DODS.L Regulatory News (DODS)

7 Mar 2005 07:01

Huveaux PLC07 March 2005 HUVEAUX PLC Preliminary announcement of the final results for the year ended 31 December 2004 HIGHLIGHTS - Sales more than trebled to £14.4 million- Pre-tax profit before exceptional items doubled to £2.45 million *- Earnings per share before exceptional items up by 9 per cent *- Dividend up by 14 per cent- Cash of £3.1 million at year-end, and strong cash generation- 3 acquisitions completed in 2004 The above highlights the underlying business performance of the Group. Thestatutory results show the following financial results: 2004 2003 £'000 £'000Turnover 14,433 4,575Profit before taxation and exceptional items* 2,450 1,205Profit before taxation 2,128 1,205Earnings per share before exceptional items (basic)* 2.19p 2.01pEarnings per share (basic) 1.94p 2.01pDividend per share 1.00p 0.88p * Exceptional items amounted to £322,000 (before tax) relating principally tothe cost of restructuring the Parliamentary Communications Limited operationsacquired during 2004. John van Kuffeler, Chairman of Huveaux PLC, commented: "We are delighted that 2004 was a year of considerable growth for Huveaux, bothorganically and through acquisition. Sales, profits and earnings per share haveall significantly increased. We have invested in new offices in London to bring our UK Political Divisionunder one roof and this will generate significant benefits going forward.Overall, the business has been transformed under a strengthened seniormanagement team and is in excellent shape. The outlook for 2005 is for anotheryear of growth." For further information, please contact:John van Kuffeler, Huveaux PLC 020 7245 0270Ann-marie Wilkinson/Geoff Callow, Bell Pottinger 020 7861 3232 CHAIRMAN'S STATEMENT The year 2004 saw a further major transformation of Huveaux. We made threeacquisitions more than doubling our size and in addition achieved good organicgrowth. As a result sales more than trebled from £4.6 million to £14.4 millionand pre-tax profits before exceptional items doubled to £2.45 million (2003 -£1.20 million). Earnings per share before exceptional items increased by 9 percent to 2.2 pence (2003- 2.0 pence) and the Directors are recommending adividend of 1 pence per share (2003- 0.88 pence), an increase of 14 per centover 2003. Huveaux ended the year with a strong balance sheet, no borrowings and£3.1 million of cash balances in the bank. The exceptional item of £322,000 (2003- £nil) represents principally the cost ofrestructuring the Parliamentary Communications Limited operations, including 18redundancies, the day we completed that acquisition. After this exceptionalitem, the pre-tax profit was £2.1 million (2003- £1.2 million). The acquisitions in 2004 of Parliamentary Communications and Public Affairs Newshave been fully integrated with Vacher Dod in the UK creating a very strongmarket position in UK political publishing, with significant cost and revenuebenefits flowing through in 2005. Similarly, the operations of ATP- Egora havebeen integrated into Le Trombinoscope in Paris with similar benefits flowingthrough to 2005. In addition we have significantly strengthened our Board andmanagement team. Altogether, these measures have ensured a strong start to 2005. Review of Operations As at 31 December 2004 Huveaux's business comprised four operating units all inthe field of specialist B2B publishing. The sales and profits of each were asfollows for the year 2004: Sales Pre-tax Profit* £000 £000UK Political 6,682 1,283EU Political 2,213 335 ---------- ------------Total Political Division 8,895 1,618 ---------- ------------ Fenman 2,875 466Lonsdale 2,663 1,188 ---------- ------------Total Education & Training Division 5,538 1,654 ---------- ------------ Operating Result 14,433 3,272Head Office - (822) ---------- ------------Sales/Pre-tax Profit 14,433 2,450 ========== ============ * before exceptional items Each of these is now described in turn. Our UK Political Operation, Dod's Parliamentary Communications, is our largestoperating unit and is the leading political information, public affairs andpolicy communication specialist in the UK. It comprises magazines, websites,databases, reference books, seminars and events. Sales totalled £6.7 million in2004, up from £1.5 million in 2003, with a large proportion of the increase fromthe acquisitions made during the year. This Division is showing strong organicgrowth with revenues increasing 16 per cent in 2004 on a like-for-like basis.The costs in 2004 include the full costs of moving from four separate officebuildings to the new integrated office in Westminster Tower (including the costsof the remainder of the old leases). The pre-tax profit before exceptional itemsof this division amounted to £1.28 million. Our magazines offer comprehensive editorial content from key decision makers whoinfluence, inform and educate- resulting in an essential read for thoseinterested in government, policy and the decision- making process. Regularlyhighlighted in independent "best read" research, our publications link thepolitical communities of the UK, allowing readers to keep abreast ofdevelopments at all levels. Our magazines account for some 35 per cent of Dod'sParliamentary Communications sales and comprise: The House Magazine is the premier weekly publication for the Houses ofParliament and those involved in politics and policy development. The Parliamentary Monitor provides a monthly commentary on the big issues in thepolitical world, resulting in a respected insight into the current andforthcoming agenda. In 2005 we have added The Regional Monitor, a month by monthanalysis of the political issues around the regions of the UK. Whitehall and Westminster World is a fortnightly newspaper for the civilservants charged with developing, influencing and implementing policy inWhitehall and Westminster. Public Affairs News is Europe's leading monthly business publication dedicatedto those in the public affairs industry and government relations. pH7 is the quarterly parliamentary health magazine for parliamentarians andhealth policy makers to read and debate current issues. The International Development Magazine is a new magazine which analyses issuesin the developing world. It is read by parliamentarians and leading figuresinvolved in development. Our UK new media services comprise: ePolitix.com is the highly regarded open access politics website with news,policy bulletins, and a comprehensive legislation guide, as well as 420 MP and250 specialist government relations websites. It has a monthly audience of60,000 unique users and over 8,000 people read the daily email bulletins. ePolitixlocal.com is the local government equivalent of ePolitix.com which waslaunched in February 2005. dodonline.co.uk is the UK's most authoritative online political intelligenceresource covering the people, institutions and constituencies in the UK. Aspreferred supplier to the UK Parliament it delivers unrivalled real- timeinformation and search facilities based on the highly respected Dod'sParliamentary Companion database. ePolitixplus.com is a specialist information provider for political monitoring.It delivers fast and accurate tailor- made political information to clients fora fee, which varies according to the complexity of information required. Thenumber of clients grew from 30 to more than 100 during the year 2004. The revenue from the above new media businesses account for some 25 per cent ofUK Political sales. Our UK Political training and seminar business comprises: Westminster Explained which offers high quality training and developmentseminars to the public and private sector, facilitating a high standard ofperformance and understanding in policymaking. The Certificate in Public Sector Delivery which offers a high qualityprofessional training programme for people working in the civil service and thepublic sector. Westminster Briefing which offers political and policy specialists the rareopportunity to hear about proposed government legislation and initiatives fromkey parliamentary figures. The revenue from the above training and seminar businesses account for some 22per cent of UK political sales from over 100 events in 2004. Our database and reference book business is dominated by Dod's ParliamentaryCompanion and its accompanying titles, Dod's Civil Service Companion, Dod'sConstituency Guide, Dod's Scotland, Wales and Northern Ireland Companion, VQ,and the Dod's Handbooks of Parliamentary Procedures. The revenue from thesepublications account for some 15 per cent of UK political sales. Electus is the leading search and selection consultancy for the public affairsand political communications industry. The revenue from this business accountfor some 3 per cent of UK political sales, after sales more than doubled in2004. The outlook for 2005 is for continued good growth in sales with the cost andoperational benefits of the new building flowing through. Our budgets for 2005are based upon a May General Election, but an autumn poll date could have aninfluence on the Division's results for 2005. Our EU Political Operation, based in Paris and Brussels, had sales of £2.2million in 2004, a like-for-like increase of 19 per cent over 2003. It consistsof: • Le Trombinoscope (two reference books, a newsletter, a subscription website and the prestigious 'Prix du Trombinoscope' political awards) which had sales growth of 9 per cent in 2004;• Parliament Magazine, published fortnightly, reports and reflects upon the work of the European Parliament, and the European Commission as well as upon broader European issues, which achieved a phenomenal 46 per cent sales growth over the equivalent period last year;• EUPolitix.com which has seen stable revenues since being acquired by Huveaux, and has turned a £ 364,000 loss pre-acquisition into a small pre-tax profit;• ATP - Egora acquired in 2004 (which consists of four quarterly specialist medical magazines under the brand "Reseaux" and a website for professionals in the French healthcare sector) which similarly saw stable revenues but saw increased profits under our ownership with a contribution of approximately €70,000 (£48,000) in the four months post - acquisition. Overall, the EU Political Operation achieved pre-tax profits of £335,000 in2004. Our operations in Paris, comprising the separate businesses of Le Trombinoscopeand ATP - Egora, have recently moved into new premises together, enablingfurther operational benefits to accrue. Parliament Magazine and EUPolitix.com are both run from our Brussels officewhich is opposite the European Commission building. Eurosource, which is the title for the new database and reference books andsubscription website on the EU Parliament and the EU Commission (which combinesthe former Dod's and Trombinoscope databases) achieved sales of approximately£249,000 in 2004, all of which were deferred to 2005 pending the delivery tocustomers of Volume II. This postponement arose as a direct result of the EUParliament rejecting the proposed EU Commission in October. Sales in 2004 weretherefore £ nil as compared to £184,000 on a like-for-like basis in 2003. Overall, the EU Political Operation should see continued strong growth in 2005combined with the benefit of the Eurosource sales being deferred from 2004 to2005. The Education & Training Division consists of Fenman and Lonsdale. Fenman is a specialist publisher of material for training managers in both thepublic and private sectors, including larger companies, government departments,local authorities, the armed forces and large accounting firms. Its flagshipproduct is a monthly publication, The Training Journal, which has some 5,000annual subscribers. Fenman also makes and sells a wide range of training videosand publishes 108 different training manuals. In addition, it runs seminars andcourses for training managers at locations throughout the UK, and operates awebsite for training managers with over 2,000 subscribers. Fenman is based inEly, Cambridgeshire and has 16 employees. Fenman had sales of approximately £ 2.9 million in 2004 as compared to £ 0.7million in 2003 (part year only), but on a like-for-like basis, sales were 2 percent lower. Pre-tax profits were £466,000 (2003 - £184,000 part year only). Thiswas a disappointing result reflecting a slowing of manual and video sales (down13 per cent) counterbalanced by 8 per cent growth in Training Journal revenuesand a 48 per cent growth in seminar revenues (on a like-for-like basis in eachcase). Immediate action has been taken to address these points:- •Production of the Training Journal is being moved to London to be produced alongside our other magazine titles with consequent cost savings and the benefit of a large advertising sales department. •The Fenman seminars business will be given the added expertise of our large London political conference and training unit and further expansion of this high growth business is planned for 2005. •The manual and video business will reduce its heavy direct marketing spend which will be replaced by a small sales unit targeting high value customers, particularly the larger Government departments. The outlook for 2005 for Fenman is therefore for a resumption of modest salesgrowth. Lonsdale is a specialist publisher of revision guides and workbooks for schoolsin England and Wales. It specialises in Key Stages 2, 3 and 4, including GCSE(for pupils between the ages of 7 and 16) and has 63 current titles. Sales aremade directly to schools and are priced at between £1 and £4. The guides aredesigned to assist teachers to ensure that their pupils receive the exactmaterial on which they will be assessed. Lonsdale is based in Holmfirth,Yorkshire; and Carnforth and Penrith in the Lake District. It has 18 employees. Lonsdale achieved sales of approximately £ 2.66 million in 2004, as compared to£2.5 million on a like-for-like basis in 2003, representing sales growth of 6per cent. Pre-tax profits were approximately £1.19 million, which represents apre-tax profit margin of 44 per cent. A number of new titles were publishedduring the year, including six new maths titles published in November, and saleshave started strongly in 2005. Group Financial Head Office costs were £ 822,000 net of interest income which was in line withexpectations. Huveaux ended the year with a strong balance sheet with no borrowings andapproximately £ 3.1 million cash in the bank. Cash generation was strong with 93 per cent of pre-tax profits being converted into cash during the year, excluding deferred payments in respect of the Fenman and Lonsdale acquisitions and the payment following exercise of options by the vendors of Parliamentary Communications Limited. Corporate Philosophy Huveaux has the objective of building a substantial publishing and media groupover the next ten years. After three years of significant achievement, includingseven acquisitions, our corporate philosophy remains unchanged: •Concentration on "must-have" information businesses with strong market positions •Strong organic growth supplemented by carefully targeted acquisitions •Increasing pre-tax profits and EPS each year •All our businesses must be cash generating •A progressive dividend policy Staff We now have approximately 190 employees, of whom approximately 160 are in the UKand 30 are in Paris and Brussels. Our staff represent a valuable resource of theGroup, which through our acquisitions in 2004 has been strengthened bysignificant sales and marketing, editorial and events management expertise. During the year, we introduced two share incentive schemes to provide staff atall levels with the opportunity to participate in share ownership of Huveaux.Our staff have responded well to a period of rapid change. The Board would liketo thank all staff for their continued efforts and hard work, which have been soimportant to the success of the Group. Board and Management During 2004 we continued the strengthening of our board. Kevin Hand, GerryMurray and Jean-Marie Simon were appointed directors in November, 2004. Five ofour eight directors are highly experienced publishers and three have served onFTSE100 company boards. This gives us confidence that we have the management inplace to exploit the next phase of our growth. 2004 has been an active year, involving three acquisitions and significantreorganisation and restructuring of the operations under our strengthened seniormanagement team. Gerry Murray now has responsibility for all our UK operations,and Jean-Marie Simon heads our European political activities. Both have activelyintegrated our acquisitions and positioned the businesses for growth. Thebenefits of the actions taken this year are expected to flow through for yearsto come. Outlook It is still early in the new financial year, but the results for January andFebruary are encouraging. We are concentrating on achieving strong organicgrowth during the early months of the year to lay the sound foundations for asuccessful year. We will also have the benefit of the full year contributionfrom the three acquisitions made in 2004. In addition, the Board is continuingto evaluate and negotiate acquisitions which meet its strict criteria. Overallthe outlook for 2005 is for continued significant growth, enhanced by theexpected UK General Election in May. 4 March 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 December 2004 Note 2004 2003 £ 000s £ 000s TurnoverContinuing operations 2 7,572 4,575Acquisitions 2 6,861 - -------- --------- 14,433 4,575Cost of sales (6,872) (1,497) -------- --------- Gross profit 7,561 3,078 -------- ---------Administrative expenses (5,217) (1,969)Exceptional items 3 (322) - -------- ---------Total administrative expenses (5,539) (1,969) -------- ---------Continuing operations 2 1,281 1,109Acquisitions 2 741 - -------- ---------Total operating profit 2,022 1,109 Other interest receivable and similar income 116 99Interest payable and similar charges (10) (3) -------- --------- Profit on ordinary activities before taxation 2,128 1,205 Tax on profit on ordinary activities 4 (345) (250) -------- --------- Profit for the financial year 1,783 955 Dividends on equity shares 5 (1,065) (629) -------- ---------Retained profit for the year 718 326 ======== ========= Adjusted basic earnings per share before exceptionalitems 6 2.19 p 2.01 pEarnings per share- basic 6 1.94 p 2.01 pEarnings per share - diluted 6 1.92 p 2.01 p The accompanying notes are an integral part of this consolidated profit and lossaccount. CONSOLIDATED BALANCE SHEETAt 31 December 2004 Note 2004 2003 £ 000s £ 000s Fixed assetsIntangible assets 8 38,046 19,451Tangible assets 800 515 -------- --------- 38,846 19,966 -------- --------- Current assetsStocks 1,329 841Debtors 4,638 1,153Cash at bank and in hand 3,120 3,710 -------- --------- 9,087 5,704 Creditors: Amounts falling due within one year (8,736) (2,901) -------- --------- Net current assets 351 2,803 -------- --------- Total assets less current liabilities 39,197 22,769 Creditors: Amounts falling due after more than one year (77) (1,162) Provision for liabilities and charges - (22) -------- ---------Net assets 39,120 21,585 ======== ========= Capital and reservesCalled-up equity share capital issued 9 10,646 7,146Called-up equity share capital not issued 9 400 400Share premium account 26,444 13,157Merger reserve 409 409Profit and loss account 1,221 473 -------- ---------Equity shareholders' funds 39,120 21,585 ======== ========= The accompanying notes are an integral part of this consolidated balance sheet. These financial statements were approved by the board of directors and signed onits behalf by: John P de Blocq van Kuffeler David B HorneChairman Finance Director 4 March 2005 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2004 Note 2004 2003 £ 000s £ 000s Reconciliation of operating profit to net cash flowfrom operating activities Operating profit 2,022 1,109Depreciation charges 238 45Increase in stocks (483) (106)Increase in debtors (773) (258)Decrease in creditors (108) (631) -------- --------Net cash inflow from operating activities 896 159 ======== ======== Cash flow statement Cash flow from operating activities 896 159Returns on investments and servicing of finance 10 106 96Taxation (49) -Capital expenditure and financial investment 10 (309) (240)Acquisitions and disposals 10 (17,122) (12,514)Equity dividends paid (629) (155)Management of liquid resources (47) - -------- --------Cash outflow before financing (17,154) (12,654) Financing 10 16,787 14,763 -------- --------(Decrease)/increase in cash for the year 11 (367) 2,109 ======== ======== Notes to the preliminary announcement31 December 2004 Note 1. Accounting policies The financial statements have been prepared on the basis of the accountingpolicies set out on pages 19, 20 and 21 of the Huveaux PLC Annual Report for2003, which have been consistently applied, except that the Group nowcapitalises development costs of new publications and other new products andamortises them over periods between one and five years following the firstrelease of the new product for sale. The impact of these changes for the yearended 31 December 2003 and net assets at that date is not material. 2. Segmental information All amounts shown relate to one business segment, that of publishing. Continuing operations Acquisitions Total 2004 2004 2004 2003 £ 000s £ 000s £ 000s £ 000sGroup turnover by geographicalareaUnited Kingdom 6,645 5,580 12,225 4,060Continental Europe & rest of world 927 1,281 2,208 515 --------- ---------- -------- -------- 7,572 6,861 14,433 4,575 ========= ========== ======== ======== Operating profit beforeexceptional items by geographicalareaUnited Kingdom 1,182 614 1,796 889Continental Europe & rest of the 99 127 226 220world --------- ---------- -------- -------- 1,281 741 2,022 1,109 ========= ========== ======== ======== Net assets/(liabilities) bygeographical areaUnited Kingdom 38,553 (575) 37,978 21,459Continental Europe 595 547 1,142 126 --------- ---------- -------- -------- 39,148 (28) 39,120 21,585 ========= ========== ======== ======== Head office operating costs of £917,000 (2003: £378,000) have been allocated tooperating profits on a pro rata basis. Exceptional items of £322,000 (2003: nil) were incurred in respect of the UnitedKingdom totaling £306,000 and Continental Europe & rest of the world totaling£16,000. 3. Exceptional Items 2004 £ 000s Wages and salaries 182Social security costs 78Legal fees 27 ---------Redundancy and people related costs 287Provisions for vacant properties 35 --------- 322 ========= Immediately following the acquisition of Parliamentary Communications Limited,the Group carried out a significant cost reduction exercise in parts of thatbusiness that were loss-making. 18 people left the Group and a property wasvacated. Following the integration of our UK Political Division into a singlelocation, 2 further properties were vacated. The exceptional charge for theproperties represents the costs incurred in vacating them and provisions forfuture rental cost, net of expected rental income. There were no exceptionalitems in the prior year. 4. Taxation 2004 2003 £ 000s £ 000sUK corporation taxCurrent tax on income for the period 272 46Overaccrual in respect of prior periods (4) - --------- --------- 268 46 Double taxation relief (5) - Foreign taxCurrent tax on income for the period 5 - --------- ---------Total current tax 268 46 Deferred taxOrigination and reversal of timing differences 371 275Deferred tax asset on French losses (278) -Impact of discounting (16) (71) --------- ---------Total deferred tax 77 204 --------- ---------Tax on profit on ordinary activities 345 250 ========= ========= 5. Dividends 2004 2003 £ 000s £ 000s Equity shares- Final dividend proposed 1.00p (2003: 0.88p) 1,065 629 ========= ========= A final dividend of 1.00 pence per 10p Ordinary share (2003: 0.88 pence per 10pOrdinary share) is recommended and, subject to approval by shareholders, will bepaid on 13 May 2005 to shareholders on the register as at 15 April 2005. 6. Earnings per Share 2004 2003 £ 000s £ 000s Profit attributable to shareholders 1,783 955Add: exceptional items (note 3) 322 -Less: tax in respect of exceptional items (97) - -------- ---------Adjusted profit attributable to shareholders 2,008 955 ======== ========= 2004 2003 Shares SharesWeighted average number of sharesIn issue during the year - basic 91,737,954 47,473,307Dilutive potential ordinary shares 1,179,162 - -------- ---------Diluted 92,917,116 47,473,307 ======== ========= Adjusted basic earnings per share before exceptionalitems (pence) 2.19 2.01Earnings per share- basic (pence) 1.94 2.01Earnings per share - diluted (pence) 1.92 2.01 7. Acquisitions Each of the following acquisitions has been accounted for by the acquisitionmethod. An analysis of the book value and provisional fair value of the netassets acquired on each is set out below. Publishing rights have, for eachacquisition, been valued to reflect their estimated fair values, and eachpublication can be separately identified and valued. a) Public Affairs NewsletterOn 5 March 2004 the Group acquired the assets and trade of the Public AffairsNewsletter, a sole proprietorship, excluding the cash of the business. The following table sets out the book values of the identifiable assets andliabilities acquired and their provisional fair value to the group. All fairvalues are provisional, awaiting final determination of the balances required. Fair value Book value adjustments Fair value £ 000s £ 000s £ 000s Publishing rights - 818 818Debtors 85 - 85Creditors (85) - (85) --------- --------- ---------Net assets acquired - 818 818 ========= ========= Goodwill - ---------Total consideration 818 ========= Satisfied by:Cash paid 750Acquisition costs 68 --------- 818 ========= The summarised profit and loss account for the Public Affairs Newsletter for theyear ended 31 January 2004 is given below. Year ended 31 January 2004 Unaudited £000s Turnover 199 =========Profit before taxation 119 ========= b) Parliamentary Communications LimitedOn 6 May 2004 the Group took effective control of Parliamentary CommunicationsLimited. A number of loss-making activities (investments in and intercompany funding ofother business activities controlled by the vendors) and other assets andliabilities were hived out of Parliamentary Communications Limited prior tocompletion. The book value of these adjustments is as follows: Book value £ 000sTangible fixed assets 66Fixed asset investments 588Creditors (678) ---------Net liabilities hived out (24) ========= The following table sets out the book values of the identifiable assets andliabilities acquired (after hive-out) and their provisional fair value to thegroup. The adjustment to tangible fixed assets was made to reduce to zero thenet book value of software and leasehold improvements that are no longer used inthe operation. The adjustments to stock, deferred tax and creditors were made toensure consistency of accounting policies The fair value adjustment to debtorsreflects write-down to estimated realisable value. All fair values areprovisional, awaiting final determination of the balances required. Book value Adjustment Fair value £ 000s £ 000s £ 000s Publishing rights 1 17,744 17,745Tangible fixed assets 607 (439) 168Stock 27 (11) 16Debtors 1,730 (51) 1,679Deferred tax 81 510 591Creditors (3,037) (937) (3,974) --------- --------- ---------Net (liabilities)/ assets acquired (591) 16,816 16,225 ========= ========= Goodwill - ---------Total consideration 16,225 ========= Satisfied byCash paid 15,229Deferred consideration 471Acquisition costs 525 --------- 16,225 ========= On the date of acquisition, an agreement was entered into for the simultaneouscreation and repurchase of a minority interest in the subsidiary. Subsequent to6 May 2004, options over 9,009,009 ordinary shares of ParliamentaryCommunications Limited were exercised and £450,000 was paid into that Company.Huveaux PLC controlled 100% of the share capital throughout the post-acquisitionperiod. The summarised consolidated profit and loss account for ParliamentaryCommunications Limited for the year ended 30 June 2003 and the period from 1July 2003 to 30 April 2004, both before hive-out as previously noted, is givenbelow: Period ended Year ended 30 April 2004 30 June 2003 Unaudited Audited £ 000s £ 000s Turnover 6,836 7,980 ---------- -----------Operating profit/ (loss) 1,099 (437) ---------- -----------Profit/ (loss) before taxation 452 (417)Taxation (250) (271) ---------- -----------Profit/ (loss) after tax 202 (688) ========== =========== c) ATP Egora SAOn 1 September 2004 the group took effective control of ATP Egora SA. The following table sets out the book values of the identifiable assets andliabilities acquired and their provisional fair value to the group. Theadjustment to deferred tax was made to ensure consistency of accountingpolicies. All fair values are provisional, awaiting final determination of thebalances required. Book value Adjustments Fair value £ 000s £ 000s £ 000s Publishing rights - 1 1Tangible fixed assets 33 - 33Debtors 330 - 330Deferred tax - 173 173Cash at bank and in hand 238 - 238Creditors (287) - (287) ---------- ---------- ---------Net assets acquired 314 174 488 ========== ========== Goodwill - ---------Total consideration 488 ========= Satisfied by:Cash paid 341Acquisition costs 147 --------- 488 ========= The summarised consolidated profit and loss account for ATP Egora SA for theyear ended 31 December 2003 and the period from 1 January 2004 to 31 August 2004is given below. Period ended Year ended 31 August 31 December 2004 2003 Unaudited Audited £ 000s £ 000s Turnover 700 1,294 ------------- -----------Operating profit/ (loss) 45 (62) ------------- -----------Profit/(loss) before taxation 19 (632)Taxation - - ------------- -----------Profit/(loss) after tax 19 (632) ============= =========== 8. Intangible fixed assets Publishing rights £000sCost & Net book valueAt 1 January 2004 19,451Additions 5Additions through acquisition 18,564Fair value adjustments 26 -------------At 31 December 2004 38,046 ============= Additions to publishing rights of £5,000 are additional costs in respect of theacquisition of Publications Professionnelles Parlementaires SAS and FenmanLimited. Fair value adjustments to publishing rights of £26,000 are in respect of changesto the provisional fair values of Fenman Limited, as follows: £000sStock (finished goods) 59Creditors (accruals and deferred income) 28Debtors (trade debtors) 4Cost of sales (39)Tangible fixed assets (additions through acquisition) (15)Turnover (continuing operations) (11) ------------- 26 ============= The directors' impairment review of intangible assets used a discount rate of10% in the net present value calculation of the carrying value. 9. Called-up share capital Company 2004 2003 £ 000s £ 000sAuthorised:Equity : 175,000,000 (2003: 120,000,000) ordinary shares of10p each 17,500 12,000 ======== ======== Allotted, called-up and fully paid:Equity: 106,464,730 (2003: 71,464,730) ordinary shares of10p each 10,646 7,146 ======== ======== Equity shares to be issued 400 400 ======== ======== During the year the company issued 35,000,000 ordinary shares of 10p each forconsideration of £3,500,000 and share premium of £13,287,000 net of expenses. Shares to be issued of £400,000 relates to the settlement of contingentconsideration in relation to the acquisition of Lonsdale SRG in 2003. Share optionsThe following options over 10p ordinary shares have been granted and areoutstanding at 31 December 2004 : Number of shares of year Unapproved Executive Share Option SchemeOutstanding options at 1 January 2004 -Granted during the year 3,136,925 ---------- Outstanding options at 31 December 2004 3,136,925 ========== 2004 Number Exercise Exercise of shares price dateOutstanding options areanalysed as follows:Granted in May 2004:EMI options 878,000 65.0p May 2007-2014 Unapproved options 763,000 65.0p May 2007-2014 ------- 1,641,000Granted in November 2004:Unapproved options 1,495,925 54.0p November 2007-2014 ------- 1,495,925 -------Outstanding options at 31December 3,136,9252004 ======= Comprising:EMI options 878,000Unapproved options 2,258,925 -------Outstanding options 31December 3,136,9252004 ======= Number of shares Savings related share optionschemeOutstanding options at 1 -January 2004Granted during the year 585,643Lapsed during the year (6,228) -------Outstanding options at 31December 2004 579,415 ======= 2004 Number Exercise Exercise of shares price dateOutstanding options analysedas follows:Granted in June 2004 145,605 52.5p July 2007-2009 Granted in September 2004 433,810 44.0p November 2007-2009 ------- Outstanding options at 31December 579,4152004 ======= 10. Analysis of cash flows 2004 2003 £ 000s £ 000s Returns on investment an servicing of financeInterest and similar income received 116 99Interest paid (10) (3) ========= --------- 106 96 ========= ========= Capital expenditure and financial investmentPurchase of tangible fixed assets (304) (231)Purchase of intangible fixed assets (5) (9) --------- --------- (309) (240) ========= ========= Acquisitions and disposalsPurchase of subsidiary undertakings and assets (17,060) (12,866)Lonsdale deferred consideration paid (300) -Cash acquired on acquisition of subsidiary 238 352 --------- --------- (17,122) (12,514) ========= =========FinancingShort term funding received - 1,380Short term funding paid - (1,380)Issue of Ordinary share capital 17,500 15,573Expenses paid in connection with share issue (713) (810) --------- --------- 16,787 14,763 ========= ========= 11. Analysis of net funds At beginning Exchange At end of year Cash flow movement of year £ 000s £ 000s £ 000s Cash at bank and in hand 3,710 (607) 17 3,120 Debt due within one year (240) 240 - - ---------- ---------- -------- ---------- 3,470 (367) 17 3,120 ========== ========== ======== ========== 12. Post balance sheet events Payments totalling £1,100,000 of deferred consideration in respect of theLonsdale acquisition were settled in full on 16 February 2005. A payment of £471,000 of deferred consideration in respect of the ParliamentaryCommunications Limited acquisition was paid on 2 March 2005. 13. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 December 2004 or 2003 but is derivedfrom those accounts. Statutory accounts for 2003 have been delivered to theregistrar of companies, and those for 2004 will be delivered following thecompany's annual general meeting. The auditors have reported on those accounts;their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange