets Metals and Mining and Fastmarkets Forest Products. The acquisition of The Jacobsen, a price reporting agency, in January 2021 has added further prices to Fastmarkets Agriculture in markets such as animal fats, feeds and vegetable oils as well as lower-carbon intensive fuels such as bio-diesel. The Jacobsen is performing ahead of our expectations.

   3)    Return Investment Research to growth 

The turnaround of BCA Research and Ned Davis Research is progressing ahead of plan, with subscriptions renewal rates continuing to improve across the year. The rate of decline in the Asset Management BoB(4) improved by 4.4 percentage points over the last 12 months to -0.6% at 30 September 2021 with non-vote Investment Research BoB(4) improving by 4.8 percentage points to 0.1% over the same period. The improvement was driven by a higher renewal rate following investment in the sales team and in auto-renewals, integration of sales teams to drive cross-selling and new research products.

We maintain our target to return the non-vote Investment Research subscription BoB (4) to sustainable growth by the end of FY 2022, which will result in revenue growth during FY 2023.

   4)    Strong post-covid blended events, moving towards a 3.0 membership model 

We believe the future of events will be blended with physical and virtual elements complementing one another. During the year we hosted 382 virtual events and 50 blended events (with in-person events returning from May 2021 onwards). Our virtual events enabled us to stay close to our customers, when physical events were not possible, keeping our specialist communities connected and maintaining our brand visibility. Our blended events have been well received by customers who have welcomed the opportunity to meet in person again. As a result, we saw a strong year-on-year recovery in events revenue in H2 2021. It is clear to us that the need for industries to convene, network and transact remains and we will continue to develop our blended proposition. We have also taken the opportunity to rationalise our events portfolio during the year to focus on higher-quality events. In FY 2021 total events revenue for the Group was GBP61m, this compares to a pre-pandemic FY 2019 events revenue of GBP161m or GBP142m rebased for the portfolio rationalisation.

At Institutional Investor we already have a successful events membership model in which members pay an annual fee to participate in a number of events as well as receive a defined set of other access and intelligence opportunities. We are now increasing the value and the number of engagement opportunities for customers (such as data and industry insights, networking and peer intelligence) and we are beginning to introduce the membership model more widely in the Group. The ITW Global Leaders' Forum (GLF) for telecoms companies is an example of a membership model in an area other than Institutional Investor. GLF members continued to meet virtually and work on business-critical issues for member organisations during the pandemic. During the year an additional membership group was created, The Global Leaders Forum Community, which extends some of the benefits and outputs to a wider group.

5) Standardise platforms, processes and policies for an efficient, inclusive, and diverse company

We continue to use the Group's scale to support our businesses and drive efficiency by rolling out standardised platforms. During the year our implementation of cloud-based solutions included finance, customer relationship management and events management software. The governance and optimisation of strategic public cloud hosting partners is progressing well. As part of our platform standardisation, for example, we moved Group-wide to a cloud-based telephony service, further enhancing remote working. We also commenced the rollout of advanced protection systems to minimise our exposure to the risks associated with phishing and ransomware. In addition, we launched our Group Event Operations centre which is enabling us to centralise procurement, logistics and other shared event activities.

Our ESG focus areas:

Euromoney is a people and data business. During the year we identified five ESG focus areas that are important to us and are integral to our strategy. We are embedding our ESG framework across the business and are defining relevant KPIs to track our progress.

 
      1.   Workforce inclusion, diversity and well-being: The value we 
            create for customers comes from the work our people do every 
            day. We need to employ the best talent, and we recognise that 
            talent is to be found in all demographics. However, it is 
            not enough just to have the right people - we want them to 
            reach their full potential and thrive at Euromoney. To do 
            this, they need to feel they belong; to be motivated, engaged 
            and empowered; and have their physical and mental well-being 
            needs supported. In October 2021 we introduced Working 3.0 
            which allows every colleague to choose where they work and, 
            secondly, the ability to start their weekend at Friday lunchtime. 
            This extra flexibility has been strongly supported by colleagues 
            and means our recruitment talent pool in an increasingly challenging 
            labour market is not limited by geography. 
      2.   Data and information security and privacy: Proprietary data, 
            analysis, news and insights are the foundation of our customer 
            offer. For this information to be valuable it must be accurate, 
            useful, and legal. Among other guarantors of quality, we therefore 
            need to deliver the highest standards of information security. 
            As we also hold information on our customers and our sector 
            communities - we need to be trusted to safeguard this data 
            securely and use it responsibly. During the year we appointed 
            a Chief Privacy Officer to ensure a culture of responsible 
            use of personal data. 
      3.   Transparency, ethics, governance, and risk management: We 
            facilitate efficient markets by providing data and insights. 
            We also believe in the contribution business makes to society. 
            Efficient markets and fulfilling societal responsibilities 
            also require that market participants operate with transparency, 
            adopt ethical practices, establish strong governance frameworks 
            and manage risk robustly. 
      4.   Encouraging strong ESG practices in the markets we serve: 
            As well as the actions we take internally, we believe that 
            we are well placed to shape good ESG practices in the markets 
            we serve through raising the profile of ESG matters such as 
            inclusion and diversity and climate change, and by expanding 
            our footprint in ESG-related areas. 
      5.   Reducing our climate impact: We are not a high-carbon emitting 
            organisation, but we recognise the need to play our part and 
            reduce both our climate and other environmental impacts. We 
            aim to be leaders in running environmentally sustainable events 
            through appropriate sourcing and waste reduction and by lowering 
            the carbon footprint per attendee, and we continue to look 
            for ways to reduce energy use in our offices and our equipment. 
            During FY 2021 we have reviewed and improved the robustness 
            of our Scope 1 and 2 emissions data. In FY 2022 we commit 
            to achieve carbon-neutral status for our FY 2021 Scope 1 and 
            Scope 2 emissions by using high-quality offsets and working 
            to reduce emissions. In addition, we will set out the Group's 
            strategy to Net Zero for Scopes 1, 2 and 3. 
 

Operating and financial review

When reviewing performance, the Board considers a number of adjusted performance measures, as set out on pages 12 to 20.

Following the IFRS Interpretations Committee (IFRIC) Agenda Decision on IAS 38 "Intangible Assets" which determined that configuration and customisation of Software as a Service (SaaS) solutions should be expensed rather than capitalised unless they meet the definition of separate intangible assets, the Group has reviewed its treatment of its SaaS costs. The new treatment is applicable immediately and retrospectively. At a Group level in FY 2021 the new treatment results in a net charge of GBP3.8m to the income statement and a reduction in adjusted operating profit and adjusted profit before tax, reflecting the reversal of in-year capitalised expense of GBP5.6m partly offset by lower in-year amortisation GBP1.8m. See page 30 for further detail. Free cash flow is not affected by the change.

The Group operates through three divisions: Fastmarkets, Financial & Professional Services (FPS) and Asset Management. The divisions align with our previous reporting segments: Pricing, Data & Market Intelligence and Asset Management.

Fastmarkets: 26% of Group revenue

Fastmarkets is Euromoney's price reporting agency. It provides commodity price benchmarks and analysis critical to our customers' business processes and workflows. Fastmarkets provides prices across the supply chain from the creation of the commodity to recycling in the metals, mining, forest products and agriculture markets. Its business model benefits from high barriers to entry and it operates in markets with significant opportunity for long-term growth.

 
                                     2021  2020  Change  Underlying(1) 
                                                             change 
                                     ----  ---- 
Revenue                              GBPm  GBPm 
Subscriptions                        79.8  73.9   +8%        +13% 
Events                                2.7   6.6  (59%)       (63%) 
Other                                 2.9   3.2   (9%)       (7%) 
Total                                85.4  83.7   +2%         +5% 
                                     ----  ---- 
Adjusted operating profit (1)        30.4  31.7   (4%)        +3% 
Adjusted operating profit margin % 
 (1)                                  36%   38%  (2ppt) 
-----------------------------------  ----  ----  ------  ------------- 
 

Fastmarkets revenue increased by 5% on an underlying basis with a strong performance in subscriptions outweighing the covid-19 impact on events. On a reported basis revenue increased by 2%.

Subscriptions revenue, which is 94% of divisional revenue, grew by 13% underlying and 8% on a reported basis driven largely by growth in Metals and Mining and Forest Products. The subscription BoB(4) , which is a key leading growth indicator, increased by 12.7% year-on-year at 30 September 2021. This represents a very strong improvement on the 4.2% year-on-year growth at 30 September 2020.

Events revenue, which is 3% of divisional revenue, declined by 63% underlying and 59% on a reported basis, reflecting the impact of covid-19. Other revenue, which is 3% of divisional revenue, declined by 7% underlying and 9% on a reported basis.

Adjusted operating profit increased by 3% on an underlying basis reflecting the growth in subscriptions revenue and investment in new products. On a reported basis adjusted operating profit decreased by 4% largely reflecting foreign exchange movements. Adjusted operating profit before the change in interpretation of IAS 38 "Intangible Assets" was GBP29.9m (September 2020: GBP32.3m), a decrease of 7% or 1% on an underlying basis.

Fastmarkets continues to invest in future growth through the roll-out of the new Fastmarkets technology platform which is delivering enhanced value to customers with a better customer interface. The acquisition of AgriCensus in March 2020 established agricultural commodities as Fastmarkets' third commodity vertical (Fastmarkets Agriculture), in addition to its leading market position in forest products and metals and mining. The acquisition of The Jacobsen in January 2021 has added further scale to Fastmarkets Agriculture in markets such as animal fats, feeds and vegetable oils as well as lower-carbon intensive fuels such as bio-diesel.

Financial & Professional Services (FPS): 41% of Group revenue

FPS provides essential and actionable data, market and people intelligence, accreditation, marketing services, and events to financial and professional services businesses. FPS also delivers embedded workflow solutions and business development services. It combines a complementary portfolio of well-known industry brands that operate within four pillars: People Intelligence, NextGen, Derivatives, and Events.

 
                                      2021   2020  Change  Underlying(1) 
                                                               change 
                                     -----  ----- 
Revenue                               GBPm   GBPm 
Subscriptions                         87.1   71.2   +23%        +5% 
Events                                29.0   41.3  (30%)       (35%) 
Other                                 22.3   21.6   +4%         +6% 
Total                                138.4  134.1   +3%        (7%) 
                                     -----  ----- 
Adjusted operating profit (1)         24.5   20.1   +22%        +8% 
Adjusted operating profit margin % 
 (1)                                   18%    15%  +3ppt 
-----------------------------------  -----  -----  ------  ------------- 
 

FPS revenue decreased by 7% on an underlying basis driven by the impact of covid-19 on physical events. On a reported basis revenue increased by 3% reflecting the impact of the acquisitions of WealthEngine, Wealth-X and RelSci.

Subscriptions revenue, which is 63% of divisional revenue, increased by 5% underlying benefiting from strong growth in the People Intelligence and NextGen pillars, and by 23% on a reported basis. Renewal rates for the division remained high during the period, demonstrating the essential nature of the data, specialist insight and solutions we provide. The subscription BoB(4) increased by 6.8% year-on-year at 30 September 2021 or by 7.9% excluding WealthEngine and RelSci.

Events revenue, which is 21% of divisional revenue, was down 35% underlying and 30% on a reported basis. During the year FPS ran 259 virtual events and 35 blended events in comparison with 163 virtual events and 117 physical events in FY 2020. During H1 2021 all events were virtual and from May 2021 we have been able to host blended events.

Other revenue, which consists of research and rankings, advertising, consultancy and thought leadership, and is 16% of divisional revenue, increased by 6% underlying and by 4% on a reported basis reflecting growth in research, surveys, and online advertising.

Adjusted operating profit increased by 8% on an underlying basis reflecting the benefits of the restructuring announced in H2 2020, and further good cost control during the period. On a reported basis adjusted operating profit increased by 22% reflecting timing of events, acquisitions, and foreign exchange movements. Adjusted operating profit before the change in interpretation of IAS 38 "Intangible Assets" was GBP26.7m (September 2020: GBP20.9m), an increase of 28% or 14% on an underlying basis.

We further strengthened our People Intelligence business with the acquisition of WealthEngine in December 2020 and RelSci in May 2021.

Asset Management: 33% of Group Revenue

Asset Management includes our brands and businesses that serve the global asset management industry and broader financial community: BCA Research, Ned Davis Research (NDR) and Institutional Investor. This division provides independent research that enables our clients to make informed investment decisions, runs networks and conferences that bring asset allocators and asset managers together in an effective and efficient way and provides news and data that are critical for the industry to stay informed and make deals.

 
                                      2021   2020  Change  Underlying(1) 
                                                               change 
                                     -----  ----- 
Revenue                               GBPm   GBPm 
Subscriptions                         67.6   74.4   (9%)       (3%) 
Events                                29.2   33.1  (12%)       (9%) 
Other                                 13.0   11.3   +15%       +25% 
Total                                109.8  118.8   (8%)       (2%) 
                                     -----  ----- 
Adjusted operating profit (1)         42.5   44.6   (5%)        +2% 
Adjusted operating profit margin % 
 (1)                                   39%    38%  +1ppt 
-----------------------------------  -----  -----  ------  ------------- 
 

Asset Management revenue declined 2% on an underlying basis mainly reflecting the reduction in events revenue. On a reported basis revenue declined by 8% largely reflecting foreign exchange movements.

Subscriptions revenue, which is 61% of divisional revenue, decreased by 3% underlying and by 9% on a reported basis. This was an improvement compared to FY 2020 when subscriptions revenue declined by 8% on an underlying basis. The turnaround of Investment Research continues to progress ahead of plan, with subscriptions renewal rates improving across the year. The 12-month moving average renewal rate at 30 September 2021 increased to 90% (30 September 2020: 86%).

The rate of decline in the Asset Management BoB(4) improved by 4.4 percentage points over the last 12 months to -0.6% at 30 September 2021 with non-vote Investment Research BoB(4) improving by 4.8 percentage points to +0.1% over the same period. The improvement was driven by a higher renewal rate following investment in the sales team and in auto-renewals, integration of sales teams to drive cross-selling, and new research products.

Investment Solutions, which embeds our data and intellectual property into investment decision making processes, has continued to grow its assets under advisement (AUA) to $1.9bn at 30 September 2021 (30 September 2020: $1.3bn).

Events revenue, which is 27% of divisional revenue, decreased by 9% underlying and by 12% on a reported basis, reflecting the impact of covid-19 but also the relative resilience of Institutional Investor and its membership model. Other revenue, which is 12% of divisional revenue, grew by 25% underlying and 15% on a reported basis driven by Institutional Investor research reports and media.

Asset Management adjusted operating profit increased by 2% on an underlying basis with the decrease in revenue outweighed by good cost control. On a reported basis adjusted operating profit declined by 5% largely reflecting foreign exchange movements. Adjusted operating profit before the change in interpretation of IAS 38 "Intangible Assets" was GBP43.0m (September 2020: GBP44.9m), a decrease of 4% or an increase of 3% on an underlying basis.

Revenue, adjusted operating profit and pre-tax profit

 
                                            2021    2020  Change  Underlying 
                                                                   (1) change 
                                          ------  ------  ------ 
Revenue by division                         GBPm    GBPm 
Fastmarkets                                 85.4    83.7   +2%        +5% 
FPS                                        138.4   134.1   +3%       (7%) 
Asset Management                           109.8   118.8   (8%)      (2%) 
Foreign exchange gains/(losses) on 
 forward contracts                           2.4   (1.3) 
Total revenue                              336.1   335.3    -        (2%) 
Adjusted operating profit (1) 
Fastmarkets                                 30.4    31.7   (4%)       +3% 
FPS                                         24.5    20.1   +22%       +8% 
Asset Management                            42.5    44.6   (5%)       +2% 
----------------------------------------  ------  ------  ------  ----------- 
Divisional adjusted operating profit(1)     97.5    96.4    -         +4% 
----------------------------------------  ------  ------  ------  ----------- 
Foreign exchange gains/(losses) on 
 forward contracts                           2.4   (1.3) 
Central costs                             (34.6)  (36.7)   +6%        +2% 
----------------------------------------  ------  ------  ------  ----------- 
Group adjusted operating profit (1)         65.3    58.4   +12%       +8% 
Group adjusted operating profit margin 
 % (1)                                       19%     17%  +2ppt 
Associates and JVs                           0.3   (0.3) 
Net finance costs                          (4.2)   (3.8) 
Adjusted profit before-tax (1)              61.4    54.3   +13% 
                                          ------  ------  ------ 
 

Adjusted profit before tax before the change in interpretation of IAS 38 "Intangible Assets"(5) was GBP65.2m (30 September 2020: GBP57.4m)

Group reported revenues were slightly up with subscriptions revenue and other revenue growth outweighing the impact of a GBP21m reduction in events revenue. Group adjusted operating profit increased by 8% to GBP65.3m underlying and 12% on a reported basis reflecting good cost control and lower central costs, which included a one-off GBP2.5m insurance claim receipt. In September 2020, the Group announced a restructuring and cost reduction programme, mainly focused on our events businesses. The programme delivered gross savings, before investment in other areas of approximately GBP15m in FY 2021. Adjusted profit before tax increased by 13% to GBP61.4m mainly reflecting higher adjusted operating profit. Adjusted diluted earnings per share increased by 12% to 45.5p (FY 2020: 40.5p). Statutory profit before tax was GBP26.6m (FY 2020: GBP29.9m).

Other financial items

Exceptional items

In FY 2021 total exceptional costs were GBP15.1m. Exceptional items include GBP2.3m of costs from the previously announced major restructuring across the Group at the beginning of the period. Net foreign exchange losses of GBP1.2m on quasi-equity loans and net investment hedging that had been deferred to equity in previous years have been recognised in exceptional items as the entities they relate to are no longer part of the Group.

An impairment of right of use assets and property, plant and equipment of GBP3.0m has been recognised in exceptional items, due to properties across the Group being vacated.

Other exceptional costs of GBP8.6m consist of expenditure associated with the acquisition of Wealth-X, AgriCensus, WealthEngine, The Jacobsen and RelSci, which is treated as exceptional due to its magnitude. The recognition of the earn-out payments for the acquisition of AgriCensus are treated as compensation costs and included in exceptional items. Also included are costs incurred to support the strategic review of Asset Management.

Tax

The adjusted effective tax rate for FY 2021 is 20% (FY 2020: 20%) which is based on adjusted profit before tax and excludes deferred tax movements on intangible assets, tax on exceptional items, prior year items and other tax adjusting items as described below. The tax rate in each year depends mainly on the geographic mix of profits as well as on applicable tax rates and although the tax charge involves a level of estimate, we currently expect it to be 21% for FY 2022.

The Group's statutory effective tax rate is 53% for FY 2021 compared to 5% in FY 2020. The increase is largely driven by GBP3.6m withholding tax charge from the payment of an intragroup dividend from Canada to the UK, a GBP1.5m deferred tax charge in respect of the remeasurement of deferred tax liabilities arising on the transfer of certain intangible assets from Singapore to the US and a related write off of GBP2.6m for tax losses in Singapore. Excluding the impact of these, the group statutory rate is approximately 23%.

The basis for the calculation of both effective tax rates and further information can be found in notes 8 and 23.

During the period the Group has progressed several outstanding tax matters:

 
 --   As previously noted, we have resolved all historical Canadian 
       tax issues relating to the exposure identified in 2020 and 
       a tax refund of C$10.5m (GBP6.1m) was received in May 2021. 
 --   The Group has historically provided for a GBP12.4m UK tax 
       exposure relating to the disposal of an investment in the 
       Capital Data business during the year ended 30 September 2015. 
       The Group received a favourable judgement from the first-tier 
       tax tribunal hearing held in May 2020, which HM Revenue and 
       Customs (HMRC) intend to appeal at the Upper Tier Tribunal. 
       Aside from potential interest continuing to accrue we have 
       therefore left the provision unchanged. 
 --   In the 2020 Annual Report the Group disclosed a contingent 
       tax liability of GBP8.9m in relation to the European Commission 
       investigation into the UK Controlled Foreign Company legislation. 
       HMRC have now confirmed that this matter is now closed and 
       therefore there is no longer any contingent liability. 
 

Dividend

The Board has proposed a final dividend of 12.5p per share which results in a full year dividend of 18.2p (FY 2020: 11.4p) reflecting the strong balance sheet, cash generative nature of the business and confidence in the future. Our dividend policy is to pay out approximately 40% of full year adjusted diluted earnings per share, subject to the capital needs of the business.

Net cash and cash flow

A reconciliation of free cash flow, an alternative performance measure, and cash generated from operations and cash and cash equivalents, the nearest statutory measures, is set out below.

 
                                        2021     2020   Change 
                                        GBPm     GBPm     GBPm 
-----------------------------------  -------  -------  ------- 
 Cash generated from operations         67.3     53.5     13.8 
 Leases and interest                  (12.4)    (9.6)    (2.8) 
 Capex                                 (4.8)    (6.7)      1.9 
 Taxation                              (3.2)    (7.1)      3.9 
                                     -------  -------  ------- 
 Free cash flow                         46.9     30.1     16.8 
                                     -------  -------  ------- 
 Dividends paid                       (18.5)   (24.0)      5.5 
 Net M&A                              (24.2)   (24.8)      0.6 
                                     -------  -------  ------- 
                                         4.2   (18.7)     22.9 
                                     -------  -------  ------- 
 Opening cash and cash equivalents      28.1     50.1   (22.0) 
 Currency translation                    0.2    (3.3)      3.5 
                                     -------  -------  ------- 
 Closing cash and cash equivalents      32.5     28.1      4.4 
-----------------------------------  -------  -------  ------- 
 

Net cash at 30 September 2021 was GBP32.5m, excluding lease liabilities, compared with GBP28.1m as at 30 September 2020. This increase in net cash largely reflects the strength of our cash generative subscriptions revenues which exceeded payments for acquisitions in the year totalling GBP24.2m and dividends of GBP18.5m. Strong operating cash flows of GBP67.3m were underpinned by significant improvements in working capital reflecting the growth in subscriptions and strong collections. Free cash flow increased by GBP16.8m to GBP46.9m.

The Group's adjusted cash conversion for FY 2021 was 123% (2020: 105%). See page 19 for the calculation. The Group has a strong and consistent record of high cash conversion reflecting the robust nature of the Group's subscription businesses and the relatively capital light business model.

Management of balance sheet and liquidity risk and financing

The Group regularly reviews the level of cash and debt facilities required to fund its activities. In May 2021, the Group refinanced and increased its existing bank facility. It now has a committed multi-currency revolving credit facility of GBP190m which is available to the Group until May 2024, with two additional one-year extension options available. An additional GBP130m uncommitted accordion facility also remains available.

Currency

The Group generates approximately 75% of its revenue in US dollars, including approximately 40% of its UK revenue and c.88% of the Group's operating profit. The exposure to US dollar revenue in the UK businesses is partially hedged using forward contracts to sell US dollars, which delays the impact of movements in exchange rates for at least a year.

The average sterling-US dollar rate for FY2021 was $1.37 (2020: $1.28). This reduced headline revenue growth rates for the year by approximately 4 percentage points and adjusted profit before tax by GBP2.3m. Each one cent movement in the US dollar rate has an impact on translated profits, net of UK revenue hedging, of approximately GBP0.7m on an annualised basis. The Group also translates its non-sterling denominated balance sheet items, which resulted in a loss in 2021 of GBP11k (2020: GBP1.1m ).

Definitions

Adjusted measures exclude the impact of amortisation of acquired intangible assets, exceptional items and other adjusting items in accordance with the Group's policy. A detailed reconciliation of the Group's adjusted and underlying results is set out in the Glossary on pages 12 to 20 of this statement.

Underlying measures are the adjusted results stated at constant exchange rates, including pro forma prior year comparatives for acquisitions and new business launches and excluding disposals, business closures and significant event and publication timing differences, including proforma prior year adjustments for the application of new accounting standards.

Summary of guidance for FY 2022

Income statement:

   --      Revenue outlook 

o Fastmarkets and FPS subscriptions - expect continued strong underlying growth

o Asset Management - expect continued progress towards sustainable growth at BCA Research and NDR

o Events revenue - expect further recovery as physical aspects of events continue to return

   --      Costs 

o GBP8m investment people to drive subscriptions growth including renewables in Fastmarkets and Wealth Management in Asset Management

o Higher people costs and travel-related expenses as physical events return

o IAS 38 - higher SaaS-related investment in technology; net c.GBP2m increase on FY 2021, largely in

central costs

o Central costs - expected to increase reflecting IAS 38 (see above) and one-off GBP2.5m insurance claim receipt in

FY 2021

   --      Tax rate 

o Group adjusted effective tax rate expected to be c.21% (FY 2021: 20%)

Cash flow:

o Capital expenditure - capex of GBP6m reflecting continued investment in technology and systems; GBP15m before changes to IAS 38

CAUTIONARY STATEMENT

This Preliminary Statement ("Statement") is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its Directors, employees, agents and advisers accept and assume no liability to any person in respect of this Statement save as would arise under English law. Statements contained in this Statement are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore facts stated and views expressed may change after that date.

This document and any materials distributed in connection with it may include forward-looking statements, beliefs, opinions or statements concerning risks and uncertainties, including statements with respect to the Group's business, financial condition and results of operations. Those statements and statements which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the Company's Directors' beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and which may cause results and developments to differ materially from those expressed or implied by those statements and forecasts. No representation is made that any of those statements or forecasts will come to pass or that any forecast results will be achieved. You are cautioned not to place any reliance on such statements or forecasts. Those forward-looking and other statements speak only as at the date of this Statement. The Group undertakes no obligation to release any update of, or revisions to, any forward-looking statements, opinions (which are subject to change without notice) or any other information or statement contained in this Statement. Furthermore, past performance of the Group cannot be relied on as a guide to future performance.

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Euromoney Institutional Investor PLC share for the current or future financial years would necessarily match or exceed the historical published earnings per Euromoney Institutional Investor PLC share.

Nothing in this document is intended to constitute an invitation or inducement to engage in investment activity. This document does not constitute or form part of any offer for sale or subscription of, or any solicitation of any offer to purchase or subscribe for, any securities nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. This document does not constitute a recommendation regarding any securities.

LEI Number: 213800PZU2RGHMHE2S67

Glossary of financial performance measures

In order to fully explain the performance of the business, the Group uses several alternative performance measures (APMs) and business KPIs. APMs are non-GAAP and not defined by IFRS; therefore, they may not be considered directly comparable to other companies' APMs. APMs should be considered in addition to, rather than a substitute for, IFRS measures.

The Group presents two main sets of APMs in its Annual Report and financial results: adjusted measures and underlying measures.

Adjusted measures

Adjustments principally include the amortisation of acquired intangible assets, exceptional items, net movements in deferred consideration and acquisition commitments, fair value remeasurements and the associated tax thereon.

Adjusted measures provide additional useful information for shareholders to evaluate and compare the performance of the business from period to period. Management use these for budgeting, planning and monthly reporting purposes and they are the basis on which executive management is incentivised. These adjusted measures also enable the Group to track more easily and consistently the underlying operational performance by separating out exceptional income, charges and non-cash items. We also present adjusted EBITDA as the Group's borrowing facilities contain certain covenants, including the ratio of adjusted net debt to EBITDA.

Underlying measures

Underlying measures include adjustments and adjust for material events that move across reporting dates, material biennial events, currency and M&A.

Underlying measures provide a fairer like-for-like comparison than adjusted measures as the factors noted above can influence growth rates but do not reflect underlying business performance.

 
APM/KPI term                    Closest equivalent IFRS measure  Purpose and definition 
------------------------------  -------------------------------  ----------------------------------------------------- 
Underlying revenue(1)           Revenue                          Underlying revenue (and underlying revenue growth) 
                                                                 enable us to compare revenue on a like-for-like 
                                                                 basis and are an important indicator of the health 
                                                                 and trajectory of our divisions and the 
                                                                 Group as a whole. Underlying revenue adjusts for 
                                                                 material events that move across reporting 
                                                                 dates, material biennial events, currency, M&A and 
                                                                 closed businesses, and new accounting standards 
                                                                 that are not applied retrospectively. 
                                                                 Underlying revenue growth is one of the financial 
                                                                 measures used for Directors' remuneration. 
------------------------------  -------------------------------  ----------------------------------------------------- 
Adjusted operating profit(1)    Operating profit(3)              Adjusted operating profit enables the Group to more 
                                                                 closely track operational performance 
                                                                 by adjusting operating profit for the amortisation of 
                                                                 acquired intangible assets and exceptional 
                                                                 items. 
------------------------------  -------------------------------  ----------------------------------------------------- 
Adjusted operating margin       Operating profit(3) margin       Adjusted operating margin measures the efficiency of 
                                                                 the Group and the effectiveness of investment 
                                                                 decisions, cost reduction efforts and mix 
                                                                 improvements. Adjusted operating margin is calculated 
                                                                 as adjusted operating profit as a percentage of 
                                                                 revenue. 
------------------------------  -------------------------------  ----------------------------------------------------- 
Underlying operating profit(1)  Operating profit(3)              Underlying operating profit enables the Group to 
                                                                 compare operating profit on a like-for-like 
                                                                 basis. Underlying operating profit adjusts adjusted 
                                                                 operating profit for material events that 
                                                                 move across reporting dates, material biennial 
                                                                 events, currency, M&A and closed businesses, 
                                                                 and new accounting standards that are not applied 
                                                                 retrospectively. 
------------------------------  -------------------------------  ----------------------------------------------------- 
Adjusted EBITDA(1)              Operating profit(3)              Adjusted EBITDA is a measure used in covenants 
                                                                 relating to the Group's borrowing facilities. 
                                                                 It is calculated as the Group's net (cash)/debt to 
                                                                 adjusted operating profit and share of 
                                                                 results in associates before depreciation and 
                                                                 amortisation of licences and software, including 
                                                                 those of our associates and IFRS 16 adjustments, and 
                                                                 adjustments for the timing of acquisitions 
                                                                 and disposals. 
------------------------------  -------------------------------  ----------------------------------------------------- 
 
 
Adjusted profit before tax(1)           Profit before tax                       Adjusted profit before tax measures 
                                                                                the overall success of management 
                                                                                actions to manage the 
                                                                                portfolio and invest to grow the 
                                                                                business. 
                                                                                Adjusted profit before tax is one of 
                                                                                the financial measures used for 
                                                                                Directors' remuneration. 
                                                                                This APM adjusts profit before tax for 
                                                                                the amortisation of acquired 
                                                                                intangible assets, exceptional 
                                                                                items, net movements in deferred 
                                                                                consideration and acquisition 
                                                                                commitments and fair value 
                                                                                remeasurements. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Underlying profit before tax(1)         Profit before tax                       Underlying profit before tax enables 
                                                                                the Group to compare profit on a 
                                                                                like-for-like basis. 
                                                                                Underlying profit before tax adjusts 
                                                                                adjusted profit before tax for 
                                                                                material events that move 
                                                                                across reporting dates, material 
                                                                                biennial events, currency, M&A and 
                                                                                closed businesses, and 
                                                                                new accounting standards that are not 
                                                                                applied retrospectively. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Adjusted diluted earnings per share(2)  Diluted earnings per share              Adjusted diluted earnings per share 
                                                                                measures the Group's overall returns 
                                                                                to shareholders. 
                                                                                It is calculated using profit for the 
                                                                                year attributable to the equity 
                                                                                holders of the parent 
                                                                                adjusted for the amortisation of 
                                                                                acquired intangible assets, 
                                                                                exceptional items, net movements 
                                                                                in deferred consideration and 
                                                                                acquisition commitments and fair value 
                                                                                remeasurements and tax 
                                                                                thereon divided by the diluted 
                                                                                weighted average number of shares in 
                                                                                issue. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Adjusted cash generated from            Cash generated from operations          Adjusted cash generated from 
operations(1)                                                                   operations gives a clearer picture of 
                                                                                the cash generating nature 
                                                                                of the Group. It is calculated by 
                                                                                adjusting cash generated from 
                                                                                operations for the cash impact 
                                                                                relating to exceptional items, capital 
                                                                                expenditure and significant timing 
                                                                                differences affecting 
                                                                                the movement on working capital. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Free cash flow                          Cash generated from operations          Free cash flow reflects the cash 
                                                                                available to shareholders. Cash 
                                                                                generated from operations 
                                                                                is adjusted for the cash impact of 
                                                                                lease and interest payments, capital 
                                                                                expenditure and taxation. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Net cash(1)                             Cash and cash equivalents less          Net cash shows the availability of 
                                        borrowings                              cash in the business. It comprises 
                                                                                cash at bank and in 
                                                                                short-term deposits. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Adjusted net cash(1)                    Cash and cash equivalents less          Adjusted net cash adjusts net cash for 
                                        borrowings                              average exchange rates. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Adjusted cash conversion(1)             None                                    Adjusted cash conversion is a measure 
                                                                                of the quality of the Group's 
                                                                                earnings. It measures 
                                                                                the percentage by which adjusted cash 
                                                                                generated from operations, net of 
                                                                                capital expenditure 
                                                                                and cash payments for exceptional 
                                                                                items, covers adjusted operating 
                                                                                profit. 
--------------------------------------  --------------------------------------  -------------------------------------- 
Adjusted net cash to EBITDA ratio(1)    None                                    Adjusted net cash to EBITDA ratio is a 
                                                                                measure used in covenants relating to 
                                                                                the Group's borrowing 
                                                                                facilities. It is calculated as 
                                                                                adjusted net cash as a percentage of 
                                                                                adjusted EBITDA. 
--------------------------------------  --------------------------------------  -------------------------------------- 
 

1 Reconciliation of these performance measures to statutory performance measures can be found below

2 Calculation of adjusted diluted earnings per share is in note 7 to the Financial Statements

3 Operating profit is presented in the Consolidated Income Statement. It is not defined per IFRS, however, it is a generally accepted profit measure

Adjusted measures

The Directors believe that the adjusted measures provide additional useful information for shareholders to evaluate and compare the performance of the business from period to period. These measures are used by management for budgeting, planning and monthly reporting purposes and are the basis on which executive management is incentivised. The non-IFRS measures also enable the Group to track more easily and consistently the underlying operational performance by separating out the following types of exceptional income, charges and non-cash items.

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, customer relationships and databases); exceptional items; share of associates' and joint ventures' acquired intangibles amortisation and exceptional items; net movements in deferred consideration and acquisition commitments; fair value remeasurements; related tax items and other adjusting items described below.

The amortisation of acquired intangible assets is adjusted as the premium paid relative to the net assets on the balance sheet of the acquired business is classified as either goodwill or as an intangible asset arising on a business combination and is recognised on the Group's balance sheet. This differs to organically developed businesses where assets such as employee talent and customer relationships are not recognised on the balance sheet. Impairment and amortisation of intangible assets and goodwill arising on acquisitions are excluded from adjusted results as they are balance sheet items that relate to historical M&A activity.

Exceptional items are items of income or expense considered by the Directors to be significant, non-recurring and not attributable to underlying trading. It is Group policy to treat as exceptional significant earn-out payments required by IFRS to be recognised as a compensation cost. 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. Given that these payments are in substance part of the cost of an investment and will not recur once the earn-out payments have been made, they have been excluded from adjusted profit.

Adjusted finance costs exclude interest arising on any uncertain tax provisions, as these provisions are not in the ordinary course of business and relate to tax adjusting items.

In respect of earnings, adjusted amounts reflect a tax rate that includes the current tax effect of 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. Tax on exceptional items are excluded as these items are adjusted in accordance with Group policy. Adjustments in respect of prior years are also removed from the adjusted tax expense as they do not relate to current year underlying trading.

Further analysis of the adjusting items is presented in notes 2, 3, 4, 5, 7 and 10 to the Preliminary Statements.

The Group has applied these principles in calculating adjusted measures and it is the Group's intention to continue to apply these principles in the future.

Underlying measures

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.

Underlying results include adjusted results and are stated:

 
      at constant exchange rates, with the prior year comparatives being 
--     restated using current year exchange rates; 
      including pro forma prior year comparatives for acquisitions and 
       new business launches and excluding all results for disposals or 
--     business closures; 
      including adjustments for events which run in one of the current 
       or comparative periods due to changes in the event date. For example, 
--     this means we adjust for biennial events; and 
      including proforma prior year adjustments for the application of 
--     new accounting standards. 
 

Underlying measures previously also excluded events and publications which took place in the comparative period but did not take place in the current period (for example due to cancellations or changes in event format); with events and publications which took place in the current period but did not take place in the comparative period, being added into the comparative period at the same amount. The covid-19 pandemic has changed the event industry, with virtual and blended events now firmly established, as a result of the restrictions on holding physical events. This proliferation of formats means that it is significantly more difficult to assess whether an event is new or cancelled compared with the event that ran in the comparative period. The new methodology also aligns reported and underlying metrics more closely.

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 reconciliation below sets out the adjusted results of the Group and the related adjustments to the statutory Income Statement that the Directors consider necessary to provide useful and comparable information about the Group's adjusted trading performance.

 
                                        2021                                             2020 
                       ---------------------------------------  ------------------------------------------------------ 
                                                                                                 Restated(1) 
                              Statutory  Adjustments  Adjusted  Restated(1) Statutory            Adjustments  Adjusted 
                       Notes     GBP000       GBP000    GBP000                 GBP000                 GBP000    GBP000 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Revenue                    2    336,061            -   336,061                335,256                      -   335,256 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Adjusted operating 
 profit                    2     65,257            -    65,257                 58,444                      -    58,444 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Acquired intangible 
 amortisation              8   (19,020)       19,020         -               (23,039)                 23,039         - 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Exceptional items          3   (15,105)       15,105         -                (4,811)                  4,811         - 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Operating profit                 31,132       34,125    65,257                 30,594                 27,850    58,444 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Operating profit 
 margin                              9%            -       19%                     9%                      -       17% 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Share of results in 
 associates               10         25          329       354                  (495)                    154     (341) 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Finance income             4         46            -        46                  4,141                (3,850)       291 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Finance expense            4    (4,558)          311   (4,247)                (4,368)                    307   (4,061) 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Net finance costs          4    (4,512)          311   (4,201)                  (227)                (3,543)   (3,770) 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Profit before tax                26,645       34,765    61,410                 29,872                 24,461    54,333 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Tax expense on profit      5   (14,000)        1,744  (12,256)                (1,458)                (9,432)  (10,890) 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Profit for the year              12,645       36,509    49,154                 28,414                 15,029    43,443 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
Attributable to: 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Equity holders of the 
 parent                          12,645       36,509    49,154                 28,608                 14,968    43,576 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Equity 
 non-controlling 
 interests                            -            -         -                  (194)                     61     (133) 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
                                 12,645       36,509    49,154                 28,414                 15,029    43,443 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
Diluted earnings per 
 share                     7      11.7p                  45.5p                  26.6p                            40.5p 
---------------------  -----  ---------  -----------  --------  ---------------------  ---------------------  -------- 
 
 
 1   As outlined in note 1 to the Preliminary Statement, the results 
      for the year ended 30 September 2020 have been restated to reflect 
      the impact of the IFRIC decision on configuration and customisation 
      costs in a cloud computing arrangement relating to IAS 38 'Intangible 
      Assets'.. 
 

The following table sets out the reconciliation from statutory to underlying for revenue, operating profit and profit before tax:

 
                                                      Restated(1) 
                                                2021         2020  Change 
                                              GBP000       GBP000       % 
-------------------------------------------  -------  -----------  ------ 
Statutory revenue                            336,061      335,256      0% 
-------------------------------------------  -------  -----------  ------ 
Net M&A and closed businesses                      -       16,316 
-------------------------------------------  -------  -----------  ------ 
Timing differences and event cancellations         -        5,448 
-------------------------------------------  -------  -----------  ------ 
Foreign exchange                                   -     (12,377) 
-------------------------------------------  -------  -----------  ------ 
Underlying revenue                           336,061      344,643    (2%) 
-------------------------------------------  -------  -----------  ------ 
 
Statutory operating profit                    31,132       30,594      2% 
-------------------------------------------  -------  -----------  ------ 
Adjustments                                   34,125       27,850 
-------------------------------------------  -------  -----------  ------ 
Adjusted operating profit                     65,257       58,444     12% 
-------------------------------------------  -------  -----------  ------ 
Net M&A and closed businesses                      -          810 
-------------------------------------------  -------  -----------  ------ 
Timing differences and event cancellations         -        3,911 
-------------------------------------------  -------  -----------  ------ 
Foreign exchange                                   -      (2,616) 
-------------------------------------------  -------  -----------  ------ 
Underlying operating profit                   65,257       60,549      8% 
-------------------------------------------  -------  -----------  ------ 
 
Statutory profit before tax                   26,645       29,872   (11%) 
-------------------------------------------  -------  -----------  ------ 
Adjustments                                   34,765       24,461 
-------------------------------------------  -------  -----------  ------ 
Adjusted profit before tax                    61,410       54,333     13% 
-------------------------------------------  -------  -----------  ------ 
Net M&A and closed businesses                      -          810 
-------------------------------------------  -------  -----------  ------ 
Timing differences and event cancellations         -        3,911 
-------------------------------------------  -------  -----------  ------ 
Foreign exchange                                   -      (2,271) 
-------------------------------------------  -------  -----------  ------ 
Underlying profit before tax                  61,410       56,783      8% 
-------------------------------------------  -------  -----------  ------ 
 
 
 1   As outlined in note 1 to the Preliminary Statement, the results 
      for the year ended 30 September 2020 have been restated to reflect 
      the impact of the IFRIC decision on configuration and customisation 
      costs in a cloud computing arrangement relating to IAS 38 'Intangible 
      Assets'.. 
 

The following table reconciles the underlying revenue and adjusted operating profit changes for the divisions and the Group:

 
                                                                             Foreign exchange gains/(losses) 
                                    Fastmarkets      FPS  Asset Management              on forward contracts     Total 
                                         GBP000   GBP000            GBP000                            GBP000    GBP000 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
2021 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Statutory revenue                        85,423  138,443           109,804                             2,391   336,061 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
 
2020 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Statutory revenue                        83,667  134,111           118,778                           (1,300)   335,256 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Net M&A and closed businesses             1,372   14,944                 -                                 -    16,316 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Timing differences                          732    3,824               892                                 -     5,448 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Foreign exchange                        (4,388)  (4,015)           (7,624)                             3,650  (12,377) 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Underlying revenue                       81,383  148,864           112,046                             2,350   344,643 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Underlying revenue change %                  5%     (7%)              (2%)                                2%      (2%) 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
 
                                    Fastmarkets      FPS  Asset Management                     Central Costs     Total 
                                         GBP000   GBP000            GBP000                            GBP000    GBP000 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
2021 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Adjusted operating profit                30,429   24,546            42,481                          (32,199)    65,257 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
 
2020 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Adjusted operating profit                31,684   20,101            44,628                          (37,969)    58,444 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Net M&A and closed businesses             (241)    1,051                 -                                 -       810 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Timing differences                          507    3,154               250                                 -     3,911 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Foreign exchange                        (2,396)  (1,651)           (3,447)                             4,878   (2,616) 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Underlying adjusted operating 
 profit                                  29,554   22,655            41,431                          (33,091)    60,549 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
Underlying adjusted operating 
 profit change %                             3%       8%                2%                              (3%)        8% 
----------------------------------  -----------  -------  ----------------  --------------------------------  -------- 
 

The following table reconciles the underlying revenue changes for the divisions by revenue type:

 
                                Subscriptions   Events    Other    Total 
                                       GBP000   GBP000   GBP000   GBP000 
Fastmarkets 
2021 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      79,802    2,706    2,915   85,423 
------------------------------  -------------  -------  -------  ------- 
 
2020 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      73,927    6,620    3,120   83,667 
------------------------------  -------------  -------  -------  ------- 
Net M&A and closed businesses           1,243        -      129    1,372 
------------------------------  -------------  -------  -------  ------- 
Timing differences                          -      732        -      732 
------------------------------  -------------  -------  -------  ------- 
Foreign exchange                      (4,273)     (20)     (95)  (4,388) 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue                     70,897    7,332    3,154   81,383 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue change %               13%    (63%)     (7%)       5% 
------------------------------  -------------  -------  -------  ------- 
 
FPS 
2021 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      87,131   28,990   22,322  138,443 
------------------------------  -------------  -------  -------  ------- 
 
2020 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      71,122   41,343   21,646  134,111 
------------------------------  -------------  -------  -------  ------- 
Net M&A and closed businesses          14,944        -        -   14,944 
------------------------------  -------------  -------  -------  ------- 
Timing differences                          -    3,824        -    3,824 
------------------------------  -------------  -------  -------  ------- 
Foreign exchange                      (2,711)    (764)    (540)  (4,015) 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue                     83,355   44,403   21,106  148,864 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue change %                5%    (35%)       6%     (7%) 
------------------------------  -------------  -------  -------  ------- 
 
Asset Management 
2021 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      67,612   29,199   12,993  109,804 
------------------------------  -------------  -------  -------  ------- 
 
2020 
------------------------------  -------------  -------  -------  ------- 
Statutory revenue                      74,433   33,013   11,332  118,778 
------------------------------  -------------  -------  -------  ------- 
Net M&A and closed businesses               -        -        -        - 
------------------------------  -------------  -------  -------  ------- 
Timing differences                        243      870    (221)      892 
------------------------------  -------------  -------  -------  ------- 
Foreign exchange                      (5,015)  (1,929)    (680)  (7,624) 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue                     69,661   31,954   10,431  112,046 
------------------------------  -------------  -------  -------  ------- 
Underlying revenue change %              (3%)     (9%)      25%     (2%) 
------------------------------  -------------  -------  -------  ------- 
 

Cash conversion

Cash conversion is an alternative performance measure of the quality of the Group's earnings. Cash conversion measures the percentage by which adjusted cash generated from operations covers adjusted operating profit.

 
                                                   Restated(1) 
                                             2021         2020 
                                           GBP000       GBP000 
----------------------------------------  -------  ----------- 
Adjusted operating profit                  65,257       58,444 
----------------------------------------  -------  ----------- 
 
Cash generated from operations             67,321       53,488 
----------------------------------------  -------  ----------- 
Exceptional items(2)                       17,642       14,646 
----------------------------------------  -------  ----------- 
Capital expenditure                       (4,793)      (6,690) 
----------------------------------------  -------  ----------- 
Adjusted cash generated from operations    80,170       61,444 
----------------------------------------  -------  ----------- 
Adjusted cash conversion %                   123%         105% 
----------------------------------------  -------  ----------- 
 
 
 1   As outlined in note 1 to the Preliminary Statement, the results 
      for the year ended 30 September 2020 have been restated to 
      reflect the impact of the IFRIC decision on configuration and 
      customisation costs in a cloud computing arrangement relating 
      to IAS 38 'Intangible Assets'. 
 2   This represents cash paid during the year in relation to exceptional 
      items, this includes payments on exceptional items accrued 
      in previous periods. 
 

Adjusted cash generated from operations is after adjusting for the cash impact relating to exceptional items and capital expenditure. For the year ended 30 September 2021, exceptional cash payments largely consist of integration and transaction costs of newly acquired businesses and to support the restructure and cost reduction programme announced in September 2020. For the year ended 30 September 2020, exceptional cash payments largely consisted of integration and transaction costs of acquired businesses and to support the strategic review of Asset Management.

Net cash is an alternative performance measure and comprises cash and cash equivalents along with the Group's borrowings excluding lease liabilities. The measure is important because the Group's RCF covenant includes the requirement to keep adjusted net debt below three times adjusted EBITDA. The following table sets out the cash movements in the year and reconciliation to adjusted net cash:

Net cash

 
                                                          2021      2020 
                                                        GBP000    GBP000 
-----------------------------------------------------  -------  -------- 
Total cash and cash equivalents at 1 October            28,093    50,078 
-----------------------------------------------------  -------  -------- 
Net increase/(decrease) in cash and cash equivalents     4,172  (19,601) 
-----------------------------------------------------  -------  -------- 
Increase in borrowings                                       -       880 
-----------------------------------------------------  -------  -------- 
Effect of foreign exchange rate movements                  230   (3,264) 
-----------------------------------------------------  -------  -------- 
Total cash and cash equivalents at 30 September         32,495    28,093 
-----------------------------------------------------  -------  -------- 
 
Net cash comprises: 
-----------------------------------------------------  -------  -------- 
Cash at bank and short-term deposits                    32,495    28,093 
-----------------------------------------------------  -------  -------- 
Total cash and cash equivalents                         32,495    28,093 
-----------------------------------------------------  -------  -------- 
Net cash                                                32,495    28,093 
-----------------------------------------------------  -------  -------- 
Average exchange rate adjustment                          (86)       619 
-----------------------------------------------------  -------  -------- 
Adjusted net cash                                       32,409    28,712 
-----------------------------------------------------  -------  -------- 
 

Adjusted EBITDA is an alternative performance measure. The following table sets out the reconciliation from adjusted operating profit to adjusted EBITDA:

Adjusted EBITDA

 
                                                                  2021     2020 
                                                                GBP000   GBP000 
-------------------------------------------------------------  -------  ------- 
Adjusted operating profit                                       65,257   58,444 
-------------------------------------------------------------  -------  ------- 
Share of results in associates                                     354    (341) 
-------------------------------------------------------------  -------  ------- 
Add back: 
-------------------------------------------------------------  -------  ------- 
Intangible amortisation on licences and software                 2,920    2,017 
-------------------------------------------------------------  -------  ------- 
Depreciation of property, plant and equipment                    2,041    2,908 
-------------------------------------------------------------  -------  ------- 
Depreciation of right of use assets                              9,031    7,785 
-------------------------------------------------------------  -------  ------- 
Share of associates' interest, depreciation and amortisation        29      163 
-------------------------------------------------------------  -------  ------- 
Adjusted EBITDA                                                 79,632   70,976 
-------------------------------------------------------------  -------  ------- 
Add back: 
-------------------------------------------------------------  -------  ------- 
IFRS 16 adjustments                                            (9,779)  (7,711) 
-------------------------------------------------------------  -------  ------- 
M&A annualised adjustment                                          366    (136) 
-------------------------------------------------------------  -------  ------- 
Adjusted EBITDA for covenant purposes                           70,219   63,129 
-------------------------------------------------------------  -------  ------- 
Adjusted net cash to EBITDA ratio for covenant purposes           0.46     0.45 
-------------------------------------------------------------  -------  ------- 
 

The Group's borrowing facilities contain certain covenants, including the ratio of adjusted net debt to EBITDA. The amounts and foreign exchange rates used in the covenant calculations are subject to adjustments as defined under the terms of the arrangement. The facility's covenant requires the Group's net debt to be no more than three times adjusted EBITDA and requires minimum levels of interest cover of three times on a rolling 12-month basis.

The bank covenant ratio uses an average exchange rate in the calculation of net debt and an annualised adjustment attributable to acquisitions and disposals in the calculation of adjusted EBITDA. When businesses are acquired after the beginning of the financial year, the calculation of adjusted EBITDA includes EBITDA attributable to the business as if the acquisition had been completed on the first day of the financial year. The calculation excludes the EBITDA of any businesses disposed of during the year.

The bank covenant ratio is adjusted to remove the impact of IFRS 16. This means that the adjusted EBITDA for covenant compliance calculations includes an entry for the rental expense which would have been recognised for the Group's leases had the transition to IFRS 16 not taken place. To be consistent with the bank covenant calculations, net cash is defined to exclude lease liabilities.

Consolidated Income Statement

for the year ended 30 September 2021

 
                                                                                                    Restated 
                                                                                             2021       2020 
                                                                                 Notes     GBP000     GBP000 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Revenue                                                                              2    336,061    335,256 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Cost of sales                                                                            (45,525)   (55,713) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Gross profit                                                                              290,536    279,543 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Administrative expenses and distribution costs                                          (220,385)  (216,723) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Net impairment of trade receivables                                                       (4,894)    (4,376) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Operating profit before acquired intangible amortisation and exceptional items             65,257     58,444 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Acquired intangible amortisation                                                     8   (19,020)   (23,039) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Exceptional items                                                                    3   (15,105)    (4,811) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Operating profit                                                                     2     31,132     30,594 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Share of results in associates                                                      10         25      (495) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Finance income                                                                       4         46      4,141 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Finance expense                                                                      4    (4,558)    (4,368) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Net finance costs                                                                    4    (4,512)      (227) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Profit before tax                                                                    2     26,645     29,872 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Tax expense on profit                                                                5   (14,000)    (1,458) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Profit for the year                                                                  2     12,645     28,414 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Attributable to: 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Equity holders of the parent                                                               12,645     28,608 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Equity non-controlling interests                                                                -      (194) 
-------------------------------------------------------------------------------  -----  ---------  --------- 
                                                                                           12,645     28,414 
-------------------------------------------------------------------------------  -----  ---------  --------- 
Earnings per share 
-------------------------------------------------------------------------------  -----  ---------  --------- 
   Basic                                                                             7      11.7p      26.6p 
-------------------------------------------------------------------------------  -----  ---------  --------- 
   Diluted                                                                           7      11.7p      26.6p 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 
Dividend per share (including proposed dividends)                                    6      18.2p      11.4p 
-------------------------------------------------------------------------------  -----  ---------  --------- 
 

A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 12 to 20.

The 2020 Consolidated Income Statement has been restated as detailed in note 1.

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2021

 
                                                                                                            Restated 
                                                                                                      2021      2020 
                                                                                                    GBP000    GBP000 
-----------------------------------------------------------------------------------------------   --------  -------- 
Profit for the year                                                                                 12,645    28,414 
------------------------------------------------------------------------------------------------  --------  -------- 
 
Items that may be reclassified subsequently to profit or loss: 
-----------------------------------------------------------------------------------------------   --------  -------- 
Change in fair value of cash flow hedges                                                             3,314     1,838 
------------------------------------------------------------------------------------------------  --------  -------- 
Transfer of (gains)/losses on cash flow hedges from fair value reserves to Income Statement: 
-----------------------------------------------------------------------------------------------   --------  -------- 
   Foreign exchange (gains)/losses in revenue                                                      (2,391)     1,300 
------------------------------------------------------------------------------------------------  --------  -------- 
   Foreign exchange (gains)/losses in administrative expenses                                        (366)       523 
------------------------------------------------------------------------------------------------  --------  -------- 
Net exchange differences on translation of net investments in overseas subsidiary undertakings    (17,164)  (17,425) 
------------------------------------------------------------------------------------------------  --------  -------- 
Net exchange differences on foreign currency loans                                                      34   (3,781) 
------------------------------------------------------------------------------------------------  --------  -------- 
Translation reserves recycled to Income Statement                                                    1,183         - 
------------------------------------------------------------------------------------------------  --------  -------- 
Tax gains on changes in fair value of cash flow hedges                                                 300         - 
------------------------------------------------------------------------------------------------  --------  -------- 
 
Items that will not be reclassified to profit or loss: 
-----------------------------------------------------------------------------------------------   --------  -------- 
Actuarial gains on defined benefit pension schemes                                                   4,500     3,005 
------------------------------------------------------------------------------------------------  --------  -------- 
Tax loss on actuarial gains on defined benefit pension schemes                                     (1,013)     (468) 
------------------------------------------------------------------------------------------------  --------  -------- 
Change in value of FVTOCI assets                                                                        50         - 
------------------------------------------------------------------------------------------------  --------  -------- 
 
Other comprehensive expense for the year                                                          (11,553)  (15,008) 
------------------------------------------------------------------------------------------------  --------  -------- 
 
Total comprehensive income for the year                                                              1,092    13,406 
------------------------------------------------------------------------------------------------  --------  -------- 
 
Attributable to: 
-----------------------------------------------------------------------------------------------   --------  -------- 
Equity holders of the parent                                                                         1,092    13,600 
Equity non-controlling interests                                                                         -     (194) 
------------------------------------------------------------------------------------------------  --------  -------- 
                                                                                                     1,092    13,406 
 -----------------------------------------------------------------------------------------------  --------  -------- 
 
 

Consolidated Statement of Financial Position

as at 30 September 2021

 
                                                                      Restated  1 October 
                                                               2021       2020    2019(1) 
                                                   Notes     GBP000     GBP000     GBP000 
-------------------------------------------------  -----  ---------  ---------  --------- 
Non-current assets 
-------------------------------------------------  -----  ---------  ---------  --------- 
Intangible assets 
-------------------------------------------------  -----  ---------  ---------  --------- 
   Goodwill                                            8    457,057    456,343    246,281 
-------------------------------------------------  -----  ---------  ---------  --------- 
   Other intangible assets                             8    188,249    193,590    154,042 
-------------------------------------------------  -----  ---------  ---------  --------- 
Property, plant and equipment                                11,413     14,454     15,294 
-------------------------------------------------  -----  ---------  ---------  --------- 
Right of use assets                                    9     44,244     53,404     56,732 
-------------------------------------------------  -----  ---------  ---------  --------- 
Investment in associates and joint ventures           10      8,861      8,836      5,271 
-------------------------------------------------  -----  ---------  ---------  --------- 
Other equity investments                              10        163          -          - 
-------------------------------------------------  -----  ---------  ---------  --------- 
Convertible loan note                                             -          -      3,759 
-------------------------------------------------  -----  ---------  ---------  --------- 
Deferred tax assets                                           4,317      4,018      2,486 
-------------------------------------------------  -----  ---------  ---------  --------- 
Retirement benefit asset                                      3,010        566      1,511 
-------------------------------------------------  -----  ---------  ---------  --------- 
Other non-current assets                                        770        422        317 
-------------------------------------------------  -----  ---------  ---------  --------- 
Derivative financial instruments                                 22        307         93 
-------------------------------------------------  -----  ---------  ---------  --------- 
                                                            718,106    731,940    485,786 
-------------------------------------------------  -----  ---------  ---------  --------- 
Current assets 
-------------------------------------------------  -----  ---------  ---------  --------- 
Trade and other receivables                                  84,262     71,428     48,955 
-------------------------------------------------  -----  ---------  ---------  --------- 
Contract assets                                               5,452      1,454      1,457 
-------------------------------------------------  -----  ---------  ---------  --------- 
Current income tax assets                                     4,023     10,602      4,362 
-------------------------------------------------  -----  ---------  ---------  --------- 
Cash and cash equivalents                                    32,495     28,093     49,751 
-------------------------------------------------  -----  ---------  ---------  --------- 
Derivative financial instruments                              1,854        782        219 
-------------------------------------------------  -----  ---------  ---------  --------- 
Total assets of businesses held for sale                          -          -    292,356 
-------------------------------------------------  -----  ---------  ---------  --------- 
                                                            128,086    112,359    397,100 
-------------------------------------------------  -----  ---------  ---------  --------- 
Current liabilities 
-------------------------------------------------  -----  ---------  ---------  --------- 
Acquisition commitments                                        (54)       (15)      (986) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Deferred consideration                                            -          -      (138) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Trade and other payables                                   (43,092)   (27,885)   (43,929) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Lease liabilities                                     12    (9,259)    (9,142)    (8,056) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Current income tax liabilities                             (13,309)   (15,824)   (16,564) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Accruals                                                   (62,291)   (44,013)   (36,285) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Contract liabilities                                      (132,637)  (132,615)   (87,150) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Derivative financial instruments                              (616)      (914)    (3,578) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Provisions                                                  (1,616)    (7,272)      (785) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Total liabilities of businesses held for sale                     -          -   (71,534) 
-------------------------------------------------  -----  ---------  ---------  --------- 
                                                          (262,874)  (237,680)  (269,005) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Net current (liabilities)/assets                          (134,788)  (125,321)    128,095 
-------------------------------------------------  -----  ---------  ---------  --------- 
Total assets less current liabilities                       583,318    606,619    613,881 
-------------------------------------------------  -----  ---------  ---------  --------- 
 
 
Non-current liabilities 
-------------------------------------------------  -----  ---------  ---------  --------- 
Acquisition commitments                                           -          -    (1,640) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Lease liabilities                                     12   (52,430)   (60,999)   (63,548) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Other non-current liabilities                                 (208)      (216)      (227) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Contract liabilities                                        (2,214)    (1,936)    (1,278) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Deferred tax liabilities                                   (30,131)   (26,320)   (16,249) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Retirement benefit obligation                                     -    (3,130)    (7,723) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Derivative financial instruments                              (302)      (134)      (293) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Provisions                                                  (2,963)    (2,848)    (2,845) 
-------------------------------------------------  -----  ---------  ---------  --------- 
                                                           (88,248)   (95,583)   (93,803) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Net assets                                                  495,070    511,036    520,078 
-------------------------------------------------  -----  ---------  ---------  --------- 
 Shareholders' equity 
-------------------------------------------------  -----  ---------  ---------  --------- 
Called up share capital                               13        273        273        273 
-------------------------------------------------  -----  ---------  ---------  --------- 
Share premium account                                       104,637    104,636    104,306 
-------------------------------------------------  -----  ---------  ---------  --------- 
Other reserve                                                64,981     64,981     64,981 
-------------------------------------------------  -----  ---------  ---------  --------- 
Capital redemption reserve                                       56         56         56 
-------------------------------------------------  -----  ---------  ---------  --------- 
Own shares                                                 (14,102)   (14,592)   (19,682) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Reserve for share-based payments                             39,075     38,686     40,120 
-------------------------------------------------  -----  ---------  ---------  --------- 
Fair value reserve                                         (22,415)   (23,528)   (27,087) 
-------------------------------------------------  -----  ---------  ---------  --------- 
Translation reserve                                         105,943    122,431    143,235 
-------------------------------------------------  -----  ---------  ---------  --------- 
Retained earnings                                           216,622    218,093    212,833 
-------------------------------------------------  -----  ---------  ---------  --------- 
Equity shareholders' surplus                                495,070    511,036    519,035 
-------------------------------------------------  -----  ---------  ---------  --------- 
Equity attributable to non-controlling interests                  -          -      1,043 
-------------------------------------------------  -----  ---------  ---------  --------- 
Total equity                                                495,070    511,036    520,078 
-------------------------------------------------  -----  ---------  ---------  --------- 
 
 

1 The balances at 1 October 2019 are as reported on 30 September 2019, adjusted to include the IFRS 16 transition balances reported in note 1 of the 2020 Annual Report and Accounts as well as the IAS 38 IFRIC restatements, disclosed in note 1 of the Preliminary Statement.

The Consolidated Statement of Financial Position at 30 September 2020 has been restated as detailed in note 1.

Approved by the Board of Directors on 17 November 2021.

Consolidated Statement of Changes in Equity

for the year ended 30 September 2021

 
                    Called 
                        up    Share              Capital            Reserve for      Fair 
                     share  premium    Other  redemption       Own  share-based     value  Translation  Retained            Non-controlling     Total 
                   capital  account  reserve     reserve    shares     payments   reserve      reserve  earnings     Total        interests    equity 
                    GBP000   GBP000   GBP000      GBP000    GBP000       GBP000    GBP000       GBP000    GBP000    GBP000           GBP000    GBP000 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 1 October 2019 
 (reported)            273  104,306   64,981          56  (19,682)       40,120  (27,087)      143,243   216,806   523,016            1,043   524,059 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Restatement (note 
 1)                      -        -        -           -         -            -         -          (8)   (3,973)   (3,981)                -   (3,981) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 1 October 2019 
 (restated)            273  104,306   64,981          56  (19,682)       40,120  (27,087)      143,235   212,833   519,035            1,043   520,078 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Profit for the 
 year (restated) 
 (note 1)                -        -        -           -         -            -         -            -    28,608    28,608            (194)    28,414 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Other 
 comprehensive 
 income/(expense) 
 for the year            -        -        -           -         -            -     3,661     (21,206)     2,537  (15,008)                -  (15,008) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Total 
 comprehensive 
 income for the 
 year                    -        -        -           -         -            -     3,661     (21,206)    31,145    13,600            (194)    13,406 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Share-based 
 payments                -        -        -           -         -        (729)         -            -     2,992     2,263                -     2,263 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Cash dividend 
 paid (note 6)           -        -        -           -         -            -         -            -  (23,994)  (23,994)                -  (23,994) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Exercise of 
 acquisition 
 option 
 commitments             -        -        -           -         -            -         -            -       849       849            (849)         - 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Exercise of share 
 options                 -      330        -           -     5,090        (705)         -            -   (4,385)       330                -       330 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Reclassification 
 of reserves             -        -        -           -         -            -     (102)          402     (300)         -                -         - 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Tax relating to 
 items taken 
 directly to 
 equity                  -        -        -           -         -            -         -            -   (1,047)   (1,047)                -   (1,047) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 30 September 
 2020 (restated)       273  104,636   64,981          56  (14,592)       38,686  (23,528)      122,431   218,093   511,036                -   511,036 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Profit for the 
 year                    -        -        -           -         -            -         -            -    12,645    12,645                -    12,645 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Other 
 comprehensive 
 income/(expense) 
 for the year            -        -        -           -         -            -     1,113     (16,488)     3,822  (11,553)                -  (11,553) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Total 
 comprehensive 
 income for the 
 year                    -        -        -           -         -            -     1,113     (16,488)    16,467     1,092                -     1,092 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Share-based 
 payments                -        -        -           -         -          764         -            -         -       764                -       764 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Cash dividend 
 paid (note 6)           -        -        -           -         -            -         -            -  (18,479)  (18,479)                -  (18,479) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Exercise of share 
 options                 -        1        -           -       490        (375)         -            -     (116)         -                -         - 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
VAT on share 
 buy-back                -        -        -           -         -            -         -            -       532       532                -       532 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Tax relating to 
 items taken 
 directly to 
 equity                  -        -        -           -         -            -         -            -       125       125                -       125 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 30 September 
 2021                  273  104,637   64,981          56  (14,102)       39,075  (22,415)      105,943   216,622   495,070                -   495,070 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
 

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 Employee Share Ownership Trust and Euromoney Employee Share Trust.

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 and included in this Preliminary Statement.

 
                                                  2021       2020 
                                                Number     Number 
-------------------------------------------  ---------  --------- 
Euromoney Employees' Share Ownership Trust      58,976     58,976 
-------------------------------------------  ---------  --------- 
Euromoney Employee Share Trust               1,139,807  1,179,662 
-------------------------------------------  ---------  --------- 
Total                                        1,198,783  1,238,638 
-------------------------------------------  ---------  --------- 
Nominal cost per share (p)                        0.25       0.25 
-------------------------------------------  ---------  --------- 
Historical cost per share (GBP)                  11.76      11.78 
-------------------------------------------  ---------  --------- 
Market value (GBP000)                           12,180      9,946 
-------------------------------------------  ---------  --------- 
 

Consolidated Statement of Cash Flows

for the year ended 30 September 2021

 
                                                                                        Restated 
                                                                                  2021      2020 
                                                                       Notes    GBP000    GBP000 
---------------------------------------------------------------------  -----  --------  -------- 
Cash flow from operating activities 
---------------------------------------------------------------------  -----  --------  -------- 
Operating profit                                                                31,132    30,594 
---------------------------------------------------------------------  -----  --------  -------- 
Long-term incentive expense and salary deferral                                    764     2,261 
---------------------------------------------------------------------  -----  --------  -------- 
Acquired intangible amortisation                                           8    19,020    23,039 
---------------------------------------------------------------------  -----  --------  -------- 
Licences and software amortisation                                         8     2,920     2,017 
---------------------------------------------------------------------  -----  --------  -------- 
Depreciation and impairment of property, plant and equipment                     2,821     2,908 
---------------------------------------------------------------------  -----  --------  -------- 
Depreciation and impairment of right of use assets                         9     9,031     7,785 
---------------------------------------------------------------------  -----  --------  -------- 
Recycling of foreign exchange                                              3     1,183         - 
---------------------------------------------------------------------  -----  --------  -------- 
(Profit)/loss on disposal of property, plant and equipment                        (33)       115 
---------------------------------------------------------------------  -----  --------  -------- 
Impairment of intangible assets                                            3         -     1,727 
---------------------------------------------------------------------  -----  --------  -------- 
(Decrease)/increase in provisions                                              (5,469)     6,389 
---------------------------------------------------------------------  -----  --------  -------- 
Operating cash flows before movements in working capital                        61,369    76,835 
---------------------------------------------------------------------  -----  --------  -------- 
(Increase)/decrease in receivables                                            (16,601)     1,752 
---------------------------------------------------------------------  -----  --------  -------- 
Increase/(decrease) in payables                                                 22,553  (25,099) 
---------------------------------------------------------------------  -----  --------  -------- 
Cash generated from operations                                                  67,321    53,488 
---------------------------------------------------------------------  -----  --------  -------- 
Income taxes paid                                                              (3,761)   (7,139) 
---------------------------------------------------------------------  -----  --------  -------- 
Net cash generated from operating activities                                    63,560    46,349 
---------------------------------------------------------------------  -----  --------  -------- 
 
Investing activities 
---------------------------------------------------------------------  -----  --------  -------- 
Interest received                                                                   36       310 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of intangible assets                                              8   (4,620)   (5,230) 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of property, plant and equipment                                        (269)   (1,967) 
---------------------------------------------------------------------  -----  --------  -------- 
Proceeds from disposal of property, plant and equipment                             96       507 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of businesses/subsidiary undertakings, net of cash acquired      11  (24,165)  (23,999) 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of long-term investment                                                 (109)         - 
---------------------------------------------------------------------  -----  --------  -------- 
Receipt of deferred consideration                                                    -       176 
---------------------------------------------------------------------  -----  --------  -------- 
Payment of deferred consideration                                                    -     (134) 
---------------------------------------------------------------------  -----  --------  -------- 
Net cash used in investing activities                                         (29,031)  (30,337) 
---------------------------------------------------------------------  -----  --------  -------- 
 
Financing activities 
---------------------------------------------------------------------  -----  --------  -------- 
Dividends paid                                                             6  (18,479)  (23,994) 
---------------------------------------------------------------------  -----  --------  -------- 
Interest paid                                                                  (2,632)   (2,130) 
---------------------------------------------------------------------  -----  --------  -------- 
Capital element of lease repayments                                            (8,005)   (6,071) 
---------------------------------------------------------------------  -----  --------  -------- 
Interest element of lease repayments                                           (1,774)   (1,985) 
---------------------------------------------------------------------  -----  --------  -------- 
Issue of new share capital                                                13         1       330 
---------------------------------------------------------------------  -----  --------  -------- 
Increase in borrowings                                                          50,000    67,857 
---------------------------------------------------------------------  -----  --------  -------- 
Repayment of borrowings                                                       (50,000)  (68,737) 
---------------------------------------------------------------------  -----  --------  -------- 
Recovery of VAT on share buy-back costs                                            532         - 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of additional interest in subsidiary undertakings                11         -     (883) 
---------------------------------------------------------------------  -----  --------  -------- 
Net cash used in financing activities                                         (30,357)  (35,613) 
---------------------------------------------------------------------  -----  --------  -------- 
 
Net increase/(decrease) in cash and cash equivalents                             4,172  (19,601) 
---------------------------------------------------------------------  -----  --------  -------- 
Cash and cash equivalents at beginning of year                                  28,093    50,078 
---------------------------------------------------------------------  -----  --------  -------- 
Effect of foreign exchange rate movements                                          230   (2,384) 
---------------------------------------------------------------------  -----  --------  -------- 
Cash and cash equivalents at end of year                                        32,495    28,093 
---------------------------------------------------------------------  -----  --------  -------- 
 
 

Notes to the Preliminary Statement

1 Basis of preparation

While the financial information contained in this Preliminary Announcement has been prepared in accordance with the recognition and measurement criteria of International Accounting Standards in conformity with the requirements of the Companies Act 2006 (IFRS), the applicable legal requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, this announcement does not itself contain sufficient information to comply with IFRS.

The information for the year ended 30 September 2021 does not constitute statutory accounts for the purposes of section 435 of the Companies Act 2006. A copy of the accounts for the year ended 30 September 2020 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. The accounts for the year ended 30 September 2021 have been audited and finalised on the basis of the financial information presented by the Directors in this Preliminary Statement and will be delivered to the Registrar of Companies following the Annual General Meeting.

Accounting Policies

The consolidated financial statements have 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 financial statements as were applied in the Group's 2020 annual audited financial statements, except as described below.

 
 --   Amendment to IFRS 16 'Leases' Covid 19- Related Rent Concessions 
       - mandatory for reporting periods starting on or after 1 June 
       2020 
 --   Amendment to IFRS 3 'Business Combinations' - mandatory for 
       reporting periods starting on or after 1 January 2020 
 --   Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark 
       Reform - Phase 1 - mandatory for reporting periods starting 
       on or after 1 January 2020 - this addresses the accounting 
       consequences for hedges impacted by the phasing out of certain 
       benchmark interest rates. The Group has no such hedges and 
       this amendment had no effect on the Group 
 --   Amendments to IAS 1 and IAS 8: Definition of Material - mandatory 
       for reporting periods starting on or after 1 January 2020 
 --   Amendments to References to the Conceptual Framework in IFRS 
       Standards - mandatory for reporting periods starting on or 
       after 1 January 2020 
 --   International Financial Reporting Interpretations Committee 
       (IFRIC) agenda decision on IAS 38 'Intangible Assets' relating 
       to configuration and customisation costs in a cloud computing 
       arrangement. This interpretation has a material impact on this 
       Preliminary Statement as disclosed on page 30 
  Certain changes to IFRS will be applicable to the Group Financial 
   Statements in future years. Set out below are those which are 
   considered to be most relevant to the Group 
  Relevant new standards, amendments and interpretations issued 
   but effective subsequent to the year end: 
 
 
 --   Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16 Interest Rate 
       Benchmark Reform - Phase 2 - the mandatory effective date of 
       implementation is 1 January 2021 - this addresses the consequences 
       of amending financial instruments, hedges and leases impacted 
       by the phasing out of certain benchmark interest rates. The 
       Group will adopt this amendment on 1 October 2021. The effects 
       of this amendment on the Group's financial instruments and 
       leases are explained in the IFRS 9 and IFRS 16 sections below 
 --   Amendments to IFRS 16 Leases: Covid-19- Related Rent Concessions 
       beyond 30 June 2021 - the mandatory effective date of implementation 
       is 1 April 2021 
 --   Amendments to IFRS 3 Business Combinations; IAS 16 Property, 
       Plant and Equipment; IAS 37 Provisions, Contingent Liabilities 
       and Contingent Assets; and Annual Improvements 2018-2020 - 
       the mandatory effective date of implementation is 1 January 
       2022 
 As at 30 September 2021, the following standards have not been 
  endorsed: 
 --   Amendments to IAS 1 Presentation of Financial Statements: Classification 
       of Liabilities as Current or Non-current - the mandatory effective 
       date of implementation is 1 January 2023 
 --   Amendments to IAS 1 Presentation of Financial Statements and 
       IFRS Practice Statement 2: Disclosure of Accounting policies 
       - the mandatory effective date of implementation is 1 January 
       2023 
 --   Amendments to IAS 8 Accounting policies, Changes in Accounting 
       Estimates and Errors: Definition of Accounting Estimates - 
       the mandatory effective date of implementation is 1 January 
       2023 
 

IFRS 9 'Financial Instruments'

The standard is being amended for periods beginning from 1 January 2021 in response to the phasing out of certain benchmark interest rates. The amendments cover how to account for changes in contractual cash flows or hedging relationships for financial instruments affected by the replacement of benchmark interest rates. During the period, the Group has not designated any risk components of alternative benchmark rates in any hedge relationships. The Group does not hold any other financial instruments exposed to alternative benchmark rates, except the GBP190m multi-currency committed facility as at 30 September 2021 which references GBP, EUR and USD LIBOR rates. The committed facility will transition to the relevant alternative reference rate at the point of the cessation of the impacted LIBOR rate. The Group does not expect that any transition adjustments will be required.

IFRS 16 'Leases'

The standard is being amended for periods beginning from 1 January 2021 in response to the phasing out of certain benchmark interest rates. The amendments cover how to account for changes in the value of lease liabilities in instances where there are future variable lease payments whose value is specified with reference to benchmark interest rates which are being phased out. An assessment of the Group's leases has been carried out and no transition adjustments have been identified. This is because the majority of the Group's leases do not contain variable lease payments and the agreements that do refer to interest rates which are not being phased out.

Basis of preparation

Having assessed the principal risks and the other matters discussed in connection with the viability statement, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing this Preliminary Statement.

Going concern, debt covenants and liquidity

At 30 September 2021, the Group's unlevered, net cash position excluding lease liabilities was GBP32.5m comprising cash and cash equivalents. At 30 September 2021, the Group had access to a committed GBP190m multi-currency revolving credit facility and is available until May 2024, with two additional one-year extension options available. The facility's covenants require the Group's net debt to be no more than three times adjusted 12-month EBITDA though this can increase to three and a half times for certain periods in the event of an acquisition and requires minimum levels of interest cover of three times on a 12-month basis. The values and foreign exchange rates used in the covenant calculations are subject to adjustments from the statutory numbers as defined under the terms of the facility agreement.

The uncertainty as to the future impact on the Group around the speed and shape of the covid-19 recovery has been considered as part of the Group's adoption of the going concern basis. The Group has not identified any material uncertainties in its going concern assessment.

Taking into account reasonably possible changes in trading performance, the Group's forecasts and projections, out to the going concern assessment period of 12 months from the date of signing the Financial Statements, show that the Group should be able to operate within the level and covenants of its current and available borrowing facilities.

In making the going concern assessment, the Directors have also modelled a severe but plausible downside that assumes no physical events during the going concern period, plus a fall of 5% in total revenue and a 5% fall in the operating margin of non-events business during this period versus the plan. The Group's net cash position provides a strong foundation on which to model this downside scenario. This scenario shows sufficient headroom against the Group's banking covenants and demonstrates sufficient resilience to these adverse events mainly due to the Group's robust capital position and strong cash-generative nature, before management taking any mitigating actions to reduce the impact on the financial results.

Climate change

In preparing the Preliminary Statements management has considered the impact of climate change, particularly in the context of the disclosures included in the Strategic Report this year. These considerations did not have a material impact on the financial reporting judgements and estimates.

Management has considered the impact of climate change on the future cash flow forecasts used in the impairment assessments of the carrying value of non-current assets, such as goodwill and intangible assets (see note 8).

Restatements

Intangible assets

In March 2021, IFRIC issued an agenda decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets'. In response to the IFRIC update the Group's accounting policy on intangibles assets have been updated, specifically to disallow the capitalisation of costs incurred in the implementation of 'software as a service' (SaaS) solutions. This change in accounting policy is applied retrospectively and the impact on the Group's financial statements is summarised below:

 
 
                                                           2019                                     2020 
-----------------  -----------------  ----------------------------------------------  -------------------------------- 
                                                GBP000      GBP000            GBP000     GBP000      GBP000     GBP000 
-----------------  -----------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
Statements         Line item                1 Oct 2019  Adjustment        1 Oct 2019       2020  Adjustment       2020 
adjusted                                      reported                      restated   reported               restated 
-----------------  -----------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
                   Operating profit 
                    before acquired 
                    intangible 
                    amortisation and 
Consolidated        exceptional 
 Income Statement   items(1)                         -           -                 -     61,481     (3,037)     58,444 
-----------------  -----------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Tax expense on profit                               -           -                 -    (2,125)         667    (1,458) 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Basic EPS (total)                                   -           -                 -       28.8      (2.20)       26.6 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Diluted EPS (total)                                 -           -                 -       28.8      (2.20)       26.6 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
Consolidated 
 Statement of 
 Financial 
 Position and 
 Consolidated 
 Statement of 
 Changes in        Other intangible 
 Equity             assets                     159,140     (5,098)           154,042    201,713     (8,123)    193,590 
-----------------  -----------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Deferred tax liabilities                     (17,366)       1,117          (16,249)   (28,104)       1,784   (26,320) 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Translation reserves                          143,243         (8)           143,235    122,427           4    122,431 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Retained earnings                             216,806     (3,973)           212,833    224,436     (6,343)    218,093 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
Consolidated 
 Statement of 
 Cash Flows        Operating profit                  -           -                 -     33,631     (3,037)     30,594 
-----------------  -----------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Licenses and software amortisation                  -           -                 -      2,860       (843)      2,017 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 Purchase of intangible assets                       -           -                 -    (9,110)       3,880    (5,230) 
 -----------------------------------  ----------------  ----------  ----------------  ---------  ----------  --------- 
 

1 All of the adjustment relates to administrative expenses.

2 Segmental analysis

The analysis by segment is presented in accordance with IFRS 8 'Operating Segments', on the basis of those segments whose operating results are regularly reviewed by the Chief Executive, who act as the Chief Operating Decision Maker (CODM) as defined by IFRS 8.

Segmental information is presented in respect of the Group's divisions and reflects the Group's management and internal reporting structure. The Group is organised into three divisions: Fastmarkets; Financial & Professional Services (FPS); and Asset Management previously called Pricing, Data & Market Intelligence and Asset Management respectively.

Revenues generated in the Fastmarkets division are primarily from subscriptions. FPS and Asset Management revenues consist mainly of subscriptions and events. A breakdown of the Group's revenue by type is set out below. Advertising revenue is included in other revenue.

From the 1 October 2020, the Group has simplified revenue reporting, to align with the Group's strategic objectives, and within Asset Management has re-categorised Institutional Investor's events-based memberships from subscriptions to events revenue. In addition, there has been a reclassification of some revenues in FPS from subscriptions to other revenue, to reflect the primary nature of the revenue type. The comparative split of divisional revenues and revenue by type have been restated to reflect these reclassifications.

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

 
                                                                                  Total 
                                              Subscriptions   Events    Other   revenue 
2021                                                 GBP000   GBP000   GBP000    GBP000 
--------------------------------------------  -------------  -------  -------  -------- 
Revenue by division and type: 
--------------------------------------------  -------------  -------  -------  -------- 
Fastmarkets                                          79,802    2,706    2,915    85,423 
--------------------------------------------  -------------  -------  -------  -------- 
Financial & Professional Services                    87,131   28,990   22,322   138,443 
--------------------------------------------  -------------  -------  -------  -------- 
Asset Management                                     67,612   29,199   12,993   109,804 
--------------------------------------------  -------------  -------  -------  -------- 
                                                    234,545   60,895   38,230   333,670 
--------------------------------------------  -------------  -------  -------  -------- 
Foreign exchange gains on forward contracts               -        -    2,391     2,391 
--------------------------------------------  -------------  -------  -------  -------- 
Revenue                                             234,545   60,895   40,621   336,061 
--------------------------------------------  -------------  -------  -------  -------- 
 
 
                                                 Restated (1)  Restated(1)  Restated(1)     Total 
                                                subscriptions       events        other   revenue 
2020                                                   GBP000       GBP000       GBP000    GBP000 
---------------------------------------------  --------------  -----------  -----------  -------- 
Revenue by division and type: 
---------------------------------------------  --------------  -----------  -----------  -------- 
Fastmarkets                                            73,927        6,620        3,120    83,667 
---------------------------------------------  --------------  -----------  -----------  -------- 
Financial & Professional Services                      71,122       41,343       21,646   134,111 
---------------------------------------------  --------------  -----------  -----------  -------- 
Asset Management                                       74,433       33,013       11,332   118,778 
---------------------------------------------  --------------  -----------  -----------  -------- 
                                                      219,482       80,976       36,098   336,556 
---------------------------------------------  --------------  -----------  -----------  -------- 
Foreign exchange losses on forward contracts                -            -      (1,300)   (1,300) 
---------------------------------------------  --------------  -----------  -----------  -------- 
Revenue                                               219,482       80,976       34,798   335,256 
---------------------------------------------  --------------  -----------  -----------  -------- 
 

1 For the year ended 30 September 2020, GBP27.2m of revenue previously classified as subscriptions within Asset Management has been reclassified as events revenue. In addition to this, GBP1.7m of subscriptions revenue previously reported within Financial & Professional Services has been reclassified as other revenue. The reclassification has not changed total revenue for the period.

Events revenue of GBP37.6m (2020: GBP53.8m) and print advertising of GBP4.8m (2020: GBP7.9m) are recognised at a point in time. The remaining subscription, events-based memberships and online advertising revenues are recognised over time.

 
                               United Kingdom    North America     Rest of World      Eliminations         Total 
                                 2021     2020     2021     2020     2021     2020     2021     2020     2021     2020 
                               GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Revenue by division and 
source: 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Fastmarkets                    39,332   36,314   44,450   44,207    1,757    3,277    (116)    (131)   85,423   83,667 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Financial & Professional 
 Services                      91,877  102,585   45,920   31,834    9,387    9,499  (8,741)  (9,807)  138,443  134,111 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Asset Management                    -        -  109,806  118,834                 -      (2)     (56)  109,804  118,778 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Foreign exchange 
 gains/(losses) on forward 
 contracts                      2,391  (1,300)        -        -        -        -        -        -    2,391  (1,300) 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Revenue                       133,600  137,599  200,176  194,875   11,144   12,776  (8,859)  (9,994)  336,061  335,256 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
Revenue by destination         61,186   48,784  171,062  173,458  103,813  113,014        -        -  336,061  335,256 
----------------------------  -------  -------  -------  -------  -------  -------  -------  -------  -------  ------- 
 
 
                                           United Kingdom      North America       Rest of World          Total 
---------------------------------------  ------------------  ------------------  -----------------  ------------------ 
                                             2021   2020(1)      2021   2020(1)      2021  2020(1)      2021   2020(1) 
                                           GBP000    GBP000    GBP000    GBP000    GBP000   GBP000    GBP000    GBP000 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Operating profit (1) by division and 
source: 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Fastmarkets                                12,410    13,488    23,700    22,532   (5,681)  (4,336)    30,429    31,684 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Financial & Professional Services          15,151    18,351    13,255     4,642   (3,860)  (2,892)    24,546    20,101 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Asset Management                                -         -    42,481    44,628         -        -    42,481    44,628 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Unallocated corporate costs              (30,883)  (36,218)     (612)   (1,481)     (704)    (270)  (32,199)  (37,969) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Operating profit before acquired 
 intangible amortisation and 
 exceptional items                        (3,322)   (4,379)    78,824    70,321  (10,245)  (7,498)    65,257    58,444 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Acquired intangible amortisation(2) 
 (note 8)                                 (4,142)   (4,180)  (14,840)  (18,821)      (38)     (38)  (19,020)  (23,039) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Exceptional items (note 3)                (2,780)     6,033  (12,342)  (10,732)        17    (112)  (15,105)   (4,811) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Operating profit/(loss)                  (10,244)   (2,526)    51,642    40,768  (10,266)  (7,648)    31,132    30,594 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Share of results in associates (note 
 10)                                                                                                      25     (495) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Finance income (note 4)                                                                                   46     4,141 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Finance expense (note 4)                                                                             (4,558)   (4,368) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Profit before tax                                                                                     26,645    29,872 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Tax expense on profit (note 5)                                                                      (14,000)   (1,458) 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
Profit for the year                                                                                   12,645    28,414 
---------------------------------------  --------  --------  --------  --------  --------  -------  --------  -------- 
 
 
 
 1    The operating profit for 30 September 2020 has been restated 
       to reflect the impact of the IFRIC decision on configuration 
       and customisation costs in a cloud computing arrangement relating 
       to IAS 38 'Intangible Assets' (note 1). 
 2    Acquired intangible amortisation represents amortisation of 
       acquisition-related non-goodwill assets such as trademarks and 
       brands, customer relationships, databases and software (note 
       8). Following a review of balances, the comparatives have been 
       represented to correct the geographic areas classification, 
       moving GBP1,2m of the total amortisation from United Kingdom 
       to North America. 
 
 
                                                                               Restated depreciation and amortisation 
                      Acquired intangible amortisation    Exceptional items                     (1) 
-------------------  ----------------------------------  -------------------  ---------------------------------------- 
                                 2021              2020        2021     2020                 2021                 2020 
                               GBP000            GBP000      GBP000   GBP000               GBP000               GBP000 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Other segmental 
information by 
division: 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Fastmarkets                   (6,415)           (6,783)     (3,809)  (1,689)              (3,184)              (1,524) 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Financial & 
 Professional 
 Services                     (8,181)           (6,440)     (7,798)  (6,874)              (3,488)              (1,196) 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Asset Management              (4,424)           (9,638)       (461)  (8,748)                (633)              (2,366) 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Sold/closed 
 businesses                         -                 -           -      173                    -                    - 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Unallocated 
 corporate costs                    -             (178)     (3,037)   12,327              (7,467)              (7,624) 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
Total                        (19,020)          (23,039)    (15,105)  (4,811)             (14,772)             (12,710) 
-------------------  ----------------  ----------------  ----------  -------  -------------------  ------------------- 
 
 

1 The amortisation for 30 September 2020 has been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets' (note 1).

The closing net book value of goodwill, other intangible assets, property, plant and equipment, right of use assets and investments is analysed by geographic area as follows:

 
                                              United Kingdom    North America     Rest of World         Total 
                                                2021     2020     2021     2020     2021     2020     2021     2020 
                                              GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Goodwill                                     110,973  110,972  341,409  340,601    4,675    4,770  457,057  456,343 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Other intangible assets(1, 2)                 33,189   35,572  154,672  157,570      388      448  188,249  193,590 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Property, plant and equipment                  3,540    4,109    7,561    9,756      312      589   11,413   14,454 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Right of use assets                           18,862   21,906   23,103   28,632    2,279    2,866   44,244   53,404 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Investments                                    8,861    8,836      163        -        -        -    9,024    8,836 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Non-current assets (2)                       175,425  181,395  526,908  536,559    7,654    8,673  709,987  726,627 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Additions to property, plant and equipment      (43)    (251)     (51)  (1,886)    (516)    (446)    (610)  (2,582) 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Additions to right of use assets                   -  (1,914)      (4)  (1,860)    (530)    (789)    (534)  (4,564) 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Additions to other intangible assets(1)      (3,161)  (2,928)  (1,459)  (2,302)        -        -  (4,620)  (5,230) 
-------------------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
 
 
 1   The other intangible assets at 30 September 2020 has been 
      restated to reflect the impact of the IFRIC decision on configuration 
      and customisation costs in a cloud computing arrangement relating 
      to IAS 38 'Intangible Assets' (note 1). 
 2   Following a review of balances, the comparatives have been 
      represented to correct the geographic areas classification. 
      This resulted in the reclassification of GBP15.9m of non-current 
      assets from United Kingdom to North America (GBP13.7m) and 
      Rest of World (GBP2.2m). Of the GBP15.9m, GBP14.0m of other 
      intangible assets were reclassified from United Kingdom to 
      North America. 
 

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 CODM in operational decision making or monitoring of business performance.

3 Exceptional items

Exceptional items are items of income or expense considered by the Directors as being significant, non-recurring and which require additional disclosure in order to provide an indication of the underlying trading performance of the Group.

 
                                                                 2021      2020 
                                                               GBP000    GBP000 
-----------------------------------------------------------  --------  -------- 
Restructuring                                                 (2,291)   (8,954) 
-----------------------------------------------------------  --------  -------- 
Recycling of foreign exchange                                 (1,183)         - 
-----------------------------------------------------------  --------  -------- 
Right of use and property, plant and equipment impairments    (3,014)         - 
-----------------------------------------------------------  --------  -------- 
Other exceptional costs                                       (8,617)  (10,906) 
-----------------------------------------------------------  --------  -------- 
VAT provision release                                               -    10,633 
-----------------------------------------------------------  --------  -------- 
Payroll taxes provision release                                     -     6,143 
-----------------------------------------------------------  --------  -------- 
Impairment charges                                                  -   (1,727) 
-----------------------------------------------------------  --------  -------- 
                                                             (15,105)   (4,811) 
-----------------------------------------------------------  --------  -------- 
 

For the year ended 30 September 2021, the Group recognised exceptional costs of GBP15.1m.

Costs of GBP2.3m as a result of the major restructuring across the Group are included in exceptional items. No further costs will be treated as exceptional in relation to this major restructuring. The costs comprise severance costs and professional costs associated with the restructuring. Normal restructuring costs of GBP0.4m are not treated as exceptional items.

Foreign exchange gains/losses were recycled from equity to exceptional items amounting to GBP1.2m. This relates to foreign exchange gains/losses on quasi-equity loans and net investment hedging that had been deferred to equity in previous years. These amounts have been recycled because the net investment or party to the quasi-equity loan is no longer part of the Group. As these items are not material, no restatement has been made.

An impairment of right of use assets and property, plant and equipment of GBP3.0m has been recognised in exceptional items, due to management's intention to vacate a number of properties across the Group.

Other exceptional costs of GBP8.6m consist of expenditure associated with acquisition related costs of GBP7.9m, mainly for Wealth-X, AgriCensus, WealthEngine, The Jacobsen and RelSci (note 11) treated as exceptional due to the magnitude of the costs. The recognition of the earn-out payments of GBP0.6m for the acquisitions of AgriCensus are treated as compensation costs and included in exceptional items. Also included are costs of GBP0.4m incurred to support the strategic review of Asset Management. A recovery of VAT of GBP0.3m is also included relating to a reclaim in respect of share buy-back related expenditure previously recorded in exceptional items.

The Group's tax charge includes a related tax credit on exceptional items of GBP3.1m (note 5).

Management has consistently applied its definition of exceptional items in 2021 and 2020 and has made no adjustments to capture incremental costs associated with covid-19.

For the year ended 30 September 2020, the Group recognised exceptional costs of GBP4.8m.

Costs of GBP9.0m as a result of the major restructuring across the Group were included in exceptional items. A provision of GBP7.0m was recognised during the year ended 30 September 2020 for exceptional severance costs associated with the restructuring programme announced in September 2020. Normal restructuring costs of GBP0.6m were not treated as exceptional items.

Other exceptional costs consisted of expenditure associated with the acquisition of BoardEx and The Deal, Wealth-X and AgriCensus, and were treated as exceptional due to the magnitude of the costs. Also included are costs incurred to support the strategic review of Asset Management as well as significant costs associated with an acquisition that did not complete. The recognition of the earn-out payments for the acquisition of Site Seven Media Ltd (TowerXchange) and AgriCensus are treated as compensation costs and included in exceptional items.

The Group released a provision of GBP10.6m originally recognised in the 2019 Financial Statements in respect of UK VAT on supplies between UK Group companies for the four years ended 30 September 2018. The potential exposure was identified during the second half of the 2019 financial year and after discussing the matter with HMRC during the first half of 2020, the Group was notified on 11 May 2020 by HMRC that no VAT was due on these supplies.

The Group released GBP6.1m of the GBP8.2m provision held in respect of payroll taxes with an additional GBP0.6m release for interest as an adjusted finance item (note 4). This provision was originally recognised in the 2019 Annual Report and Accounts with a restatement for previously unidentified liabilities for payroll taxes covering the six years to 30 September 2019. Following a meeting with HMRC in February 2020, a settlement amount of GBP1.2m was agreed in April 2020 and the Group incurred GBP0.3m of professional fees.

Following the impairment review assessment, an impairment of GBP1.7m was recognised relating to the customer relationships of Broadmedia and Layer123 due to the low than expected retention rates.

The Group's tax charge includes a related tax credit on exceptional items of GBP0.1m (note 5).

4 Finance income and expense

 
                                                          2021     2020 
                                                        GBP000   GBP000 
-----------------------------------------------------  -------  ------- 
Finance income 
-----------------------------------------------------  -------  ------- 
   Interest receivable from short-term investments          46      291 
-----------------------------------------------------  -------  ------- 
   Movements in acquisition commitments                      -    1,728 
-----------------------------------------------------  -------  ------- 
   Fair value remeasurements                                 -      130 
-----------------------------------------------------  -------  ------- 
   Interest on tax                                           -    1,988 
-----------------------------------------------------  -------  ------- 
   Movements in deferred consideration                       -        4 
-----------------------------------------------------  -------  ------- 
                                                            46    4,141 
-----------------------------------------------------  -------  ------- 
Finance expense 
   Interest payable on borrowings                      (2,212)  (1,813) 
-----------------------------------------------------  -------  ------- 
   Interest on lease liabilities                       (1,774)  (1,985) 
-----------------------------------------------------  -------  ------- 
   Net interest expense on defined benefit liability      (46)    (136) 
-----------------------------------------------------  -------  ------- 
   Movements in acquisition commitments                   (39)        - 
-----------------------------------------------------  -------  ------- 
   Interest on tax                                       (487)    (434) 
-----------------------------------------------------  -------  ------- 
                                                       (4,558)  (4,368) 
-----------------------------------------------------  -------  ------- 
Net finance costs                                      (4,512)    (227) 
-----------------------------------------------------  -------  ------- 
 
 
                                                                                           2021     2020 
                                                                                         GBP000   GBP000 
--------------------------------------------------------------------------------------  -------  ------- 
Reconciliation of net finance costs in Income Statement to adjusted net finance costs 
--------------------------------------------------------------------------------------  -------  ------- 
Net finance costs in Income Statement                                                   (4,512)    (227) 
--------------------------------------------------------------------------------------  -------  ------- 
Add back: 
--------------------------------------------------------------------------------------  -------  ------- 
   Movements in acquisition commitments                                                      39  (1,728) 
--------------------------------------------------------------------------------------  -------  ------- 
   Movements in deferred consideration                                                        -      (4) 
--------------------------------------------------------------------------------------  -------  ------- 
   Fair value remeasurements                                                                  -    (130) 
--------------------------------------------------------------------------------------  -------  ------- 
   Interest on tax                                                                          272  (1,681) 
--------------------------------------------------------------------------------------  -------  ------- 
                                                                                            311  (3,543) 
--------------------------------------------------------------------------------------  -------  ------- 
Adjusted net finance costs                                                              (4,201)  (3,770) 
--------------------------------------------------------------------------------------  -------  ------- 
 
 

The reconciliation of net finance 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.

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.

Interest on tax excluded from the adjusted net finance expense consist of an interest charge of GBP0.3m (2020: GBP0.5m income) for movements in respect of uncertain tax positions. At 30 September 2020, finance income of GBP1.2m from the release of a provision for interest on payroll taxes amounting to GBP0.6m and interest on VAT liabilities of GBP0.6m were excluded as the related income is not expected to recur.

During the year ended 30 September 2020, the Group's convertible loan note asset was measured at fair value through profit or loss (FVTPL), until it was converted to equity. The fair value remeasurement was an adjusting item as it relates to historical M&A activity rather than the current trading performance and is as a result of the revaluation of the convertible loan note as at 30 September 2019 and up to its conversion on 24 January 2020.

5 Tax expense on profit

 
                                                 Restated 
                                           2021      2020 
                                         GBP000    GBP000 
--------------------------------------  -------  -------- 
Current tax expense 
--------------------------------------  -------  -------- 
UK corporation tax (income)/expense     (1,292)     2,121 
--------------------------------------  -------  -------- 
Foreign tax expense                      12,831     8,254 
--------------------------------------  -------  -------- 
Adjustments in respect of prior years       579   (6,859) 
--------------------------------------  -------  -------- 
                                         12,118     3,516 
--------------------------------------  -------  -------- 
Deferred tax expense/(income) 
--------------------------------------  -------  -------- 
Current year                                183   (3,261) 
--------------------------------------  -------  -------- 
Adjustments in respect of prior years      (70)     1,233 
--------------------------------------  -------  -------- 
Change in rate of deferred tax            1,769      (30) 
--------------------------------------  -------  -------- 
                                          1,882   (2,058) 
--------------------------------------  -------  -------- 
Tax expense in Income Statement          14,000     1,458 
--------------------------------------  -------  -------- 
Effective tax rate                          53%        5% 
--------------------------------------  -------  -------- 
 

Reconciliation of tax expense in Income Statement to adjusted tax expense

The adjusted effective tax rate for the year is set out below:

 
                                                                                     Restated 
                                                                               2021      2020 
                                                                             GBP000    GBP000 
--------------------------------------------------------------------------  -------  -------- 
Reconciliation of tax expense in Income Statement to adjusted tax expense 
--------------------------------------------------------------------------  -------  -------- 
Total tax expense in Income Statement                                        14,000     1,458 
--------------------------------------------------------------------------  -------  -------- 
Add back: 
--------------------------------------------------------------------------  -------  -------- 
   Tax on acquired intangible amortisation                                    3,002     4,011 
--------------------------------------------------------------------------  -------  -------- 
   Tax on exceptional items                                                   3,111        76 
--------------------------------------------------------------------------  -------  -------- 
   Other tax adjusting items                                                (5,994)     1,408 
--------------------------------------------------------------------------  -------  -------- 
   Deferred tax on goodwill and intangible amortisation                     (1,421)   (1,624) 
--------------------------------------------------------------------------  -------  -------- 
   Share of tax on profits of associates and joint ventures                      67      (65) 
--------------------------------------------------------------------------  -------  -------- 
   Adjustments in respect of prior years                                      (509)     5,626 
--------------------------------------------------------------------------  -------  -------- 
                                                                            (1,744)     9,432 
--------------------------------------------------------------------------  -------  -------- 
Adjusted tax expense                                                         12,256    10,890 
--------------------------------------------------------------------------  -------  -------- 
 
Adjusted profit before tax                                                   61,410    54,333 
--------------------------------------------------------------------------  -------  -------- 
Adjusted effective tax rate                                                     20%       20% 
--------------------------------------------------------------------------  -------  -------- 
 

The Group presents the above adjusted effective tax rate reconciliation to help users of this report better understand its tax charge. Tax on exceptional items is excluded as these items are adjusted in accordance with Group policy. For the year ended 30 September 2021, tax on exceptional items relates largely to the tax charge arising on Group restructuring and redundancy costs, legal and professional fees in relation to investment acquisitions.

Adjustments in respect of prior years are also removed from the adjusted tax expense as they do not relate to current year underlying trading. Share of tax on profits of associates and joint ventures is calculated on the adjusted profits of associates and joint ventures and excludes tax on exceptional items consistent with the Group's approach and policy.

The Group excludes the deferred tax impact of amortisation of intangibles and goodwill as any deferred tax on these items would only crystallise in the event of a disposal and that is not the current intention.

Other tax adjusting items comprise the removal of the impact of GBP3.6m Canadian withholding tax on intragroup dividends and deferred tax charges of GBP4.1m arising from restructuring during the year, with the balance being the removal of a net deferred tax credit from tax rate changes in the UK and US.

The actual tax expense for the year is different from the UK rate of 19% of profit before tax for the reasons set out in the following reconciliation:

 
                                                                                   Restated 
                                                                             2021      2020 
                                                                           GBP000    GBP000 
------------------------------------------------------------------------  -------  -------- 
Profit before tax                                                          26,645    29,872 
------------------------------------------------------------------------  -------  -------- 
 
Tax at 19.0% (2020: 19.0%)                                                  5,063     5,676 
------------------------------------------------------------------------  -------  -------- 
Factors affecting tax charge: 
------------------------------------------------------------------------  -------  -------- 
Different tax rates of subsidiaries operating in overseas jurisdictions     2,551     1,957 
------------------------------------------------------------------------  -------  -------- 
Share of tax on associates and joint ventures                                (64)        25 
------------------------------------------------------------------------  -------  -------- 
Non-taxable income                                                          (311)     (193) 
------------------------------------------------------------------------  -------  -------- 
Goodwill and intangibles                                                    (119)      (63) 
------------------------------------------------------------------------  -------  -------- 
Non-recoverable withholding tax                                             3,635         - 
------------------------------------------------------------------------  -------  -------- 
Recognition of deferred tax                                                   357   (1,897) 
------------------------------------------------------------------------  -------  -------- 
Derecognition of deferred tax                                               2,600       516 
------------------------------------------------------------------------  -------  -------- 
Remeasurement of deferred tax                                               1,526         - 
------------------------------------------------------------------------  -------  -------- 
Disallowable expenditure                                                      532     1,476 
------------------------------------------------------------------------  -------  -------- 
Other timing differences                                                    (519)     (383) 
------------------------------------------------------------------------  -------  -------- 
Impact of change in rate                                                  (1,760)      (30) 
------------------------------------------------------------------------  -------  -------- 
Adjustments in respect of prior years                                         509   (5,626) 
------------------------------------------------------------------------  -------  -------- 
Total tax expense for the year                                             14,000     1,458 
------------------------------------------------------------------------  -------  -------- 
 
 

The drivers of the effective tax rate for the period include tax charges arising on disallowable expenses, such as non-deductible legal and professional fees incurred in respect of the acquisition of WealthEngine in December 2020 and The Jacobsen in January 2021 (note 11). On acquisition, a deferred tax asset of $1.3m (GBP1.0m) was recognised for US tax losses brought forward with a gross value of $6m (GBP4m). In addition to the recognised tax losses, WealthEngine also had unrecognised losses of $17m (GBP12m) as at the date of acquisition. These losses are not recognised due to restrictions in place on a change of ownership which means that it is not probable that the losses will be used before they expire.

Other tax adjusting items include non-recoverable Canadian withholding tax of GBP3.6m, a deferred tax charge in relation to the recognition of a deferred tax liability arising on unremitted foreign earnings in Canada and deferred tax charges arising on restructuring during the year. The charge arising on remeasurement of deferred tax relates to deferred tax liabilities transferred from Singapore to the United States, reflecting the higher tax rates in the US.

The non-recoverable withholding tax arises as a direct consequence of a $100m intercompany dividend which was triggered by a change in the Group's approach to the remittance of its earnings in Canada and paid to the Canada Revenue Agency in October 2021. Going forwards the Group will be making more regular dividend payments all of which carry a 5% withholding tax charge levied by the Canada Revenue Agency.

The Group holds a full provision in respect of a UK tax exposure relating to an enquiry by HMRC into the tax treatment of the disposal of an investment in the "Capital Data" business during the year ended 30 September 2015. This has a maximum exposure of GBP10.7m, plus estimated interest of GBP1.7m. Following a first-tier tax tribunal (FTT) hearing held in May 2020, the Group received a judgement in its favour allowing its appeal on 4 March 2021. HMRC have appealed this judgement at the Upper Tier Tribunal and the case is scheduled to be heard in July 2022. After seeking professional advice the Group's assessment is unchanged from the half-year report which is that there has been no change to the likelihood of HMRC ultimately prevailing and therefore no adjustment to the provision is being made at this time.

In the 2020 Annual Report the Group disclosed, but did not provide for, a contingent tax liability of GBP8.9m (including interest) in relation to the European Commission (EC) investigation into the UK Controlled Foreign Company legislation. Following the Group's proactive engagement with HMRC, on 26 March 2021 HMRC confirmed that the Group was not a beneficiary of State aid under the EC Decision and therefore this matter is now closed with no additional tax liability or consequences for the Group.

In addition to the amount charged to the Income Statement, the following amounts relating to tax on pensions, share options and financial instruments have been directly recognised in other comprehensive income and equity:

 
                Other comprehensive income        Equity 
               ----------------------------  ---------------- 
                        2021           2020     2021     2020 
                      GBP000         GBP000   GBP000   GBP000 
-------------  -------------  -------------  -------  ------- 
Deferred tax             713            468    (125)    1,047 
-------------  -------------  -------------  -------  ------- 
 

6 Dividends

 
                                                                                2021     2020 
                                                                              GBP000   GBP000 
---------------------------------------------------------------------------  -------  ------- 
Amounts recognisable as distributable to equity holders in year 
---------------------------------------------------------------------------  -------  ------- 
Final dividend for the year ended 30 September 2020 of 11.4p (2019: 22.3p)    12,459   24,362 
---------------------------------------------------------------------------  -------  ------- 
Interim dividend for year ended 30 September 2021 of 5.7p (2020: nil)          6,230        - 
---------------------------------------------------------------------------  -------  ------- 
                                                                              18,689   24,362 
---------------------------------------------------------------------------  -------  ------- 
Employee share trusts dividend                                                 (210)    (368) 
---------------------------------------------------------------------------  -------  ------- 
                                                                              18,479   23,994 
---------------------------------------------------------------------------  -------  ------- 
 
Proposed final dividend for the year ended 30 September                       13,661   12,459 
---------------------------------------------------------------------------  -------  ------- 
Employee share trusts dividend                                                 (150)    (141) 
---------------------------------------------------------------------------  -------  ------- 
                                                                              13,511   12,318 
---------------------------------------------------------------------------  -------  ------- 
 
 

An interim dividend of 5.7p per share was paid in 2021 (2020: nil).

The proposed final dividend of 12.5p (2020: 11.4p) is subject to approval at the AGM on 9 February 2022 and has not been included as a liability in these Financial Statements in accordance with IAS 10 'Events after the Reporting Period'.

7 Earnings per share

 
                                      Restated(1) 
                                2021         2020 
                              GBP000       GBP000 
--------------------------  --------  ----------- 
Profit for the year           12,645       28,414 
--------------------------  --------  ----------- 
Non-controlling interests          -          194 
--------------------------  --------  ----------- 
Total earnings                12,645       28,608 
--------------------------  --------  ----------- 
Adjustments                   36,509       14,968 
--------------------------  --------  ----------- 
Total adjusted earnings       49,154       43,576 
--------------------------  --------  ----------- 
 
 
                                               2021     2020 
                                             Number   Number 
                                                000      000 
------------------------------------------  -------  ------- 
Weighted average number of shares           109,289  109,275 
------------------------------------------  -------  ------- 
Shares held by the employee share trusts    (1,207)  (1,605) 
------------------------------------------  -------  ------- 
Weighted average number of shares           108,082  107,670 
------------------------------------------  -------  ------- 
Effect of dilutive share options                 25        - 
------------------------------------------  -------  ------- 
Diluted weighted average number of shares   108,107  107,670 
------------------------------------------  -------  ------- 
 
                                              Pence    Pence 
------------------------------------------  -------  ------- 
Total earnings per share 
------------------------------------------  -------  ------- 
   Basic                                       11.7     26.6 
------------------------------------------  -------  ------- 
   Diluted                                     11.7     26.6 
------------------------------------------  -------  ------- 
 
Total adjusted earnings per share 
------------------------------------------  -------  ------- 
   Basic                                       45.5     40.5 
------------------------------------------  -------  ------- 
   Diluted                                     45.5     40.5 
------------------------------------------  -------  ------- 
 

1 The profit for the year, total earnings per share and total adjusted earnings per share for 30 September 2020 have been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets' (note 1).

The adjusted earnings per share figures have been disclosed since the Directors consider it necessary in order to give an indication of the Group's adjusted trading performance. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 12 to 20.

8 Goodwill and other intangible assets

 
                                                  Restated 
                                            2021      2020 
                                          GBP000    GBP000 
---------------------------------------  -------  -------- 
Goodwill                                 457,057   456,343 
---------------------------------------  -------  -------- 
 
Trademarks and brands                     77,598    88,649 
---------------------------------------  -------  -------- 
Customer relationships                    78,465    77,783 
---------------------------------------  -------  -------- 
Databases and software                    20,338    16,937 
---------------------------------------  -------  -------- 
Total acquired intangible assets         176,401   183,369 
---------------------------------------  -------  -------- 
Internally generated intangible assets    11,848    10,221 
---------------------------------------  -------  -------- 
Total intangible assets                  188,249   193,590 
---------------------------------------  -------  -------- 
 
Total                                    645,306   649,933 
---------------------------------------  -------  -------- 
 

The movement predominantly reflects additions of GBP33.5m following the acquisitions of Wealth Engine, The Jacobsen and RelSci; additions to intangible assets under development of GBP4.6m; offset by an amortisation charge of GBP21.9m and an adverse exchange movement of GBP20.7m from the predominantly US dollar-denominated balance. As outlined in note 1 to the Preliminary Statement, the internally generated intangible assets for the year ended 30 September 2020 have been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets'.

Acquired intangible asset amortisation for the year is GBP19.0m (2020: GBP23.0m).

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 this report.

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination.

During the year, the goodwill in respect of each of the CGUs was tested for impairment in accordance with IAS 36 'Impairment of Assets'. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's value in use or fair value less costs of disposal.

The following methodologies applied and key assumptions, reflecting past experience and external sources of information included:

Value in use (VIU):

 
 --   Pre-tax cash flow budgets derived from approved 2021 budgets 
       with a compound annual growth rate (CAGR) of 4.01% to 30.96% 
       using 2020 as the benchmark on cash flows to 2024. These budgets 
       are based on management's view of expected performance. Management 
       believes these budgets to be achievable. 
 --   The pre-tax nominal discount rates derived from the Group's 
       benchmarked weighted average cost of capital (WACC) are weighted 
       based on the geographical area in which the CGU group's revenue 
       is generated. The long-term growth rates applied are weighted 
       on the same basis. 
 --   For the CGU most dependent on events revenue (FPS), given the 
       estimation uncertainty in the budgets around the speed and 
       quantum of the recovery of physical events and the return to 
       international travel due to climate change, probability weighted 
       scenarios have been used. The budget cashflows from 2022 to 
       2024 have been tapered. The budget is given a higher weighting 
       in earlier years reflecting higher certainty in the near term 
       cashflows; with weightings for 2024 showing 60% allocated to 
       the budget reflecting the recovery of international events 
       and 40% allocated to a scenario reflecting the risk to international 
       travel due to climate change. The scenario for the risk associated 
       with climate change assumes a 67% drop on international revenue 
       on each budgeted cash flow year. No impairment is shown for 
       FPS under this scenario. 
 

The discount rates and long-term growth rates used in the calculation are as per the below table.

 
                                                                              2021 
                                          ---------------------------------------------------------------------------- 
Group of CGUs                              Valuation method  Long-term growth rate %  Discount rate %  Goodwill GBP000 
----------------------------------------  -----------------  -----------------------  ---------------  --------------- 
Fastmarkets                                             VIU                      2.2             10.2          146,681 
----------------------------------------  -----------------  -----------------------  ---------------  --------------- 
Financial & Professional Services (FPS)                 VIU                      2.2             10.2          115,644 
----------------------------------------  -----------------  -----------------------  ---------------  --------------- 
Asset Management                                        VIU                      2.2             10.6          194,732 
----------------------------------------  -----------------  -----------------------  ---------------  --------------- 
 

For the year ended 30 September 2021 (2020: GBPnil), no goodwill impairment has been recognised.

Further disclosures in accordance with IAS 36 are provided where the Group holds an individual goodwill item relating to a CGU group that is significant, which the Group considers to be 15% or more of the Group's total carrying value of goodwill.

The Directors performed a sensitivity analysis on the total carrying value of each CGU group.

Significant CGU groups

For Fastmarkets, with a headroom of GBP195m, for the recoverable amount to fall to the carrying value, the discount rate would need to be increased by seven percentage points, the long-term growth rate reduced by eight percentage points or the CAGR on cash flows reduced by 10 percentage points.

For FPS, with a headroom of GBP294m, for the recoverable amount to fall to the carrying value, the discount rate would need to be increased by 11 percentage points, the long-term growth rate reduced by 14 percentage points or the CAGR on cash flows reduced by 22 percentage points.

For Asset Management, with a headroom of GBP239m, for the recoverable amount to fall to the carrying value, the discount rate would need to be increased by nine percentage points, the long-term growth rate reduced by 11 percentage points or the CAGR on cash flows reduced by 14 percentage points.

For the year ended 30 September 2020, an impairment of GBP1.7m for acquired intangible assets relating to the customer relationships of Broadmedia and Layer123 due to lower than expected retention rate was recognised in exceptional items (note 3).

Climate change

Management has considered the impact of climate change on the future cash used in the impairment assessments of the carrying value of non-current assets, such as goodwill and intangible assets.

The goodwill impairment budgets have been adjusted to include a scenario where climate change has a significant impact on the recoverability of international events revenue as disclosed on page 40.

9 Right of use assets

The right of use assets recognised by the Group are for leasehold premises, predominately used as office space.

The table below shows the movements in right of use assets during the year.

 
                                               Leasehold 
                                            office space 
2021                                              GBP000 
-----------------------------------------  ------------- 
Cost 
-----------------------------------------  ------------- 
At 1 October 2020                                 61,174 
-----------------------------------------  ------------- 
Additions                                            534 
-----------------------------------------  ------------- 
Balance at acquisition of company                  1,911 
-----------------------------------------  ------------- 
Disposals                                          (316) 
-----------------------------------------  ------------- 
Reassessments                                    (1,104) 
-----------------------------------------  ------------- 
Exchange differences                             (1,544) 
-----------------------------------------  ------------- 
At 30 September 2021                              60,655 
-----------------------------------------  ------------- 
Accumulated depreciation and impairments 
-----------------------------------------  ------------- 
At 1 October 2020                                  7,770 
-----------------------------------------  ------------- 
Depreciation                                       6,661 
-----------------------------------------  ------------- 
Impairments                                        2,370 
-----------------------------------------  ------------- 
Disposals                                          (287) 
-----------------------------------------  ------------- 
Exchange differences                               (103) 
-----------------------------------------  ------------- 
At 30 September 2021                              16,411 
-----------------------------------------  ------------- 
Net book value at 30 September 2021               44,244 
-----------------------------------------  ------------- 
 
 
                                               Leasehold 
                                            office space 
2020                                              GBP000 
-----------------------------------------  ------------- 
Cost 
-----------------------------------------  ------------- 
Transition to IFRS 16 on 1 October 2019           56,732 
-----------------------------------------  ------------- 
Additions                                          3,277 
-----------------------------------------  ------------- 
Balance at acquisition of company                  1,622 
-----------------------------------------  ------------- 
Reassessments                                      1,287 
-----------------------------------------  ------------- 
Exchange differences                             (1,744) 
-----------------------------------------  ------------- 
At 30 September 2020                              61,174 
-----------------------------------------  ------------- 
Accumulated depreciation and impairments 
-----------------------------------------  ------------- 
At 1 October 2019                                      - 
-----------------------------------------  ------------- 
Depreciation                                       6,467 
-----------------------------------------  ------------- 
Impairments                                        1,318 
-----------------------------------------  ------------- 
Exchange differences                                (15) 
-----------------------------------------  ------------- 
At 30 September 2021                               7,770 
-----------------------------------------  ------------- 
Net book value at 30 September 2020               53,404 
-----------------------------------------  ------------- 
 

The rent expense recognised in the Consolidated Income Statement in respect of short-term leases was GBP0.4m (2020: GBP1.4m).

Reassessments

The majority of the movement attributable to reassessments in 2020 resulted from the completion of a rent review for the Group's main London office. Also included within reassessments are changes to several leases which involved either moving rent-free periods or temporarily reducing rent, in response to the covid-19 pandemic. These changes have been treated as reassessments rather than modifications in line with the temporary IFRS 16 amendment issued by the IASB (note 1).

Impairments

Where right of use assets are no longer used in the day-to-day operations of the Group they are tested for impairment. In practice this means when management makes a decision to completely vacate an office. The impairment review is performed by comparing the carrying value of the asset with its recoverable value. For the impairments recognised in both 2020 and 2021, the recoverable value was established using value in use methodology, calculated using discounted cash flows which could reasonably be achieved by subletting the property for the remainder of the lease, as advised by property experts. The pre-tax discount rates used in the impairment calculations are based on the Group's WACC, adjusted for the lessor's size and location. The discount rate used in 2021 was 11.10% (2020: range from 9.50% to 12.75%). Key assumptions in the impairment calculations are the length of time it will take to find a sublease tenant and the value of the likely rent income when agreed. In 2021 the recoverable value of the impaired assets was GBP0.6m (2020: GBP2.1m). GBP0.9m of the 2021 impairment was recorded in the Fastmarkets division and GBP1.3m was recorded in FPS.

10 Investments

 
                             Investment in associates                                     Total 
                                               GBP000  Other equity investments GBP000   GBP000 
---------------------------  ------------------------  -------------------------------  ------- 
At 1 October 2019                               5,271                                -    5,271 
---------------------------  ------------------------  -------------------------------  ------- 
Additions                                       4,060                                -    4,060 
---------------------------  ------------------------  -------------------------------  ------- 
Share of losses after tax                       (495)                                -    (495) 
---------------------------  ------------------------  -------------------------------  ------- 
At 30 September 2020                            8,836                                -    8,836 
---------------------------  ------------------------  -------------------------------  ------- 
Additions                                           -                              109      109 
---------------------------  ------------------------  -------------------------------  ------- 
Revaluation                                         -                               50       50 
---------------------------  ------------------------  -------------------------------  ------- 
Exchange differences                                -                                4        4 
---------------------------  ------------------------  -------------------------------  ------- 
Share of profits after tax                         25                                -       25 
---------------------------  ------------------------  -------------------------------  ------- 
At 30 September 2021                            8,861                              163    9,024 
---------------------------  ------------------------  -------------------------------  ------- 
 

All of the above investments in associates are accounted for using the equity method in this Preliminary Statement. Other equity investments are classified as financial assets measured at fair value through other comprehensive income.

 
                                                                                               2021     2020 
                                                                                             GBP000   GBP000 
------------------------------------------------------------------------------------------  -------  ------- 
Reconciliation of share of results in associates in Income Statement to adjusted share of 
 results in associates and joint ventures 
------------------------------------------------------------------------------------------  -------  ------- 
Total share of results in associates in Income Statement                                         25    (495) 
------------------------------------------------------------------------------------------  -------  ------- 
Add back: 
------------------------------------------------------------------------------------------  -------  ------- 
   Share of tax on profits/(losses)                                                              15    (212) 
------------------------------------------------------------------------------------------  -------  ------- 
   Share of acquired intangible amortisation                                                    314      366 
------------------------------------------------------------------------------------------  -------  ------- 
                                                                                                329      154 
------------------------------------------------------------------------------------------  -------  ------- 
Adjusted share of results in associates and joint ventures                                      354    (341) 
------------------------------------------------------------------------------------------  -------  ------- 
 

The reconciliation of share of results in associates 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. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 12 to 20. The share of profit after tax includes a finance expense of GBP29k (2020: GBP0.2m).

Information on investment in associates:

 
                                                 Year                        Type of      Group 
                        Principal activity      ended  Date of acquisition   holding   interest  Registered Office 
----------------------  ---------------------  ------  -------------------  --------  ---------  --------------------- 
Investment in 
associates 
----------------------  ---------------------  ------  -------------------  --------  ---------  --------------------- 
Zanbato, Inc.           Private capital        30 Sep            Sept 2015  Ordinary      11.8%  715 N Shoreline 
(Zanbato)               placement and                                                            Boulevard, Mountain 
                        workflow                                                                 View CA, 94043, 
                                                                                                 United States 
----------------------  ---------------------  ------  -------------------  --------  ---------  --------------------- 
 
 

As at 30 September 2021, the Group has an 11.8% (2020:12.3%) shareholding due to changes to Zanbato's total diluted shareholding. In 2020, the Group's investment holding in Zanbato increased from 9.9% to 12.5% upon the Group's conversion of a convertible loan note on 24 January 2020. This resulted in the GBP4.1m additions to investments in associates in the period. The investment in Zanbato is one of the Group's strategic investments.

IAS 28 'Investments in associates and joint ventures' requires that the fair value of assets and liabilities of associates is identified and that the Group's share of profit from Zanbato is adjusted for the amortisation of the acquired intangible assets. The Group has recognised its share of acquired intangible amortisation of GBP0.3m (2020: GBP0.4m) relating to the database intangible asset.

On the 14 September 2021, the Group disposed of its joint venture of Sanostro. The disposal gave rise to a profit on disposal of GBP44k after the deduction of the disposal costs incurred.

The Group has two other equity investment measured at fair value through other comprehensive income, Estimize has a fair value of nil at 30 September 2021 (2020: nil) and NDR Investment Solutions strategies fair value as at 30 September 2021 is GBP0.2m.

11 Acquisitions and disposals

Purchase of business

WealthEngine

On 4 December 2020, the Group acquired 100% of the equity share capital of WealthEngine Inc and its subsidiary for $14.8m (GBP11.2m). WealthEngine is a SaaS platform providing data-driven intelligence and predictive analytics to wealth managers, luxury brands and not-for-profit organisations. It is a workflow tool which profiles US individuals and is used by its clients for prospecting potential donors or customers. WealthEngine is included in the Financial & Professional Services division.

The acquisition accounting is set out below:

 
                                                      Book                             Fair 
                                                     value  Fair value adjustments    value 
                                                    GBP000                  GBP000   GBP000 
-------------------------------------------------  -------  ----------------------  ------- 
Intangible assets                                        -                  12,238   12,238 
-------------------------------------------------  -------  ----------------------  ------- 
Right of use assets                                  1,543                       -    1,543 
-------------------------------------------------  -------  ----------------------  ------- 
Trade and other receivables                          2,196                       -    2,196 
-------------------------------------------------  -------  ----------------------  ------- 
Trade and other payables                           (1,312)                       -  (1,312) 
-------------------------------------------------  -------  ----------------------  ------- 
Lease liabilities                                  (1,543)                       -  (1,543) 
-------------------------------------------------  -------  ----------------------  ------- 
Deferred tax liabilities                                 -                 (2,312)  (2,312) 
-------------------------------------------------  -------  ----------------------  ------- 
Contract liabilities                               (6,459)                     873  (5,586) 
-------------------------------------------------  -------  ----------------------  ------- 
Cash and cash equivalents                            1,287                       -    1,287 
-------------------------------------------------  -------  ----------------------  ------- 
                                                   (4,288)                  10,799    6,511 
-------------------------------------------------  -------  ----------------------  ------- 
 
Net assets acquired (100%)                                                            6,511 
-------------------------------------------------  -------  ----------------------  ------- 
Goodwill                                                                              4,709 
-------------------------------------------------  -------  ----------------------  ------- 
Total consideration                                                                  11,220 
-------------------------------------------------  -------  ----------------------  ------- 
Consideration satisfied by: 
-------------------------------------------------  -------  ----------------------  ------- 
Cash                                                                                 10,895 
-------------------------------------------------  -------  ----------------------  ------- 
Working capital adjustments                                                             325 
-------------------------------------------------  -------  ----------------------  ------- 
                                                                                     11,220 
-------------------------------------------------  -------  ----------------------  ------- 
Net cash outflow arising on acquisition: 
-------------------------------------------------  -------  ----------------------  ------- 
Cash consideration                                                                   11,220 
-------------------------------------------------  -------  ----------------------  ------- 
Less: cash and cash equivalent balances acquired                                    (1,287) 
-------------------------------------------------  -------  ----------------------  ------- 
                                                                                      9,933 
-------------------------------------------------  -------  ----------------------  ------- 
 
 

Intangible assets represent customer relationships of $11.3m (GBP8.5m), brands of $1.6m (GBP1.1m), a technology platform of $3.0m (GBP2.3m) and databases of $0.4m (GBP0.3m) for which amortisation of $2.0m (GBP1.5m) has been charged for the year ended 30 September 2021. The intangible assets will be amortised over their respective expected useful economic lives; customer relationships of 7 years, brand of 10 years, technology platform of 5 years and database of 10 years.

Goodwill arises from the anticipated future operating synergies from integrating the acquired operations within the Group and the acquired workforce.

The $1.2m (GBP0.9m) fair value adjustment to contract liabilities relates to an adjustment to reduce the deferred revenue balance. The fair value adjustment to deferred tax of $3.0m (GBP2.2m) represents the deferred tax impact of the acquisition accounting, most significantly the recognition of acquired intangible assets.

WealthEngine contributed GBP9.2m to the Group's revenue and GBP1.9m, before acquired intangible amortisation, to the Group's operating profit and profit before tax between the date of acquisition and 30 September 2021. If the acquisition had been completed on the first day of the financial year, WealthEngine would have contributed GBP11.2m to the Group's revenue and GBP2.4m to the Group's operating profit and profit before tax.

For the year ended 30 September 2021, acquisition related costs of GBP3.6m, relating to the WealthEngine acquisition have been charged to the Consolidated Income Statement.

By-Products Interactive (The Jacobsen)

On 29 January 2021, the Group acquired 100% of the equity share capital of By-Products Interactive, Inc. for $12.7m (GBP9.3m). The Jacobsen is a Price Reporting Agency that produces news and price assessments on agricultural feedstocks for biofuels, animal fats, feed, vegetable oils, hides and leather. It is predominantly a subscriptions business with some additional consulting and events revenue. The Jacobsen is included in the Fastmarkets division.

The acquisition accounting is set out below:

 
                                                      Book                             Fair 
                                                     value  Fair value adjustments    value 
                                                    GBP000                  GBP000   GBP000 
-------------------------------------------------  -------  ----------------------  ------- 
Intangible assets                                        -                   1,483    1,483 
-------------------------------------------------  -------  ----------------------  ------- 
Trade and other receivables                             75                       -       75 
-------------------------------------------------  -------  ----------------------  ------- 
Trade and other payables                              (25)                       -     (25) 
-------------------------------------------------  -------  ----------------------  ------- 
Deferred tax liabilities                                 -                   (415)    (415) 
-------------------------------------------------  -------  ----------------------  ------- 
Contract liabilities                                 (691)                       -    (691) 
-------------------------------------------------  -------  ----------------------  ------- 
Cash and cash equivalents                               67                       -       67 
-------------------------------------------------  -------  ----------------------  ------- 
                                                     (574)                   1,068      494 
-------------------------------------------------  -------  ----------------------  ------- 
 
Net assets acquired (100%)                                                              494 
-------------------------------------------------  -------  ----------------------  ------- 
Goodwill                                                                              8,775 
-------------------------------------------------  -------  ----------------------  ------- 
Total consideration                                                                   9,269 
-------------------------------------------------  -------  ----------------------  ------- 
Consideration satisfied by: 
-------------------------------------------------  -------  ----------------------  ------- 
Cash                                                                                  9,269 
-------------------------------------------------  -------  ----------------------  ------- 
                                                                                      9,269 
-------------------------------------------------  -------  ----------------------  ------- 
Net cash outflow arising on acquisition: 
-------------------------------------------------  -------  ----------------------  ------- 
Cash consideration                                                                    9,269 
-------------------------------------------------  -------  ----------------------  ------- 
Less: cash and cash equivalent balances acquired                                       (67) 
-------------------------------------------------  -------  ----------------------  ------- 
                                                                                      9,202 
-------------------------------------------------  -------  ----------------------  ------- 
 
 

Intangible assets represent customer relationships of $2.0m (GBP1.5m), for which amortisation of $0.1m (GBP0.1m) has been charged for the year ended 30 September 2021. The intangible asset will be amortised over its expected useful economic life of 10 years.

Goodwill arises from the anticipated future operating synergies from integrating the acquired operations within the Group and the acquired workforce. The fair value adjustment to the deferred tax liability of $0.6m (GBP0.4m) relates to the deferred tax liability recognised on the acquired intangible asset.

The Jacobsen contributed GBP1.5m to the Group's revenue and GBP0.3m, before acquired intangible amortisation, to the Group's operating profit and profit before tax between the date of acquisition and 30 September 2021. If the acquisition had been completed on the first day of the financial year, The Jacobsen would have contributed GBP2.1m to the Group's revenue and GBP1.2m to the Group's operating profit and profit before tax.

For the year ended 30 September 2021, acquisition related costs of GBP0.7m, relating to The Jacobsen acquisition have been charged to the Consolidated Income Statement.

Relationship Science (RelSci)

On 24 May 2021, the Group acquired the trading assets of Relationship Science LLC and 100% of the equity share capital of Relationship Science India Private Limited, collectively 'RelSci' for $8.5m (GBP6.1m). RelSci is a global relationship-mapping data provider serving financial, professional services and not-for-profit organisations. Its platform contains over 9 million profiles of global business leaders and senior management, and its proprietary software enables clients to easily identify and act upon their relationships across a range of core use-cases. RelSci is included in the Financial & Professional Services division.

The acquisition accounting is set out below and is provisional pending final determination of the fair value of the assets and liabilities acquired:

 
                                                      Book                          Provisional 
                                                     value  Fair value adjustments   fair value 
                                                    GBP000                  GBP000       GBP000 
-------------------------------------------------  -------  ----------------------  ----------- 
Property, plant and equipment                            5                       -            5 
-------------------------------------------------  -------  ----------------------  ----------- 
Intangible assets                                      176                   4,789        4,965 
-------------------------------------------------  -------  ----------------------  ----------- 
Right of use assets                                    368                       -          368 
-------------------------------------------------  -------  ----------------------  ----------- 
Trade and other receivables                            811                       -          811 
-------------------------------------------------  -------  ----------------------  ----------- 
Trade and other payables                             (736)                       -        (736) 
-------------------------------------------------  -------  ----------------------  ----------- 
Deferred tax assets/(liabilities)                       27                    (84)         (57) 
-------------------------------------------------  -------  ----------------------  ----------- 
Contract liabilities                               (1,624)                     337      (1,287) 
-------------------------------------------------  -------  ----------------------  ----------- 
Lease liability                                      (368)                       -        (368) 
-------------------------------------------------  -------  ----------------------  ----------- 
Cash and cash equivalents                            1,050                       -        1,050 
-------------------------------------------------  -------  ----------------------  ----------- 
                                                     (291)                   5,042        4,751 
-------------------------------------------------  -------  ----------------------  ----------- 
 
Net assets acquired (100%)                                                                4,751 
-------------------------------------------------  -------  ----------------------  ----------- 
Goodwill                                                                                  1,329 
-------------------------------------------------  -------  ----------------------  ----------- 
Total consideration                                                                       6,080 
-------------------------------------------------  -------  ----------------------  ----------- 
Consideration satisfied by: 
-------------------------------------------------  -------  ----------------------  ----------- 
Cash                                                                                      5,268 
-------------------------------------------------  -------  ----------------------  ----------- 
Working capital adjustments                                                                 812 
-------------------------------------------------  -------  ----------------------  ----------- 
                                                                                          6,080 
-------------------------------------------------  -------  ----------------------  ----------- 
Net cash outflow arising on acquisition: 
-------------------------------------------------  -------  ----------------------  ----------- 
Cash consideration                                                                        6,080 
-------------------------------------------------  -------  ----------------------  ----------- 
Less: cash and cash equivalent balances acquired                                        (1,050) 
-------------------------------------------------  -------  ----------------------  ----------- 
                                                                                          5,030 
-------------------------------------------------  -------  ----------------------  ----------- 
 

The intangible assets recognised through fair value adjustments represent a brand of $0.1m (GBP0.1m), a database of $3.8m (GBP2.7m) and a platform of $2.8m (GBP2.0m) for which amortisation of $0.5m (GBP0.4m) has been charged for the year ended 30 September 2021. The intangible assets will be amortised over their expected useful economic lives: brand of 10 years, database of 5 years and platform of 4 years.

Goodwill arises from the anticipated future operating synergies from integrating the acquired operations within the Group and the acquired workforce. The fair value adjustment to the deferred tax liability of $0.1m (GBP0.1m) relates to the deferred tax impact of the fair value adjustment to reduce contract liabilities.

RelSci contributed GBP1.7m to the Group's revenue and a loss of GBP0.2m, before acquired intangible amortisation, to the Group's operating profit and profit before tax between the date of acquisition and 30 September 2021. If the acquisition had been completed on the first day of the financial year, RelSci would have contributed GBP5.1m to the Group's revenue and a loss of GBP0.9m to the Group's operating profit and profit before tax.

For the year ended 30 September 2021, acquisition related costs of GBP1.9m, relating to the RelSci acquisition have been charged to the Consolidated Income Statement.

12 Lease liabilities

The table below shows the movements in lease liabilities during the year.

 
                                          Lease liabilities 
                                                     GBP000 
----------------------------------------  ----------------- 
Transition to IFRS 16 on 1 October 2019              71,604 
----------------------------------------  ----------------- 
Additions                                             3,745 
----------------------------------------  ----------------- 
Balance at acquisition of company                     1,748 
----------------------------------------  ----------------- 
Reassessments                                         1,287 
----------------------------------------  ----------------- 
Finance charge in year                                1,985 
----------------------------------------  ----------------- 
Lease payments in year                              (8,056) 
----------------------------------------  ----------------- 
Exchange differences                                (2,172) 
----------------------------------------  ----------------- 
At 30 September 2020                                 70,141 
----------------------------------------  ----------------- 
Balance at acquisition of company                     1,911 
----------------------------------------  ----------------- 
Additions                                               530 
----------------------------------------  ----------------- 
Reassessments                                       (1,104) 
----------------------------------------  ----------------- 
Finance charge in year                                1,774 
----------------------------------------  ----------------- 
Lease payments in year                              (9,779) 
----------------------------------------  ----------------- 
Exchange differences                                (1,784) 
----------------------------------------  ----------------- 
At 30 September 2021                                 61,689 
----------------------------------------  ----------------- 
 
 

The maturity profile of the Group's lease payments is shown below.

 
                                              Lease payments  Lease payments 
                                                        2021            2020 
Timing of future lease payments                       GBP000          GBP000 
--------------------------------------------  --------------  -------------- 
Within 12 months                                       9,259           9,142 
--------------------------------------------  --------------  -------------- 
1 - 3 years                                           22,600          23,301 
--------------------------------------------  --------------  -------------- 
4 - 5 years                                           13,719          14,934 
--------------------------------------------  --------------  -------------- 
Over 5 years                                          24,491          32,952 
--------------------------------------------  --------------  -------------- 
                                                      70,069          80,329 
--------------------------------------------  --------------  -------------- 
Impact of discounting future lease payments          (8,380)        (10,188) 
--------------------------------------------  --------------  -------------- 
Total                                                 61,689          70,141 
--------------------------------------------  --------------  -------------- 
 

During the year some lease liabilities were reassessed to assume that available break clauses will be exercised. This reduces the present value of cash flows for the affected leases. A corresponding reduction in value has been recorded against the respective right of use assets as a result (note 9).

13 Called up share capital

 
                                                                                                  2021     2020 
                                                                                                GBP000   GBP000 
--------------------------------------------------------------------------------------------   -------  ------- 
Allotted, called up and fully paid 
--------------------------------------------------------------------------------------------   -------  ------- 
109,289,530 ordinary shares of 0.25p each (2020: 109,289,406 ordinary shares of 0.25p each)        273      273 
---------------------------------------------------------------------------------------------  -------  ------- 
 

During the year, 124 ordinary shares of 0.25p each (2020: 40,054 ordinary shares) with an aggregate nominal value of GBP0.31 (2020: GBP100) were issued following the exercise of share options granted under the Company's share option schemes for a cash consideration of GBP994 (2020: GBP330,446).

14 Contingent liabilities

European Commission (EC) investigation into state aid

In the 2020 Annual Report the Group disclosed, but did not provide for, a contingent tax liability of GBP8.9m (including interest) in relation to the European Commission (EC) investigation into the UK Controlled Foreign Company legislation. Following the Group's proactive engagement with HMRC, on 26 March 2021 HMRC confirmed that the Group was not a beneficiary of State aid under the EC Decision and therefore this matter is now closed with no additional tax liability or consequences for the Group.

15 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 Directors who served during the year, along with their 
          close family members, received dividends of GBP39k (2020: 
          GBP64k) in respect of ordinary shares held in the Company. 
 (ii)    During the year, the Group provided services to Zanbato of 
          $50k (2020: $nil). 
 (iii)   The Group had an outstanding intercompany balance receivable 
          from Sanostro Institutional AG, a joint venture investment, 
          of $51k in 2020, this was written off in 2021. 
 (iv)    The Group made contributions of GBP1.1m (2020: GBP0.8m) to 
          the defined benefit contribution schemes during the year. 
 

16 Events after the balance sheet date

The Directors propose a final dividend of 12.5p per share (2020: 11.4p) totalling GBP13.5m (2020: GBP12.3m) for the year ended 30 September 2021. The dividend will be submitted for approval by shareholders at the AGM to be held on 9 February 2022. In accordance with IAS 10 'Events after the Reporting Period', these Financial Statements do not reflect this dividend payable which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ending 30 September 2022.

There were no other events after the balance sheet date.

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