29 Jul 2009 07:00
| 29 July 2009 |
Huveaux PLC
Interim Results for the six months ended 30 June 2009
Financial Highlights
Operational Highlights
| Summary of Results | Six months to 30 June 2009 | Six months to 30 June 2008 |
| £'000 | Unaudited | Unaudited |
| Total Revenue | 11,281 | 21,675 |
| Revenue from Retained Business | 11,281 | 13,294 |
| EBITDA** | 360 | 1,799 |
| EBITDA from Retained Business | 360 | 1,148 |
| Normalised (loss)/profit before tax*** | (139) | 803 |
| Loss before tax | (1,777) | (907) |
| Loss per share (basic) | (0.98)p | (3.01)p |
* Retained business is excluding the sold French Healthcare and Epic businesses. The results of Epic are included in continuing business for statutory purposes.
** EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, and non-trading items.
*** Normalised profit is stated before amortisation of intangible assets acquired through business combinations, share based payment charges and non-trading items and related tax and discontinued operations.
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 judgement, 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.
Gerry Murray, Chief Executive of Huveaux, commented:
"We are now a more focussed and resilient business than at any time in our history. We have disposed of underperforming businesses, enabling us to concentrate on Politics and Education. This has allowed us to deal more effectively with the challenging trading conditions faced by all Media Companies in 2009.
Huveaux has traded in line with expectations in the first half of the year. The underlying growth within the Politics Division is clouded by timing differences - after adjusting for these, the Division continues to show strong organic growth. Within Education we have been able to mitigate significantly the effect of the lost sales at KS3.
Within Politics, Civil Service Live moved from April in 2008 to July in 2009. This has moved a significant amount of revenue (and profit) out of these Interim results. Nevertheless, the year on year comparison of the event shows a 30% growth in net revenue and this will be reflected in the full year numbers.
We have continued to show strong growth in the digital monitoring and face-to-face businesses within the Division - further reducing the importance of display advertising to the Group.
Our Education division has responded well following the abolition of KS3 SATs in 2008 and both the significant cost savings achieved and the highly variable cost base, mean that the impact of the reduced revenue has been limited.
While the first half of the year is materially smaller than the second, the visibility of the trading for the second half, especially in Politics, is good and we remain confident of the full year results. In addition, we believe that the market leading positions of our brands and the impending General Election in the UK, result in significant potential for growth in 2010 and beyond. This further enhances the underlying value of the Group."
For further information, please contact:
Huveaux
Gerry Murray, Chief Executive Officer 020 7245 0270
Rupert Levy, Group Finance Director
Kevin Hand, Non-Executive Chairman
An analyst presentation will be held at 9am at Brewin Dolphin, 12 Smithfield Street, London EC1A 9BD.
OPERATING AND FINANCIAL REVIEW
Group Performance
The first half of 2009 saw revenue of £11.3m (2008: £21.7m). The 2008 numbers include 5 months' revenue from the businesses sold in June 2008. Excluding these businesses, retained revenue moved from £13.3m in 2008 to £11.3m in 2009. For statutory purposes only the French Healthcare business is included in "discontinued operations", while the results of Epic are included in continuing businesses within the Learning Division for 2008.
Within revenue from retained businesses, Education shows a £1.4m reduction, reflecting the loss of KS3 SATs revenues and the effect of the recession on the high street. Politics, on the other hand, after adjusting for Civil Service Live (which moved from H1 to H2 in 2009) and the closed Monitor shows a 4% growth on ongoing business. In addition, Civil Service Live will show a more than 30% growth over 2008.
EBITDA decreased from £1.8m to £0.4m in aggregate, and from £1.1m to £0.4m on the retained businesses. This reflects a significant movement of profit into H2 within Politics, and the reduced revenues within Education.
The basic loss per share was 0.98 pence (2008: loss of 3.01 pence).
Operating Review
Political Division
Revenue in the Political Division fell from £7.8m to £7.2m and EBITDA was at £0.6m (2008: £0.9m).
When analysing the results, it is important to allow for the significant timing differences which understate the growth in the 2009 results. Civil Service Live was held in April 2008 and contributed £0.7m net revenue. In 2009 this major exhibition was held in the first week of July and will contribute £0.9m of net revenue with a significant increase in EBITDA. The Monitor magazine was closed in December 2008 - this magazine contributed £237k of revenue in the first half of 2008, but a very small profit.
After adjusting for these material items, the underlying business showed organic growth of 4% in terms of revenue and a flat performance in terms of EBITDA. The reduction in the overall margin reflects the loss of the marginal display advertising pages (with a very high margin) which were replaced with events revenue.
The most dramatic performance in the first half of the year was in our Political Knowledge business, incorporating Westminster Explained and Westminster Briefing, which had a record half year. Growth has come across this portfolio, where we continue to be successful in competitive pitches - securing long-term relationships with Government departments. This portfolio delivered a 40% growth in revenue and a tripling of EBITDA. The second half of the year contains some of the larger events, and is on track to deliver a profit approximately twice the size of that in 2008.
Within the core UK Politics division, we have been hit by the recessionary effect on display advertising and the recent uncertainty in Parliament concerning MPs' expenses, the future of the Prime Minister and the likely date of the General Election. Despite these factors, and following the return to some certainty regarding the timing of the General Election, the division is on track to deliver significant organic growth in line with expectations for the full year.
Display advertising has been hit - on average being 30% below prior years - but our strategy of reducing its importance to the Group has resulted in this being of less impact than in previous years. Offsetting this decline has been the strong performance of Events and Data products.
The UK Monitoring business continues to grow well - with both new business and renewal rates ahead of forecast, reflecting an increase in our market share. The second half of the year will see an upgrade to Dodonline which will provide increased functionality to the user and drive further revenue growth.
As well as the main Civil Service Live, we ran our first Regional Civil Service Live event in Gateshead in March. This event, though smaller than the main event, provided an additional communications forum for the Cabinet Office and further cemented our relationship with them. There will be an additional similar event held later in the year, in Manchester.
While The House magazine suffered from the reduced demand for display advertising, the related Events business continues to grow. The Fringe Events at the autumn party conferences are already ahead of prior years - and we are now the leading provider of fringe events across the three major conferences. In addition, 2009 has seen a steady increase in smaller events and we are planning at least two larger Prospective Parliamentary Candidates events in the latter part of the year.
Our European business was, as expected, affected by the hiatus in the run-up to the European Elections in June. This, together with a market decline in advertising spend, resulted in a reduced performance against 2008. At the same time, the EU Monitoring business continued to grow rapidly - with revenue 60% ahead of 2008.
Our French political business, Le Trombinoscope, is in a cyclical "down year" due to the lack of any elections in France. This is reflected in the forecast for the year which is approximately 10% lower than 2008.
Fenman has rationalised the DVD/Manual part of the business - resulting in a more focussed business with lower overheads. Training Journal has suffered from the effects of the recession, which are particularly severe in the training sector.
The move towards greater transparency and the significant changes likely to follow the next General Election will provide significant opportunities for this Division in 2010 and beyond. The second half of 2009 will also see an increasing number of events within the portfolio. Forward orders for these are good and so we are confident that 2009 will show good revenue, profit and margin growth.
Since the end of the first half of the year, the second Civil Service Live was held at Olympia in London. More than 8,000 senior civil servants attended over the 3 days and speakers included the HRH The Prince of Wales, Alistair Campbell, Baron Sugar and the Cabinet Secretary. Despite the economic conditions, the second edition showed 30% top line growth and will again make a significant contribution to the full year results. This exhibition is now established as a key part of the internal communication plans of the Civil Service and will be repeated in July 2010. Re-bookings for this event have started very strongly.
Education Division
The Education Division had first half revenues of £4.1m (2008: £5.5m) and EBITDA of £0.2m (2008: £0.9m).
As reported in our Annual Report, 2008 saw significant changes in the market. The most dramatic change resulted from the sudden abolition of KS3 SATs in October 2008. This had a material effect on 2008 results and this has continued into 2009. This change has the effect of removing £600k of revenue from the first half of 2009.
A lesser change was that in the schools' financial year (April 2008 - March 2009) there was a move from GCSE spending to A-Levels. This resulted in a reduction in spend of approximately £300k in the first half of 2009. This shift is beginning to reverse as the spend moves towards the changed curriculum subjects within GCSEs - where we are stronger.
In addition, the Education market has, in line with all retail industries, suffered from reduced demand on the High Street. This has affected the Division across the various retail outlets, albeit that we have worked with the larger retailers to ensure that the reduction suffered is smaller than our competitors.
In Scotland, sales were also down from £0.9m to £0.8m, reflecting the recession in the same way as in the remainder of the UK. In addition, Leckie & Leckie have now moved from producing the "official SQA" past papers to producing its "own brand" practice papers. The switch from the former to the latter resulted in a £100k shortfall in revenue in the first half of the year. The new publications will start to sell in the 3rd quarter of 2009 and early indications are that the lower price point combined with additional functionality will result in a significant market share. It should be noted that these publications will be at a significantly higher margin than the previous products.
As a result of the changes in the market, especially regarding KS3 SATs, a cost reduction exercise was implemented at the start of 2009. This exercise successfully reduced the costs of the Division by £600k in 2009. This, together with the variable cost base, has meant that the EBITDA reduction has been limited to £0.6m in the half year and will help to minimise the margin fall in the full year.
Financial Review
Gross debt has fallen from £9.1m to £8.6m in the 6 months to 30th June 2009. Net debt at 30 June 2009 of £8.6m is £0.5m improved from the year end.
During the first half we generated £1.6m of operating cash flows (2008: £1.6m). The level of gearing for the Group, with net debt at approximately twice run-rate EBITDA, provides a robust financial position going forward.
Outlook
The second half of 2009 will again be more important than the first half for Huveaux, as it coincides with the start of the academic year in September, the autumn Party Conferences and Civil Service Live which was held in early July.
The outlook for Huveaux in the second half of 2009 is encouraging across the Group. The political market has got over the turmoil in early June, and the visibility into the third quarter is very good. The Education Division is performing more predictably, and the new GCSE publishing has been well received.
The economic climate continues to be hard for all Media Companies, however the Board remains confident regarding the full year outcome - and believes that the true value of the Group is evidenced by the strong market positions of both of the Divisions and the potential growth in 2010 and beyond.
HUVEAUX PLC
CONSOLIDATED INCOME STATEMENT
| For the six | For the six | For the year | ||
| months ended | months ended | ended | ||
| 30 June | 30 June | 31 December | ||
| 2009 | 2008 | 2008 | ||
| Unaudited | Unaudited | Audited | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | 3 | 11,281 | 16,111 | 30,759 |
| Cost of sales | (7,367) | (9,615) | (17,866) | |
| Gross profit | 3,914 | 6,496 | 12,893 | |
| Administrative expenses: | ||||
| Non-trading items | 4 | (358) | - | (190) |
| (Loss)/profit on disposal of subsidiary undertaking | - | (170) | 300 | |
| Amortisation of intangible assets acquired through |
| (1,281) | (1,465) | (2,757) |
| business combinations | ||||
| Net administrative expenses |
| (3,830) | (5,405) | (8,959) |
| Total administrative expenses | (5,469) | (7,040) | (11,606) | |
| Operating (loss)/profit | (1,555) | (544) | 1,287 | |
| Finance income | 113 | 62 | 276 | |
| Financing costs | (335) | (425) | (1,058) | |
| (Loss)/profit before tax | (1,777) | (907) | 505 | |
| Income tax credit | 5 | 284 | 656 | 891 |
| (Loss)/profit after tax from continuing operations | (1,493) | (251) | 1,396 | |
| Results from discontinued operations (net of tax) | 9 | - | (4,330) | (5,380) |
| Loss for the period | (1,493) | (4,581) | (3,984) | |
| Earnings per share | ||||
| Basic | 6 | (0.98 p) | (3.01 p) | (2.62 p) |
| Diluted | 6 | (0.98 p) | (3.01 p) | (2.62 p) |
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
| For the six | For the six | For the year | |
| months ended | months ended | ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Exchange differences recognised on disposal of discontinued operations | - | 565 | 565 |
| Exchange differences on translation of foreign operations | 12 | 3 | 21 |
| Net income recognised directly in equity | 12 | 568 | 586 |
| Loss for the period | (1,493) | (4,581) | (3.984) |
| Total recognised income and expense for the period attributable to equity holders of parent company | (1,481) | (4,013) | (3.398) |
HUVEAUX PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| As at | As at | As at | ||
| 30 June | 30 June | 31 December | ||
| 2009 | 2008 | 2008 | ||
| Unaudited | Unaudited | Unaudited | ||
| Note | £'000 | £'000 | £'000 | |
| Goodwill | 7 | 22,847 | 23,324 | 22,847 |
| Intangible assets | 8 | 29,704 | 31,892 | 31,024 |
| Property, plant and equipment | 307 | 420 | 378 | |
| Non-current assets | 52,858 | 55,636 | 54,249 | |
| Inventories | 2,422 | 2,448 | 2,496 | |
| Trade and other receivables | 4,553 | 4,776 | 4,967 | |
| Derivative financial instruments | - | 50 | 45 | |
| Cash | 54 | 1,678 | 96 | |
| Current assets | 7,029 | 8,952 | 7,604 | |
| Interest bearing loans and borrowings | (2,130) | (2,130) | (2,130) | |
| Income tax payable | (81) | (15) | (240) | |
| Provisions | - | (50) | - | |
| Trade and other payables | (6,721) | (7,670) | (6,207) | |
| Current liabilities | (8,932) | (9,865) | (8,577) | |
| Net current liabilities | (1,903) | (913) | (973) | |
|
| ||||
| Total assets less current liabilities | 50,955 | 54,723 | 53,276 | |
| Interest bearing loans and borrowings | (6,477) | (8,075) | (7,010) | |
| Deferred tax liability | (4,654) | (5,326) | (4,937) | |
| Non current liabilities | (11,131) | (13,401) | (11,947) | |
| Net assets | 39,824 | 41,322 | 41,329 | |
| Capital and reserves | ||||
| Issued capital | 15,200 | 15,200 | 15,200 | |
| Share premium | 30,816 | 30,816 | 30,816 | |
| Other reserves | 409 | 409 | 409 | |
| Retained loss | (6,589) | (5,100) | (5,117) | |
| Translation reserve | (12) | (3) | 21 | |
| Equity shareholders' funds | 39,824 | 41,322 | 41,329 |
| HUVEAUX PLC | For the six | For the six | For the year | |
| CONSOLIDATED STATEMENT OF CASH FLOWS | months ended | months ended | ended | |
| 30 June | 30 June | 31 December | ||
| 2009 | 2008 | 2008 | ||
| Unaudited | Unaudited | Audited | ||
| Note | £'000 | £'000 | £'000 | |
| Cash flows from operating activities | ||||
| Loss for the period | (1,493) | (4,581) | (3,984) | |
| Depreciation of property, plant and equipment | 90 | 161 | 153 | |
| Amortisation of intangible assets acquired through business combinations | 1,281 | 1,465 | 2,757 | |
| Amortisation of other intangible assets | 660 | 586 | 1,069 | |
| Results from discontinued operations | - | 4,330 | 5,380 | |
| Loss/(profit) on sale of subsidiary undertaking | - | 170 | (300) | |
| Share based payments charges | - | 75 | (18) | |
| Net finance costs | 222 | 363 | 782 | |
| Income tax credit | (284) | (701) | (891) | |
| Cash flow relating to restructuring provisions | - | (660) | (899) | |
| Operating cash flows before movements in working capital | 476 | 1,208 | 4,049 | |
| Change in inventories | 73 | (422) | 714 | |
| Change in receivables | 487 | 616 | 6,612 | |
| Change in payables | 716 | 240 | (8,059) | |
| Cash generated by operations | 1,752 | 1,642 | 3,316 | |
| Income tax paid | (159) | (26) | (22) | |
| Net cash from operating activities | 1,593 | 1,616 | 3,294 | |
| Cash flows from investing activities | ||||
| Interest and similar income received | 113 | 61 | 276 | |
| Proceeds from sale of property, plant and equipment | - | - | 439 | |
| Proceeds from sale of subsidiary undertaking | - | 4,750 | 4,600 | |
| Cash divested with sale of subsidiary undertaking | - | (69) | (69) | |
| Acquisition of property, plant and equipment | (14) | (120) | (124) | |
| Acquisition of other intangible assets | (624) | (586) | (1,468) | |
| Net cash used in investing activities | (525) | 4,037 | 3,654 | |
| Cash flows from financing activities | ||||
| Interest and similar expenses paid | (663) | (764) | (958) | |
| Repayment of borrowings | (533) | (10,460) | (11,525) | |
| Dividends paid | - | - | (1,140) | |
| Net cash used in financing activities | (1,196) | (11,224) | (13,623) | |
| Net decrease in cash and cash equivalents in continuing operations | (128) | (5,571) | (6,675) | |
| Opening cash and cash equivalents | 96 | 1,477 | 1,477 | |
| Effect of exchange rate fluctuations on cash held | 86 | (629) | (913) | |
| Closing cash and cash equivalents in continuing operations | 54 | (4,723) | (6,111) | |
| Cash flows from discontinued operations | ||||
| Net cash increase from operating activities | - | 573 | 679 | |
| Net cash used in investing activities | - | 5,303 | 5,149 | |
| Net cash used in financing activities | - | (1) | (210) | |
| Net increase in cash and cash equivalents | - | 5,875 | 5,618 | |
| Opening cash and cash equivalents | - | 517 | 517 | |
| Effect of exchange rate fluctuations on cash held | - | 9 | 72 | |
| Closing cash and cash equivalents in discontinued operations | - | 6,401 | 6,207 | |
| Total cash and cash equivalents in the Group | 11 | 54 | 1,678 | 96 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| Share | Share | Merger | Retained | Translation | ||
| capital | premium | reserve | earnings | reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 31 December 2008 | 15,200 | 30,816 | 409 | (5,117) | 21 | 41,329 |
| Loss for the period | - | - | - | (1,493) | - | (1,493) |
| Currency translation differences | - | - | - | 21 | (33) | (12) |
| At 30 June 2009 | 15,200 | 30,816 | 409 | (6,589) | (12) | 39,824 |
HUVEAUX PLC Notes to the Accounts 30 June 2009
1 Statement of Accounting Policies
The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRSs as adopted by the EU, applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2008, except for the following change:
The Group has applied IFRS 8 "Operating Segments" as of 1 January 2009. IFRS 8 states that segment information should be based on management's internal reporting structure and accounting principles. As disclosed in the financial statements for the year ended 31 December 2008, Huveaux PLC's segment information has already been based on the management reporting structure and therefore the operating segments are the same as previously reported - Political, Education and Learning. Although full disclosure has not been made in accordance with IFRS 8 in these Interim Financial Statements, the Group will fully comply with this standard in the 31 December 2009 financial statements.
Discontinued operations
A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or that meets the criteria to be classified as held for sale. Discontinued operations are presented in the income statement (including the comparative period) analysing the post-tax profit or loss of the discontinued operation.
2 Nature of information
The interim accounts for the six months ended 30 June 2009 and the comparative figures for the six months ended 30 June 2008 are not audited by the Company's auditors. The financial statements for the twelve months ended 31 December 2008 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors on these accounts was unqualified and did not contain any statement under Sections 237(2) or 237(3) of the Companies Act 1985.
3 Segment information
Segment information is presented in respect of the Group's operating segments. The operating segments have been identified on the basis of internal reports about the components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance.
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Unaudited | |
| Revenue | £'000 | £'000 | £'000 |
| Political | |||
| Political | 4,465 | 5,530 | 15,960 |
| Learning | 2,754 | 2,268 | 1,269 |
| 7,219 | 7,798 | 17,229 | |
| Learning | - | 2,817 | 2,817 |
| Education | 4,062 | 5,496 | 10,713 |
| Revenue from continuing operations | 11,281 | 16,111 | 30,759 |
| Healthcare (discontinued) | - | 5,564 | 5,564 |
| Total revenue | 11,281 | 21,675 | 36,323 |
| Revenue | |||
| United Kingdom | 9,958 | 14,711 | 26,545 |
| Continental Europe and rest of the world | 1,323 | 6,964 | 9,778 |
| 11,281 | 21,675 | 36,323 | |
| 3 Segment information (continued) | |||
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Unaudited | |
| EBITDA from operations* | £'000 | £'000 | £'000 |
| Political | |||
| Political | 61 | 550 | 2,824 |
| Learning | 547 | 353 | 239 |
| 608 | 903 | 3,063 | |
| Learning | - | 249 | 194 |
| Education | 241 | 887 | 2,262 |
| Head Office | (489) | (642) | (1,038) |
| EBITDA from continuing operations | 360 | 1,397 | 4,481 |
| Healthcare (discontinued) | - | 402 | 364 |
| Total EBITDA | 360 | 1,799 | 4,845 |
*EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, and non-trading items.
A reconciliation between EBITDA and operating profit is shown in Schedule A.
4 Non-trading items
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Redundancy and people related costs | 358 | - | 151 |
| Abortive deal costs | - | - | 39 |
| 358 | - | 190 |
5 Taxation
The taxation charge for the six months ended 30 June 2009 is based on the expected annual tax rate.
6 Earnings per Share
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Loss attributable to shareholders | (1,493) | (4,581) | (3,984) |
| Add: loss/(profit) on sale of subsidiary undertaking | - | 170 | (300) |
| Add: results of discontinued operations | - | 4,330 | 5,380 |
| Add: non-trading items | 358 | - | 190 |
| Add: amortisation of intangible assets acquired through business combinations | 1,281 | 1,465 | 2,757 |
| Less: share based payment charge/(credit) | - | 75 | (18) |
| Adjusted profit attributable to shareholders | 146 | 1,459 | 4,025 |
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| Shares | Shares | Shares | |
| Weighted average number of shares | |||
| In issue during the year - basic | 151,998,453 | 151,998,453 | 151,998,453 |
| Dilutive potential ordinary shares | - | 586,820 | 238,888 |
| Diluted | 151,998,453 | 152,585,273 | 152,237,341 |
| Loss per share - basic (pence) | (0.98) | (3.01) | (2.62) |
| Loss per share - diluted (pence) | (0.98) | (3.01) | (2.62) |
| Normalised earnings per share before non-trading items and amortisation | |||
| of intangible assets acquired through business combinations (pence) | 0.10 | 0.96 | 2.65 |
7 Goodwill
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Cost & Net book value | |||
| Opening balance | 22,847 | 28,651 | 28,651 |
| Revisions to fair values of assets and liabilities on acquisitions made in the prior year | - | 7 | 7 |
| Effect of change in tax rate | - | - | (707) |
| Disposals | - | (5,334) | (5,104) |
| Closing balance | 22,847 | 23,324 | 22,847 |
8 Intangible fixed assets
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| Assets acquired through business combinations | £'000 | £'000 | £'000 |
| Cost | |||
| Opening balance | 37,129 | 47,633 | 47,633 |
| Disposals | - | (10,504) | (10,504) |
| Closing balance | 37,129 | 37,129 | 37,129 |
| Amortisation | |||
| Opening balance | 8,293 | 7,378 | 7,378 |
| Charge for the period | 1,281 | 1,603 | 2,895 |
| Disposals | - | (1,980) | (1,980) |
| Closing balance | 9,574 | 7,001 | 8,293 |
| Net book value | |||
| Opening balance | 28,836 | 40,255 | 40,255 |
| Closing balance | 27,555 | 30,128 | 28,836 |
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Other intangible assets | |||
| Net book value | |||
| Opening balance | 2,188 | 2,070 | 2,070 |
| Closing balance | 2,147 | 1,764 | 2,188 |
| Net intangible assets | |||
| Opening balance | 31,024 | 42,325 | 42,325 |
| Closing balance | 29,702 | 31,892 | 31,024 |
Other intangible assets comprise IT software and plate costs for revision guide materials.
9 Discontinued operations
Discontinued operations comprise the results of the French Healthcare business, which was sold on 3 June 2008. Results attributable to this business were as follows:
| Six months ended | Six months ended | Year ended | |
| 30 June | 30 June | 31 December | |
| 2009 | 2008 | 2008 | |
| Unaudited | Unaudited | Unaudited | |
| £'000 | £'000 | £'000 | |
| Revenue | 5,564 | 5,564 | |
| Cost of sales | (4,077) | (4,077) | |
| Gross profit | - | 1,487 | 1,487 |
| Non-trading items | - | - | |
| Amortisation of intangible assets acquired through business combinations | (138) | (138) | |
| Other administrative expenses | (1,147) | (1,123) | |
| Operating profit | - | 202 | 226 |
| Net finance costs | (202) | (202) | |
| Profit before tax | - | - | 24 |
| Related income tax | 5 | - | |
| Deferred tax credit arising from intangible assets disposed | 2,077 | 2,077 | |
| Loss on sale of discontinued operations | (6,412) | (7,481) | |
| Loss for the year | - | (4,330) | (5,380) |
During June 2008 the Group also sold its investment in Epic Group PLC. This is included within continuing operations as it did not constitute a material business segment.
10 Analysis of net debt
| At beginning | Non-cash | Exchange | At end | ||
| of year | Cash flow | movements | movement | of period | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Cash at bank and in hand | 96 | (128) | - | 86 | 54 |
| Debt due within one year | (2,130) | 533 | (533) | - | (2,130) |
| Debt due after one year | (7,010) | - | 533 | - | (6,477) |
| (9,044) | 405 | - | 86 | (8,553) |
Schedule A
Reconciliation between operating profit and non-statutory measure
The following tables reconcile operating profit as stated above to EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group. EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of assets acquired through business combinations, and non-trading items.
| Six months ended 30 June 2009 | Operating (loss)/profit | Depreciation* | Amortisation of intangible assets | Non-trading items** | EBITDA |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Political | |||||
| Political | (804) | 210 | 627 | 28 | 61 |
| Learning | 330 | 10 | 154 | 53 | 547 |
| (474) | 220 | 781 | 81 | 608 | |
| Learning | - | - | - | - | - |
| Education | (533) | 48 | 500 | 226 | 241 |
| Head Office | (548) | 8 | - | 51 | (489) |
| Result from continuing operations | (1,555) | 276 | 1,281 | 358 | 360 |
| Healthcare (discontinued) | - | - | - | - | - |
| Group total | (1,555) | 276 | 1,281 | 358 | 360 |
| Year ended 31 December 2008 | Operating profit/(loss) | Depreciation* | Amortisation of intangible assets | Non-trading items** | EBITDA |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Political | |||||
| Political | 1,155 | 354 | 1,262 | 53 | 2,824 |
| Learning | (103) | 24 | 308 | 10 | 239 |
| 1,052 | 378 | 1,570 | 63 | 3,063 | |
| Learning | (42) | 52 | 184 | - | 194 |
| Education | 1,137 | 113 | 1,003 | 9 | 2,262 |
| Head Office | (860) | 22 | - | (200) | (1,038) |
| Result from continuing operations | 1,287 | 565 | 2,757 | (128) | 4,481 |
| Healthcare (discontinued) | 226 | - | 138 | - | 364 |
| Group total | 1,513 | 565 | 2,895 | (128) | 4,845 |
| Six months ended 30 June 2008 | Operating (loss)/profit | Depreciation* | Amortisation of intangible assets | Non-trading items** | EBITDA |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Political | |||||
| Political | (245) | 168 | 627 | - | 550 |
| Learning | 187 | 12 | 154 | - | 353 |
| (58) | 180 | 781 | - | 903 | |
| Learning | (162) | 57 | 184 | 170 | 249 |
| Education | 330 | 57 | 500 | - | 887 |
| Head Office | (654) | 12 | - | - | (642) |
| Result from continuing operations | (544) | 306 | 1,465 | 170 | 1,397 |
| Healthcare (discontinued) | 202 | 62 | 138 | - | 402 |
| Group total | (342) | 368 | 1,603 | 170 | 1,799 |
*including amortisation of software shown within intangibles.
**including losses on disposal of operations.