DODS.L Regulatory News (DODS)

Dods (Group) PLC

2011 PRELIMINARY RESULTS

Financial Highlights

- Revenue at £15.3 million (2010: £16.1 million)

- Gross profit margin maintained at 33%

- Reduced statutory loss attributable to shareholders £0.9m (2010: £1.3m)

- Adjusted EBITDA at £1.9 million (2010: £1.9 million) *

- Adjusted EBITDA from retained business at £1.9 million (2010: £2.0 million) **

- Net cash of £1.4m at 31 December 2011 (2010: net cash of £1.3m)

Operating Highlights

- Double digit growth in Digital subscriptions - now 33% of Group revenue

- Politics Home digital news service successfully integrated

- Awarded PPA Digital Publisher of the Year

Successful in the winning tender for Civil Service Learning

Record performance of parliamentary events

Acquisition of DeHavilland agreed. Awaiting outcome of OFT report.

* EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, share based payments and non-trading items.

** Retained business is excluding the sold Education Division.

The Group believes that these measures provide additional guidance to the statutory measures of performance of the business. These measures are not defined under adopted IFRS and therefore may not be directly comparable with other companies' adjusted profit measures.

Non-trading items are items which, in management's judgment, need to be disclosed by virtue of size, incidence or nature. Such items are included within the income statement caption to which they relate and are separately disclosed either in the notes to the consolidated financial statements or on the face of the consolidated income statement.

Kevin Hand, Non-Executive Chairman of Dods, commented:

"Dods (Group) PLC continues to demonstrate the strength of its highly focused political communications business. Our company is expanding its competitive position at a challenging time in its markets, which has seen a number of competitors exit the market.

2011 has been another year of strong growth in our digital subscriptions business - high value, high margin products - and record demand for our events in the Parliamentary areas. At the same time, the Public Sector has had a year of reduced activity which has affected our Government-facing portfolios. Our successful participation in the tender for the Civil Service Learning business came too late to affect the 2011 results in our political training businesses but will clearly have a beneficial effect in future years.

Dods has moved into 2012 in a very strong competitive position. The acquisition of Politics Home is a key development in our continued focus on the Digital market. This focus has delivered significant results - with more than 33% of the Group's revenue and 49% of the Group's contribution having been delivered from Digital products, the vast majority of this from digital subscriptions. We are awaiting the decision of the Office of Fair Trading on whether we can proceed with the completion of the acquisition of DeHavilland.

Revenue from the Civil Service Learning tender will start to be generated during 2012. This and the ongoing growth in our digital and face-to-face businesses will be at the heart of the development of the Group in 2012. We hope to add to this the acquisition of DeHavilland.

The Board continues to be focused on maximizing shareholder value - and recognizes that this will be achieved by a combination of strong organic growth and, at the appropriate time, acquisitions within our core markets."

For further information, please contact:

Dods

Kevin Hand, Non-Executive Chairman 020 7593 5500

Gerry Murray, Chief Executive Officer

Cenkos (NOMAD)

Adrian Hargrave 020 7397 8922

Note to editors:

Dods (Group) PLC is a public limited company listed on the Alternative Investment Market (ticker DODS.L)

2011 Overview

While the adjusted results of the Group showed, overall, a flat trading result against 2010, the underlying changes within the Group were increasingly positive in the face of a very difficult market for a number of our products - and Dods moved into 2012 in a competitively stronger position than it had entered 2011. Dods successful participation in the winning consortium for the Civil Service Learning tender will add to this strength. In addition we hope to add the business of DeHavilland which is currently subject to an Office of Fair Trading ("OFT") review.

For the whole Group, revenue was £15.3m and earnings before interest, tax, amortisation and non-trading items (Adjusted EBITDA) was £1.9 million (2010: £1.9 million).

As disclosed in Schedule A (unaudited), non-trading items amounted to a total of £1.1m (2010: £0.4m), mainly arising from the one-off costs related to the acquisitions of Politics Home (in July 2011) and the potential acquisition of DeHavilland and some further restructuring within the business.

The Board has identified that growth must be enhanced by targeted additional acquisitions, which it believes represents the best use of shareholders' funds at this time and, for this reason, does not intend to declare a dividend at this time.

Strategy

Since I joined the Group in 2003, the transformation has been pronounced. Following the disposals in June 2009 this has been accelerated. At that time, the Group set out its strategy as being to drive the organic growth, predominantly in Digital and Events, while assessing the market for targeted acquisitions where the availability of finance and opportunities combined.

This strategy has demonstrably produced significant results for Dods - with the proportion of the Group's contribution coming from Digital and Events having reached 68% in 2011. 2011 has shown how this strategy has paid back - not initially in significant growth in the bottom line, but more in a significant strengthening of the market position in the face of challenging market conditions.

The Board, Management and People

I am delighted to welcome onto the Board Henrietta Marsh, the nominated Director of ISIS. Henrietta has been involved with the Group since its earliest days and brings a great deal of knowledge regarding the Group, the City and business in general.

Also, joining the Board is Keith Sadler as Group Finance Director. Keith has many years experience in the media sector with national and regional newspaper groups and, latterly, with business to business publishing and events and marketing services companies.

I would also like to express my thanks to our Finance Director Rupert Levy, who left the Group in April after four years. Rupert has been an integral part of the development of the Group and I wish him every success in the future.

The Group's management and staff have been at the centre of the development of the company and its continued transformation into a modern business to business media company. I would like to thank them once again for their hard work, without which none of the developments would have been possible.

On the 9 March 2012 there was a serious electrical fire in our Dartmouth Street head office. I am glad to say that there were no injuries to anyone from any of the Companies in that building. Following this fire, the business had to relocate to temporary office space and a huge amount of effort was put in to ensure that there was no interruption to the business and no loss of revenue. That this was successfully achieved is highly commendable - and the efforts of all of the staff, most particularly of Andy Heather and Simon Thompson who led this work, deserves special mention. I am also happy to report that the Group was adequately provided for in terms of insurance -and so all of the increased costs of working, together with the renovation and repair works have been covered.

Year end

The period from September to December has traditionally seen the vast majority of the profits generated in the year, due to the natural political business cycle (Party Conferences, year-end Awards events etc). The Board has considered this matter and has recently announced that the year end will be moved, with the next period ending on the 31 March 2013 and then annually from then on. The Board believes that this move will facilitate a more natural split between the first and second halves of the year. Dods will be producing interims for the 6 months ending 30 June 2012 and the Company will be publishing its annual audited accounts for the 15 month period ending 31 March 2013, on or before 30 September 2013. 

Outlook

Despite the confirmation that Dods is part of the winning tender for the Civil Service Learning contract, it is still not completely clear how the volumes from this contract will arise - and over what period. This will greatly influence the results for the current financial period. Nevertheless, what is clear is that the importance of Digital and Events will only increase and the strength of the Group will increase with it.

Dods will continue to be a robust, cash-generative business, and one that will continue to target market-leading positions in its markets and strong relationships with all of its stakeholders. The Board is confident that 15 month period to 31 March 2013 will show continued growth in the core business and a strong overall result.

Kevin Hand

Chairman

CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW

Introduction

The 2011 results once again show the Group's resilience in the face of difficult market conditions - conditions that have led to a number of our competitors falling away.

Our UK Parliament and Brussels activities had a stronger year, and our Digital businesses continued to press ahead, while there was another hard year for the Civil Service-facing activities where the hiatus in spend continued. The participation in the winning tender for the Civil Service Learning budget sets this part of the business up strongly going into 2012.

The structure of the portfolio - and the increasing amount of high-margin, renewable digital revenue - continues to set Dods apart from its competitors.

Business Overview

Following the sale of the Education Division in 2010, 2011 was the first full year where Dods was completely focused on its Political business. This has allowed the Group both to continue its organic development, but also commence targeted acquisitions. The first of these was Politics Home which was purchased in July 2011, with all of the consideration deferred and based on future performance.

Politics Home has accelerated the development of our online parliamentary engagement offering, and complements The House magazine giving a new life to our engagement division.

Under the coalition government the need to engage with all 3 major political parties resulted in a record year for our Events business in our Parliament unit - with party conference fringe meetings being particularly successful.

The lack of progress with the Civil Service Learning outsourcing was frustrating and had a detrimental effect on profits. This has now been successfully completed and will have a long term beneficial effect on Dods financial position.

Our development of the IT infrastructure continued in 2011 - with the development of a new EU Monitoring platform being the main product launch in the year. This continued development will form the basis of a significant IT expenditure in 2012 which will lead to a new UK Monitoring platform. The IT strategy continues to be driven around the use of independent software products which can be integrated into a single structure, allowing complete flexibility across the data sets - enabling the agile development of products and a completely integrated Group data.

2012 Priorities

The clear priority within the Group remains our continued advance as the premier political intelligence provider in Europe. Our double digit growth in digital subscriptions underpins our progress in this sector. Further the resolution of the Civil Service Learning process and the identification and completion of targeted acquisitions will be at the forefront of our efforts in 2012.

The IT development will be significant in the year - and the delivery of the 2012, and most importantly the 2013 numbers will be dependent on the success of this project. The level of spend is material for a Company the size of Dods - and the control of this expenditure will be of paramount importance.

The 2011 public affairs landscape in the UK was relatively constant and dominated by the government's austerity and debt reduction programme. EU government affairs were dominated by the ongoing Eurozone crisis while in France 2011 was a relatively quiet year running up to the 2012 Election.

The predicted acceleration in the outsourcing of public services did not arise in the year. While this has now started in 2012 (with Dods being part of the winning tender for the Civil Service Learning outsourcing as an example), the momentum in this part of the market did not pick up until the very end of 2011. While our products remain central to this market - and retain the support of the new leadership of the Civil Service following the retirement of Lord O'Donnell - 2011 showed a further 23% fall in revenues from this area.

For Dods, the overall results show a 5% reduction in revenue and a 5% reduction in EBITDA. This shows that there has been a significant amount of costs taken out of the business, mainly from headcount following a reorganisation of the editorial structures of the business.

The overall results also reflect a second year of reducing revenue from our training business - by 20% on 2010 - due to the delay of the tender process until the start of 2012.

The remainder of the portfolio performed better - with the digital information products continuing to deliver strong double-digit growth at high margins.

Highlights:

- The core Dods political businesses delivered flat revenue but an 8% growth in EBITDA.

- The UK and EU political information & intelligence digital businesses grew revenue by 22% and captured additional market share.

- The Parliament Magazine grew by 48% in the year despite the Euro crisis.

- Integration of Politics Home into Dods' engagement products following acquisition.

- Launch of the Global Public Service Leaders Summit aimed at the global leaders of the Civil Services, which will be held in Singapore in 2012.

The Parliament unit showed good contribution growth on the back of a small growth in revenue. The House magazine, which had been boosted by the Election in 2010, fell away considerably in the year. This reflects the long-term decline in Display Advertising and the increased move to Events. The latter grew revenue by 76%, most spectacularly growing the number of Fringe events from 40 in 2010 to 72 in 2011. In addition, the creation of "Dialogues" which bring together a number of customers around a single topic delivered additional roundtable and other events. The acquisition of Politics Home in July increased the penetration of our digital services into the Houses of Parliament and we merged Politics Home with ePolitix later in the year. The future of our Engagement portfolio will be focused around the Events and the Politics Home digital products, which will develop further in 2012.

The Information unit can be split between digital products and traditional directories. The latter was down year on year, following the Election year editions in 2011. While the Dods Parliamentary Companion is a strong brand, the future of our people information businesses is in the digital sphere.

The UK digital products continued to make very strong progress, which delivered a combined revenue increase of 21% and a 28% increase in contribution. The UK Information & Intelligence products showed both strong renewal rates (approaching 90%) as well as strong new business throughout the year. The integration of the DeHavilland business in 2012 will be key to the continued growth of this area - and the development of a "best in class" service for our customers. Dods People continued to grow, with revenue 12% ahead of 2010.

The Government unit had another very hard year with revenue falling by 23%. Following the public sector cuts, the forecast outsourcing of public sector services did not really start in 2011. All aspects of the portfolio saw reductions against 2010 with the exception of Research, which was an area of strong growth in the year. As this portfolio develops, the bespoke research and other digital products will become an increasingly material part. In November we held the first Global Public Service Leaders Summit, hosted by Lord O'Donnell. This event hosted a number of the heads of Civil Services from around the world, who discussed best-practice in public sector delivery. This will now be an annual event and we are delighted that it will be hosted in Singapore in 2012.

The European unit had a very strong year, growing revenue by 9% and contribution by 29%. This growth was driven by the Parliament Magazine and the EU Information & Intelligence service.

The Euro crisis did affect the portfolio, in that the Regional Review and the Research Review both attract revenue from the regions - which has been drastically reduced. The combined revenues of these products reduced from £457k in 2010 to £165k in 2011.

While the other magazines suffered, Parliament Magazine had a very strong year - 48% ahead of 2010, underlining the growing recognition of the brand as a key vehicle to engage with EU legislators. This was enhanced by the continued strong growth of the EU Information & Intelligence service which grew by 22%, maintained a 90% renewal rate and is still a unique product in the market. The new platform has been rolled out to our customers and provides a sound base for continued development of the product. While our European Events portfolio was flat year on year, there is good momentum going into 2012 as we now provide better return on investment for our clients.

The Political Knowledge events entered 2011 looking forward to the unblocking of training spend in the Civil Service. This did not happen and the unit enters 2012 having won the training outsourcing tender with Capita PLC and the way forward a lot more clear.

Westminster Explained open courses continued to struggle throughout the year as there was no freeing up of departmental spending. Revenues fell by a further 30% - to little more than 50% of the 2009 level. There is significant opportunity in this area now that the tender has been awarded, and there start of 2012 has been much more positive. The volumes, yields and process for the new post-tender era will become clear as we go through 2012.

The Westminster Briefing conferences faced a difficult environment with tight budgets across the markets. In the light of this, a reduction of only 9% in revenue was very commendable. Towards the end of the year, we launched some larger conferences in partnership with the Government unit. These started slowly, but have strong momentum going into 2012 where they will contribute more significantly.

The impending French elections in 2012 resulted in 2011 being flat on 2010. Going into 2012, the business is focused on maximising the opportunities coming out of the Election - and this includes a new partnership with the Dods European unit in developing the Trombiniscope Newsletter into a monthly magazine.

Following its restructuring, Training Journal showed a 10% growth in revenue on the back of an improved advertising performance and a more than doubling of revenue from Events. The products portfolio within Fenman showed a slight decline in revenue but an increase in contribution due to cost savings.

Financial Review

Revenue and Operating Results

Operating performance was mixed across the portfolio. Overall revenue fell from £16.1 million to £15.3 million and Adjusted EBITDA was unchanged at £1.9 million.

On a retained basis, revenue fell by 5% to £15.3 million, while Adjusted EBITDA of £1.9 million was 5% below 2010 (2010: £2.0 million). The loss for the year reduced significantly to £0.8 million (2010: £1.3 million). This includes the impact of the disposal of the Education Division in 2010.

Non-trading items

As discussed in Schedule A (unaudited) non-trading items for the year totalled £1.1 million, relating to transaction costs relating to Politics Home and De Havilland, staff costs relating to restructurings within the Group and other non-recurring costs. Due to the timing of the DeHavilland acquisition, the costs of the acquisition will be split between 2011 and 2012/13.

Taxation

The utilisation of tax losses has led to a low tax payment in the year and a net income tax credit of £0.2 million (2010: tax credit of £0.8 million) in the year. Whilst the Group continues to seek to optimise its tax position going forward, it is expected that the effective tax rate will increase.

Earnings per Share (EPS)

Adjusted EPS (before non-trading items, discontinued operations, share based payments credits and amortisation of intangible assets acquired through business combinations) was 0.71 pence per share (2010: 1.12 pence per share). Basic EPS on continuing operations was (0.57) pence per share (2010: 0.03 pence per share).

Dividends

A dividend of 0.25p per Share was paid to shareholders on the 11 January 2011.

Liquidity and Capital Resources

Interest payable during the year amounted to £0.1 million (2010: £0.4 million). Dods took out a £250,000 loan to fund an element of the Office Move in 2010. At the year end, this loan stood at £94,000.

During the year, underlying cash conversion was in line with expectations. The Group generated £1.2 million (2010: £1.7 million) of cash from its operating activities.

At the year-end, the Group had net cash of £1.4 million (2010: £1.3 million).

Derivatives and Other Instruments

In 2011, Dods' financial instruments comprised bank loans, cash deposits and other items such as normal receivables and payables. The main purpose of these financial instruments is to finance the Group's day-to-day operations.

During 2011, the Company entered into certain derivative transactions in order to manage the financial risk exposures arising from the Group's activities such as interest rate, liquidity and foreign currency risks. The Group's policy is that no speculative trading in derivatives is permitted.

Dods PLC

2011 PRELIMINARY RESULTS

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 December 2011

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2011

At an Annual General Meeting of the Company held on 16 June 2010, the members of the Company resolved that the Company's share premium account be cancelled.

Following the passing of the resolution an application was made to the Companies Court, Chancery Division, High Court of Justice to approve the capital reduction. The capital reduction was confirmed by the Court on 14 July 2010 and became effective when the order of the Court and minute on reduction of capital and cancellation of share premium account was registered at Companies House on 27 July 2010.

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2011

Notes to the preliminary announcement

31 December 2011

1 Basis of Preparation

The Group financial statements consolidate those of Dods (Group) PLC and its subsidiaries (together referred to as the "Group"). The financial statements have been prepared on the basis of the accounting policies set out on pages 10 to 15 of the Dods (Group) PLC Interim Report for 2011 which have been consistently applied.

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2011 or 2010. The financial information for 2010 is derived from the statutory accounts for 2010 which have been delivered to the registrar of companies. The auditor has reported on the 2010 accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain  a statement under section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for 2011 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course.

As required by EU law (IAS regulation EC 1606/2002) the Group's accounts have been prepared in accordance with International Financial Reporting Standards endorsed by the International Accounting Standards Board (IASB) as adopted by the EU ("Adopted IFRS").

2 Non-trading items

Acquisition expenses include legal and financial due diligence costs associated with the acquisition of Politics Home and the investigation of the potential acquisition of DeHavilland. Further costs have been incurred subsequent to the balance sheet date and will be recognised as appropriate during the period 31 March 2013. Acquisition expenses also includes £210,000 of allocated salary costs for senior management which have been apportioned on the basis of the time they have spent during the year on the acquisition related activity.

Redundancy and people related costs represent the effect of a Group initiative to reduce costs.

Non-trading items include expenses incurred aligning tax and business costs within the Group's offices in Brussels and Paris.

Office move costs relate to additional costs in relocating the Group to Dartmouth Street, London.

3 Taxation

The effect of non-trading items charged during the year is to increase the tax charge by £136,000 (2010: £107,000).

The credit to the income statement in respect of deferred tax of £387,000 (2010: £796,000) is stated after recording a deferred tax asset of £nil (2010: £nil) in respect of tax losses.

The tax charge for the period differs from the standard rate of corporation tax in the UK of 26.5% (2010: 28%).

The differences are explained below:

4 Discontinued operations

Discontinued operations relates to the results of the Education Division, which was sold on 19 March 2011. The Education Division included Letts Educational Ltd, Leckie & Leckie Ltd and the division Lonsdale which was held within Dods (Group) PLC. Results attributable to this business were as follows:

5 (Loss) / earnings per share

6 Interest bearing loans and borrowings

The weighted average interest rate paid on the bank loans was 3.95% (2010: 5.7%).

The Sterling loan of £250,000 represents a loan taken out in 2011 with Bank of Scotland to finance the fit-out costs of the new office premises at 21 Dartmouth Street. The last repayment is due in December 2012.

In connection with the Group's banking and borrowing facilities with the Bank of Scotland, the Company and its UK subsidiary undertakings have entered into a cross guarantee, which gives a fixed and floating charge over the assets of the UK trading companies of the Group.

The Group estimates the fair value of its loans to be the same as their carrying amount.

The Group negotiated and confirmed an overdraft facility of £300,000 with the Bank of Scotland during January 2012.

7 Reconciliation of net cash

Cautionary statement

This press release may contain forward-looking statements based on current expectations or beliefs, as well as assumptions about future events. In that regard, such statements are:

·; inherently predictive and speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future; and

·; not a guarantee of future performance and are subject to factors that could cause the actual results to differ materially from those expressed or implied.

The name Dods is a trademark of Dods (Group) PLC. All other trademarks mentioned herein are the property of Dods' respective subsidiary companies. All rights reserved.

The Dods (Group) PLC 2011 Annual Report and Financial Statements are being posted to shareholders on 1 June 2012 and will be available to the public upon request at the Company's registered office:

21 Dartmouth Street, London, SW1H 9BP.

Copies of recent announcements, including this Preliminary Results announcement, and additional information on Dods, can be found at www.Dodsgroupplc.com.

Schedule A (Unaudited)

Reconciliation between operating profit and non-statutory performance measure

The following tables reconcile operating profit as stated in the income statement to Adjusted EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group.

Adjusted EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of assets acquired through business combinations, and non-trading items. Plate cost amortisation is included within cost of sales of the Education Division as management believes this is an appropriate classification.

* including amortisation of software shown within intangibles.

** including share based payments charges/(credits) and profit on disposal of subsidiary undertaking.