ELE.L Regulatory News (ELE)

16 Dec 2008 07:00



16th December 2008

Electric Word plc 

("Electric Word" or the "Company")

Trading Statement

Electric Word plc (ELE.L), the specialist information publisher, today announces the following update for the year ended 30th November 2008 prior to entering its close period and ahead of its preliminary results announcement on 17 February 2009.

Group adjusted profits before tax for 2008 are expected to be in line with market expectations, reflecting good performances from the company's professional publishing businesses. Sales are expected to be slightly ahead of expectations.

Trading in the professional education business, which publishes mainly for the UK schools sector, has been ahead of 2007 and also above the Board's expectations for the year. Speechmark, the professional development publishing business for speech therapists and special needs professionals acquired late in 2007, has performed strongly in improving both sales and margins. 

 In Optimus Professional Publishing, growth was led by the teacher conferences and by books sales, both in large part through the strength of the online and email channels. In 2008 the Group invested in building its range of professional development books for teachers and this can be expected to continue with margins likely to improve as the business matures. The education division as a whole benefitted from the deepening synergies between the Optimus, Speechmark and Incentive Plus businesses, with the Speechmark acquisition in particular supporting growth in both profits and margins. 

Sales in Sport Business Group were also ahead of 2007, including advertising revenues, although the strongest growth came from subscription revenue as a result of improving yields. 

Electric Word's consumer publishing also addresses both education and sports markets. The sports performance websites, newsletters and books, which are aimed at competitive athletes and coaches, performed well and grew earnings in the year. 

MyChild, in which a majority stake was acquired in November 2007, provides information and products for parents to support their children's educational development. The MyChild business has evolved over the course of the year since acquisition. During the year it became apparent that more value was being created in the website and associated email database than from the initial investment in building subscriptions for the print magazine. As a result, the MyChild business, which was loss making for the full year, has been restructured and will now continue as an online business only (www.mychild.co.uk). 

The reshaping of the MyChild business has incurred one-off restructuring costs, all of which will be provided for in 2008 in a net charge of £289,000 along with some impairment of the goodwill value of the business. Going forward the business will operate from a lower base of revenue and costs and is expected to make a positive contribution to earnings in 2009 as part of an integrated consumer publishing division. 

Julian Turner, Chief Executive of Electric Word, commented:

"Our success in building online communities around electronic newsletters in education and other target markets has created an opportunity to further strengthen the company's online advertising sales capacity in the coming year. 

"Despite the challenges of the broader economic environment, current trading continues to demonstrate the robust nature of Electric Word's markets, products and revenue mix as we enter 2009."

- ENDS -

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