Regulatory Announcements
REG-United Bus Media Ld: Preliminary results - Part 2
Released: 05/03/2010
- Part 2: For the preceeding part double click [ID:nPRr5F765a]
0.6 2.0
987.3 1,278.7
Current assets
Inventories 7.7 9.3
Trade and other receivables 169.8 202.0
Derivative financial instruments 0.3 -
10 Cash and cash equivalents 158.9 172.4
336.7 383.7
Total assets 1,324.0 1,662.4
Liabilities
Current liabilities
11 Borrowings 0.3 58.5
Trade and other payables 315.8 356.2
Derivative financial instruments 10.9 10.9
Provisions 23.4 43.1
6 Current tax liabilities 109.0 237.2
459.4 705.9
Non-current liabilities
11 Borrowings 385.0 374.3
12 Retirement benefit obligation 26.6 15.6
Trade and other payables 12.9 24.7
Provisions 26.6 35.5
6 Deferred tax liabilities 27.7 35.2
478.8 485.3
Total liabilities 938.2 1,191.2
Shareholders' equity
13 Share capital 24.4 24.4
14 Share premium 1.2 1.0
15 Other reserves (597.7) (567.5)
15 Retained earnings 948.4 1,005.7
Total shareholders' equity 376.3 463.6
15 Minority interest in equity 9.5 7.6
Total equity 385.8 471.2
Total equity and liabilities 1,324.0 1,662.4
Consolidated statement of changes in equity
for the year ended 31 December 2009
Share Share Other Retained Minority Total
capital premium reserves earnings interests equity
Notes £m £m £m £m £m £m
At 1 January 2009 24.4 1.0 (567.5) 1,005.7 7.6 471.2
Profit for the year - - - 75.2 6.6 81.8
Other comprehensive losses - - (43.8) (54.0) (0.1) (97.9)
15 Total comprehensive - - (43.8) 21.2 6.5 (16.1)
(losses)/income for the year
13, 14 Issued in respect of share - 0.2 - - - 0.2
options chemes and other entitlements
Share-based payments - - - 2.4 - 2.4
8 Equity dividends - - - (58.8) - 58.8
15 Minority interest dividends - - - - (4.4) (4.4)
16 Acquisition of minority - - - (8.5) (0.2) (8.7)
interests
15 Shares awarded by ESOP - - 13.6 (13.6) - -
At 31 December 2009 24.4 1.2 (597.7) 948.4 9.5 385.8
At 1 January 2008 82.7 361.3 217.7 (301.3) 5.7 366.1
Profit for the year - - - 76.4 6.3 82.7
Other comprehensive - - 95.4 (14.8) 2.7 83.3
income/(losses)
15 Total comprehensive income for - - 95.4 61.6 9.0 166.0
the year
13, 14 Issued in respect of share 0.1 1.9 - - - 2.0
options schemes and schemes
and other entitlements
13 Capital reorganisation (58.1) (362.2) (885.4) 1,305.7 - -
13 Capital reorganisation - (0.3) - 0.3 (9.3) - (9.3)
repurchase of B shares
Share-based payments - - - 7.9 - 7.9
8 Equity dividends - - - (54.4) - (54.4)
15 Minority interest dividends - - - - (7.1) (7.1)
15 Shares awarded by ESOP - - 4.5 (4.5) - -
At 31 December 2008 24.4 1.0 (567.5) 1,005.7 7.6 471.2
Consolidated statement of cash flows
for the year ended 31 December 2009
As restated
2009 2008
Notes £m £m
Cash flows from operating
activities
Reconciliation of profit to
operating cash flows
Profit for the year 81.8 82.7
Add back:
6 Taxation (117.5) 18.6
Depreciation 12.3 11.5
Amortisation of website development 0.9 1.4
costs
Amortisation of intangibles arising 26.8 26.1
on acquisition
5 Interest income (1.8) (4.6)
5 Interest expense 14.8 11.0
5 Financing income (6.9) (4.4)
5 Financing income - other (2.9) (0.3)
5 Financing expense - other 6.7 4.6
Other non-cash items 2.9 8.4
Share of results from joint (2.0) (1.1)
ventures and associates (after tax)
4 Non-cash exceptional items and 169.5 39.1
charges to provision
184.6 193.0
Payments against provisions (41.3) (41.3)
12 Pension deficit contributions (3.7) (1.7)
Decrease in inventories 0.9 -
Decrease in trade and other 25.5 23.1
receivables
Decrease in trade and other (23.3) (37.0)
payables
Cash generated from operations 142.7 136.1
Interest and finance income 7.8 3.8
received
Interest and finance costs paid (22.3) (8.0)
Taxation paid (16.5) (18.7)
Dividends received from joint 1.5 3.3
ventures and associates
Net cash flows from operating 113.2 116.5
activities
Cash flows from investing
activities
Acquisition of interests in (25.6) (47.5)
subsidiaries, net of cash acquired
Purchase of property, plant and (14.5) (15.0)
equipment and intangibles
Purchase of interest in joint - (0.4)
ventures and associates
Proceeds from sale of investments 3.4 -
Net cash flows from investing (36.7) (62.9)
activities
Cash flows from financing
activities
14 Proceeds from issuance of ordinary 0.2 2.0
share capital
Return of capital to shareholders - (9.3)
(including costs)
Acquisition of minority interests (8.7) -
15 Dividends paid to shareholders (58.8) (54.4)
15 Dividends paid to minority (4.4) (7.1)
interests
Repayment of borrowings (254.5) (7.1)
Issue of £75m floating rate reset - 75.0
bonds
Issue of £250m fixed rate sterling 247.1 -
bonds 2016
Net cash flows from financing (79.1) (0.9)
activities
Net (decrease)/increase in cash and (2.6) 52.7
cash equivalents
Net foreign exchange difference (7.3) 21.3
10 Cash and cash equivalents at 1 168.7 94.7
January
10 Cash and cash equivalents at 31 158.8 168.7
December
Notes to the consolidated financial statements
for the year ended 31 December 2009
1. General information
United Business Media Limited (`UBML') is a company incorporated in Jersey
under the Companies (Jersey) Law 1991. The address of the registered office is
Whiteley Chambers, Don Street, St. Helier, JE4 9WG, Jersey. UBML is tax
resident in the Republic of Ireland. The nature of the Group's operations and
its principal activities are set out in Note 3.
The preliminary announcement was approved by the Board of Directors on 5 March
2010.
The figures and financial information for the year ended 31 December 2009 do
not constitute the statutory financial statements for that year. Those
financial statements have not yet been delivered to the Jersey Registrar of
Companies, but include the auditor's report which was unqualified and did not
contain a statement under Article 111(2) or Article 111(5) of the Companies
(Jersey) Law 1991. The figures and financial information for the year ended 31
December 2008 included in the preliminary announcement do not constitute the
statutory financial statements for that year. Those financial statements have
been delivered to the Registrar and included the auditor's report which was
unqualified and did not contain a statement under Article 111(2) or Article
111(5) of the Companies (Jersey) Law 1991.
The comparative information for the year ended 31 December 2008 has been
restated for acquisition accounting adjustments which have been finalised in
relation to certain acquisitions made in 2008. The comparative information has
been restated in accordance with IFRS 3 `Business Combinations'. The impact of
this restatement is to increase goodwill, property, plant and equipment, cash
and cash equivalents and accruals and deferred income by £0.8m, £0.7m, £0.2m
and £1.6m respectively, with a corresponding reduction in prepayments and
accrued income by £0.1m.
Principal risks and uncertainties
Principal risks and uncertainties affecting the Group will be detailed within
the Annual Report for the year ended 31 December 2009, a copy of which will be
made available on the Group's website at www.ubm.com.
Changes to the composition of the Group
Year ended 31 December 2009
The Group has made a number of acquisitions in the year as disclosed in Note
16. These acquisitions are accounted for using the purchase method of
accounting.
Year ended 31 December 2008
On 1 July 2008, as part of a reorganisation of the corporate structure of the
Group, UBML was created as a new holding company and parent company of the
Group. UBML is UK-listed, incorporated in Jersey and with its tax residence in
the Republic of Ireland. United Business Media plc (`UBM plc') became a
subsidiary of UBML. The former UBM plc shareholders were issued new shares in
UBML on a one-for-one basis following a Scheme of Arrangement (`the Scheme')
under Part 26 of the Companies Act 2006 which was approved by UBM plc
shareholders. Immediately following the Scheme, the former shareholders of UBM
plc held the same economic interest in UBML as they held in UBM plc
immediately prior to its implementation.
The acquisition of UBM plc by UBML falls outside the scope of IFRS 3 `Business
Combinations'. Following the guidance regarding the selection of an
appropriate accounting policy provided by IAS 8 `Accounting policies, changes
in accounting estimates and errors', the transaction was accounted for in the
comparative period of these financial statements using the pooling of
interests method, which reflects the economic substance of the transaction.
2. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (`IFRS') as issued by the International
Accounting Standards Board and IFRIC interpretations. The financial statements
are prepared in compliance with the provisions of the Companies (Jersey) Law
1991.
The consolidated financial statements have been prepared on a historical cost
basis, except for derivative financial instruments that have been measured at
fair value.
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous
financial year except as follows:
The Group has adopted a number of new, revised and amended IAS, IFRS and IFRIC
interpretations as of 1 January 2009. Adoption of the following new and
revised standards has affected the presentation and disclosure in the
financial statements of the Group, but has had no affect on the amounts
reported:
IAS 1 Presentation of Financial statements (revised)
IAS 36 Impairment of Assets (part of Improvements to IFRSs - (May 2008))
IFRS 7 Financial Instruments: Disclosures (amendment)
IFRS 8 Operating Segments
IFRS 8 Operating Segments (amendment)
The principal effects of these changes are as follows:
IAS 1 - Presentation of financial statements (revised)
The Group adopted this revised standard on 1 January 2009. The revision
separates owner and non-owner changes in equity. The statement of changes in
equity includes only details of transactions with owners, with non-owner
changes in equity presented as a single line. In addition, the standard
introduces the statement of comprehensive income to be presented either as a
single statement, or as two linked statements. The Group has elected to
present two statements.
IAS 36 Impairment of Assets
When discounted cash flows are used to estimate `fair value less costs to
sell', additional disclosure is required about the discount rate, consistent
with disclosures required when discounted cash flows are used to estimate
`value in use'. For those cash generating units where the Group is required to
compute the recoverable amount, fair value less costs to sell is used on an
earnings multiples approach. Where the fair value less costs to sell test does
not demonstrate that the recoverable amount is in excess of the carrying
amount, the cash generating unit is tested under value in use. This
improvement does not have any impact on the presentation of the financial
statements in the current year. Additional disclosures will be included in the
future where applicable.
IFRS 7 - Financial Instruments: Disclosures
As of 1 January 2009, the Group adopted this amendment which requires
increased disclosures about fair value measurements and liquidity risk. Fair
value measurements related to items recorded at fair value are to be disclosed
by source of inputs using a three level fair value hierarchy, by class, for
all financial instruments recognised at fair value. The amendments also
clarify the requirements for liquidity risk disclosures with respect to
derivative transactions and assets used for liquidity management. The fair
value measurement and liquidity risk disclosures are presented in Note 21 of
the Group financial statements. The Group has elected not to provide
comparative information for these expanded disclosures in the current year in
accordance with the transitional reliefs offered in the amendment.
IFRS 8 - Operating Segments
The Group adopted IFRS 8 as of 1 January 2009. This new standard requires
disclosure of information about the Group's operating segments and replaces
the requirement to determine primary (business) and secondary (geographical)
reporting segments of the Group. Adoption of this Standard did not have any
effect on the financial position or performance of the Group. The Group
determined that the four operating and reportable segments are Events, Data,
Services and Online, Print - Magazines and Targeting, Distribution and
Monitoring. Additional disclosures about each of these segments are shown in
Note 3.
IFRS 8 - Operating Segments (amendment)
The Group has adopted early the amendment to IFRS 8 as of 1 January 2009. The
amendment was issued as part of the Annual Improvements to IFRSs 2009. It
removes the requirement to present segment asset information if it is not
regularly provided to the chief operating decision maker. Adoption of this
amendment did not have any effect on the financial position or performance of
the Group; disclosure of segment assets is not given in the financial
statements. Further details are given in Note 3.
The standards and interpretations adopted in these financial statements which
have had no effect on the amounts reported, presentation or disclosure are:
IAS 23 Borrowing costs (revised)
IAS 27 Consolidated and Separate Financial Statements (amendment)
IAS 32 Financial Instruments: Presentation and IAS 1 - Presentation of
Financial Statements - Puttable Financial Instruments and
Obligations Arising on Liquidation (amendments)
IFRS 2 Share-based Payment - Vesting Conditions and Cancellations (amendment)
IFRIC 9 Re-assessment of embedded derivatives (amendment)
IFRIC 15 Agreements for Construction of Real Estate
IFRIC 16 Hedges of net Investment in a Foreign Operation
Improvements to IFRSs - (May 2008)
Those standards listed above which have resulted in a change in accounting
policy are:
IAS 23 - Borrowing costs (revised)
The revised IAS 23 requires capitalisation of borrowing costs that are
directly attributable to the acquisition, construction or production of a
qualifying asset. The Group's previous policy was to expense borrowing costs
as they were incurred. In accordance with the transitional provisions of the
revised IAS 23, the Group has adopted the standard on a prospective basis. It
applies to borrowing costs arising on qualifying assets where the commencement
date for capitalisation is on or after 1 January 2009. It did not have an
impact on the financial position or performance of the Group in 2009.
IFRS 2 - Share-based Payment - Vesting Conditions and Cancellations
(amendment)
This amendment specifies that only service and performance conditions are
vesting conditions. It also prescribes that all cancellations should result in
an acceleration of the vesting period. The Group has adopted the revised
standard on 1 January 2009; it did not have an impact on the financial
position or performance of the Group.
IFRIC 16 - Hedges of Net Investment in a Foreign Operation
The interpretation provides guidance to be applied prospectively on the
accounting for a hedge of a net investment. It provides guidance on
identifying foreign currency risks that qualify for hedge accounting in a net
investment hedge; which entity in the Group can hold the hedging instruments
used in the hedge of a net investment; and how an entity should determine the
amount of foreign currency gain or loss, relating to both the net investment
and hedging instrument, to be recycled on disposal of the net investment. The
Group has adopted IFRIC 16 on 1 January 2009, it did not have any impact on
the financial position or performance of the Group.
Improvements to IFRSs - (May 2008)
In May 2008, the IASB issued a collection of amendments to its standards,
primarily to remove inconsistencies and to clarify wording. Most of the
improvements are effective from 1 January 2009 and there are separate
transitional provisions for each standard. The adoption of the following
amendments resulted in changes to accounting policies but did not have any
impact on the financial position or performance of the group.
- IAS 1 Presentation of Financial Statements: assets and liabilities
classified as held for trading in accordance with IAS 39 Financial
Instruments: Recognition and Measurement are not always required to be
presented as current in the statement of financial position. The Group has
assessed whether this would result in any reclassifications of financial
instruments between current and non-current in the statement of financial
position and determined that it would not.
- IAS 16 Property, Plant and Equipment: replaces the term `net selling price'
with `fair value less costs to sell'. The Group has applied this improvement,
although it did not result in any changes to the financial position or
performance of the Group.
- IAS 23 Borrowing costs: the definition of borrowing costs is revised to
consolidate the two types of items that are considered components of
`borrowing costs' into one - the interest expense calculated in accordance
with IAS 39 Financial Instruments: Recognition and Measurement. The Group has
amended its accounting policy accordingly which did not result in a change to
the financial position or performance of the Group.
- IAS 38 Advertising and promotional activities: the improvements clarify that
an entity is permitted to recognise a prepayment asset for advertising or
promotional expenditure only up to the point at which the entity has the right
to access the goods purchase or services received. Mail order catalogues have
been specifically identified as a form of advertising and promotional
activities. Clarification of this standard has not resulted in any changes to
the financial position or performance of the Group.
Other amendments resulting from Improvements to IFRSs did not have any impact
on the accounting policies, financial position or performance of the Group.
3. Segment information
Business segments
The chief operating decision maker (`CODM') for the purpose of IFRS 8
reporting is the executive management team - the Group Chief Executive Officer
and the Group Chief Financial Officer. The Group considers there to be four
reportable operating segments organised around products and services. The
Group operates in a number of different markets and communities and considers
that presentation of financial results on a products and services basis is the
most appropriate way to demonstrate the performance of the Group. For the
purpose of resource allocation and assessment of performance, the CODM
regularly reviews information based on the products and services at a revenue
and adjusted operating profit level.
- Events which provide face to face interaction in the form of exhibitions,
trade shows, conferences and other live events;
- Data, Services and Online which provide a range of services including
data-based workflow products, intellectual property consultancy and analytical
services, sales lead generation programmes, website sponsorships and banner
advertising as well as print and online directory products;
- Print - Magazines which publishes magazines and trade press to specialist
markets; and
- Targeting, Distribution and Monitoring which operates in the targeting and
distribution of company information and the evaluation of its impact on
targeted audiences.
No operating segments have been aggregated to form the above reportable
segments. The Group's management reporting and controlling systems use the
accounting policies that are the same as those referred to in Note 2.
Segment measures
The Group measures the performance of its operating segments through a measure
of segment profit or loss which is referred to as adjusted operating profit.
Adjusted operating profit, as defined in the footnote to the Income Statement,
represents operating profit excluding amortisation of intangible assets
arising on acquisitions, exceptional items and share of taxation on results of
joint ventures and associates. This measure is reported to the CODM for the
purposes of resource allocation and assessment of performance.
Interest income, interest expense and income tax expense are not included in
the adjusted operating profit measure which is reviewed by the CODM.
Intersegment revenue is recorded at values that represent estimated
third-party selling prices.
Segment assets and liabilities are not regularly provided to the CODM. The
Group has elected as provided under IFRS 8 `Operating segments' (amended) not
to disclose a measure of segment assets or liabilities where these amounts are
not regularly provided to the CODM.
With respect to geographical regions, revenue is generally allocated to
countries based on the location where the products and services are provided.
Non-current assets are disclosed according to the location of the businesses
to which the assets relate.
Year ended 31 December 2009
Depreciation Share of
(including pre-tax
amortisation results Segment
of website from JVs adjusted
External Intersegment Total development and operating
revenue revenue revenue costs) associates profit*
£m £m £m £m £m £m
Events 287.5 0.4 287.9 (3.6) 0.8 87.2
Data, Services and Online 232.9 - 232.9 (2.9) 0.1 39.7
Print - magazines 165.8 - 165.8 (2.1) 0.2 8.9
Targeting, Distribution 161.4 0.5 161.9 (4.2) 1.1 44.8
and Monitoring
Total segments 847.6 0.9 848.5 (12.8) 2.2 178.8
Other corporate - - - (0.4) 0.5 (7.6)
Eliminations - (0.9) (0.9) - - -
847.6 - 847.6 (13.2) 2.7 171.2
Amortisation of (26.8)
intangibles arising
on acquisitions
Impairment charge (153.0)
Exceptional reorganisation (16.5)
and restructuring costs
Share of taxation on (0.7)
profit in joint
ventures and associates
Group operating loss (25.8)
Interest income 1.8
Interest expense (14.8)
Financing income 6.9
Financing income - other 2.9
Financing expense - other (6.7)
Loss before tax (35.7)
* Adjusted operating profit represents operating profit excluding amortisation
of intangible assets arising on acquisitions, exceptional items and share of
taxation on profit in joint ventures and associates
Total corporate costs for 2009 were £15.5m (2008: £15.1m). The corporate costs
are offset by a level of internal cost recoveries from the Group's operating
businesses and by sundry income which is not attributable to any of the
Group's operations.
Year ended 31 December 2008
Depreciation Share of
(including pre-tax
amortisation results Segment
of website from JVs adjusted
External Intersegment Total development and operating
revenue revenue revenue costs) associates profit*
£m £m £m £m £m £m
Events 291.8 0.2 292.0 (3.8) 0.8 82.2
Data, Services and Online 225.3 - 225.3 (3.0) - 31.1
Print - magazines 215.6 - 215.6 (2.8) 0.5 23.9
Targeting, Distribution 154.3 - 154.3 (2.9) 0.9 43.3
and Monitoring
Total segments 887.0 0.2 887.2 (12.5) 2.2 180.5
Other corporate - - - (0.4) (0.4) (7.0)
Eliminations - (0.2) (0.2) - - -
887.0 - 887.0 (12.9) 1.8 173.5
Amortisation of (26.1)
intangibles arising
on acquisitions
Exceptional reorganisation (37.5)
and restructuring costs
Other exceptional items (1.6)
Share of taxation of (0.7)
profit in joint
ventures and associates
Group operating profit 107.6
Interest income 4.6
Interest expense (11.0)
Financing income 4.4
Financing income - other 0.3
Financing cost - other (4.6)
Profit before tax 101.3
* Adjusted operating profit represents operating profit excluding amortisation
of intangible assets arising on acquisitions, exceptional items and share of
taxation on profit in joint ventures and associates
Revenue by products and services
Revenue from external customers analysed by products and services is given in
the above segment tables. The Group's reportable segments are organised around
products and services provided to external customers.
Geographic information
Year ended Year ended
31 December 31 December
Revenues from external customers 2009 2008
£m £m
United Kingdom 129.6 178.3
Foreign countries
United States* 386.6 421.6
Other Americas 6.1 5.0
Europe and Middle East 163.8 154.1
China 101.4 75.8
Japan 18.5 18.4
Other Asia/Pacific 41.6 33.8
718.0 708.7
Total revenue 847.6 887.0
* United States revenue also includes Canada due to the integrated nature of
the business in North America
2009 2008
Non-current assets £m £m
United Kingdom 236.6 252.6
Foreign countries
United States* 426.1 583.0
Other Americas 33.9 44.8
Europe and Middle East 248.8 314.3
China 7.2 8.2
Japan 6.1 13.0
Other Asia/Pacific 28.6 32.6
750.7 995.9
Total non-current assets 987.3 1,248.5
* United States non-current assets also includes Canada due to the integrated
nature of the business in North America.
Non-current assets for this purpose consist of goodwill, intangible assets,
property, plant and equipment, investments in joint ventures and associates
and other investments.
4. Exceptional items
Exceptional items are presented separately as, due to their nature or for the
infrequency of the events giving rise to them, this allows shareholders to
understand better the elements of financial performance for the year, to
facilitate comparison with prior periods, and to assess better the trends of
financial performance.
2009 2008
£m £m
Charged to operating (loss)/profit
Reorganisation and restructuring costs
- Vacant property costs (3.9) (11.4)
- Redundancy (10.5) (16.8)
- Restructuring and business reorganisation costs (2.1) (5.1)
- Change of domicile - (4.2)
(16.5) (37.5)
Other exceptional items - (1.6)
Impairment of goodwill (see Note 9) (149.8) -
Impairment of joint ventures and associates (1.9) -
Impairment of other investments (1.3) -
Total charged to operating (loss)/profit (169.5) (39.1)
Charged to (loss)/profit before tax
Fair value adjustment - early settlement of (6.7) -
interest rate swap contracts
Credited to profit after tax
Taxation relating to exceptional items - 1.6
Exceptional taxation net credit 135.2 -
Total credited to profit after tax 135.2 1.6
Total charged to profit for the year (41.0) (37.5)
Charged to operating (loss)/profit
Year ended 31 December 2009
During 2009, UBM continued to actively manage its product portfolio. This
included the closure and merging of a number of print titles, and a headcount
reduction of approximately 500 people. The exceptional charge of £16.5m
includes £10.5m relating to redundancy, £2.1m relating to restructuring and
business reorganisation costs and £3.9m relating to vacant property. The
redundancy and restructuring and business reorganisation costs will be
substantially incurred by 31 December 2010, and the amount relating to vacant
property will be incurred over the remainder of the lease terms.
Total impairment losses of £153.0m have been recognised during the year of
which £149.8m relates to goodwill; details are given in Note 9. The carrying
value of investments in joint ventures and associates and other investments
have been impaired by £1.9m and £1.3m respectively.
Year ended 31 December 2008
In April 2008, UBM announced that it was undertaking a reorganisation of the
corporate structure of the Group which would create a new holding company
which is UK-listed, incorporated in Jersey and with tax residency in the
Republic of Ireland. The scheme was approved by shareholders on 2 June 2008
and was formally implemented on 1 July 2008. The exceptional charge of £4.2m
represents the professional fees and other costs arising in connection with
this change of domicile.
In November 2008, the CPhI India and P-MEC India events were cancelled as a
result of the terrorist attacks in Mumbai. The irrecoverable costs incurred by
CMP Asia and CMP Information, which total £1.6m, have been recorded as an
exceptional item, classified within other exceptional items.
During the year, UBM reorganised its core operations, replacing the historic
`divisional' structure with a much flatter, market-focused organisation. In
February, UBM Technology was reorganised into four separate market-focused
businesses, followed by CMP Information into five businesses in June and
Commonwealth Business Media into two businesses in December. UBM also
implemented a number of restructuring and reorganisation projects across the
Group. The objectives of these projects are to achieve greater alignment of
product portfolios and organisational structure to the changing needs of
customers, to better position the businesses to take advantage of higher
growth areas and to improve profitability. This involved closure and merger of
some print titles and a headcount reduction of over 500 people.
The exceptional charge of £33.3m includes £16.8m relating to redundancy costs
and £5.1m relating to restructuring and business reorganisation. Of the amount
charged, £8.4m has been incurred in 2008 and the balance is expected to be
incurred in 2009. The charge also includes £11.4m of vacant property and other
property costs which will be incurred over the remainder of the lease terms.
Charged to loss before tax
Year ended 31 December 2009
The fair value adjustment relates to early settlement of six interest rate
swap contracts which were previously designated as cash flow hedges of
expected payments under $300m of borrowing from the Group's £325m variable
rate multi-option facility. Further details are given in Note 5.
Credited to profit after tax
Year ended 31 December 2009
As a consequence of the resolution of a large number of outstanding taxation
items, in various jurisdictions, there was a net exceptional tax credit of
£135.2m. Further details are given in Note 6.
Year ended 31 December 2008
There is a £1.6m tax credit in relation to the £5.5m of redundancy and
restructuring costs incurred by UK companies.
5. Finance income/(expense)
2009 2008
Before 2009 2009 Before 2008 2008
Exceptional Exceptional Total exceptional Exceptional Total
£m £m £m £m £m £m
Interest income
Cash and cash equivalents 1.8 - 1.8 4.6 - 4.6
Interest expense
Borrowings and loans (13.2) - (13.2) (9.3) - (9.3)
Other (1.6) - (1.6) (1.7) - (1.7)
(14.8) - (14.8) (11.0) - (11.0)
Financing income:
Pension schemes 2.2 - 2.2 4.4 - 4.4
Foreign exchange gain on 4.7 - 4.7 - - -
forward contracts
6.9 - 6.9 4.4 - 4.4
Financing income - other
Foreign exchange gain on 1.0 - 1.0 - - -
forward contracts
Ineffective portion of net 0.3 - 0.3 - - -
investment hedges
Ineffective portion of cash 0.1 - 0.1 - - -
flow hedges
Net foreign exchange gain 1.3 - 1.3 - - -
Other fair value 0.2 - 0.2 0.3 - 0.3
adjustments
2.9 - 2.9 0.3 - 0.3
Financing expense - other
Fair value adjustments - - (6.7) (6.7) - - -
early settlement of
interest rate swap
contracts
Ineffective portion of cash - - - (0.3) - (0.3)
flow hedges
Net foreign exchange loss - - - (4.3) - (4.3)
- (6.7) (6.7) (4.6) - (4.6)
Net finance expense (3.2) (6.7) (9.9) (6.3) (6.3)
In December 2009, the Group settled early six interest rate swap contracts
which were previously designated as cash flow hedges of expected payments
under $300m of borrowing from the Group's £325m variable rate multi-option
facility. Following the issue of the £250m fixed rate sterling bonds in
November 2009, that $300m of borrowings was repaid. Three of the swap
contracts totaling $150m were due to mature in January 2011 with the other
three contracts totaling $150m were due to mature in July 2012. The early
settlement resulted in a loss of £6.7m which has been included as an
exceptional item.
Foreign exchange gain on forward contracts within financing income represents
realised gains on foreign currency contracts against profits of the overseas
operations.
6. Taxation
Major components of income tax income for the year ended 31 December 2009 are:
2009 2008
£m £m
Consolidated income statement
Current tax:
Current tax charge (24.2) (24.8)
Exceptional taxation net credit 135.2 -
Deferred tax:
Origination and reversal of temporary 6.5 6.2
differences
Income tax credit/(charge) in the consolidated 117.5 (18.6)
income statement
Consolidated statement of other comprehensive
income
Current tax - -
Deferred tax - -
Income tax recognised in other comprehensive - -
income
Factors affecting tax (credit)/charge for the year
A reconciliation of income tax expense applicable to loss before tax at the
statutory tax rate to tax expense for the year ended 31 December 2009 is as
follows:
2009 2008
£m £m
(Loss)/profit before tax (35.7) 101.3
(Loss)/profit before tax multiplied by (4.5) 12.7
standard rate of corporation tax in Republic
of Ireland of 12.5%(2008:12.5%)
Effect of:
Expenses not deductible for tax purposes 23.7 4.0
Tax effect of items not recognised in (9.1) (9.8)
consolidated financial statements
Origination and reversal of temporary (9.5) (4.8)
differences not recognised
Different tax rates on overseas earnings 19.3 19.1
Share of results from associates and joint (0.6) (0.3)
ventures (after tax)
Non-taxable income (1.6) (2.3)
Exceptional taxation net credit (135.2) -
Income tax (credit)/charge reported in the (117.5) 18.6
consolidated income statement
The amounts relating to current tax recognised in the statement of financial
position are:
2009 2008
£m £m
At 1 January 2009 237.2 227.6
Current tax charge 24.2 24.8
Exceptional tax credit (135.2) -
Tax paid (16.5) (18.7)
Foreign exchange and other movements (0.7) 3.5
At 31 December 2009 109.0 237.2
At 31 December 2008 the current tax liability of £237.2m included an
assessment of the Group's uncertain tax positions in various jurisdictions,
including the dispute with HMRC in relation to the sale of the Regional
Newspapers business in 1998 where the tax in dispute was estimated at £80m.
During the year the Group has resolved a large number of outstanding items in
various jurisdictions.
This included:
(i) the dispute in relation to the sale of the Regional Newspapers business,
for which a payment (including interest) of £36.4m is due to be paid in March
2010;
(ii) other UK issues for accounting periods up to 31 December 2007 for which a
payment (including interest) of £10.1m is due to be paid in March 2010, and
(iii) other non-UK issues for which a payment of £3m was made during the year.
The £46.5m due to be paid in March 2010 is included in the current tax
liabilities at 31 December 2009.
The amounts included in the current tax liability at 31 December 2008 in
relation to these issues, over and above the amounts paid and payable above,
have therefore been released. As a consequence there was a net exceptional tax
credit of £135.2m.
The Group does not expect the tax cash outflow in 2010 in respect of this
creditor to exceed £10m in addition to the £46.5m referred to above.
Deferred tax
Deferred tax at 31 December relates to the following:
Consolidated statement of Consolidated income
financial position statement
2009 2008 2009 2008
£m £m £m £m
Deferred tax
Intangible assets acquired 26.0 33.4 (6.4) (6.4)
Other temporary differences 1.7 1.8 (0.1) 0.2
27.7 35.2 (6.5) (6.2)
At 31 December 2009, there was no recognised deferred tax liability for taxes
that would be payable on the unremitted earnings of certain of the Group's
subsidiaries as the Group has determined that undistributed profits of its
subsidiaries will not be distributed in the foreseeable future.
The temporary differences associated with investments in subsidiaries for
which a deferred tax liability has not been recognised amount in aggregate to
£5.3bn (2008: £13.1bn). There are no income tax consequences to the Group
arising from the payment of dividends by the Company to its shareholders.
2009 2008
£m £m
The movement in the net deferred tax liability
was as follows:
Net liability at 1 January 35.2 30.8
Acquisition of subsidiaries (see Note 16) 1.3 3.0
Amounts credited to net profit (6.5) (6.2)
Currency translation (2.3) 7.6
Net liability at 31 December 27.7 35.2
The Group has unrecognised deferred tax assets of £59.2m relating to
deductible temporary differences and £105.5m (of which £63.9m will expire
between 2019 and 2029) relating to unused tax losses (2008: £80.1m and £63.6m
of which £50.6m will expire within 2018 and 2028 respectively). No deferred
tax asset has been recognised in respect of these amounts due to the
unpredictability of future taxable profit streams. The Group also has
unrecognised deferred tax assets of £52.3m (2008: £52.3m) relating to unused
capital losses which can only be utilised against future capital gains.
7. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the
year attributable to ordinary equity shareholders of the parent by the
weighted average number of ordinary shares outstanding during the year
(reflecting the movements set out in Note 13).
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary shareholders of the parent by the weighted average
number of ordinary shares outstanding during the year (adjusted for the
effects of dilutive options).
Adjusted earnings per share is calculated on adjusted Group operating profit
(net profit for the year attributable to ordinary equity shareholders, less
amortisation of intangible assets arising on acquisitions, certain exceptional
items, deferred tax on amortisation of intangible assets, taxation relating to
exceptional items and net financing expense - other) divided by the weighted
average number of ordinary shares outstanding during the year. Certain
exceptional items, net financing expense - other, taxation related to
exceptional items and deferred tax on amortisation of intangible assets are
excluded from this calculation, as due to their nature and the infrequency of
the events giving rise to them, separate presentation allows shareholders to
understand better the elements of financial performance for the year, so as to
facilitate comparison with prior periods and to assess better the trends of
financial performance.
The following reflects the income and share data used in the basic and diluted
earnings per share computations:
2009 2008
Weighted Weighted
average 2009 average 2008
2009 no. Earnings 2008 no. Earnings
Earnings of shares per share Earnings of shares per share
£m million pence £m million pence
Adjusted Group operating profit 171.2 173.5
Net interest expense (13.0) (6.4)
Financing income 6.9 4.4
Adjusted profit before tax 165.1 171.5
Taxation (24.8) (27.3)
Minority interests (6.6) (6.3)
B share dividend - (0.5)
Adjusted earnings per share 133.7 243.1 55.1 137.4 241.2 57.0
Adjustments
Amortisation of intangible assets (26.8) (11.0) (26.1) (10.8)
arising on acquisitions
Deferred tax on amortisation of 6.4 2.6 6.4 2.6
intangible assets
Adjustments in respect of non-tax (169.5) (69.8) (39.1) (16.2)
exceptional items
Tax exceptional item 135.2 55.6 - -
Taxation relating to exceptional - - 1.6 0.7
items
Net financing expense - other (3.8) (1.6) (4.3) (1.8)
Basic earnings per share 75.2 243.1 30.9 75.9 241.2 31.5
Dilution
Options - 3.4 (0.4) - 5.1 (0.7)
Diluted earnings per share 75.2 246.5 30.5 75.9 246.3 30.8
Adjusted earnings per share
(as above) 133.7 243.1 55.1 137.4 241.2 57.0
Options - 3.4 (0.9) - 5.1 (1.2)
Diluted adjusted earnings
per share 133.7 246.5 54.2 137.4 246.3 55.8
The Group has one category of dilutive potential ordinary shares: those share
options granted to employees where the exercise price is less than the average
market price of the Company's ordinary shares during the year. The impact of
dilutive securities in 2009 would be to increase weighted average shares by
3.4 million shares (2008: 5.1 million shares) for employee share options.
The weighted average number of shares excludes ordinary shares held by the
Employee Share Ownership Plan (the `ESOP') and the Qualifying Employee Share
Ownership Trust (the `QUEST').
8. Dividends
2009 2008
£m £m
Declared and paid during the year
Equity dividends on ordinary shares
Second interim dividend for 2008 of 18.20p 44.2 40.4
(2007: 16.76p)
Interim dividend for 2009 of 6.00p (2008: 14.6 13.5
5.60p)
Equity dividends - B shares - 0.5
58.8 54.4
Proposed (not recognised as a liability at 31
December)
Equity dividends on ordinary shares
Second interim dividend for 2009 of 18.20p 44.3 44.0
(2008: 18.20p)
The proposed second interim dividend has not been recognised as a liability in
these financial statements.
Pursuant to the Dividend Access Plan (`DAP') arrangements put in place as part
of the Scheme of Arrangement, shareholders in the Company are able to elect to
receive their dividends from a UK source (the `DAP election'). Shareholders
who held 50,000 or fewer shares (i) on the date of admission of the Company's
shares to the London Stock Exchange and (ii) in the case of shareholders who
did not own the shares at that time, on the first dividend record date after
they become shareholders in the Company, unless they elect otherwise, will be
deemed to have elected to receive their dividends under the DAP arrangements.
Shareholders who hold more than 50,000 shares and who wish to receive their
dividends from a UK source must make a DAP election. All elections remain in
force indefinitely unless revoked. Unless shareholders have made a DAP
election, or are deemed to have made a DAP election, dividends will be
received from an Irish source and will be taxed accordingly.
9. Goodwill
31 December 2009
Common- Targeting,
wealth Distribution
UBM CMP UBM UBM Business and
Technology Medica Asia* Information** Media RISI Monitoring*** Total
£m £m £m £m £m £m £m £m
Cost
At 1 January 2009 300.3 321.5 19.7 212.9 104.1 5.0 75.7 1,039.2
Acquisitions (see (1.5) 3.4 2.5 0.4 (0.5) - 4.3 8.6
Note 16)
Transfer to joint - - (2.5) - - - - (2.5)
venture
Transfers (0.2) - (4.6) 4.8 - - - -
Currency translation (29.9) (25.0) (1.9) (1.5) (8.9) - (7.4) (74.6)
At 31 December 2009 268.7 299.9 13.2 216.6 94.7 5.0 72.6 970.7
Impairment
At 1 January 2009 - - - - - - - -
Charge for the year 47.0 67.0 - - 35.8 - - 149.8
At 31 December 2009 47.0 67.0 - - 35.8 - - 149.8
Carrying value
At 1 January 2009 300.3 321.5 19.7 212.9 104.1 5.0 75.7 1,039.2
At 31 December 2009 221.7 232.9 13.2 216.6 58.9 5.0 72.6 820.9
* Formerly CMP Asia
** Formerly CMP Information
*** Formerly B2B Distribution, Monitoring and Targeting
31 December 2008 (as restated)
Common- Targeting,
wealth Distribution
UBM CMP UBM UBM Business and
Technology Medica Asia Information Media RISI Monitoring Total
£m £m £m £m £m £m £m £m
Cost
At 1 January 2008 188.6 243.9 14.8 202.6 80.0 5.0 51.4 786.3
Acquisitions (see 33.4 0.3 - 6.0 0.1 - 5.1 44.9
Note 16)
Currency translation 78.3 77.3 4.9 4.3 24.0 - 19.2 208.0
At 31 December 300.3 321.5 19.7 212.9 104.1 5.0 75.7 1,039.2
2008
Impairment
At 1 January 2008
and
31 December 2008 - - - - - - - -
Carrying value
At 1 January 2008 188.6 243.9 14.8 202.6 80.0 5.0 51.4 786.3
At 31 December 2008 300.3 321.5 19.7 212.9 104.1 5.0 75.7 1,039.2
The amounts shown for the year ended 31 December 2008 have been restated to
reflect the finalisation of acquisition accounting adjustments relating to
certain acquisitions made in 2008 (see Note 1).
Financial results of cash generating units
The tables below show the revenue and adjusted operating profit measures of
each cash generating unit (`CGU') in the current and prior year. The amounts
are shown to provide additional financial information in respect of the
financial performance of these CGUs and as a context for the reasons for
impairment set out below. The same measures for the Group's reportable
segments of Events, Data, Services and Online, Print - Magazines and
Targeting, Distribution and Monitoring are set out in Note 3.
31 December 2009
Common- Targeting,
UBM wealth Distribution
UBM CMP UBM Business and
Technology Medica Asia Information Media RISI Monitoring Total
£m £m £m £m £m £m £m £m
External revenue 162.2 178.7 117.6 154.1 58.2 15.4 161.4 847.6
Inter-CGU
revenue - - 0.4 - - - 0.5 0.9
Total CGU
revenue 162.2 178.7 118.0 154.1 58.2
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