TIDMINF
RNS Number : 8328G
Informa PLC
29 July 2021
Informa PLC Press Release
29 July 2021
Half-Year Results for Six Months to 30 June 2021
2021-2022: Improving Revenues, Profits and Cashflow
2021-2024: Growth Acceleration Plan II (GAP II)
Informa (LSE: INF.L), the Information Services, Advanced
Learning, B2B Exhibitions and Events Group today announced its
financial results for the six months ended 30 June 2021, reporting
further strength in its Subscriptions-led businesses and returning
confidence across its B2B events portfolio.
Stephen A. Carter , Group Chief Executive, Informa PLC, said:
"Informa's Subscriptions-led businesses continue to deliver improving
growth, reflecting our consistent investment in product development
and increasing focus on specialist brands in growth markets."
He added: "Our Physical Events business is increasingly returning
in Mainland China and progressively rebuilding in North America
and the Middle East, with positive forward bookings and growing
commercial confidence. Clearly, however, there is continuing restriction
and uncertainty in other parts of the world and we continue to
monitor the rules and relaxation approaches on a country-by-country
basis."
He concluded: "Looking ahead over the next three years, a Growth
Acceleration Plan will focus on delivering further growth in Subscriptions
and Services, progressive recovery in Physical Events and continued
expansion of our range of Digital Services, to meet growing customer
demand for data-led, digital solutions in all our businesses."
H1 2021 Financial Highlights
-- Revenue and Profit: Statutory revenues of GBP688.9m (H1 2020
GBP814.4m) and Adjusted Operating Profit(1) of GBP69.2m (H1 2020:
GBP118.6m) reflect differing pandemic-impacts on the Physical
Events business in the front half of 2020 and 2021;
-- Improving statutory performance : The reduction in
COVID-related exceptional costs and lower non-cash intangible
amortisation delivers improvement in statutory operating loss to
-GBP58.0m (H1 2020: -GBP739.9m);
-- Strong Free Cash Flow(1) : High cash conversion, supported by
strong subscription renewals, positive forward bookings and low
levels of refunds, delivers Free Cash Flow(1) of GBP134.1m (H1
2020: GBP71.3m)
-- Decreasing Net Debt :(1) Free Cash Flow strength, combined
with currency effect, drives a reduction in net debt to GBP1,890.1m
(FY 2020: GBP2,029.6m); Strong financial position and growing
confidence in the outlook reflected in investment grade status from
Fitch, Moodys and Standard & Poors.
2021-2022: Improving Revenues, Profits and Cashflow
-- Improving performance: Further strength in Subscription-led
businesses is now being supported by growing commercial confidence
in returning Physical Events and deeper digital
diversification;
-- Increased revenue guidance: Revenue guidance for the 2021
Transition Year raised to GBP1,800m+/- (from GBP1,700m+/-), with
adjusted operating profit expected to be GBP375m+/- post currency
effects; Forward momentum into 2022, underpinned by improving
conversion of profits into cash;
-- Confidence in returning Physical Events and Digital Services:
In all three of Informa's major geographic markets (North America,
Mainland China, Middle East), we are seeing a progressive return of
physical event activity alongside increasing demand for Digital
Services, with good customer support and progressive rebooking into
2022;
-- Strength at Taylor & Francis: Strong first half
performance (H1 URG: 3.0%), reflecting flexible, customer-led
approach and consistent investment, including in Open Research.
Robust subscription renewals, strength in eBooks and full pipeline
of Open Research activity expected to deliver 2%+ underlying
revenue growth in the full year;
-- Accelerating growth at Informa Intelligence: Strong demand
for specialist data and content, combined with consistent product
investment continuing to deliver higher levels of growth (H1 URG:
7.9%). Strong forward sales pipeline and further growth in
annualised contract values, most notably in Pharma, sees full year
2021 underlying revenue growth guidance raised to 4.5%+;
-- Informa Intelligence increasing portfolio focus: Continuing
focus in three core markets of Pharma, Maritime and Finance. Market
launch of Curinos, a new brand providing competitive intelligence
to the Retail Banking market, alongside EPFR Global and IGM brands
in Finance, Lloyd's List in Maritime, and Citeline and Trialscope
in Pharma. Confirmation of disposal of Barbour EHS, one of three
non-core brands under review, with ongoing discussions in relation
to Asset Intelligence and Barbour ABI.
2021-2024: Growth Acceleration Plan II (GAP II)
As we approach the end of the Transition Year, using our proven
GAP methodology, Informa will implement GAP II, a programme to
accelerate our strategy of Market Specialisation and increase
Digitisation in all our businesses, thereby expanding our
addressable audiences, improving the mix and quality of our revenue
and bringing us closer to our markets and customers.
-- Market Specialisation: Informa's strategy of building depth
around specific customer markets and subject categories delivered
through the pandemic and is providing momentum on the way out, both
within our Subscriptions-led businesses and across our portfolio of
B2B Physical Events brands and B2B Digital Services;
-- Digital Acceleration: Accelerated customer adoption of
digital technology through the last 18 months is driving change and
creating new opportunities, providing scope to extend brands to
broader audiences, deepen connections to customers and further
expand in specialist Digital Services;
-- Digital Information & Knowledge Services: Following five
years of investment and focus, in Informa Intelligence and Taylor
& Francis we are further advanced on data management and
digital product development, which is delivering increased customer
retention and improving underlying growth.
-- Enhanced B2B Digital Services: Across our three B2B
businesses (Informa Markets, Informa Connect, Informa Tech), we
have accelerated our digital commitment in three areas: Smart
Events, Content Marketing & Audience Access, Data Analytics
& Purchasing Intent. Through IIRIS, our centralised and shared
platform for collecting, collating and curating all our B2B
audience data, we are building the capabilities to further increase
the quality and reach of our digital service offering.
-- FasterForward on ESG: Another key component of GAP II will be further operationalising the sustainability commitments within our FasterForward programme, including on renewable energy, efficient offices, and the increasingly positive role large-scale B2B events can make as effective, carbon-efficient consolidators of business travel.
-- Capital Markets Day: Further details on the approach and
ambitions of the 2021-2024 GAP II will be provided at a Capital
Markets Day on Tuesday 7 December.
(1) In this report we refer to non-statutory measures including
underlying results, as defined in the Financial Review on page 9
and Glossary on page 49.
Enquiries
Stephen A. Carter, Group Chief Executive +44 (0) 20 7017 5771
Gareth Wright, Group Finance Director +44 (0) 20 7017 7096
Richard Menzies-Gow, Director of IR
& Communications +44 (0) 20 3377 3445
+44 (0) 7583 413254 / +44
Tim Burt / Zoë Watt - Teneo (0) 7713 157561
----------------------------------------- -------------------------
H1 2021 Financial Summary
H1 2021 H1 2020 Reported Underlying(1)
GBPm GBPm % %
--------------------------------------------------------- -------------- ----------- ------------- --------------------
Revenue 688.9 814.4 (15.4) (7.5)
Statutory operating loss (58.0) (739.9) n/a
Adjusted operating profit(2) 69.2 118.6 (41.7) (2.5)
Adjusted operating margin (%)(2) 10.0 14.6 (31.2)
Operating cash flow(2) 175.7 183.5 (4.3)
Statutory loss before tax (91.0) (801.2) n/a
Adjusted profit before tax(2) 36.3 71.0 (48.9)
Statutory diluted earnings per share (p) (6.1) (56.9) n/a
Adjusted diluted earnings per share (p)(2) 1.7 5.0 (66.0)
Free cash flow(2) 134.1 71.3 88.1
Net debt (incl. IFRS 16)(2) 1,890.1 1,947.9 (3.0)
--------------------------------------------------------- -------------- ----------- ------------- --------------------
H1 2021 Divisional Highlights H1 2021 H1 2020 Reported Underlying(1)
GBPm GBPm % %
------------------------------------- -------- -------- --------- --------------
Informa Markets
Revenue 187.6 282.1 (33.5) (29.3)
Statutory operating loss (118.6) (380.0) n/a
Adjusted operating (loss)/profit(2) (43.3) 12.9 n/a (1,459)
Adjusted operating margin(2) (%) n/a 4.6
------------------------------------- -------- -------- --------- --------------
Informa Connect
Revenue 35.8 66.0 (45.8) (6.8)
Statutory operating loss (23.0) (147.3) n/a
Adjusted operating loss(2) (15.1) (19.3) n/a 58.0
Adjusted operating margin(2) (%) n/a n/a
------------------------------------- -------- -------- --------- --------------
Informa Tech
Revenue 58.1 59.8 (2.8) 12.9
Statutory operating loss (14.1) (303.4) n/a
Adjusted operating profit/(loss)(2) (5.6) (19.8) n/a 79.0
Adjusted operating margin(2) (%) n/a n/a
------------------------------------- -------- -------- --------- --------------
Informa Intelligence
Revenue 162.2 150.0 8.1 7.9
Statutory operating profit 38.7 29.0 33.4
Adjusted operating profit(2) 47.2 47.6 (0.8) 4.8
Adjusted operating margin(2) (%) 29.1 31.7
------------------------------------- -------- -------- --------- --------------
Taylor & Francis
Revenue 245.2 256.5 (4.4) 3.0
Statutory operating profit 59.0 61.8 (4.5)
Adjusted operating profit(2) 86.0 97.2 (11.5) 3.6
Adjusted operating margin(2) (%) 35.1 37.9
------------------------------------- -------- -------- --------- --------------
(1) In this document we refer to Statutory and Underlying
results. Underlying figures are adjusted for acquisitions and
disposals, the phasing of events including biennials, the impact of
changes from new accounting standards and accounting policy
changes, and the effects of currency. It includes, on a pro-forma
basis, results from acquisitions from the first day of ownership in
the comparative period and excludes results from sold businesses
from the date of disposal in the comparative period. Statutory
figures exclude such adjustments. Alternative performance measures
are detailed in the Glossary.
(2) In this document we also refer to Statutory and Adjusted
results, as well as other non-statutory financial measures.
Adjusted results are prepared to provide an alternative measure to
explain the Group's performance. Adjusted results exclude adjusting
items as set out in Note 4 to the Financial Statements. Operating
Cash Flow, Free Cash Flow, net debt and other non-statutory
measures are discussed in the Financial Review and the
Glossary.
Trading Outlook
2021-2022: Improving Revenue, Profits and Cashflow
We are seeing further strength in our Subscriptions-led
businesses and continued progress in B2B Digital Services now
supported by the progressive return of Physical Events.
The pace and rate of Physical Events return continues to vary by
region, with Mainland China most advanced, having been running
major physical event brands for over a year post-pandemic. However,
our largest market, North America, is also returning, as is the
Middle East. The return of Physical Events in Europe is scheduled
but later in the year.
We are focused on delivering as full a schedule as possible in
2022, when increasing customer confidence and the return to more
relevant Industry calendar cycles will provide a better product
experience.
In 2021, we are continuing to make scheduling decisions on a
brand-by-brand basis, informed by customer feedback and with the
focus on long-term value. For some markets and brands, like
Construction (World of Concrete) and Healthcare (Arab
Health/Medlab), this has seen us stage more targeted out-of-cycle
events this year, supported by additional marketing support and
continued investment in AllSecure security and hygiene measures.
For others, like Brand Licensing (Licensing Expo) and Environmental
Services (WWETT), we are focusing efforts on 2022. In the next
quarter, we will stage events in CyberSecurity (Black Hat), Fashion
(Magic) and Health & Nutrition (Natural Products Expo East),
amongst others.
Guidance for full year 2021 revenue increased to GBP1,800m
+/-.
Guidance for adjusted operating profit of GBP375m +/-, including
currency effects.
Continuing strength in Subscriptions-led businesses
Our Subscriptions-led businesses performed strongly in the first
six months of the year and momentum remains positive, with customer
retention high and annualised contract values growing
consistently.
In Taylor & Francis, Subscription renewals remain robust, as
does forward growth. In Royalty-Based Publishing (including our
Books business), consistent expansion of our front list and a
strong focus on identifying underserved subject areas continues to
produce results, aided by a full period of access to university
libraries and bookshops through the first half, unlike in H1
2020.
In Open Research, our investment in building a platform of scale
and quality, with a broad base of flexible, customer-led offerings
for authors, funders and institutions, continues to deliver. This
is reflected in the volume of open research articles published in
the first half, which were +20% on the same period in 2020.
Underlying revenue growth guidance for 2021 increased to
2%+.
In Informa Intelligence, consistent levels of product investment
and a clear focus on the quality of service offering continues to
deliver improving underlying growth.
Our strategy to focus our portfolio on specialist markets where
we have real strengths in brand, in data and in specialist
expertise, is also proving effective. The disposal (cGBP35m, c14x
EBITDA) of our Health & Safety information and registration
business (Barbour EHS) will further improve our portfolio
focus.
In each of our three core markets - Pharma (clinical trials
intelligence and MedTech market data), Finance (mortgage pricing
intelligence and international fund flow data) and Maritime
(real-time tracking of global shipping and cargo) - we provide data
and intelligence that delivers tangible value through competitive
intelligence and real-time market analysis, therefore enabling
better decision making.
In the Retail Banking market we have completed the combination
of FBX and Novantas to create Curinos, a new Business and Brand
providing competitive intelligence and decision support tools to
consumer & commercial institutions. This includes product and
pricing analytics and digital optimization tools that enable
customers to make more profitable, data-driven decisions
faster.
In Pharma, we seek to enable drug development companies to plan
and deliver more efficient clinical trials, using proprietary data
and sophisticated analytical tools to provide intelligent insights
into key decisions around timing, location and approach. We have
expanded our range of services in regulatory compliance and patient
recruitment, the latter combining our deep market knowledge and
broad customer reach to help identify the most suitable patients
for trials, something that can save drug companies hundreds of
millions of dollars in lost time and investment.
Underlying revenue growth guidance for 2021 increased to
4.5%+.
Specialist B2B Events and Digital Services
As we move into the second half, we are starting to confirm
schedules and plans for our Brands in Informa Markets, Informa
Connect and Informa Tech for 2022, when many will return to more
relevant industry calendar cycles. In the 2021 Transition Year, we
continue to remain flexible, planning for Physical Events where it
is feasible, makes sense for customers and for the brands, whilst
continuing to expand our B2B Digital Services offering.
Digital Services will be a growing element of the product mix,
providing an opportunity to extend and enhance our specialist B2B
communities through Smart Events, Specialist Content and Specialist
Marketing Services. In the US, in particular, some of our brands
have been generating revenue in these areas for some time,
providing a strong foundation from which to expand this capability
into other verticals.
This activity brings us closer to customers and provides deeper
insight into market trends and individual preferences. It also
generates significant volumes of first party data, from
identification and firmographic data to real-time customer
behavioural data.
Through our proprietary data and analytics platform, IIRIS, we
are building the capabilities to capture, manage and curate
consented customer data in a way that drives value, either in
better informing traditional product development and customer
targeting, or in the creation of a new range of audience solutions
that provide highly qualified and targeted customer access or
insight into purchasing intent.
Demand for face-to-face platforms remains strong and this is
increasingly evident as more markets open up, particularly amongst
commercial SMEs, for whom the trade show remains highly
valuable.
In Mainland China, over the last 12 months since reopening, we
have seen a consistent and progressive recovery in Physical Events
activity, to the extent that some of our major brands in Beauty
& Aesthetics (China Beauty Expo), have more than offset the
absence of international participation through domestic strength.
Rebooking trends in the region for 2022 are robust, with the
possibility that total revenue in Mainland China could return close
to 2019 levels, notwithstanding international quarantine measures
remain in place, as does limited cross-border participation.
In North America and the Middle East, the returning schedule is
one year behind China, with shortened sales cycles, and active
decisions to make between an off-cycle return in 2021 or an
on-cycle return in 2022.
Where we have already brought our brands back to market in North
America and the Middle East, participation levels have been broadly
as expected, with the number of exhibitors running around half of
2019 levels and with overall participation running at around
35-40%.
We expect participation levels to build over time and this is
evident in the commitments we have for later in 2021, particularly
where brands are running on a favourable industry calendar cycle.
We are seeing progressive rebooking for 2022, giving us further
confidence in our planned growth and recovery period through
2021-2024.
Board Update
Following the retirement of two Directors from the Board in
June, Stephen Davidson has joined the Audit Committee, effective
from July 2021.
2021-2024 Growth Acceleration Plan II ("GAP II")
Informa will implement a new Growth Acceleration Plan through
2021-2024, applying our growth focused operating methodology to
accelerate our strategy of Market Specialisation and further expand
in Digital Services. This will help us expand addressable
audiences, improve the mix and quality of our revenue and bring us
closer to customers.
Digital acceleration and post-COVID business trends
The COVID-19 pandemic has accelerated the adoption of digital
technology in the workplace, underlining the efficiency of digital
communications but also its shortcomings, with some types of work
tasks and meetings far more suited to digital delivery than
others.
In our events businesses, this delineation is also becoming
clearer, with many of our content-led events, where participants
are absorbing information, listening to speakers, asking questions
etc, migrating online and/or to a hybrid model effectively, often
attracting new audiences that never previously attended Physical
Events.
Our transaction-driven events and exhibitions provide direct
product exposure, direct access to customers, direct competitor
insight and a rounded industry view that translates less naturally
to a digital environment.
However, even here, where a direct digital alternative does not
readily translate, the power of digital technology is increasingly
being applied to deliver value for customers through pre-show
discovery and planning, event registration, hybrid access and
post-show education and connections.
Business travel volumes and indicators: B2B Events as an
effective, carbon efficient consolidator of business travel
The rapid adoption of digital technology has implications for
business travel and this is reflected in forward forecasts on
airline volume and recovery, something we track through our CAPA
aviation data business.
Its latest data, which is free-to-access at
(www.informa.com/capa), shows that in Mainland China, domestic air
travel has already recovered ahead of 2019 levels, whilst in the
US, passenger volumes have been increasing rapidly since May but
remain c20% below 2019 levels. Much of the US recovery to date has
been driven by leisure travel and whilst corporate air ticket sales
have picked up rapidly in recent weeks, our customer research
indicates that US business travel will likely remain muted through
the remainder of 2021 due to ongoing corporate travel restrictions
and locked budgets for the year. As health concerns subside,
airline capacity recovers and travel budgets are reinstated, we
then expect a progressive recovery through 2021-2024, led by the
commercial SME community, for whom the industry trade show is often
a critical platform for launching products and securing business
for the year ahead.
The efficiency of digital communication is expected to have some
long-term impact on business travel. Our research suggests that
internal company meetings and single company closed events will, to
a much greater extent, be delivered through technology. Where
business travel does return, there is an expectation it will be
much more efficient and purposeful, with the average duration
lengthening to incorporate multi-customer meetings and
multi-industry access in a single trip.
All these trends lend themselves to Informa's major brands and
services, which by their very nature deliver highly efficient
platforms for whole industries to meet and do business. In much the
same way that digitisation increased the value of face-to-face
interactions with customers before the pandemic, we believe that
post-pandemic, platforms that act as consolidators of business
travel will become increasingly valuable.
Market Specialisation, Digitisation and GAP II
Informa's long-term focus on building depth in a range of
customer markets and specialist subject categories has served us
well through the pandemic, keeping us close to customers and
ensuring our products and services have remained relevant
throughout.
Market Specialisation will remain a key focus on the other side
of COVID as we look to further deepen our customer relationships
within a targeted range of specialist markets. This will include
further expansion in the range of Digital Services we provide to
these markets to meet the evolving expectations of customers.
We were investing consistently in our digital capabilities
pre-COVID. At Taylor & Francis and Informa Intelligence, this
started with the 2014-2017 Growth Acceleration Plan, when we set
about upgrading our core product platforms and accelerating digital
product development. Over time, this commitment, combined with an
increasing focus on certain customer markets, has led to a
progressive improvement in the scale and quality of growth of these
businesses, as evidenced by current performance.
Across our three B2B businesses (Informa Markets, Informa
Connect, Informa Tech), pre-COVID we were investing in building a
range of B2B Digital Services around our core events brands,
including specialist content and media products, marketing services
and digital directories.
Through 2021-2024 GAP II, we will seek to further expand and
enhance this service offering, combining digital and face-to-face
platforms to deliver an improved product and customer
experience.
This expansion will focus on three core categories of B2B
digital services:
1. Smart Events (Digital-only events, hybrid events, online training etc)
2. Content Marketing & Audience Access (Specialist Media
& Specialist Marketing Services, Specialist Content, B2B
Marketplaces, B2B Communities etc)
3. Data Analytics & Purchasing Intent (Audience Solutions,
including audience extension, audience development and purchasing
intent etc)
FasterForward on ESG
Another key component of GAP II will be further operationalising
the sustainability commitments within FasterForward, our five-year
programme to become a sustainable, positive impact company. These
commitments include moving Faster to Zero, with the ambition to
become a zero waste and net zero carbon company by 2030 or earlier,
embedding Sustainability Inside all of our brands by 2025, and
becoming a positive Impact Multiplier by enabling more than one
million disconnected people to access networks and knowledge by
2025.
Our commitment to use our specialist brands and platforms to
support sustainable development in our customers markets will also
see us leverage the increasingly positive role large-scale B2B
events can make as effective, carbon-efficient consolidators of
business travel.
IIRIS...harnessing the power of B2B customer data
One of the foundations for effectively expanding our B2B digital
service offering will be the collection and management of our first
party data, helping us understand our customers and audiences
better and deliver better experiences and more tailored
services.
We are already capturing significant volumes of first party
profile and behavioural data through the Physical Events and
Digital Services we deliver. For example, in our market facing
Informa Tech business, we have already identified more than 3.5
million unique customer profiles. However, the quality of our data
is mixed in terms of the detail we have built, its accuracy and
quality, and the proportion of customers we are actively engaged
with where we have consent.
Through IIRIS, we are building a unified, centralised and shared
platform to standardise our methodology and improve these outputs,
providing a consistent approach to collation, curation and the
management of all our B2B customer/audience profile and behavioural
data. This will inform and support both our Physical Events and our
B2B Digital Services, whilst also opening up the potential to
deliver a range of data-led audience solutions, within the third
category outlined above.
Financial Review
The statutory financial results for the first six months of the
year reflect the differing impact of the COVID-19 pandemic on
Informa's Physical Events business in the first half of 2020 and
2021. Our subscriptions businesses continue to deliver improving
levels of growth, reflecting consistent investment and focus on our
specialist brands within attractive growth markets. This strength
is being supported by continued demand for B2B Digital Services and
returning confidence in physical events in all three of our major
geographic markets.
Furthermore, our balance sheet remains secure, with liquidity
increasing to GBP1.5bn, no financial covenants on any of our Group
level borrowings and no debt due to mature until 2023.
Income Statement
The results for the six months to 30 June 2021 reflect a strong
trading performance in our Informa Intelligence and Taylor and
Francis businesses, offset by the continuing pandemic related
disruption to our physical events business. The continuing benefits
of our COVID-19 Action Plan helped to limit the overall impact on
the Group's financial performance. H1 2021 reported revenues and
profits were lower than H1 2020 due to the prior year period
including over two months of physical events revenues before
COVID-19 control measures were introduced in North America, the
Middle East and Europe.
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
H1 2021 H1 2021 H1 2021 H1 2 020 H1 2 020 H1 2 020
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Revenue 688.9 - 688.9 814.4 - 814.4
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Operating
profit/(loss) 69.2 (127.2) (58. 0) 118.6 (858.5) (739.9)
Loss on disposal - (0.1) (0.1) - (4.0) (4.0)
Net finance
costs (32.9) - (32. 9) (47.6) (9.7) (57.3)
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Profit/(loss)
before tax 36.3 (127.3) (91.0) 71.0 (872.2) (801.2)
Tax
(charge)/credit (6.2) 10.3 4.1 (9.2) 43.9 34.7
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Profit/(loss)
for the period 30.1 (117.0) (86.9) 61.8 (828.3) (766.5)
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Adjusted
operating
margin 10.0% 14.6%
Adjusted diluted
and statutory
diluted EPS 1.7p ( 6.1)p 5.0p (56.9)p
----------------- --------------- --------------- -------------- --------------- --------------- ---------------
Statutory income statement results
The continuing disruption to our physical events portfolio led
to a 15.4% decrease in statutory revenue to GBP688.9m, with the
comparator period for the six months to 30 June 2020 including over
two months where trading was unaffected by COVID-19.
The Group reported a lower statutory operating loss of GBP58.0m
this year, compared with an operating loss of GBP739.9m for the six
months to 30 June 2020. Both periods reflect the impact of the
COVID-19 disruption on our events businesses, with the losses in
the prior half year period significantly higher due to the non-cash
goodwill impairment of GBP592.9m.
Statutory net finance costs reduced by GBP24.4m to GBP32.9m. The
main driver of this decrease was the reduction in average net debt
due to improving free cash flow in the first half of 2021, and the
benefits of the COVID-19 Financing Action Plan implemented in 2020,
which included debt rescheduling (replacing Private Placement debt
with lower cost EMTN financing) and an equity issue. The reduction
also reflects one-off costs associated with this plan within the
prior half year period.
The combination of all these factors led to a statutory loss
before tax of GBP91.0m, compared with a loss before tax of
GBP801.2m in the six months ended 30 June 2020.
This lower statutory loss led to a tax credit for the period of
GBP4.1m, compared with a GBP34.7m tax credit in the six months
ended 30 June 2020.
This outcome translated into a statutory loss per share of 6.1p,
compared with a loss per share of 56.9p for the six months ended 30
June 2020. The difference primarily reflects the net impact of
further strength in our subscriptions businesses, the continuing
impact of the COVID-19 pandemic on our events portfolio and the
related non-cash impairment charge recorded last year, partially
offset by a lower tax charge in that period. In addition, there is
a 12.2% year-on-year increase in the weighted average number of
shares in the first half of 2021, reflecting the full period impact
of the equity issue of 250.3m shares in H1 2020.
Measurement and Adjustments
In addition to statutory results, adjusted results are prepared
for the Income Statement. These include adjusted operating profit,
adjusted diluted earnings per share and other underlying measures.
A full definition of these metrics can be found in the glossary of
terms on page 58. The Divisional table on page 11 provides a
reconciliation between statutory operating profit and adjusted
operating profit by Division.
Underlying revenue and adjusted operating profit growth on an
underlying basis are reconciled to statutory growth in the table
below.
Underlying Phasing Acquisitions Currency Statutory
growth/ and other and disposals change growth/
(decline) items (decline)
H1 2021
Revenue (7.5%) (3.6%) 1.3% (5.6%) (15.4%)
Adjusted operating
profit (2.5%) (28.5%) 2.1% (12.8%) (41.7%)
--------------------- ----------- ----------- --------------- --------- -----------
H1 2020
Revenue (26.2%) (15.0%) (1.4%) 0.5% (42.1%)
Adjusted operating
profit (54.0%) (19.1%) (1.0%) 1.3% (72.8%)
--------------------- ----------- ----------- --------------- --------- -----------
Adjusting Items
The items below have been excluded from adjusted results. The
total adjusting items included in the operating loss in the period
were GBP127.2m (H1 2020: GBP858.5m), with the decrease largely due
to the non-recurrence of the non-cash impairment of goodwill of
GBP592.9m incurred in H1 2020. The most significant items in H1
2021 were intangible asset amortisation of GBP134.8m and a credit
of GBP18.7m for one-off insurance receipts associated with
COVID-19-related event cancellations.
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
-------------------------------------------------------------- -------- -------- --------
Intangible amortisation and impairment
Intangible asset amortisation(1) 134.8 148.2 291.8
Impairment - goodwill - 592.9 592.9
Impairment - acquisition-related intangible assets - 1.0 38.5
Impairment - right of use assets 2.1 17.4 36.1
Impairment - property and equipment 0.7 - 8.8
Impairment - investments - 3.9 3.9
Acquisition costs 0.3 0.8 2.8
Integration costs 2.9 33.1 46.3
Restructuring and reorganisation costs
Reorganisation and redundancy costs 2.6 2.3 47.6
Vacant property and finance lease modification costs (1.1) 13.9 30.0
One-off insurance credits associated with COVID-19 (18.7) - -
Onerous contracts and one-off costs associated with COVID-19 4.4 43.4 52.6
Subsequent re-measurement of contingent consideration (0.8) 1.0 (3.1)
VAT charges - 0.6 -
Adjusting items in operating loss 127.2 858.5 1,148.2
Loss on disposal businesses 0.1 4.0 8.4
Finance income - - (8.3)
Finance costs - 9.7 161.8
-------------------------------------------------------------- -------- -------- --------
Adjusting items in loss before tax 127.3 872.2 1,310.1
Tax related to adjusting items (10.3) (43.9) (127.7)
Adjusting items in loss for the period 117.0 828.3 1,182.4
-------------------------------------------------------------- -------- -------- --------
(1) Excludes acquired intangible product development and
software amortisation
Intangible amortisation of GBP134.8m relates to the historical
additions of book lists and journal titles, acquired databases,
customer and attendee relationships and brands related to
exhibitions, events and conferences. As it relates to acquisitions,
it is not treated as an ordinary cost. By contrast, intangible
asset amortisation arising from software assets and product
development is treated as an ordinary cost in the calculation of
operating profit, so is not treated as an adjusting item.
The non-cash impairment of goodwill in H1 2020 of GBP592.9m
arose from the impact of the COVID-19 pandemic on the carrying
value of our physical events portfolio, with no impairment in H1
2021.
The effective implementation of a Balanced Working Programme
across the Group has improved real estate utilisation and
efficiency, leading Informa to vacate a number of offices
permanently. This led to the one-off impairment of right of use
assets of GBP2.1m, together with vacant property and finance lease
modification costs of GBP0.7m.
Integration costs of GBP2.9m include GBP2.3m relating to the
acquisition of UBM, consisting mainly of process, property and
colleague-related reorganisation costs.
Reorganisation and redundancy costs include one-off costs
relating to initiatives within the Group's COVID-19 Action Plan
undertaken in the first half of 2021.
One-off costs relating to onerous contracts associated with the
pandemic were reduced significantly through the period, from
GBP43.4m in the first half of 2020 to GBP4.4m this year. This
reflects costs for events which were cancelled or postponed due to
COVID-19, where the costs could not be recovered, typically related
to venues and event set-up. One-off insurance credits associated
with COVID-19 relate to insurance receipts from cancelled
events.
The table below shows the results and adjusting items by
Division, highlighting further strength in our Subscription-led
businesses, Informa Intelligence and Taylor & Francis, offset
by the impact of COVID-19 on physical events activity within
Informa Markets, Informa Connect and Informa Tech.
Informa Markets Informa Informa Tech Informa Connect Taylor & Group
Intelligence Francis
GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ---------------- ---------------- ------------- ---------------- ---------------- -----------
Revenue 187.6 162.2 58.1 35.8 245.2 688.9
Underlying
revenue
(decline)/growth (29.3)% 7.9% 12.9% (6.8)% 3.0% (7.5)%
Statutory
operating
(loss)/profit (118.6) 38.7 (14.1) (23.0) 59.0 (58.0)
Add back:
Intangible asset
amortisation(1) 86.7 7.3 9.0 6.7 25.1 134.8
Impairment -
right of use
assets 0.5 0.3 - 0.1 1.2 2.1
Impairment -
property and
equipment 0.3 0.1 0.1 0.1 0.1 0.7
Acquisition and
integration
costs 1.9 1.0 (0.2) 0.3 0.2 3.2
Reorganisation
and redundancy 0.8 0.3 (0.5) 0.5 0.4 1.5
One-off insurance
credits related
to COVID-19 (18.7) - - - - (18.7)
Onerous contracts
and one-off
costs associated
with COVID-19 4.1 - 0.1 0.2 - 4.4
Remeasurement of
contingent
consideration (0.3) (0.5) - - - (0.8)
Adjusted
operating
(loss)/profit (43.3) 47.2 (5.6) (15.1) 86.0 69.2
Underlying
adjusted
operating profit
(decline)/growth (1,460%) 4.8% 79.0% 58.0% 3.6% (2.5%)
------------------ ---------------- ---------------- ------------- ---------------- ---------------- -----------
1 Intangible asset amortisation is in respect of acquired
intangibles, and excludes amortisation of software and product
development
Adjusted Net Finance Costs
Adjusted net finance costs, consisting of the interest costs on
our corporate bonds and bank borrowings, decreased by GBP14.7m to
GBP32.9m. The decrease primarily relates to lower debt levels
reflecting improving free cash flow through the first half, as well
as the benefits of the COVID-19 Financing Action Plan implemented
in 2020. This included debt rescheduling (replacing Private
Placement debt with lower cost EMTN financing) and an equity
issue.
There were no adjusting items in finance costs or finance
income. The amounts in the prior half year period include costs and
income associated with the restructuring and rescheduling of debt,
which included make-whole interest payments to debt holders.
The reconciliation of adjusted net finance costs to the
statutory finance costs and finance income is as follows:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
------------------------------------------------------ -------- -------- --------
Finance income (2.0) (4.8) (15.3)
Finance costs 34.9 62.1 266.2
Add back: Adjusting items relating to finance income - - 8.3
Add back: Adjusting items relating to finance costs - (9.7) (161.8)
------------------------------------------------------- -------- -------- --------
Adjusted net finance costs 32.9 47.6 97.4
------------------------------------------------------- -------- -------- --------
Taxation
The Group continues to recognise that taxes paid are part of the
economic benefit created for the societies in which we operate, and
that a fair and effective tax system is in the interests of
tax-payers and society at large. We aim to comply with tax laws and
regulations everywhere the Group does business and Informa has open
and constructive working relationships with tax authorities
worldwide. Our approach balances the interests of stakeholders
including shareholders, governments, colleagues and the communities
in which we operate.
The Group's Effective Tax Rate (as defined in the glossary)
reflects the blend of tax rates and profits in the jurisdictions in
which we operate. In H1 2021, the Effective Tax Rate was 17.0% (H1
2020: 13.0%).
Earnings Per Share
Adjusted diluted earnings per share (EPS) was lower at 1.7p (H1
2020: 5.0p), reflecting lower adjusted earnings of GBP25.7m (H1
2020: GBP66.9m), combined with a 12.5% increase in the weighted
average number of shares.
An analysis of adjusted diluted EPS and statutory diluted EPS is
as follows:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
-------------------------------------------------------------------- -------- -------- ----------
Statutory loss for the period (86.9) (766.5) (1,037.6)
Add back: Adjusting items in loss for the period 117.0 828.3 1,182.4
-------------------------------------------------------------------- -------- -------- ----------
Adjusted profit for the period 30.1 61.8 144.8
Non-controlling interests (4.4) 5.1 (3.9)
-------------------------------------------------------------------- -------- -------- ----------
Adjusted earnings 25.7 66.9 140.9
Weighted average number of shares used in adjusted diluted EPS (m) 1,510.3 1,342.8 1,426.5
-------------------------------------------------------------------- -------- -------- ----------
Adjusted diluted EPS (p) 1.7p 5.0p 9.9p
-------------------------------------------------------------------- -------- -------- ----------
Statutory loss for the period (86.9) (766.5) (1,037.6)
Non-controlling interests (4.4) 5.1 (3.9)
-------------------------------------------------------------------- -------- -------- ----------
Statutory Earnings (91.3) (761.4) (1,041.5)
Weighted average number of shares used in diluted EPS (m) 1,501.0 1,337.8 1,419.7
-------------------------------------------------------------------- -------- -------- ----------
Statutory diluted EPS (p) (6.1p) (56.9p) (73.4)p
-------------------------------------------------------------------- -------- -------- ----------
Currency Movements
One of the Group's strengths is its international reach and
balance, with colleagues and businesses located in most major
economies of the world. This means the Group generates revenues and
costs in a mixture of currencies, with particular exposure to the
US dollar, as well as some exposure to the Euro and the Chinese
Renminbi.
In H1 2021, approximately 57% (H1 2020: 73%) of Group revenue
was received in USD or currencies pegged to USD, with 5% (H1 2020:
4%) received in Euro and around 12% (H1 2020: 1%) in Chinese
renminbi.
Similarly, we incurred approximately 46% (H1 2020: 56%) of our
costs in USD or currencies pegged to USD, with 2% (H1 2020: 2%) in
Euro and around 10% (H1 2020: 3%) in Chinese renminbi.
Each one cent ($0.01) movement in the USD to GBP exchange rate
has a circa GBP7.7m (H1 2020: circa GBP11.2m) impact on annual
revenue, and a circa GBP2.7m (H1 2020: circa GBP6m) impact on
annual adjusted operating profit.
The following rates versus GBP were applied during the
period:
H1 2021 H1 2020 FY 2020
------------ ------------------ ------------------ ------------------
Closing Average Closing Average Closing Average
rate rate rate rate Rate rate
----------- -------- -------- -------- -------- -------- --------
US Dollar 1.39 1.39 1.23 1.26 1.37 1.29
Euro 1.16 1.15 1.10 1.15 1.11 1.13
Renminbi 8.95 8.97 8.68 8.90 8.94 8.88
------------ -------- -------- -------- -------- -------- --------
Free Cash Flow
Cash generation remains a key priority and focus for the Group,
providing the funds and flexibility for paying down debt, future
organic and inorganic investment, and consistent Shareholder
returns. Our businesses typically convert adjusted operating profit
into cash at an attractive rate, reflecting the relatively low
capital intensity of the Group. In H1 2021, absolute levels of cash
flow improved significantly year-on-year but remains lower than
historical levels due to the current impact of COVID-19 on our
event-led businesses.
The following table reconciles the statutory operating loss to
Operating Cash Flow (OCF) and Free Cash Flow (FCF), both of which
are defined in the glossary.
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
----------------------------------------------------------------------- -------- --------- ---------
Statutory operating loss (58.0) (739.9) (880.4)
Add back: Adjusting items 127.2 858.5 1,148.2
----------------------------------------------------------------------- -------- --------- ---------
Adjusted operating profit 69.2 118.6 267.8
Depreciation of property and equipment 6.5 8.5 16.8
Depreciation of right of use assets 11.5 16.9 30.3
Software and product development amortisation 22.6 19.8 41.1
Share-based payments 7.5 3.6 11.2
Loss on disposal of other assets 0.1 0.4 0.9
Adjusted share of joint venture and associate results (1.3) 0.3 (0.8)
---------
Adjusted EBITDA (1) 116.1 168.1 367.3
Net capital expenditure (18.9) (25.5) (48.4)
Working capital movement (2) 81.0 44.2 (81.9)
Pension deficit contributions (2.5) (3.3) (6.2)
----------------------------------------------------------------------- -------- --------- ---------
Operating Cash Flow 175.7 183.5 230.8
Restructuring and reorganisation (19.3) (6.0) (35.6)
Onerous contracts and one-off costs / income associated with COVID-19 17.7 (35.4) (44.6)
Net interest (24.3) (49.1) (271.6)
Taxation (15.7) (21.7) (32.9)
----------------------------------------------------------------------- -------- --------- ---------
Free Cash Flow 134.1 71.3 (153.9)
----------------------------------------------------------------------- -------- --------- ---------
(1) Adjusted EBITDA represents adjusted operating profit before
interest, tax, and non-cash items including depreciation and
amortisation
(2) Working capital movement excludes movements on
restructuring, reorganisation, COVID-19 costs and acquisition and
integration accruals or provisions as the cash flow relating to
these amounts is included other lines in the Free Cash Flow and
reconciliation from Free Cash Flow to net funds flow. The variance
between the working capital in the Free Cash Flow and the
Consolidated Cash Flow Statement is driven by the non-cash movement
on these items.
Free Cash Flow was substantially higher than H1 2020 due to the
effective management of working capital, as well as a reduction in
one-off related COVID-19 costs and lower net interest and tax. The
calculation of Operating Cash Flow conversion and Free Cash Flow
conversion is as follows :
Operating Cash Flow Free Cash Flow
---------------------------------------------- ----------------------------------
H1 H1 FY H1 H1 FY
2021 2020 2020 2021 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------- ------- ------- ------- ------ --------
OCF / FCF 175.7 183.5 230.8 134.1 71.3 (153.9)
Adjusted operating profit 69.2 118.6 267.8 69.2 118.6 267.8
OCF / FCF conversion 253.9% 154.7% 86.2% 193.8% 60.1% (57.5%)
----------------------------- ------- ------- ------- ------- ------ --------
Net capital expenditure was GBP18.9m (H1 2020: GBP25.5m),
equivalent to 2.7% of H1 2021 revenue (H1 2020: 3.1%). We expect
full year 2021 capital expenditure to be at a similar level
relative to revenue.
The working capital inflow of GBP81.0m was GBP36.8m higher than
the inflow in H1 2020, reflecting strong cash controls and cash
management. This includes the effective management of refund rates
on events within our Postponement Programme, with only GBP12.6m of
refunds requested during the period, and improving levels of cash
collections on future events, with GBP383.9m of cash relating to
future events held as at 30 June 2021.
Net cash interest payments of GBP24.3m were GBP24.8m lower than
the prior half year, largely reflecting the timing of payments
together with lower levels of debt in the period, the latter
reflecting the improving free cash flow, the mix benefit of
replacing Private Placement debt with lower cost EMTN financing and
one-off finance fees of GBP12.5m in H1 2020.
The following table reconciles net cash inflow from operating
activities, as shown in the consolidated cash flow statement to
Free Cash Flow:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
------------------------------------------------------------------------------ -------- -------- --------
Net cash inflow/ (outflow) from operating activities per statutory cash flow 146.1 76.1 (139.5)
Interest received 2.0 3.6 5.7
Borrowing fees paid - (10.1) (17.6)
Purchase of property and equipment (2.4) (3.6) (10.7)
Purchase of intangible software assets (8.3) (19.0) (23.8)
Product development cost additions (8.2) (2.9) (13.9)
Add back: Acquisition and integration costs paid 4.9 27.2 45.9
--------
Free Cash Flow 134.1 71.3 (153.9)
------------------------------------------------------------------------------ -------- -------- --------
Net cash from operating activities increased by GBP70.0m to
record an inflow of GBP146.1m, principally driven by reduced
COVID-19 costs, the event cancellation insurance receipts, reduced
integration spend and lower interest payments.
The following table reconciles cash generated by operations, as
shown in the Consolidated Cash Flow Statement, to Operating Cash
Flow shown in the Free Cash Flow table above:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
------------------------------------------------------------------------------------ -------- -------- --------
Cash generated by operations per statutory cash flow 188.1 140.4 153.1
Capex paid (18.9) (25.5) (48.4)
Add back: Acquisition and integration costs paid 4.9 27.2 45.9
Add back: Restructuring and reorganisation costs paid 19.3 6.0 35.6
Onerous contracts and one-off credits received/costs paid associated with COVID-19 (17.7) 35.4 44.6
--------
Operating Cash Flow 175.7 183.5 230.8
------------------------------------------------------------------------------------ -------- -------- --------
The following table reconciles Free Cash Flow to net funds flow
and net debt, with net debt reducing by GBP139.5m to GBP1,890.1m
during the 6 months to 30 June 2021, primarily due the positive
free cash of GBP134.1m, and a GBP76.1m favourable movement in
exchange rates, mainly driven by the movement in the EUR to GBP
exchange rates.
H12021 H1 FY
GBPm 2020 2020
GBPm GBPm
--------------------------------------------- ---------- ---------- ----------
Free Cash Flow 134.1 71.3 (153.9)
Acquisitions (3.1) (81.3) (176.3)
Disposals 3.7 11.8 10.4
Dividends paid to Shareholders - - (0.2)
Dividends paid to non-controlling interests (4.8) (10.1) (13.6)
Issuance of shares - 975.2 973.7
Purchase of shares (1.6) - (1.3)
--------------------------------------------- ---------- ---------- ----------
Net funds flow 128.3 966.9 638.8
Non-cash movements (21.5) (67.1) 61.3
Foreign exchange 76.1 (178.7) (59.9)
Net finance lease additions in the period (9.7) (11.4) (12.2)
Net debt at 1 January (2,029.6) (2,657.6) (2,657.6)
Acquired debt (33.7) - -
---------- ----------
Net debt (1,890.1) (1,947.9) (2,029.6)
--------------------------------------------- ---------- ---------- ----------
Financing and Leverage
The strong free cash flow performance, combined with positive
currency effects through the period, helped to reduce net debt to
GBP1.9bn at 30 June 2021 (H1 2020: GBP1.9bn; 31 December 2020:
GBP2.0bn).
The Group retains significant available liquidity, with
unutilised committed financing facilities available to the Group of
GBP1,050.0m (30 June 2020: GBP1,650m which included SCCF facilities
of GBP750m; 31 December 2020: GBP1,050.0m). Combined with GBP412.4m
of cash, this resulted in available group level liquidity at 30
June 2021 of GBP1,462.4m. Details of acquired debt are provided in
Note 14.
Following the proactive management of our financing structure,
the average debt maturity on our drawn borrowings is currently 4.4
years (30 June 2020: 5.3 years; 31 December 2020: 4.8 years), with
no significant maturities until July 2023.
Net Debt
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
--------------------------------------------------------------- --------- -------- ------------
Cash and cash equivalents (412.4) (915.2) (299.4)
Private Placement loan notes - 1,141.0 -
Private Placement fees - (2.5) -
Bond borrowings 2,037.3 1,349.8 2,111.1
Bond borrowing fees (13.7) (10.2) (15.3)
Bank borrowings 36.1 - -
Bank borrowing fees (4.0) (10.4) (2.6)
Derivative assets associated with borrowings (24.5) (4.8) (44.6)
Derivative liabilities associated with borrowings 7.1 95.0 7.5
--------------------------------------------------------------- --------- -------- ------------
Net debt before leases 1625.9 1,642.7 1,756.7
Finance lease liabilities 271.8 314.5 280.8
Finance lease receivables (7.6) (9.3) (7.9)
--------
Net debt 1,890.1 1,947.9 2,029.6
--------------------------------------------------------------- --------- -------- ------------
Borrowings (excluding derivatives, leases, fees & overdrafts) 2 ,073.4 2,490.8 2,111.1
Unutilised committed facilities (undrawn RCF) 1 ,050.0 900.0 1,050.0
Unutilised committed facilities (undrawn SCCF) - 750.0 -
Unutilised committed facilities (undrawn Novantas facilities) 4 3.3 - -
--------------------------------------------------------------- --------- -------- ------------
Total committed facilities 3,16 6.7 4,140.8 3,161.1
--------------------------------------------------------------- --------- -------- ------------
Following the repayment of the Private Placement loan notes in
2020, there are no financial covenants on our group level debt
facilities in issue at 30 June 202 1. There are financial covenants
over $50.0m of drawn borrowings in the Novantas business
combination. Our leverage ratio at 30 June 2021 was 6.2 times (31
December 2020: 5.6 times), and the interest cover ratio was 3.6
times (31 December 2020: 3.6 times). Both are calculated
consistently with our historical financial covenants which no
longer applied at 30 June 2021. See the glossary of terms for the
definition of leverage ratio and interest cover .
The calculation of the leverage ratio is as follows:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
----------------------------------------- -------- -------- --------
Net debt as reported 1,890.1 1,947.9 2,029.6
Adjusted EBITDA (12 months to reporting
date) 315.3 715.8 367.3
Leverage 6.0x 2.7x 5.5x
Adjustment to EBITDA for covenant
calculation 1 1.0x 0.2x 0.8x
Adjustment to net debt for covenant
calculation 1 (0.8)x (0.6)x (0.7)x
------------------------------------------- -------- -------- --------
Leverage ratio per p revious debt
covenants 6.2x 2.3x 5.6x
------------------------------------------- -------- -------- --------
1 Refer to Glossary for details of the nature of debt covenant
adjustments to EBITDA and Net Debt for leverage ratio
The calculation of interest cover is as follows:
H1 2021 H1 2020 FY 2020
GBPm GBPm GBPm
---------------------------------------------------------- -------- -------- --------
Adjusted EBITDA (12 months to reporting date) 315.3 715.8 367.3
Adjusted net finance costs (12 months to reporting date) 82.7 101.4 97.4
------------------------------------------------------------ -------- -------- --------
Interest cover reported value 3.8x 7.1x 3.8x
Interest cover covenant EBITDA adjustment to ratio 1 (0.2)x 0.2x (0.2)x
------------------------------------------------------------ -------- -------- --------
Interest cover per previous debt covenants 3.6x 7.3x 3.6x
------------------------------------------------------------ -------- -------- --------
1 Refer to Glossary for details of the nature of debt covenant
adjustments to EBITDA for interest cover
Corporate development
Informa has a proven track record in creating value through
identifying, executing and integrating complementary businesses
effectively into the Group. In H1 2021, cash invested in
acquisitions was GBP3.1m (H1 2020: GBP81.3m), with GBP5.2m net
receipts relating to acquisitions net of cash acquired. Of this,
GBP1.9m related to cash paid for business assets (H1 2020:
GBP26.0m), GBP4.9m (H1 2020: GBP27.2m) to acquisition and
integration spend and GBP1.5m (H1 2020: GBP28.1m) to the cash
settlement on the exercise of an option relating to minority
interests in certain Fashion shows in the US. Net proceeds from
disposals amounted to GBP3.7m (H1 2020: GBP11.8m).
Acquisitions
On 28 May 2021, the Group combined its existing FBX business
with Novantas. The Novantas business provides quantitative and
qualitative competitive intelligence solutions for US retail banks
and forms part of the Informa Intelligence division. This
combination seeks to create a leading competitive intelligence and
specialist data business serving the retail banking markets. The
agreement is structured as an acquisition of Novantas on a cash and
debt free basis by Informa and private equity firm, Inflexion, with
Informa contributing its FBX business as non-cash consideration.
None of the Group's existing liquidity was used to finance the
acquisition.
Informa owns 57% of the equity voting shares of the combined
business and have control to direct the relevant activities of the
combined business and have therefore fully consolidated the results
of Novantas.
The non-controlling interest at the acquisition date represents
the total of the non-controlling share of the fair value of the
Novantas net assets acquired together with the non-controlling
interest share of the carrying value of FBX that has been
contributed and the non-controlling interest share of value of
preference shares that have been issued by Inflexion and Novantas
management to the combined business. See note 14 for further
details.
Pensions
The Group continues to meet all commitments to its pension
schemes, which include six defined benefit schemes, all of which
are closed to future accrual.
At 30 June 2021, the Group had a net pension liability of
GBP11.0m (31 December 2020: GBP71.4m, 30 June 2020 GBP77.2m),
comprising pension assets of GBP6.2m and pension deficits of
GBP17.2m. Gross liabilities were GBP730.2m at 30 June 2021 (31
December 2020: GBP786.8m, 30 June 2020 GBP767.2m). The decrease in
liabilities since the year end is predominantly driven by the
increase to the discount rates used for calculating the present
value of the pension liability with rates for UK schemes increasing
0.55% to 1.85%.
The net deficit remains relatively small compared with the size
of the Group's balance sheet.
The triennial funding valuations for the UBM Pension Scheme and
the Informa Final Salary Scheme (the two largest UK schemes
representing 88% of the gross pension liabilities) have been
completed with a valuation date of 31 March 2020.
Financial market conditions have significantly improved since
the valuation date, meaning the aggregate funding positions of
these schemes has improved, and in line with Regulator guidance to
use post valuation experience, we have agreed with the respective
Trustee Boards to allow most of the improvement in funding
positions since the 31 March 2020 valuation date when calculating
the required deficit repair contributions from the Group.
This has avoided an increase in Group cash contributions to
these schemes from the amounts paid in recent years, with
contributions remaining unchanged at GBP4.5m p.a. until such time
as the Group resumes the payment of shareholder dividends when the
contribution will rise to GBP5.75m p.a.
Principal Risks and Uncertainties
As with any company, at Informa, risk arises both as a natural
consequence of doing business and in the pursuit of our strategy
and business goals, and as a result Informa aim to manage rather
than avoid risk. Informa's approach to risk management is
focused:
-- To identify and understand business risks, to ensure we are
being curious, conscious and open about the risks we choose to take
according to our risk appetite;
-- To develop and deploy appropriate and effective risk
strategies to address these risks and take advantage of
opportunities, where these are present and appropriate; and
-- To clearly report on risk assessments through the company's
governance and management channels and bodies.
The Company's risk framework is designed to provide the Board,
Audit Committee and executive management with oversight of the most
significant risks faced by the Group. Regular analysis and scanning
for emerging risks are embedded in our risk management process and
overseen by the Risk Committee. The Risk Committee reports through
the Audit Committee which in turn reports through to the Board.
In the first half of 2021, COVID-19 has continued to restrict
the operation of physical events and is recognised as a Principal
Risk to the Group. Our response continues to be provided through
our COVID-19 Action Plan and business planning process. We continue
to monitor actions to ensure we are responding in the most
appropriate ways for our colleagues, customers, communities and
business operations.
Risk Profile at Half Year 2021
The risk of economic instability continues to be assessed as
high due to the current control measures in place in many
countries, designed to limit the spread of the pandemic. Such
measures create an uncertain global trading environment and, more
specifically, often include restrictions on face-to-face
gatherings.
We continue to manage our response to the pandemic through our
COVID-19 Action Plan, a programme of initiatives to build stability
and security across the Group, which have included the
implementation of an extended Postponement Programme across our
physical events portfolio, the conservation of cash and the
strengthening of our balance sheet to build financial resilience
across the period of reduced trading.
This risk is also mitigated through the breadth and diversity of
Informa's portfolio of businesses, with our Subscription-led
businesses relatively unaffected by the pandemic and continuing to
deliver strong underlying growth. In addition, with our Events-led
businesses, we have a growing portfolio of B2B Digital Services,
including Specialist Content, Media and Specialist Marketing
Services activities.
The strength of Informa's specialist brands and customer
relationships has also enabled the Company to build a portfolio of
digital and smart events over the last 18 months, whilst scope for
staging physical events around the world has been limited.
This increased focus on Digital Services has the potential to
expand our addressable markets, albeit carries a degree of
execution risk. The Company has therefore maintained the Market
Risk assessment to be high.
The Company has a reliance on key counterparties in certain
activities and areas of business operations. Global economic
uncertainty, reduced revenue and capacity constraints may lead to
individual key counterparties becoming less reliable, and therefore
this risk continues to be monitored closely.
Data privacy related risks remain relevant for Informa and
increases as the Group expands its Digital Services offering, and
uses data in new ways to reach target audiences and improve the
digital customer experience. The Company maintains and continues to
target compliance with the relevant data privacy requirements, with
ongoing focus on evolving privacy regulations around the world.
The Principal Risk around the inability to attract and retain
key talent continues to evolve with the pandemic. As restrictions
ease, at a group level we are starting to see voluntary colleague
attrition increase gradually from 2020 levels, which were
relatively low due to the pandemic. Results from our latest
Colleague Pulse survey shows Colleague engagement remains strong at
80% and a high proportion of Colleagues (92%) believe management's
response to the pandemic has been sensible and effective, with
management leading by example and providing clear direction and
information (91%). Colleagues also believe we have been strong at
staying connected as teams (87%) and supporting flexible working
(84%). Attracting, developing and retaining talent remains a risk,
however, and as we put more emphasis on Digital Services, this risk
may increase as we compete for highly sought after digital
talent.
With Government restrictions still in place in some countries,
business travel relatively subdued and physical events returning
progressively, the likelihood and impact of a health and safety
incident remains relatively low. As control measures are relaxed,
more physical events return and customers and colleagues start to
attend physical events and return to offices in larger numbers,
this risk is expected to increase back towards pre-pandemic
levels.
As at 30 June 2021, the Group recognises 13 principal risks
which have the potential to cause the most significant impact to
the delivery of its strategic objectives, performance, future
prospects and reputation. These are the same 13 Principal Risks and
Uncertainties identified at the 2020 year-end and outlined on pages
71 to 77 of the 2020 Annual Report and Accounts (available on the
Company's website at www.informa.com).
These risks are summarised below (not in order of
magnitude):
-- Acquisition and integration risk
-- Data loss and cyber breach
-- Economic instability
-- Health and safety incident
-- Inability to attract and retain key talent
-- Inadequate regulatory compliance
-- Ineffective change management
-- Inadequate response to major incidents
-- Market risk
-- Pandemic risk
-- Privacy regulation risk
-- Reliance on key counterparties
-- Technology failure
Going Concern
Overview
In adopting the going concern basis for preparing the financial
statements, the Directors have considered the future trading
prospects of the Group's businesses, the Group's cash generation in
H1 2021, available liquidity, debt maturities and the Group's
Principal Risks as set out on the previous two pages. There are no
financial covenants on any of the Group level borrowings. A summary
of the impact of COVID-19 on the Group's trading is detailed on
pages 4-5.
Liquidity and Financing
The Group has a strong liquidity position. At 30 June 2021 the
Group has GBP0.4bn of cash and undrawn committed credit facilities
of GBP1.1bn. In addition, the cost base has been matched to current
activity levels through the cost savings actioned in H2 2020,
meaning the Group generated cash in the first half of 2021 and
therefore the Group liquidity has increased since 31 December
2020.
The Group is a well-established borrower with an investment
grade credit rating from Fitch, Moody's and S&P, which provides
the Directors with confidence that the Group could further increase
liquidity by raising additional debt finance. Following the
repayment of the Private Placement (PP) notes in 2020, the group
has no financial covenants on any of its Group level
borrowings.
There are no borrowing maturities until July 2023. The first
tranche of the Revolving Credit Facility ("RCF") mainly matures in
February 2024, with the second tranche mainly maturing in February
2026.
Financial modelling
The business and operational impact of COVID-19 is discussed on
pages 4 to 5. The Government control restrictions adopted worldwide
to limit the spread of COVID-19 have created a degree of
uncertainty around the forecasting of when physical events will be
allowed to reopen and the pace and rate of revenue return. In
response, in the going concern assessment period up to the end of
2022, the Directors have modelled two main scenarios: the base case
and a reverse stress test. Key assumptions made in these scenarios
include the timing of when control restrictions are relaxed,
allowing physical events to resume, and also the participation
levels at these events as confidence returns.
Financial Reporting
In modelling the base case the Directors have assumed the
following:
--A robust performance by the subscriptions-led businesses in H2
2021 and 2022.
--A progressive return and reopening of physical events across
2021.
--All physical events in the going concern period deliver lower
levels of revenue compared to 2019, as confidence and participation
is not assumed to fully return in this period, international travel
is assumed to recover gradually, events will often be taking place
outside of the annual industry cycle and individual events may
suffer from date bunching as they reopen.
In this base case scenario, the Group maintains liquidity
headroom of more than GBP1.3bn.
The Directors have also modelled a reverse stress test, which
assesses the liquidity position if the Group had no gross profit
from 1 August 2021 to the end of 2022 and all event-related cash
collected as at 30 June 2021 is refunded to customers. In this test
the Group maintains positive liquidity headroom for at least 12
months following the start of the assessment period on 1 August
2021. The Directors feel that the assumptions applied in this
reverse stress test are extremely remote, given that the Group's
subscription-led businesses continue to trade strongly and physical
events in our key markets outside Mainland China are starting to
reopen.
Going concern basis
Based on the scenarios modelled the Directors believe that the
Group is well placed to manage its financing and other business
risks satisfactorily and have been able to form a reasonable
expectation that the Group has adequate resources to continue in
operation for at least twelve months from the signing date of these
consolidated interim financial statements. The Directors therefore
consider it appropriate to adopt the going concern basis of
accounting in preparing the financial statements. The long-term
impact of COVID-19 is uncertain and should the impact of the
pandemic on trading conditions be more prolonged or severe than
currently forecast by the Directors, the Group may need to
implement additional operational or financial measures including
further cost savings.
Cautionary statements
This interim management report contains certain forward-looking
statements. These statements are subject to a number of risks and
uncertainties and actual results and events could differ materially
from those currently being anticipated. The terms 'expect', 'should
be', 'will be' and similar expressions (or their negative) identify
forward-looking statements. Factors which may cause future outcomes
to differ from those foreseen in forward-looking statements
include, but are not limited to: general economic conditions and
business conditions in Informa's markets; exchange rate
fluctuations, customers' acceptance of its products and services;
the actions of competitors; legislative, fiscal and regulatory
developments; changes in law and legal interpretation affecting
Informa's intellectual property rights and internet communications;
and the impact of technological change.
Past performance should not be taken as an indication or
guarantee of future results, and no representation or warranty,
express or implied, is made regarding future performance. These
forward-looking statements speak only as of the date of this
interim management report and are based on numerous assumptions
regarding Informa's present and future business strategies and the
environment in which Informa will operate in the future. Except as
required by any applicable law or regulation, the Group expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in
this document to reflect any change in the Group's expectations or
any change in events, conditions or circumstances on which any such
statement is based after the date of this announcement or to update
or keep current any other information contained in this interim
management report.
Nothing in this interim management report should be construed as
a profit forecast. All persons, wherever located, should consult
any additional disclosures that Informa may make in any regulatory
announcements or documents which it publishes. This announcement
does not constitute an invitation to underwrite, subscribe for or
otherwise acquire or dispose of any Informa PLC shares, in the UK,
or in the US, or under the US Securities Act 1933 or in any other
jurisdiction.
Board of Directors
Biographical details for the current Directors of Informa plc
can be found on the Company's website: www.informa.com .
The Directors of Informa plc were listed in the 2020 Annual
Report and Accounts, but since publication, Derek Mapp and Gareth
Bullock did not stand for re-election at the AGM, with John Rishton
confirmed as the Chair of Informa. Additionally Stephen Davidson
has been appointed to the Audit Committee.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the consolidated interim financial statements have been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting";
b) the consolidated interim financial statements, which have
been prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the issuer, or the
undertakings included in the consolidation as a whole as required
by DTR 4.2.4R;
c) the interim management report includes a fair review of the
information required by DTR 4.2.7R, namely;
i. an indication of important events that have occurred during
the first six months of the financial year and their impact on the
consolidated interim financial statements; and
ii. a description of the principal risks and uncertainties for
the remaining six months of the financial year.
d) the interim management report includes, as required by DTR
4.2.8, a fair review of material related party transactions that
have taken place in the first six months of the financial year and
any material changes in the related-party transactions described in
the 2020 Annual Report.
Approved by the Board on 28 July 2021 and signed on its behalf
by:
Stephen A. Carter Gareth Wright
Chief Executive Group Finance Director
Independent Review Report to Informa PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2021 which comprises the Condensed
Consolidated Income Statement, the Condensed Consolidated Statement
of Comprehensive Income, the Condensed Consolidated Statement of
Changes in Equity, the Condensed Consolidated Balance Sheet, the
Condensed Consolidated Cash Flow Statement and related notes 1 to
18. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group will be prepared in accordance with United Kingdom adopted
International Financial Reporting Standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial
Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, UK
28 July 2021
Condensed Consolidated Income Statement
For the six months ended 30 June 2021
6 months ended 30 June (unaudited)
----------------------------------------------------------
Year ended
Adjusted Adjusting Statutory Adjusted Adjusting Statutory 31
results items results results items results December
2020
2021 2021 2021 2020 2020 2020 (audited)
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Revenue 3 688.9 - 688.9 814.4 - 814.4 1,660.8
Net operating
expenses(1) (621.0) (127.2) (748.2) (695.5) (858.5) (1,554.0) (2,542.0)
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Operating
profit/(loss)
before joint
ventures and
associates 67.9 (127.2) (59.3) 118.9 (858.5) (739.6) (881.2)
Share of results
of joint
ventures and
associates 1.3 - 1.3 (0.3) - (0.3) 0.8
----------------- ------ ---------- ---------- ---------- -----------
Operating
profit/(loss) 69.2 (127.2) (58.0) 118.6 (858.5) (739.9) (880.4)
Loss on disposal
of subsidiaries
and operations - (0.1) (0.1) - (4.0) (4.0) (8.4)
Finance income 5 2.0 - 2.0 4.8 - 4.8 15.3
Finance costs 6 (34.9) - (34.9) (52.4) (9.7) (62.1) (266.2)
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Profit/(loss)
before tax 36.3 (127.3) (91.0) 71.0 (872.2) (801.2) (1,139.7)
Tax
(charge)/credit 7 (6.2) 10.3 4.1 (9.2) 43.9 34.7 102.1
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Profit/(loss)
for the period 30.1 (117.0) (86.9) 61.8 (828.3) (766.5) (1,037.6)
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Attributable to:
Equity holders
of the parent 25.7 (117.0) (91.3) 66.9 (828.3) (761.4) (1,041.5)
Non-controlling
interest 4.4 - 4.4 (5.1) - (5.1) 3.9
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
Earnings per
share
Basic (p) 9 1.7 (6.1) 5.0 (56.9) (73.4)
Diluted (p) 9 1.7 (6.1) 5.0 (56.9) (73.4)
----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- -----------
1. Net operating expenses includes a foreign exchange gain of GBP1.1m. Adjusted gross operating
expense totalled GBP622.1m.
All results relate to continuing operations. Adjusting items are
detailed in Note 4.
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
(unaudited
(unaudited) ) (audited)
GBPm GBPm GBPm
----------------------------------------------------- ------------- ------------ ------------
Loss for the period (86.9) (766.5) (1,037.6)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of the net retirement benefit
pension obligation 59.3 (49.0) (47.6)
Tax relating to items that will not be reclassified
to profit or loss (9.1) 8.9 8.3
------------
Total items that will not be reclassified
subsequently to profit or loss 50.2 (40.1) (39.3)
Items that have been reclassified subsequently
to profit or loss
Recycling of exchange gains arising on disposal
of foreign operations - - -
Items that may be reclassified subsequently
to profit or loss
Exchange (loss)/gain on translation of foreign
operations (96.7) 409.0 (46.2)
Exchange gain/(loss) on net investment hedge
debt 44.0 (156.4) (13.0)
Loss on derivatives in net investment hedging
relationships (73.5) (54.1) (42.0)
Gain/(loss) on derivatives in cash flow
hedging relationships 84.8 (0.1) (1.1)
Movement in cost of hedging reserve (4.7) - 1.3
Tax credit relating to items that may be
reclassified subsequently to profit or loss (1.3) - 11.9
Total items that may be reclassified subsequently
to profit or loss (47.4) 198.4 (89.1)
Other comprehensive income/(expense) for
the period 2.8 158.3 (128.4)
----------------------------------------------------- ------------- ------------ ------------
Total comprehensive expense for the period (84.1) (608.2) (1,166.0)
Total comprehensive expense attributable
to:
- Equity holders of the Company (90.9) (601.1) (1,169.8)
- Non-controlling interest 6.8 (7.1) 3.8
----------------------------------------------------- ------------- ------------ ------------
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2021 (unaudited)
Share
Share premium Translation Other Retained Non-controlling Total
capital account reserve reserves earnings Total(1) interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ --------- --------- ------------ --------- --------- --------- ----------------- ----------
At 1 January 2021 1.5 1,878.8 (206.2) 1,969.6 1,821.3 5,465.0 177.0 5,642.0
(Loss)/profit for
the period - - - - (91.3) (91.3) 4.4 (86.9)
Exchange gain on
translation of
foreign
operations - - (99.1) - - (99.1) 2.4 (96.7)
Exchange loss on
net investment
hedge debt - - 44.0 - - 44.0 - 44.0
Loss arising on
derivative
hedges - - 6.6 - - 6.6 - 6.6
Actuarial loss on
defined benefit
pension schemes - - - - 59.3 59.3 - 59.3
Tax relating to
components of
other
comprehensive
income - - (1.3) - (9.1) (10.4) - (10.4)
------------------ --------- --------- ------------ --------- --------- --------- ----------------- ----------
Total
comprehensive
(expense)/income
for the period - - (49.8) - (41.1) (90.9) 6.8 (84.1)
Dividends to
non-controlling
interests - - - - - - (4.8) (4.8)
Share award
expense - - - 7.5 - 7.5 - 7.5
Issue of share
capital - (0.2) - - - (0.2) - (0.2)
Own shares
purchased - - - (1.4) - (1.4) - (1.4)
Transfer of
vested LTIPs - - - (10.4) 10.4 - - -
Disposal of NCI - - - - (4.5) (4.5) 4.5 -
Acquisition of
NCI - - - - 101.2 101.2 112.6 213.8
At 30 June 2021 1.5 1,878.6 (256.0) 1,965.3 1,887.3 5,476.7 296.1 5,772.8
------------------ --------- --------- ------------ --------- --------- --------- ----------------- ----------
(1) Total attributable to equity holders of the parent
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Condensed Consolidated Statement of Changes in Equity
(Continued)
For the six months ended 30 June 2020 (unaudited)
Share
Share premium Translation Other Retained Non-controlling Total
capital account reserve reserves earnings Total(1) interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- --------- --------- ------------ ---------- ---------- --------- ---------------- --------
At 1 January 2020 1.3 905.3 (117.2) 1,964.6 2,887.9 5,641.9 196.1 5,838.0
------------------- --------- --------- ------------ ---------- ---------- --------- ---------------- --------
Loss for the
period - - - - (761.4) (761.4) (5.1) (766.5)
Exchange gain
on translation
of foreign
operations - - 411.0 - - 411.0 (2.0) 409.0
Exchange loss
on net investment
hedge debt - - (156.4) - - (156.4) - (156.4)
Loss arising on
derivative hedges - - (54.2) - - (54.2) - (54.2)
Actuarial loss
on defined
benefit
pension schemes - - - - (49.0) (49.0) - (49.0)
Tax relating to
components of
other
comprehensive
income - - - - 8.9 8.9 - 8.9
------------------- --------- --------- ------------ ---------- ---------- --------- ---------------- --------
Total
comprehensive
income/(expense)
for the period - - 200.4 - (801.5) (601.1) (7.1) (608.2)
Dividends to
non-controlling
interests - - - - - - (10.1) (10.1)
Share award
expense - - - 3.7 - 3.7 - 3.7
Issue of share
capital 0.2 975.7 - - - 975.9 - 975.9
Own shares
purchased - - - (0.7) - (0.7) (0.7)
Transfer of vested
LTIPs - - - (4.9) 4.9 - - -
At 30 June 2020 1.5 1,881.0 83.2 1,962.7 2,091.3 6,019.7 178.9 6,198.6
------------------- --------- --------- ------------ ---------- ---------- --------- ---------------- --------
(1) Total attributable to equity holders of the parent,
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Condensed Consolidated Statement of Changes in Equity
(Continued)
For the twelve months ended 31 December 2020 (audited)
Share
Share premium Translation Other Retained Non-controlling Total
capital account reserve reserves earnings Total(1) interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ -------- --------- ------------ --------- ---------- ---------- ----------------- ----------
At 1 January 2020 1.3 905.3 (117.2) 1,964.6 2,887.9 5,641.9 196.1 5,838.0
Loss for the year - - - - (1,041.5) (1,041.5) 3.9 (1,037.6)
Exchange gain on
translation of
foreign
operations - - (46.1) - - (46.1) (0.1) (46.2)
Exchange loss on
net investment
hedge debt - - (13.0) - - (13.0) - (13.0)
Loss arising on
derivative
hedges - - (41.8) - - (41.8) - (41.8)
Actuarial loss on
defined benefit
pension schemes - - - - (47.6) (47.6) - (47.6)
Tax relating to
components of
other
comprehensive
income - - 11.9 - 8.3 20.2 - 20.2
------------------ -------- --------- ------------ --------- ---------- ---------- ----------------- ----------
Total
comprehensive
(expense)/income
for the year - - (89.0) - (1,080.8) (1,169.8) 3.8 (1,166.0)
Dividends to
non-controlling
interests - - - - - - (13.6) (13.6)
Share award
expense - - - 11.2 - 11.2 - 11.2
Issue of share
capital 0.2 973.5 - - - 973.7 - 973.7
Own shares
purchased - - - (1.3) - (1.3) - (1.3)
Transfer of
vested LTIPs - - - (4.9) 4.9 - - -
Acquisition of
non-controlling
interest - - - - 9.3 9.3 (9.3) -
At 31 December
2020 1.5 1,878.8 (206.2) 1,969.6 1,821.3 5,465.0 177.0 5,642.0
------------------ -------- --------- ------------ --------- ---------- ---------- ----------------- ----------
(1) Total attributable to equity holders of the parent,
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Condensed Consolidated Balance Sheet
30 June 30 June
2021 2020 31 Dec 2020
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
------------
Goodwill 10 5,648.5 5,884.7 5,576.6
Other intangible assets 3,038.4 3,466.0 3,094.5
Property and equipment 46.5 67.4 49.1
Right of use assets 205.2 247.5 209.9
Investments in joint ventures and
associates 21.0 19.5 20.0
Other investments 7.5 7.4 7.3
Deferred tax assets 1.0 6.1 8.4
Retirement benefit surplus 6.2 1.0 -
Finance lease receivables 5.9 7.4 6.4
Other receivables 21.5 25.5 20.2
Derivative financial instruments 24.5 4.8 44.6
------------
Non-current assets 9,026.2 9,737.3 9,037.0
----------------------------------------- ------- ------------ ------------ ------------
Inventory 34.4 36.3 31.3
Trade and other receivables 322.1 528.0 358.1
Current tax asset 1.7 9.2 4.9
Cash and cash equivalents 12 412.4 915.2 299.4
Finance lease receivables 1.7 1.9 1.5
Derivative financial instruments 0.5 0.4 -
Assets classified as held for sale 17 21.0 - -
Current assets 793.8 1,491.0 695.2
----------------------------------------- ------- ------------ ------------ ------------
Total assets 9,820.0 11,228.3 9,732.2
----------------------------------------- ------- ------------ ------------ ------------
Lease liabilities (31.7) (32.5) (33.4)
Derivative financial instruments - (16.8) (0.2)
Current tax liabilities (62.6) (88.1) (78.0)
Provisions (30.4) (47.5) (44.7)
Trade and other payables (377.0) (440.7) (343.7)
Deferred income (737.9) (846.0) (700.6)
Liabilities associated with assets
classified as held for sale 17 (3.7) - -
Current liabilities (1,243.3) (1,471.6) (1,200.6)
----------------------------------------- ------- ------------ ------------ ------------
Borrowings 13 (2,055.7) (2,467.7) (2,093.2)
Lease liabilities (240.1) (282.0) (247.4)
Derivative financial instruments (7.1) (94.9) (7.5)
Deferred tax liabilities (415.7) (518.3) (406.4)
Retirement benefit obligation (17.2) (78.2) (71.4)
Provisions (43.3) (28.2) (44.8)
Trade and other payables (20.3) (18.0) (16.2)
Deferred income (4.5) (70.8) (2.7)
----------------------------------------- ------- ------------ ------------ ------------
Non-current liabilities (2,803.9) (3,558.1) (2,889.6)
----------------------------------------- ------- ------------ ------------ ------------
Total liabilities (4,047.2) (5,029.7) (4,090.2)
----------------------------------------- ------- ------------ ------------ ------------
Net assets 5,772.8 6,198.6 5,642.0
----------------------------------------- ------- ------------ ------------ ------------
Share capital 11 1.5 1.5 1.5
Share premium account 1,878.6 1,881.0 1,878.8
Translation reserve (256.0) 83.2 (206.2)
Other reserves 1,965.3 1,962.7 1,969.6
Retained earnings 1,887.3 2,091.3 1,821.3
----------------------------------------- ------- ------------ ------------ ------------
Equity attributable to equity holders
of the parent 5,476.7 6,019.7 5,465.0
Non-controlling interest 296.1 178.9 177.0
----------------------------------------- ------- ------------ ------------ ------------
Total equity 5,772.8 6,198.6 5,642.0
----------------------------------------- ------- ------------ ------------ ------------
The notes on pages 31 to 57 are an integral part of these Condensed Consolidated
Financial Statements.
The Board of Directors approved these Condensed Consolidated Financial
Statements on 28 July 2021.
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June 2021
6 months 6 months Year ended
ended ended 31 December
30 June 30 June
2021 2020 2020
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
--------------------------------------------------- ------------ ------------ -------------
Operating activities
Cash generated by operations 12 188.1 140.4 153.1
Income taxes paid (15.7) (21.7) (32.9)
Interest paid (26.3) (42.6) (259.7)
-------------
Net cash inflow from operating activities 146.1 76.1 (139.5)
----------------------------------------------- --- ------------ ------------ -------------
Investing activities
Interest received 2.0 3.6 5.7
Purchase of property and equipment (2.4) (3.6) (10.7)
Purchase of intangible software assets (8.3) (19.0) (23.8)
Product development cost additions (8.2) (2.9) (13.9)
Purchase of intangibles related to titles,
brands and customer relationships (1.9) (3.6) (7.3)
Acquisition of subsidiaries and operations,
net of cash acquired 14 5.2 (22.4) (77.3)
Acquisition of investment - - (0.9)
Proceeds from disposal of subsidiaries
and operations 3.7 11.8 10.4
Net cash outflow from investing activities (9.9) (36.1) (117.8)
----------------------------------------------- --- ------------ ------------ -------------
Financing activities
Dividends paid to shareholders 8 - - (0.2)
Dividends paid to non-controlling interests (4.8) (10.1) (13.6)
Proceeds from EMTN bond issuance - - 788.3
Repayment of loans - (87.1) (61.3)
New loan advances - - -
Repayment of Private Placement borrowings - (153.0) (1,227.8)
Borrowing fees paid - (10.1) (17.6)
Repayment of the principal lease liabilities (15.2) (15.8) (37.1)
Finance lease receipts 0.9 1.2 2.3
Acquisition of non-controlling interests (1.5) (28.1) (44.9)
Cash outflow from purchase of shares (1.6) - (1.3)
Cash inflow from issue of shares - 975.2 973.7
Net cash (outflow)/inflow from financing
activities (22.2) 672.2 360.5
----------------------------------------------- --- ------------ ------------ -------------
Net increase in cash and cash equivalents
(including cash acquired) 114.0 712.2 103.2
Effect of foreign exchange rate changes (1.0) 7.9 1.1
Cash and cash equivalents at beginning
of the year 299.4 195.1 195.1
-------------
Cash and cash equivalents at end of period 12 412.4 915.2 299.4
----------------------------------------------- --- ------------ ------------ -------------
The notes on pages 31 to 57 are an integral part of these
Condensed Consolidated Financial Statements.
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2021
1. General information and basis of preparation
Informa PLC (the 'Company') is a company incorporated in the
United Kingdom under the Companies Act 2006 and is listed on the
London Stock Exchange. The Company is a public company limited by
shares and is registered in England and Wales with registration
number 08860726. The address of the registered office is 5 Howick
Place, London, SW1P 1WG.
The unaudited Condensed set of Consolidated Financial Statements
as at 30 June 2021 and for the six months then ended comprise those
of the Company and its subsidiaries and its interests in joint
ventures and associates (together referred to as the Group).
These Condensed set of Consolidated Financial Statements were
approved for issue by the Board of directors on 28 July 2021 and
have been prepared in accordance with United Kingdom adopted
International Accounting Standard 34 and the Disclosure Guidance
and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
The Condensed set of Consolidated Financial Statements has been
prepared on a going concern basis, as outlined on page 20, and does
not constitute the Group's statutory financial statements within
the meaning of section 434 of the Companies Act 2006. The Condensed
set of Consolidated Financial Statements should be read in
conjunction with the Annual Report and audited Financial Statements
for the year ended 31 December 2020, which have been prepared in
accordance with international accounting standards in conformity
with the Companies Act 2006 and International Financial Reporting
Standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.
The Group's most recent statutory financial statements, which
comprise the Annual Report and audited Financial Statements for the
year ended 31 December 2020, were approved by the Directors on 22
April 2021 and delivered to the Registrar of Companies. The 31
December 2020 balances in this report have been extracted from the
Annual Report. The Auditor's Report on those accounts was not
qualified, did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying the
report and did not contain statements under section 498 of the
Companies Act 2006. The Consolidated Financial Statements of the
Group as at, and for the year ended, 31 December 2020 is available
upon request from the Company's registered office at 5 Howick
Place, London, SW1P 1WG, United Kingdom or at www.informa.com .
2. Accounting Policies and Estimates
In the application of the Group's accounting policies, which are
described in the annual report and accounts, the Directors are
required to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from
these estimates.
The same accounting policies and methods of computation are
followed in the condensed consolidated financial statements for the
six months ended 30 June 2021 as compared with the most recent
annual report and accounts.
2. Accounting Policies and Estimates (Continued)
Critical accounting judgements & estimates
As at 30 June 2021, the group noted one critical judgement,
relating to the identification of CGUs. The critical judgements
identified at 31 December 2020 were the identification of CGUs and
the Identification of adjusting items.
As at 30 June 2021, the group noted three key sources of
estimation uncertainty. These were with regards to the cash flow
forecasts for the goodwill impairment assessment of those Divisions
that have been triggered for a review, the measurement of
retirement benefit obligations and the provisional fair values of
the acquisition intangibles and goodwill associated with the
acquisition of Novantas, Inc.
Judgements and estimates associated with the impairment
assessment
For the impairment review, management have estimated future cash
flows. This is based on projected operating profits, future
long-term growth rates, and discount rates. Management view the key
source of estimation uncertainty to be around future operating
profits, with uncertainty relating to the depth of the economic
impact from COVID-19, and the speed of any subsequent recovery,
alongside variability in the recovery across the geographies in
which the group operates. Details of the impact of uncertainties
associated with the impairment assessment are outlined in the
sensitivity analysis in Note 10.
Management have also made judgements relating to the WACC rate
and Long-Term Growth Rate (LTGR) and these are outlined in Note 10.
At 30 June 2021, the business forecast is subject to higher levels
of uncertainty compared to periods prior to the impact of COVID-19
on our physical events operations. This increases uncertainty when
considering future cash flow forecasts, as the shorter and longer
term implications of COVID-19 evolve. Operationally, this
uncertainty relates to future COVID-19 containment policies, such
as travel restrictions or limitations on physical events, the
extent of the economic impact alongside the speed of the future
recovery, delayed recovery to business confidence and variability
in each of these factors across the various geographies the group
operates within. In the impairment assessment, management have
considered these uncertainties whilst making the above key
assumptions.
Measurement of retirement benefit obligations
The measurement of the retirement benefit obligation involves
the use of a number of assumptions. The most significant of these
relate to the discount rate, the rate of increase in salaries and
pension and mortality assumptions. The most significant scheme is
the UBM Pension Scheme (UBMPS). Note 34 of the accounts for the
year ended 31 December 2020 details the principal assumptions which
have been adopted following advice received from independent
actuaries and also provides sensitivity analysis with regard to
changes to these assumptions. As at 30 June 2021, the group has a
total pension liability of GBP730.2m (30 June 2020: GBP767.2m, 31
December 2020: GBP786.8m), and a net pension deficit of GBP11.0m
(30 June 2020: GBP77.2m, 31 December 2020: GBP71.4m).
Acquisition Intangibles estimation for the acquisition of
Novantas, Inc.
Due to the proximity of the acquisition date of Novantas, Inc.
on 28 May 2021 to the half year reporting date the provisional fair
values of acquisition intangibles and goodwill relating to the
acquisition have been estimated using the ratio of acquisition
intangibles to goodwill using a recent comparable transaction
undertaken by the group. These amounts are subject to estimation
uncertainty relating to the value of the intangible assets being
recognised, and the resulting goodwill to be recognised. This will
be updated in the second half of 2021 through a detailed fair value
exercise, which will involve support from a third-party valuation
specialist. Further details are given in Note 14.
2. Accounting Policies and Estimates (Continued)
Basis of preparation
The group has adopted new standards and interpretations
effective as of 1 January 2021 listed below:
-- Amendment to IFRS 16, 'Leases' - Covid-19 related rent concessions (adopted 1 April 2021)
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform
- Phase 2
The adoption of these amendments and interpretations has not led
to any changes to the Group's accounting policies or had any
material impact on the financial position or performance of the
Group . Other amendments to IFRSs effective for the period ended 30
June 2021 have no impact on the group.
The preparation of the Condensed Set of Consolidated Financial
Statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
The tax charge/credit in the Condensed Consolidated Income
Statement for the interim period is determined using an estimate of
the Effective Tax Rate for the full year, adjusted for any
adjusting items in the period.
Revenue
IFRS 15 Revenue from Contracts with Customers provides a single,
principles-based five-step model to be applied to all sales
contracts. It is based on the transfer of control of goods and
services to customers and requires the identification and
assessment of the satisfaction of delivery of each performance
obligation in contracts in order to recognise revenue.
Where separate performance obligations are identified in a
single contract, total revenue is allocated on the basis of
relative stand-alone selling prices to each performance obligation,
or management's best estimate of relative value where stand-alone
selling prices do not exist.
Revenue is measured at the fair value of consideration received
or receivable and represents amounts receivable for goods and
services provided in the normal course of business, net of
discounts, VAT and other sales-related taxes, and provisions for
returns and cancellations. Revenue for each category type is
typically fixed at the date of the order and is not variable.
Payments received in advance of the satisfaction of a performance
obligation are held as deferred income until the point at which the
performance obligation is satisfied.
Revenue type Performance Revenue Timing of
obligations recognition customer
accounting payments
policy
---------------------------- ---------------------------- ---------------------------- ----------------------------
Exhibitor Provision of Performance Payments for
and related services obligations events
services associated are satisfied at are normally
with exhibition the received
and conference point of time in advance of
events, that services the event
including are provided to dates, which are
virtual events. the typically
customer with up to 12 months
revenue in
recognised when advance of the
the event
event has taken date and are
place. held as
For events deferred income
postponed until
due to COVID-19 the event date.
the For
performance events postponed
obligations due
and revenue to COVID-19,
recognition payments
will align with received may
the extend
revised event beyond 12 months
dates. before
the event date.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Subscriptions Provision of Performance Subscriptions
journals and obligations payments
online are satisfied are normally
information over time, received
services that with revenue in advance of
are provided recognised the commencement
on a periodic straight-line of the
basis or updated over the subscription
on a real-time period of the period which is
basis. subscription. typically
a 12 month
period and
are held as
deferred
income.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Transactional Provision of Revenue is Transactional
sales books and recognised sales
specific at the point of to customers are
publications time typically
in print or when control of on credit terms
digital the and
format. product is customers pay
passed to accordingly
the customer or to these terms.
the
information
service
has been
provided.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Attendee Provision of Performance Payments by
Revenue exhibition or obligations attendees
conference are satisfied at are normally
events. the received
point of time either in
that the advance of
event is held, the event date
with or at
attendee revenue the event.
recognised
at this date.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Marketing, Provision of Performance Payment for such
advertising advertising, obligations services
services marketing are satisfied are normally
and sponsorship services over the received
and event period of the in advance of
sponsorship. advertising the marketing,
subscription or advertising or
over sponsorship
the period when period.
the
marketing
service is
provided.
Revenue relating
to advertising
or sponsorship
at events is
recognised
on a point of
time basis
at the event
date.
---------------------------- ---------------------------- ---------------------------- ----------------------------
Revenue relating to barter transactions is recorded at fair
value and the timing of recognition is in line with the above.
Expenses from barter transactions are recorded at fair value and
recognised as incurred. Barter transactions typically involve the
trading of show space or conference places in exchange for services
provided at events or media advertising. See note 3 for further
details of revenue by segment.
Financial risk management and financial instruments
The Group has exposure to the following risks from its use of
financial instruments:
-- Insufficient Capital risk management
-- Financial Market risk
-- Credit risk
-- Liquidity risk
The Condensed set of Consolidated Financial Statements do not
include all financial risk management information and disclosures
required in the annual financial statements; they should be read in
conjunction with the Group's annual statutory Financial Statements
as at 31 December 2020.
Impairment of Goodwill
We consider whether the carrying value of our goodwill and our
intangible assets is impaired on an annual basis and more
frequently if there are indicators of impairment. The most recent
annual impairment review was performed as at 31 December 2020. For
the half year we consider whether there have been any impairment
indicators identified, either internal or external.
We test for the impairment of intangible assets at the
individual Cash Generating Unit ("CGU") level and do this by
comparing the carrying value of assets in each cash CGU with value
in use calculations derived from the latest Group cash flow
projections.
We test for the impairment of goodwill at the business segment
level (see note 3 for business segments). Business segments
represent an aggregation of CGUs and reflect the level at which
goodwill is monitored. We test for goodwill impairment by
aggregating the carrying value of assets across CGUs in each
segment level and comparing this to value in use calculations
derived from the latest Group cash flow projections.
3. Business Segments
The Group has identified reportable segments based on financial
information used by the Directors in allocating resources and
making strategic decisions. We consider the chief operating
decision maker to be the Executive Directors. The Group's five
identified reportable segments under IFRS 8 Operating Segments are
as described in the Divisional Trading Review. There is no
difference between the Group's operating segments and the Group's
reportable segments.
Segment revenue and results
Six months ended 30 June 2021 (unaudited):
Informa Informa Connect
Informa Markets Intelligence Informa Tech Taylor & Francis Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----------------- ------------- ---------------- ----------------- --------
Revenue 187.6 162.2 58.1 35.8 245.2 688.9
----------------- ---------------- ----------------- ------------- ---------------- ----------------- --------
Adjusted
operating
profit/(loss)
before joint
ventures and
associates (44.6) 47.2 (5.6) (15.1) 86.0 67.9
Share of
adjusted
results of
joint ventures
and associates 1.3 - - - - 1.3
----------------- ---------------- ----------------- ------------- ---------------- ----------------- --------
Adjusted
operating
profit/(loss) (43.3) 47.2 (5.6) (15.1) 86.0 69.2
Intangible asset
amortisation(1) (86.7) (7.3) (9.0) (6.7) (25.1) (134.8)
Impairment -
right use
assets (0.5) (0.3) - (0.1) (1.2) (2.1)
Impairment -
other (0.3) (0.1) (0.1) (0.1) (0.1) (0.7)
Acquisition and
integration
costs (1.9) (1.0) 0.2 (0.3) (0.2) (3.2)
Restructuring
and
reorganisation
costs (0.8) (0.3) 0.5 (0.5) (0.4) (1.5)
One-off
insurance
credits
associated with
COVID-19 18.7 - - - - 18.7
Onerous
contracts and
one-off items
associated with
COVID-19 (4.1) - (0.1) (0.2) - (4.4)
Subsequent
re-measurement
of contingent
consideration 0.3 0.5 - - - 0.8
Operating
profit/(loss) (118.6) 38.7 (14.1) (23.0) 59.0 (58.0)
Loss on disposal
of subsidiaries
and operations (0.1)
Finance income 2.0
Finance costs (34.9)
----------------- ---------------- ----------------- ------------- ---------------- ----------------- --------
Loss before tax (91.0)
----------------- ---------------- ----------------- ------------- ---------------- ----------------- --------
1. Excludes acquired intangible product development and software amortisation.
2. Adjusted operating profit before joint ventures and
associates included the following amounts for depreciation and
other amortisation: GBP17.1m for Informa Markets, GBP3.4m for
Informa Connect, GBP9.5m for Informa Intelligence, GBP1.5m for
Informa Tech and GBP9.1m for Taylor & Francis
3. Business Segments (Continued)
Six months ended 30 June 2020 (unaudited):(2)
Informa Informa
Markets Intelligence Informa Tech Informa Connect Taylor & Francis Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ----------------- ------------- ----------------- ----------------- --------
Revenue 282.1 150.0 59.8 66.0 256.5 814.4
----------------- ----------------- ----------------- ------------- ----------------- ----------------- --------
Adjusted
operating
profit/(loss)
before joint
ventures and
associates 12.8 47.6 (19.8) (18.9) 97.2 118.9
Share of
adjusted
results of
joint ventures
and associates 0.1 - - (0.4) - (0.3)
----------------- ----------------- ----------------- ------------- ----------------- ----------------- --------
Adjusted
operating
profit/(loss) 12.9 47.6 (19.8) (19.3) 97.2 118.6
Intangible asset
amortisation(1) (93.4) (8.7) (11.2) (8.8) (26.1) (148.2)
Impairment -
right use
assets (3.5) (5.1) (0.9) (3.6) (4.3) (17.4)
Impairment -
acquisition
related
goodwill (231.1) - (255.9) (105.9) - (592.9)
Impairment -
other - (1.4) - (2.5) (1.0) (4.9)
Acquisition and
integration
costs (Note 4) (18.9) (0.6) (12.3) (1.7) (0.4) (33.9)
Restructuring
and
reorganisation
costs (Note 4) (4.6) (2.7) (1.2) (4.1) (3.6) (16.2)
Onerous
contracts and
one-off costs
associated with
COVID-19 (Note
4) (39.5) (0.1) (1.7) (2.1) - (43.4)
Subsequent
re-measurement
of contingent
consideration (1.3) - (0.4) 0.7 - (1.0)
VAT charges (0.6) - - - - (0.6)
Operating
profit/(loss) (380.0) 29.0 (303.4) (147.3) 61.8 (739.9)
Loss on disposal
of subsidiaries
and operations (4.0)
Finance income 4.8
Finance costs (62.1)
----------------- ----------------- ----------------- ------------- ----------------- ----------------- --------
Loss before tax (801.2)
----------------- ----------------- ----------------- ------------- ----------------- ----------------- --------
1. Excludes acquired intangible product development and software amortisation.
2. Restated to reflect moves of certain businesses between business segments
3. Adjusted operating profit before joint ventures and
associates included the following amounts for depreciation and
other amortisation: GBP19.9m for Informa Markets, GBP4.6m for
Informa Connect, GBP9.5m for Informa Intelligence, GBP2.0m for
Informa Tech and GBP9.2m for Taylor & Francis
3. Business Segments (Continued)
Year ended 31 December 2020 (audited):(1)
Informa Informa Taylor &
Informa Markets Intelligence Informa Tech Connect Francis Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ------------- ------------- -------------- ------------- -------------
Revenue 523.5 305.3 151.8 124.2 556.0 1,660.8
---------------------- ============= ============= ============= ============== ============= =============
Adjusted operating
(loss)/profit before
joint ventures and
associates(2) (15.9) 101.7 (8.7) (21.9) 211.8 267.0
Share of adjusted
results of joint
ventures and
associates 0.4 - - 0.4 - 0.8
---------------------- ============= ============= ============= ============== ============= =============
Adjusted operating
(loss)/profit (15.5) 101.7 (8.7) (21.5) 211.8 267.8
Intangible asset
amortisation(3) (185.7) (16.6) (20.7) (16.8) (52.0) (291.8)
Impairment - goodwill (231.1) - (255.9) (105.9) - (592.9)
Impairment -
acquisition-related
intangibles (24.1) (2.7) (6.2) (4.5) (1.0) (38.5)
Impairment - IFRS 16
right of use assets (15.0) (7.0) (2.5) (5.3) (6.3) (36.1)
Impairment - property
and equipment (4.2) (1.0) (0.8) (1.3) (1.5) (8.8)
Impairment - external
investments - (1.4) - (2.5) - (3.9)
Acquisition and
integration costs (24.9) (4.3) (17.3) (1.6) (1.0) (49.1)
Restructuring and
reorganisation costs (39.5) (6.5) (11.8) (11.7) (8.1) (77.6)
Onerous contracts and
one-off costs
associated with
COVID-19 (46.3) (0.1) (2.9) (3.3) - (52.6)
Subsequent
remeasurement of
contingent
consideration (0.9) - 3.3 0.7 - 3.1
---------------------- -------------
Operating
(loss)/profit (587.2) 62.1 (323.5) (173.7) 141.9 (880.4)
Loss on disposal of
businesses (8.4)
Finance income 15.3
Finance costs (266.2)
---------------------- ------------- ------------- ------------- -------------- ------------- =============
Loss before tax (1,139.7)
---------------------- ------------- ------------- ------------- -------------- ------------- -------------
1. Restated to reflect moves of certain businesses between business segments
2. Adjusted operating profit before joint ventures and
associates included the following amounts for depreciation and
other amortisation: GBP38.8m for Informa Markets, GBP8.2m for
Informa Connect, GBP19.2m for Informa Intelligence, GBP3.7m for
Informa Tech and GBP18.3m for Taylor & Francis
3. Excludes acquired intangible product development and software amortisation
3. Business Segments (Continued)
Segment revenue by type
An analysis of the Group's revenue by segment and type is as
follows:
Six months ended 30 June 2021 (unaudited):
Informa Taylor & Francis
Informa Markets Intelligence Informa Tech Informa Connect Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------------------- ------------- ---------------- ----------------- ------
Exhibitor 129.8 - - 0.7 - 130.5
Subscriptions 10.5 147.1 28.3 0.4 144.0 330.3
Transactional sales 3.9 7.8 12.7 2.1 100.9 127.4
Attendee 9.7 - 3.2 16.8 - 29.7
Marketing and
advertising
services 25.6 7.3 10.6 6.5 0.3 50.3
Sponsorship 8.1 - 3.3 9.3 - 20.7
---------------------
Total 187.6 162.2 58.1 35.8 245.2 688.9
--------------------- ----------- -------------------- ------------- ---------------- ----------------- ------
Six months ended 30 June 2020 (unaudited):(1)
Informa Markets Informa Intelligence Informa Tech Informa Connect Taylor & Francis Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------------------- ------------- ---------------- ----------------- ------
Exhibitor 207.1 - 1.4 17.1 - 225.6
Subscriptions 10.5 139.1 27.6 0.9 153.6 331.7
Transactional sales 4.2 5.4 13.2 1.4 102.5 126.7
Attendee 18.9 0.1 3.8 28.0 - 50.8
Marketing and
advertising services 28.6 4.9 8.5 6.9 0.4 49.3
Sponsorship 12.8 0.5 5.3 11.7 - 30.3
-------------------------
Total 282.1 150.0 59.8 66.0 256.5 814.4
------------------------- ------ --------------------- ------------- ---------------- ----------------- ------
(1) Restated for restructuring of Group Divisions
Year ended 31 December 2020 (audited):(1)
Informa Taylor & Francis
Informa Markets Intelligence Informa Tech Informa Connect Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ------------------ ------------- ---------------- ----------------- --------
Exhibitor 358.2 - 13.1 21.6 - 392.9
Subscriptions 26.1 279.4 59.3 1.6 316.2 682.6
Transactional
sales 12.9 13.1 30.5 4.1 239.2 299.8
Attendee 26.7 0.2 17.3 54.7 - 98.9
Marketing and
advertising
services 77.1 11.7 21.0 14.7 0.6 125.1
Sponsorship 22.5 0.9 10.6 27.5 - 61.5
------------------
Total 523.5 305.3 151.8 124.2 556.0 1,660.8
------------------ ---------------- ------------------ ------------- ---------------- ----------------- --------
(1) Restated for restructuring of Group Divisions
Through the active and extended Postponement Programme, the
Group's events revenue is expected to be more heavily weighted
towards the second half of the 2021 year compared to both the
second half of 2020 and the six months to 30 June 2021.
4. Adjusting Items
The Board considers certain items should be recognised as
adjusting items (see glossary of terms for the definition of
adjusting items) since, due to their nature or infrequency, such
presentation is relevant to an understanding of the Group's
performance. These items do not relate to the Group's underlying
trading and are adjusted from the Group's adjusted operating profit
measure. The following charges/(credits) are presented as adjusting
items:
6 months 6 months Year ended
ended ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------------------------------- -------------- -------------- -----------------
Intangible amortisation and impairment
Intangible asset amortisation(1) 134.8 148.2 291.8
Impairment - goodwill - 592.9 592.9
Impairment - acquisition-related intangible assets - 1.0 38.5
Impairment - IFRS 16 right of use assets 2.1 17.4 36.1
Impairment - property and equipment 0.7 - 8.8
Impairment - investments - 3.9 3.9
Acquisition costs 0.3 0.8 2.8
Integration costs 2.9 33.1 46.3
Restructuring and reorganisation costs
Redundancy and reorganisation costs 2.6 2.3 47.6
Vacant property and finance lease modification costs (1.1) 13.9 30.0
One-off insurance credits associated with COVID-19 (18.7) - -
Onerous contracts and other one-off costs associated with
COVID-19 4.4 43.4 52.6
Subsequent re-measurement of contingent consideration (0.8) 1.0 (3.1)
VAT charges - 0.6 -
Adjusting items in operating loss 127.2 858.5 1,148.2
Loss on disposal of subsidiaries and operations 0.1 4.0 8.4
Finance income - - (8.3)
Finance costs - 9.7 161.8
----------------------------------------------------------------- -------------- -------------- -----------------
Adjusting items in loss before tax 127.3 872.2 1,310.1
Tax related to adjusting items (10.3) (43.9) (127.7)
Adjusting items in loss for the period 117.0 828.3 1,182.4
----------------------------------------------------------------- -------------- -------------- -----------------
1. Excludes acquired intangible product development and software amortisation
-- Intangible asset amortisation - the amortisation charges in
respect of intangible assets acquired through business combinations
or the acquisition of trade and assets
-- Impairment - the Group tests for impairment on an annual
basis or more frequently when an indicator exists. Impairment
charges and are excluded from adjusted results
-- Impairment of right of use assets and vacant property and
finance lease modification costs mainly relate to the permanent
closure of a number of office properties
-- Acquisition and integration - costs incurred in acquiring and
integrating share and asset acquisitions
-- Restructuring and reorganisation - --costs incurred by the
Group in business restructuring and operating model changes
-- One-off insurance credits associated with COVID-19 relate to
insurance receipts for events which were cancelled due to
COVID-19
-- Onerous contracts associated with COVID-19 relate to onerous
contract costs for events which have been cancelled or postponed
and the costs cannot be recovered. The costs largely relate to
venue, marketing and event set-up costs. Other items associated
with COVID-19 are one-off indirect credits or costs incurred as a
result of COVID-19.
-- Subsequent re-measurements of contingent consideration are
recognised in the period as charges or credits to the Consolidated
Income Statement unless these qualify as measurement period
adjustments arising within one year from the acquisition date.
-- Loss on disposal of subsidiaries and operations relate to
costs arising from disposals in the period
-- Finance costs in the year ended 31 December 2020 were
incurred as part of our COVID-19 Action Plan, which removed
financial covenants from our group level borrowings, pushed out our
earliest debt maturity until July 2023 and improved available
liquidity to over GBP1bn. The costs associated with this
restructuring of debt, which included make-whole interest payments
to debt holders, was GBP161.7m.
-- The tax item relates to the tax effect on the items above.
5. Finance Income
6 months 6 months Year ended
ended ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------
GBPm GBPm GBPm
------------------------------------------------------------------- -------------- -------------- -----------------
Interest income on bank deposits 1.8 3.6 5.5
Fair value gain on financial instruments through the income
statement 0.1 1.2 1.4
Interest income finance lessor leases 0.1 - 0.1
------------------------------------------------------------------- -------------- -------------- -----------------
Finance income before adjusting items 2.0 4.8 7.0
Adjusting item: finance income associated with debt issuance and
fair value gain on acquisition
put options - - 8.3
------------------------------------------------------------------- -------------- -------------- -----------------
Total finance income 2.0 4.8 15.3
------------------------------------------------------------------- -------------- -------------- -----------------
6. Finance Costs
6 months 6 months Year ended
ended ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
------------------------------------------------------------------
GBPm GBPm GBPm
------------------------------------------------------------------ -------------- -------------- ------------------
Interest expense on borrowings and loans 28.6 45.2 92.3
Interest on leases 5.3 6.6 12.2
Interest cost on pension scheme net liabilities 0.8 0.6 0.7
Total interest expense 34.7 52.4 105.2
Fair value loss on financial instruments through the income
statement 0.2 - (0.8)
Finance costs before adjusting items 34.9 52.4 104.4
------------------------------------------------------------------ -------------- -------------- ------------------
Adjusting item: financing expense associated with early repayment
of debt and associated termination
of
put options - 6.4 161.8
Adjusting item: financing expense - 3.3 -
Total finance expense 34.9 62.1 266.2
------------------------------------------------------------------ -------------- -------------- ------------------
7. Taxation
The tax charge comprises:
6 months 6 months Year ended
ended ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
-------------------------------------------------
GBPm GBPm GBPm
------------------------------------------------- -------------- -------------- -----------------
Current tax 4.2 8.1 25.4
Deferred tax (8.3) (42.8) (127.5)
Total tax credit on loss on ordinary activities (4.1) (34.7) (102.1)
------------------------------------------------- -------------- -------------- -----------------
The Effective Tax Rate of 17.0% has been estimated using full
year forecasts and has then been applied to the adjusted profit
before tax for the period. The tax credit on adjusting items for
the period has been calculated by applying to each adjusting item
the tax rate for the jurisdiction in which the adjusting item
arises, to the extent the item is expected to be
taxable/deductible.
Legislation to increase the UK corporation tax rate from 19% to
25% from 1 April 2023 has been substantively enacted during the
period. The effect of this change is to increase the deferred tax
liability recognised by GBP10.7m. The tax credit on adjusting items
includes the effect of this rate change in relation to adjusting
items, principally deferred tax liabilities on intangible
assets.
In 2017, the European Commission announced that it would be
opening a State Aid investigation into the UK's Controlled Foreign
Company regime and in particular the exemption for group finance
companies. Like many UK- based multinational companies, the Group
has made claims in relation to this exemption. During the period a
charging notice was issued by HMRC to Informa in relation to
certain Group companies and periods and Informa paid an amount of
GBP5.5m to HMRC. An appeal against this charging notice has been
filed with HMRC in addition to the appeal filed with the Court of
Justice of the European Union in 2019 following the European
Commission's State Aid decision. No amount has been recognised in
relation to this appeal.
As part of the acquisition accounting relating to contingent
liabilities, an amount of GBP8m was provided in relation to the
State Aid exposure for UBM companies. We do not believe that any
further liability will arise to the Group in relation to the State
Aid investigation and therefore have released the excess of this
provision over the amount paid.
8. Dividends
In April 2020 the Group announced the temporary suspension of
dividend payments, including the withdrawal of the proposed 2019
final dividend. There was no interim or final dividend for the year
ended 2020 and no proposed interim dividend for the six months
ended 30 June 2021. As at 30 June 2021 GBP0.2m (30 June 2020:
GBP0.4m and 31 December 2020: GBP0.2m) dividends are still to be
paid.
9. Earnings Per Share
Basic EPS
The basic earnings per share (EPS) calculation is based on a
loss attributable to equity Shareholders of the parent of GBP91.3m
(30 June 2020: loss GBP761.4m and 31 December 2020: loss
GBP1,041.5m). To calculate basic earnings per share this amount is
divided by the weighted average number of shares in issue (which is
stated after deducting shares held by the Employee Share Trust and
ShareMatch).
Diluted EPS
The diluted EPS calculation is based on the basic EPS
calculation above, except that the weighted average number of
shares includes all potentially dilutive options granted by the
reporting date as if those options had been exercised on the first
day of the accounting period or the date of the grant, if
later.
For the 6 months ended 30 June 2021, 6 months to 30 June 2020
and the year ended 31 December 2020 dilutive potential ordinary
shares have no effect on the calculation of statutory diluted EPS
as their conversion into ordinary shares cannot increase a loss per
share
The table below sets out the weighted average number of shares
used in the calculation of diluted EPS showing the adjustment in
respect of dilutive potential Ordinary Shares:
6 months ended 6 months ended Year ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
Weighted average number of shares used in basic earnings per
share 1,500,994,226 1,337,756,825 1,419,707,507
Effect of dilutive potential ordinary shares - - -
Weighted average number of shares used in diluted EPS calculation 1,500,994,226 1,337,756,825 1,419,707,507
The table below sets out the weighted average number of shares
used in the calculation of adjusted diluted EPS showing the
adjustment in respect of dilutive potential Ordinary Shares:
6 months ended 6 months ended Year ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
Weighted average number of shares used in basic earnings per
share 1,500,994,226 1,337,756,825 1,419,707,507
Effect of dilutive potential ordinary shares 9,306,205 5,089,771 6,813,614
Weighted average number of shares used in adjusted diluted EPS
calculation 1,510,300,431 1,342,846,596 1,426,521,121
9. Earnings Per Share (Continued)
Earnings per share 6 months ended 6 months ended Year ended
30 June 2021
(unaudited) 30 June 2020 (unaudited) 31 December 2020 (audited)
Earnings Per share amount Earnings Per share amount Earnings Per share amount
GBPm Pence GBPm Pence GBPm Pence
Loss for the period (86.9) (766.5) (1,037.6)
Non-controlling interests (4.4) 5.1 (3.9)
Earnings for the purpose of
statutory basic EPS/
statutory basic EPS (p) (91.3) (6.1) (761.4) (56.9) (1,041.5) (73.4)
Effect of dilutive potential
ordinary shares - - - - - -
Earnings for the purpose of
statutory diluted EPS/
diluted EPS (p) (91.3) (6.1) (761.4) (56.9) (1,041.5) (73.4)
Adjusted EPS
The basic and diluted adjusted EPS calculations have been made
to provide additional useful information on the underlying
performance. Profits are based on operations attributable to equity
Shareholders and are adjusted to exclude items that in the opinion
of the Directors would distort underlying results, with those items
detailed in Note 4.
9. Earnings Per Share (Continued)
Adjusted earnings per share: 6 months ended 6 months ended Year ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
Earnings Per share amount Earnings Per share amount Earnings Per share amount
GBPm Pence GBPm Pence GBPm Pence
Earnings for the purpose of basic
EPS/ statutory basic EPS (p) (91.3) (6.1) (761.4) (56.9) (1,041.5) (73.4)
Adjusting items:
Intangible asset amortisation 134.8 9.0 148.2 11.1 291.8 20.5
Impairment - goodwill - - 592.9 44.4 592.9 41.8
Impairment - acquisition-related
intangible assets - - 1.0 0.1 38.5 2.7
Impairment - IFRS 16 right of use
assets 2.1 0.1 17.4 1.3 36.1 2.5
Impairment - property and
equipment 0.7 - - - 8.8 0.6
Impairment - investments - - 3.9 0.3 3.9 0.3
Acquisition and integration costs 3.2 0.2 33.9 2.5 49.1 3.5
Restructuring and reorganisation
costs 1.5 0.1 16.2 1.2 77.6 5.5
One-off insurance credits
associated with COVID-19 (18.7) (1.2) - - - -
Onerous contracts and other
one-off costs associated with
COVID-19 4.4 0.3 43.4 3.2 52.6 3.7
Subsequent remeasurement of
contingent consideration (0.8) - 1.0 0.1 (3.1) (0.2)
VAT charges - - 0.6 - - -
Loss on disposal of subsidiaries
and operations 0.1 - 4.0 0.3 8.4 0.6
Finance income - - - - (8.3) (0.6)
Finance costs - - 9.7 0.7 161.8 11.4
Tax related to adjusting items (10.3) (0.7) (43.9) (3.3) (127.7) (9.0)
Earnings for the purpose of
adjusted basic EPS/ Adjusted
basic EPS (p) 25.7 1.7 66.9 5.0 140.9 9.9
Effect of dilutive potential
ordinary shares - - - - - -
Earnings for the purpose of
adjusted diluted EPS/ Adjusted
diluted EPS (p) 25.7 1.7 66.9 5.0 140.9 9.9
10. Goodwill
(Unaudited)
GBPm
Cost
At 1 January 2021 6,237.9
Additions (note 14) 154.2
Transfer to held for sale (note 17) (19.2)
Exchange differences (70.7)
At 30 June 2021 6,302.2
Accumulated impairment losses
At 1 January 2021 (661.3)
Exchange differences 7.6
At 30 June 2021 (653.7)
Carrying amount
At 30 June 2021 5,648.5
At 31 December 2020 5,576.6
Impairment trigger test and Impairment review
In preparing the 30 June 2021 balance sheet, the Directors
reviewed the carrying value of the Group's goodwill to assess if
there were indicators of impairment.
This review starts with an assessment of current and forecast
trading against the financial benchmarks used in the 2020 year end
impairment review. This assessment was undertaken at 30 June 2021
and concluded that there were no indicators of impairment in the
Taylor & Francis, Informa Intelligence, or Informa Connect
CGUs. For the Informa Markets and Informa Tech CGUs, the gradual
reopening and recovery of the US physical events market were
considered to be indicators of impairment and therefore management
conducted a full impairment review. The review found no impairment
in the carrying value of goodwill.
In undertaking the impairment review management have made
several key assumptions, specifically around Projected cash flows,
Weighted Average Cost of Capital ( WACC) rates and Long-Term Growth
Rates (LTGR), as detailed in the key estimates and judgments
section above.
10. Goodwill (Continued)
The methods for establishing these assumptions which are the
same as those used in the going concern assessment are detailed
below.
Key assumption How we have defined this
Projected cash flows The forecasts for 2021 represent the latest detailed
forecasts by management of current revenue streams,
based on the COVID-19 containment measures in the
markets we operate, alongside the feedback from
customers on confidence to travel and attend large
physical events. For 2022 to 2024, management have
used the outcomes from the three year planning
process, together with a forecast for the 2025
year based on the recovery of physical events.
Across each of these time horizons, management
have considered external metrics, market data and
publicly available economic outlooks, taking these
into account when determining the estimate.
Long-term growth For the Group's value in use calculation, a perpetual
rate growth rate has been applied to the 2025 operating
cash flow forecast. LTGR are based on external
reports of long-term GDP growth rates for the main
geographic markets in which each CGU and Division
operates and therefore are not considered to exceed
the long-term average growth prospects for the
individual markets. LTGR have not been risk adjusted
to reflect any of the uncertainties noted above,
as these uncertainties are reflected in the forecasts.
Pre-tax discount We have calculated the WACC for each CGU and CGU
rates group. For the cost of debt, we have considered
market rates, based on entities with a comparable
credit rating. The cost of equity is calculated
using the CAPM model. Discount rates have not been
risk adjusted to reflect any of the uncertainties
noted above, as these uncertainties are reflected
in the forecasts.
The average WACC pre-tax discount rates and LTGR at Half Year
2021, when the impairment review was undertaken were:
Long-term market growth Pre-tax discount rates
rates
Half Year Full Year Half Year Full Year
2021 2020 2021 2020
(Unaudited) (Audited) (Unaudited) (Audited)
Informa Markets 2.3% 2.5% 10.7% 11.1%
Informa Tech 1.9% 2.0% 11.4% 11.3%
The 30 June 2021 review found no impairment in the carrying
value of goodwill, the review at 30 June 2020 resulted in an
impairment of GBP592.9m, with GBP231.1m relating to Informa
Markets, GBP105.9m relating to Informa Connect and GBP255.9m
relating to Informa Tech.
The carrying amount of goodwill recorded in the CGU groups is
set out below:
CGU Groups As at As at As at
30 June 2021 30 June 2020 31 December 2020
(Unaudited) (Unaudited) (Audited)
GBPm GBPm GBPm
Informa Markets 3,547.5 3,820.5 3,598.8
Informa Connect 325.7 350.3 328.3
Informa Tech 428.4 479.4 433.3
Informa Intelligence 812.3 671.2 678.6
Taylor & Francis 534.6 563.3 537.6
5,648.5 5,884.7 5,576.6
Sensitivity analysis
The sensitivities provided represent areas assessed by
management to be a key source of estimation uncertainty, as
described in Note 2, for the Informa Markets and Informa Tech
Divisions that were subject to the review. Key uncertainties relate
to the depth of the economic impact from COVID-19 containment
measures, the speed of recovery, and the variability in impact
across the geographies in which the group operates, which may
impact our future cash flows, discount rates and LTGR. The cash
flow sensitivity analysis scenario considered a 10% cash flow
reduction in the period 2021 to 2025 including the perpetuity year
reflecting an estimation of the impact of restricted ability to run
physical events outside Mainland China and the pace of growth of
current digital revenue streams. Sensitivity analysis scenarios
considered changes to the key assumptions on the WACC rate and
LTGR, with the sensitivity analysis showing the impact of WACC
rates increasing by 100bps and LTGR reducing by 50bps.
The results from the sensitivity analysis showed there was
headroom in all scenarios tested, with no impairments identified.
The above sensitivities indicate management's assessment of
reasonably plausible, material changes in the environment which
could lead to a further impairment.
11. Share Capital
Share capital as at 30 June 2021 amounted to GBP1.5m (30 June
2020 and 31 December 2020: GBP1.5m).
6 months ended 6 months ended Year ended
30 June 2021 30 June 2020 31 December 2020
(unaudited) (unaudited) (audited)
Number of shares Number of shares Number of shares
At 1 January 1,502,137,804 1,251,798,534 1,251,798,534
Issue of new shares through share placement - 250,318,000 250,318,000
Other issue of shares 975,000 13,876 21,270
At 30 June / 31 December 1,503,112,804 1,502,130,410 1,502,137,804
As at 30 June 2021 the Informa Employee Share Trust (EST) held
1,147,651 (30 June 2020: 734,571; 31 December 2020: 697,644)
ordinary shares in the Company at a market value of GBP5.8m (30
June 2020: GBP3.5m; 31 December 2020: GBP3.8m). As at 30 June 2021
the ShareMatch scheme held 905,420 (30 June 2020: 629,464; 31
December 2020: 710,697) ordinary shares in the Company. At 30 June
2021, the Group held 0.1% (30 June 2020: 0.1%; 31 December 2020:
0.1%) of its own called up share capital.
12. Notes to the Cash Flow Statement
6 months
ended 6 months ended Year ended
30 June 30 June 31 December
2021 2020 2020
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Loss before tax (91.0) (801.2) (1,139.7)
Adjustments for:
Depreciation of property and equipment 6.5 8.5 16.8
Depreciation of right of use assets 11.5 16.9 30.3
Amortisation of other intangible assets 157.4 168.0 332.9
Impairment - goodwill - 592.9 592.9
Impairment - investments - 3.9 3.9
Impairment - acquisition intangible assets - 1.0 38.5
Impairment - property and equipment 0.7 - 8.8
Impairment - IFRS 16 right of use assets 2.1 17.4 36.1
Share-based payments 7.5 3.6 11.2
Subsequent re-measurement of contingent consideration (0.8) 1.0 (3.1)
Finance lease modifications (1.8) - (2.2)
Loss on disposal of businesses 0.1 4.0 8.4
Loss on disposal of property and equipment and software 0.1 0.4 0.9
Finance income (2.0) (4.8) (15.3)
Finance costs 34.9 62.1 266.2
Share of results of joint ventures and associates (1.3) 0.3 (0.8)
Operating cash inflow before movements in working capital 123.9 74.0 185.8
(Increase)/decrease in inventories (3.1) 2.2 7.2
(Increase)/decrease in receivables 3.4 (63.7) 114.8
Increase/(decrease) in payables 66.4 131.2 (148.5)
Movements in working capital 66.7 69.7 (26.5)
Pension deficit recovery contributions (2.5) (3.3) (6.2)
Cash generated by operations 188.1 140.4 153.1
12. Notes to the Cash Flow Statement (continued)
Analysis of movement in net debt (unaudited) as at 30 June
2021:
At 30
June
At 1 Jan 2021 Non-cash movements Cash flow Exchange movements 2021
GBPm GBPm GBPm GBPm GBPm
Cash at bank and in hand 299.4 - 114.0 (1.0) 412.4
Overdrafts - - - - -
Cash and cash equivalents 299.4 - 114.0 (1.0) 412.4
Bank loans due in more than one year - (35.3) - (0.8) (36.1)
Bank loan fees due in more than one
year 2.6 1.3 - 0.1 4.0
Bond borrowings due in more than one
year (2,111.1) - - 73.8 (2,037.3)
Bond borrowing fees 15.3 (1.6) - - 13.7
Derivative assets associated with
borrowings 44.6 (20.1) - - 24.5
Derivative liabilities associated with
borrowings (7.5) 0.4 - - (7.1)
Lease liabilities (280.8) (10.3) 15.2 4.1 (271.8)
Finance lease receivables 7.9 0.7 (0.9) (0.1) 7.6
Net debt (2,029.6) (64.9) 128.3 76.1 (1,890.1)
Analysis of movement in net debt (unaudited) as at 30 June
2020:
At 30
June
At 1 Jan 2020 Non-cash movements Cash flow Exchange movements 2020
GBPm GBPm GBPm GBPm GBPm
Cash at bank and in hand 195.1 - 712.2 7.9 915.2
Overdrafts - - - - -
Cash and cash equivalents 195.1 - 712.2 7.9 915.2
Bank loans due in more than one year (56.9) - 87.1 (30.2) -
Bank loan fees due in more than one
year 2.2 8.2 - - 10.4
Private placement loan notes due in
less than one year (152.2) - 153.0 (0.8) -
Private placement loan notes due in
more than one year (1,060.6) (2.6) - (77.8) (1,141.0)
Private placement loan note fees 2.7 (0.2) - - 2.5
Bond borrowings due in more than one
year (1,279.1) - - (70.7) (1,349.8)
Bond borrowing fees 11.0 (0.8) - - 10.2
Derivative assets associated with
borrowings 3.9 0.9 - - 4.8
Derivative liabilities associated with
borrowings (22.4) (72.6) - - (95.0)
Lease liabilities (316.6) (5.9) 15.8 (7.8) (314.5)
Finance lease receivables 15.3 (5.5) (1.2) 0.7 9.3
Net debt (2,657.6) (78.5) 966.9 (178.7) (1,947.9)
12. Notes to the Cash Flow Statement (continued)
Reconciliation of movement in Net Debt
6 months 6 months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Increase in cash and cash equivalents in the period (including cash
acquired) 114.0 712.2 103.2
Cash flows from net drawdown of borrowings and derivatives associated
with debt 14.3 264.8 535.6
Change in net debt resulting from cash flows 128.3 977.0 638.8
Non-cash movements including foreign exchange 20.9 (255.9) 1.3
Movement in net debt in the period 149.2 721.1 640.1
Net debt at beginning of the period (2,029.6) (2,657.6) (2,657.6)
Net finance lease additions in the period (9.7) (11.4) (12.1)
Net debt at end of the period (1,890.1) (1,947.9) (2,029.6)
13. Borrowings
The Group had GBP3.2bn of committed facilities at 30 June 2021
(GBP4.1bn at 30 June 2020 and GBP3.2bn at 31 December 2020).
Following debt repayments in November 2020 there are no financial
covenants on any of the Group's group level bank or debt
facilities. The total borrowings excluding lease liabilities and
excluding derivative assets and liabilities associated with
borrowings, are as follows:
At 30 June At 30 June At 31
2021 2020 December 2020
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Current
Bank borrowings - - -
Total current borrowings - - -
Non-current
Bank borrowings 36.1 - -
Bank debt issue costs (4.0) (10.4) (2.6)
Bank borrowings - non-current 32.1 (10.4) (2.6)
Private Placement loan notes ($1,387.1m) - repaid Nov 2020 - 1,140.9 -
Private Placement issue costs - (2.5) -
Private Placement - non-current - 1,138.4 -
Euro Medium Term Note (EUR650.0m) - due July 2023 557.7 593.4 583.6
Euro Medium Term Note (EUR700.0m) - due October 2025 600.6 - 628.5
Euro Medium Term Note (GBP450.0m) - due July 2026 450.0 300.0 450.0
Euro Medium Term Note (EUR500.0m) - due April 2028 429.0 456.5 449.0
Bond borrowings and EMTN issue costs (13.7) (10.2) (15.3)
Bond borrowings - non-current 2,023.6 1,339.7 2,095.8
Total non-current borrowings 2,055.7 2,467.7 2,093.2
Total borrowings 2,055.7 2,467.7 2,093.2
13. Borrowings (continued)
Bank borrowings reflect the debt acquired as part of the
Novantas transaction (see note 14) representing GBP36.1m ($50.0m)
of a drawn loan facility less finance fees of GBP1.6m ($2.2m).
There are total loan facilities available relating to Novantas of
up to $110.0m of which $60.0m has 6 year maturity from May 2021 and
$50.0m has a maturity date no later than 28 May 2027. None of the
Group's existing liquidity was used to finance the acquisition .
There are other Bank borrowings facilities relating to the Group's
RCF facilities of GBP1,050.0m, none of which were drawn at 30 June
2021 (31 December 2020: nil drawn, 30 June 2020: nil drawn). The
RCF facilities comprise GBP30m maturing in February 2023, GBP420m
maturing in February 2024, GBP60m maturing in February 2025 and
GBP540m maturing in February 2026.
The Group does not have any of its property and equipment and
other intangible assets pledged as security over its group level
loans. See the Financial Review for further details.
14. Business combinations
Business combinations made in 6 months ended 30 June 2021
The principal business combination in the period to 30 June 2021
was the acquisition of Novantas, Inc.
Novantas, Inc.
On 28 May 2021, the group combined its existing FBX business
with Novantas Inc., acquiring 57% of the common voting stock of
this new combined business, with preference shares held by the
private equity firm Inflexion and Novantas management and
additional rights held by Inflexion over distributions at an exit
event, which give Inflexion and Novantas management a preferential
right to proceeds in the event of an exit. Novantas provides
quantitative and qualitative competitive intelligence solutions for
US retail banks, with particular strength in the deposits market.
This combination seeks to create a leading competitive intelligence
and specialist data business serving the retail banking
markets.
Informa owns the majority of the common voting stock and has
control of the board of this new business, and as such its results
are fully consolidated from the acquisition date, with a
corresponding Non-Controlling Interest (NCI) being recognised in
equity in accordance with IFRS 10. As the preference shares hold no
voting rights this does not affect the control of the entity under
IFRS 10, however they are still accounted for as NCI. The
preference shares have been classified as equity instruments and do
not therefore form part of the fair value of net assets acquired.
Preference shares are only settled at an exit event, or if
management elect to make a distribution to the preference
shareholders.
The total fair value of consideration, which is subject to
adjustments for working capital, was GBP101.2m ($143.5m), being
59.2% of the total fair value of $242.5m for the FBX business. The
fair value of consideration represents the percentage share of the
fair value of the Informa FBX business that has been contributed in
the transaction and is no longer attributable to Informa, with no
cash contribution paid by Informa.
The goodwill arising from the acquisition was GBP154.2m
($218.6m) representing the total consideration of GBP101.2m
($143.5m) less the provisional fair value of the net assets
acquired of GBP59.6m ($84.5m) and adding GBP112.6m ($159.6m) in
respect of the value of NCI. The NCI is composed of GBP25.6m
($36.3m) relating to the proportional share of net assets held by
the 43% NCI share of common stock and GBP87.0m ($123.3m) for the
NCI share of the fair value of additional rights held by Inflexion
and the fair value of preference shares held by Inflexion and
Novantas management. The NCI fair values have been calculated using
an option pricing model using an assumed estimated exit date.
In addition, a further non-controlling interest of GBP4.5m is
recognised in respect of the partial disposal of the FBX assets,
calculated as 43.0% of the carrying value of these net assets of
GBP10.4m.
The initial accounting has only been provisionally determined at
30 June 2021, with amounts recognised in respect of the estimated
fair value of identifiable assets acquired and liabilities assumed
in respect of this acquisition provided below.
14. Business combinations (continued)
Provisional Fair value and IFRS
Book value(1) adjustments Provisional fair value
GBPm GBPm GBPm
Acquisition intangible assets - 105.6 105.6
Other intangible assets 8.2 - 8.2
Property and equipment 2.8 - 2.8
Right of use assets - 9.6 9.6
Trade and other receivables (2) 8.4 (0.7) 7.7
Other receivable relating to share
option settlement (2, 3) 39.2 - 39.2
Cash and cash equivalents 4.3 - 4.3
Trade and other payables (3.9) - (3.9)
Other payable relating to share option
settlement (3) (39.8) - (39.8)
Tax liabilities (0.1) - (0.1)
Deferred income (10.9) 1.1 (9.8)
Provisions - (0.1) (0.1)
Borrowings (33.7) - (33.7)
Lease liabilities - (9.6) (9.6)
Deferred tax liabilities (1.3) (19.5) (20.8)
Total identifiable net assets acquired (26.8) 86.4 59.6
Provisional goodwill 154.2
Non-controlling interests (112.6)
Total consideration 101.2
(1) Book value excludes amounts recorded by Novantas for goodwill and acquisition intangible
assets as these amounts are replaced at acquisition date
(2) Trade and other receivables include trade receivable, together with the other receivable
relating to share option settlement, represent the gross contractual amounts and the amounts
that are expected to be collected.
(3) Share options relating to Novantas vested prior to the acquisition date, with proceeds
and settlement occurring after the acquisition date
Satisfied by
Fair value of non-controlling interest
in Informa's FBX business 101.2
Total consideration 101.2
Net cash inflow arising on acquisition
Cash consideration -
Less: cash and cash equivalents
balances acquired 4.3
4.3
The fair values and consideration are described as provisional
due to the proximity of the acquisition to the Half Year reporting
date. Provisional fair values of intangible assets arising on
acquisition and goodwill have been estimated using a recent
comparable transaction undertaken by the Group, using the ratio of
51% of intangibles arising on acquisition to goodwill before taking
account of deferred tax on these intangibles. These are subject to
estimation uncertainty and will be refined in the second half of
2021 through a detailed fair value exercise, which will involve
support from a third-party valuation specialist. A reasonably
possible increase in the ratio of acquisition intangibles to
goodwill is 5%, bringing the ratio to 56%. This would increase the
value of intangibles arising on acquisition (principally customer
relationships) by GBP10.4m, reducing goodwill by GBP4.4m and
increasing non-controlling interest by GBP3.3m and deferred tax
liabilities by GBP2.7m.
The provisional value of consideration includes an estimate of
the fair value of additional rights held by Inflexion over
distributions at an exit event.
14. Business combinations (continued)
The provisional goodwill arising from the acquisition has been
identified as relating to the following factors:
-- Increased scale and specialisation in the financial
intelligence retail banking market through access to new US,
Canadian, UK and Australian bank relationships, where Informa
previously had less access to Deposit data, by broadening the
current product offerings and customer base;
-- Synergy opportunities from incremental revenue cross-selling opportunities; and
-- Access to an experienced and skilled workforce.
None of the goodwill recognised is expected to be deductible for
tax purposes.
The disclosure above provides the estimated fair value of
acquired identifiable assets and liabilities assumed from Novantas
and are provisional, pending the completion of a final valuation.
The provisional fair value of intangible assets arising on
acquisition relate to customer relationships and are estimated to
be GBP105.6m, with a deferred tax liability recognised on these
intangibles of GBP27.1m. Other fair value and IFRS adjustments
include the recognition of GBP9.6m of right of use assets and lease
liabilities relating to IFRS 16 lease accounting for 4 property
leases, a deferred tax asset recognised on losses of GBP7.7m, a
GBP1.1m reduction to the book value of deferred revenue to reflect
its fair value, a GBP0.7m trade receivables provision and a GBP0.1m
other provision.
There was cash acquired of GBP4.3m and the fair value debt
acquired as part of transaction of GBP33.7m, representing a $50.0m
drawn loan facility.
No acquisition costs were incurred by Informa.
The Novantas business generated an Adjusted Operating Profit of
GBP0.3m, profit after tax of GBP0.1m, and GBP3.8m of revenue for
the period between the date of acquisition and 30 June 2021. If the
acquisition had completed on the first day of the financial period,
it would have generated loss after tax of GBP0.7m and GBP21.8m of
revenue for the six month period to 30 June 2021.
Other business combinations
There was one other business combination in the six months ended
30 June 2021, being the acquisition on 6 May 2021 of the China
Bakery Exhibition business, involving purchasing 50% of the
business and taking control of the business. The total
consideration was GBP2.6m, with 50% paid in the period (GBP1.3m)
and 50% deferred for one year until May 2022. There were GBP1.6m of
contingent and deferred consideration payments relating to
acquisitions completed in prior periods and GBP3.8m of cash
received relating to the finalisation of consideration associated
with a prior year acquisition.
15. Related Party Transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions with related parties are made
at arm's length.
Transactions with Directors
There were no material transactions with Directors of the
Company during the year, except for those relating to remuneration
and shareholdings. For the purposes of IAS 24 Related Party
Disclosures, Executives below the level of the Company's Board are
not regarded as related parties.
Other related party disclosures
At 30 June 2021, Informa Group companies have guaranteed the
pension scheme liabilities of the Taylor & Francis Group
Pension and Life Assurance Scheme, the Informa Final Salary Scheme
and the UBM Pension Scheme.
During the period, Informa entered into related party
transactions to the value of GBP0.2m (30 June 2020: GBP0.3m) with a
balance of GBP0.1m (30 June 2020: GBP0.1m) outstanding at 30 June
2021. Outstanding balances at 30 June 2021 are unsecured and
settlement occurs in cash. There are no bad debt provisions for
related party balances as at 30 June 2021, and no debts due from
related parties have been written off during the period.
16. Financial Instruments
This note provides an update on the judgements and estimates
made by the group in determining the
fair values of the financial instruments since the last annual
financial report.
Fair value hierarchy
Valuation techniques use observable market data where it is
available and rely as little as possible on entity-specific
estimates. The fair values of interest rate swaps and forward
exchange contracts are measured using discounted cash flows. Future
cash flows are based on forward interest/exchange rates (from
observable yield curves/forward exchange rates at the end of the
reporting period) and contract interest/forward rates, discounted
at a rate that reflects the credit risk of the counterparties.
The fair values of put options over non-controlling interests
(including exercise price) and contingent and deferred
consideration on acquisitions are measured using discounted cash
flow models with inputs derived from the projected financial
performance in relation to the specific contingent consideration
criteria for each acquisition, as no observable market data is
available. The fair values are most sensitive to the projected
financial performance of each acquisition; management makes a best
estimate of these projections at each financial reporting date and
regularly assesses a range of reasonably possible alternatives for
those inputs and determines their impact on the total fair
value.
The fair value of the contingent and deferred consideration on
acquisitions is not significantly sensitive to a reasonable change
in the forecast performance.
Financial instruments that are measured subsequently to initial
recognition at fair value are grouped into Levels 1 to 3, based on
the degree to which the fair value is observable, as follows:
Level 1 fair value measurements are those derived from
unadjusted quoted prices in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs,
other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices).
Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs), such as
internal models or other valuation methods. Level 3 balances
include investments where, in the absence of market data, these are
held at cost, and adjusted for impairments which are taken to
approximate to fair value. Level 3 balances for contingent
consideration use future cash flow forecasts to determine the fair
value, with the fair value of deferred consideration balances taken
as the receivable amount adjusted for an impairment assessment. The
fair value of put options over non-controlling interest uses the
present value of the latest cash flow forecast for each
business.
16. Financial Instruments (continued)
Financial assets and liabilities measured at fair value in the
Consolidated Balance Sheet and their categorisation in the fair
value hierarchy at 30 June 2021 and 31 December 2020:
Level 1 Level 2
At 30 June At 30 June Level 3 Total
2021 2021 At 30 June 2021 At 30 June 2021
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBPm GBPm GBPm GBPm
Financial assets
Derivative financial instruments in designated hedge
accounting relationships - 24.5 - 24.5
Unhedged derivative financial instruments - 0.5 - 0.5
Equity investments in unquoted companies - - 7.5 7.5
- 25.0 7.5 32.5
Financial liabilities at fair value through profit
or loss
Bank borrowings - - - -
Private placement loan notes - - - -
Bond borrowings - - - -
Derivative financial instruments in designated hedge
accounting relationships(1) - 7.1 - 7.1
Deferred consideration on acquisitions(2) - - 3.1 3.1
Contingent consideration on acquisitions(3) - - 4.4 4.4
- 7.1 7.5 14.6
(1) Amounts relates to interest rate swaps associated with Euro
Medium Term Notes
(2) GBP2.9m increase from the prior year reflects a GBP3.1m
increase arising from current year acquisitions and GBP0.2m
decrease from payments relating to prior year acquisitions.
(3) GBP2.3m reduction from the prior year reflects GBP1.6m
decrease from payments relating to prior year acquisitions and
GBP0.7m relating to remeasurements.
Level 1 Level 2
At 31 At 31
December December Level 3 Total
2020 2020 At 31 December 2020 At 31 December 2020
(Audited) (Audited) (Audited) (Audited)
GBPm GBPm GBPm GBPm
Financial assets
Derivative financial instruments in designated
hedge accounting relationships(1) - 44.6 - 44.6
Equity investments in unquoted companies - - 7.3 7.3
- 44.6 7.3 51.9
Financial liabilities at fair value through
profit or loss
Derivative financial instruments in designated
hedge accounting relationships(1) - 7.5 - 7.5
Unhedged derivative financial instruments - 0.2 - 0.2
Deferred consideration on acquisitions - - 0.2 0.2
Contingent consideration on acquisitions - - 6.7 6.7
- 7.7 6.9 14.6
(1) Amounts relate to interest rate swaps associated with Euro
Medium Term Notes.
16. Financial Instruments (continued)
Fair value of other financial instruments (unrecognised)
The group also has a number of financial instruments which are
not measured at fair value in the balance sheet. For the majority
of these instruments, the fair values are not materially different
to their carrying amounts, since the interest receivable/payable is
either close to current market rates or the instruments are
short-term in nature. Significant differences were identified for
the following instruments at 30 June 2021:
Carrying amount Estimated fair value Carrying amount Estimated fair value
30 June 2021 30 June 2021 31 December 2020 31 December 2020
(Unaudited) (Unaudited) (Audited) (Audited)
GBPm GBPm GBPm GBPm
Financial liabilities
Bond borrowings 2,023.6 2,127.8 2,095.8 2,186.7
17. Assets classified as held for sale and liabilities directly
associated with assets classified as held for sale
On 28 July 2021 the Group entered into an agreement to sell the
Barbour EHS business, with completion expected on 30 July 2021, as
part of ongoing portfolio management within Informa Intelligence.
Consequently, the Group has classified the assets and liabilities
of Barbour EHS as held for sale in the Condensed Consolidated
Balance Sheet at 30 June 2021. The disposal does not meet the
criteria of a discontinued operation.
The agreed sales price of GBP35m is subject to adjustment for
working capital and is expected to result in net consideration of
GBP32m which will be settled entirely in cash . The Group considers
the net proceeds of disposal to reflect the fair value of the
assets and liabilities of the business as at 30 June 2021, and as
these exceed the carrying amounts of the related net assets, no
impairment loss has been recognised on the carrying amounts
classified as held for sale. The Group are expecting to realise a
gain on sale of approximately GBP15m, being the excess of net
disposal proceeds over the carrying value of the net assets.
17. Assets classified as held for sale and liabilities directly
associated with assets classified as held for sale (continued)
The major classes of assets and liabilities held for sale as at
30 June 2021 were as follows:
30 June 2021
(unaudited)
GBPm
Assets classified as held for sale
Goodwill 19.2
Property and equipment -
Right of use assets -
Trade and other receivables 1.8
Cash and cash equivalents -
Total assets of disposal group held for sale 21.0
Liabilities directly associated with assets classified
as held for sale
Trade and other payables (0.6)
Tax liabilities -
Deferred income (3.1)
Provisions -
Lease liabilities -
Total liabilities of disposal group held for sale (3.7)
Net assets of business held for sale 17.3
18. Events after the Balance Sheet date
On 28 July 2021 the group entered into an agreement to sell the
Barbour EHS business, with completion expected on 30 July 2021, see
note 17 for further details.
Glossary of terms: Alternative Performance Measures
The group provides adjusted results and underlying measures in
addition to statutory measures, in order to provide additional
useful information on business performance trends. The Board
considers these non-GAAP measures as the most appropriate way to
measure the Group's performance because it aids comparability to
the prior year and is also in line with the similarly adjusted
measures used by peers and therefore facilitates comparison.
The terms "adjusted" and "underlying" are not defined terms
under IFRS and may not therefore be comparable with similarly
titled measurements reported by other companies. These measures are
not intended to be a substitute for, or superior to, IFRS measures.
The Financial Review provides reconciliations of Alternative
Performance Measures (APMs) to statutory measures and also provides
the basis of calculation for certain APM metrics. These APMs are
provided on a consistent basis with the prior periods.
Underlying measures of growth
Underlying measures of growth refer to the period-on-period
change in revenue and adjusted operating profit, adjusted for
acquisitions and disposals, the phasing of events, including
biennials, the impact of changes from implementing new accounting
standards and accounting policy changes and the effects of changes
in foreign currency by adjusting the current year and prior year
amounts to use consistent currency exchange rates. Phasing and
biennial adjustments relate to the alignment of comparative period
amounts to the timing of events in the current year. The results
from acquisitions are included on a pro-forma basis from the first
day of ownership in the comparative period. Disposals are similarly
adjusted for on a pro-forma basis to exclude results in the
comparative period from the date of disposal. Underlying measures
are provided to aid comparability of revenue and adjusted operating
profit results against the prior year. The Financial Review
provides the reconciliation of underlying measures of growth to
reported measures of growth in percentage terms.
Adjusted results and Adjusting items
Adjusted results exclude items that are commonly excluded by
peers across the knowledge and information and media sector:
amortisation and impairment of goodwill and intangible assets
relating to businesses acquired and other intangible asset
purchases of book lists, journal titles, acquired databases and
brands related to exhibitions and conferences, acquisition and
integration costs, impairment of right of use assets, acquisition
and integration costs, restructuring and reorganisation costs,
subsequent remeasurement of contingent consideration, profit or
loss on disposal of businesses and other items that in the opinion
of the Directors would impact the comparability of underlying
results.
Adjusted results are prepared for the following measures which
are provided in the Consolidated Income Statement. Adjusted
operating profit, Adjusted net finance costs, Adjusted Profit
before tax (PBT), Adjusted tax charge, Adjusted Profit After Tax
(PAT), Adjusted earnings, and Adjusted diluted earnings per share.
Adjusted operating margin, Adjusted tax charge and Adjusted EBITDA
are used in the Financial Review.
EBITDA
Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation and other non-cash items such as share-based payments
and before adjusting items.
Adjusted EBITDA for interest cover purposes is earnings before
interest, tax, depreciation and amortisation and adjusting items.
It is adjusted to be on a pre-IFRS 16 basis.
Adjusted EBITDA for leverage purposes is earnings before
interest, tax, depreciation and amortisation and adjusting items.
It is adjusted to include a full year's trading for acquisitions
and remove trading results for disposals and adjusted to be on a
pre-IFRS 16 basis.
Adjusted net finance costs
Adjusted net finance costs are the sum of finance costs and
finance income and exclude adjusting items for finance income and
finance costs.
Effective Tax Rate
The Effective Tax Rate is shown as a percentage and is
calculated by dividing the adjusted tax charge by the adjusted
profit before tax. For interim accounts the effective tax rate is
estimated for the full year and this is applied to the interim
adjusted profit before tax to arrive at the adjusted tax
charge.
Operating Cash Flow and Operating Cash Flow Conversion
Operating Cash Flow is a financial measure used to determine the
efficiency of cash flow generation in the business and represents
free cash flow adding back interest, tax, restructuring and
reorganisation costs. The Financial Review reconciles operating
cash flow to statutory measures.
Operating Cash Flow Conversion is a measure of the Group's
ability to turn Adjusted Operating Profit into cash in the business
and is measured as a percentage by dividing Operating Cash Flow by
adjusted operating profit in the period. The Financial Review
provides the calculation of Operating Cash Flow conversion.
Free Cash Flow
Free Cash Flow is the key financial measure of cash generation
and represents the cash flow generated by the business before cash
flows relating to acquisitions and disposals and their related
costs, dividends, any new equity issuance or purchases and debt
issues or repayments. Free Cash Flow is one of the Group's key
performance indicators and is an indicator of operational
efficiency and financial discipline, illustrating the capacity to
reinvest, fund future dividends and repay debt. The Financial
Review provides a reconciliation of free cash flow to statutory
measures.
Leverage ratio
The leverage ratio is the ratio of net debt to adjusted EBITDA
for leverage purposes and is provided to enable an assessment of
the Group's borrowings compared to its profit generation. For the
leverage ratio, net debt is translated using average exchange rates
for the period and is adjusted to include deferred consideration
payable, exclude derivatives associated with borrowings, and to be
on a pre-IFRS 16 basis. The Financial Review provides the basis of
the calculation of the leverage ratio.
Interest cover
Interest cover is the ratio of adjusted EBITDA for interest
cover purposes to adjusted net finance costs and excluding fair
value finance items. It is provided to enable an assessment of the
Group's ability to cover its cost of financing from profits. The
Financial Review provides the basis of the calculation of interest
cover.
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