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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR DZMMMZNRGMZZ
(END) Dow Jones Newswires
November 18, 2021 02:00 ET (07:00 GMT)
Euromoney Institutional ... (LSE:ERM)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Euromoney Institutional ... (LSE:ERM)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
