HYVE.L Regulatory News (HYVE)

15 May 2018

ITE GROUP PLC

("ITE" or the "Group")

INTERIM RESULTS ANNOUNCEMENT

Transformation and Growth Programme ("TAG") underpins strong organic revenue growth

Proposed acquisition of complementary market leading events from Ascential plc for £300m

Financial highlights

· First year of like-for-like4 growth in volume and yields since 2014 

· Revenue of £75.4m; growth of 8% on a like-for-like basis, driven by early TAG initiatives, focus on Core events and the majority of markets returning to like-for-like revenue growth

· Four top 10 events ran in the period and together delivered double digit like-for-like revenue growth

· Headline profit before tax ("Headline PBT") of £16.0m; statutory profit before tax of £1.3m

· Growth of 2% on a like-for-like basis in headline PBT reflects reinvestment into future events 

· Continued strong cash generation from sales initiatives and reduced net debt by 7% to £51.2m

· Maintained interim dividend of 1.5p, in line with policy

· Forward bookings5 of £144 million already contracted for FY18; 2019 forward bookings up 31% on a like-for-like basis

Strategy update

· Early TAG initiatives and focus on Core6 events is driving performance

· Most markets have now returned to growth - continued good progress in Moscow

· Completed negotiations to move Mosbuild to Russia's largest exhibition venue on a long term basis

· TAG investment is on track, expenditure within budget

· Continued progress in managing the portfolio, including the disposal of TradeLink ITE Sdn. Bhd ("TradeLink") for £4.2m

Proposed acquisition of Ascential Events Limited

· Proposed acquisition of seven market leading and scalable event brands

· Expected to be earnings enhancing in first full year of ownership

· Cost synergies achievable net of investment

· Strong scope for growth under ITE management as part of Core portfolio

· Diversifies ITE's revenue by geography and product

· Addition of market leading brands supports and accelerates the delivery of ITE's vision

· Standby underwriting entered into with Investec Bank plc in respect of the proposed rights issue to fund the acquisition

Mark Shashoua, CEO of ITE Group plc, commented:

"We are seeing the benefits from a number of our early initiatives in the TAG programme which has driven a return to revenue growth in most of our markets. Overall, revenues were up 8% on a like-for-like basis and, encouragingly, the focus on operational rigour on our Core events delivered the first like-for-like volume and yield growth since 2014. Consistent with this, the four top 10 shows that took place during the first half collectively delivered double digit revenue growth.

Today we have also announced the proposed acquisition of seven highly complementary market leading events from Ascential plc. These events are well known to us, the acquisition is in line with our product-led acquisition strategy and gives us the benefit of a more balanced portfolio by geography and product. It also adds two more global brands in BETT and CWIEME and is expected to be earnings enhancing in 2019, our first full financial year of ownership.

As a result of our focus on forward bookings we have good visibility into this year and next with revenues booked for 2018 at 89% of consensus for the full year and, on a like-for-like basis, bookings for 2019 are up 31% at £31.0m. The combination of good progress on TAG and the proposed acquisition of Ascential Events Limited represent the significant steps for ITE in realising its vision of creating the world's leading portfolio of content-driven, must-attend events that deliver an outstanding experience and ROI for our customers."

The acquisition is conditional, inter alia, on obtaining shareholder approval and the completion of a proposed rights issue which will be launched in due course. Further details can be found in the separate announcement on the acquisition also issued today.

1. Headline profit before tax is defined as profit before tax and adjusting items which include amortisation of acquired intangibles, impairment of goodwill, intangible assets and investments, profits or losses arising on disposal of Group undertakings, restructuring costs, transaction and integration costs on completed and pending acquisitions and disposals, tax on income from associates and joint ventures, gains or losses on the revaluation of deferred/contingent consideration and on equity option liabilities over non-controlling interests, and imputed interest charges on discounted equity option liabilities - see note 3 to the condensed consolidated financial statements for details.

2. Headline diluted earnings per share is calculated using profit attributable to shareholders before adjusting items - see notes 3 and 6 to the condensed consolidated financial statements for details.

3. Net debt is defined as cash and cash equivalents after deducting bank loans.

4. Like-for-like results are stated on a constant currency basis, after excluding events which took place in the current period but did not take place under our ownership in the comparative period and after excluding events which took place in the comparative period but did not take place under our ownership in the current period. For clarity, this excludes all:

- Biennial events;

- Timing differences (i.e. events that ran in only one of the current or comparative periods, due to changes in the event dates);

- Launches;

- Cancelled or disposed of events that did not take place under our ownership in the current year;

- Acquired events in the current period; and

- Acquired events in the comparative period that didn't take place under our ownership in the comparative period (i.e. they took place pre-acquisition).

See 'Trading highlights and review of operations' for further detail.

5. Forward bookings are contracted revenues for the years ending 30 September 2018 and 30 September 2019. These are the bookings as at 11 May 2018, unless otherwise stated.

6. Core events are those of strategic importance to our future and include the Group's largest events, those with the greatest potential for growth and a number of smaller but strategically important events. Following the strategic review, the Group deliberately segmented its business into Core and Non-Core, enabling management to increase its focus on events that present the greatest opportunities whilst reducing distraction from smaller events.

Enquiries:

About ITE Group plc

ITE Group plc was founded in 1991 and is now one of the world's leading organisers of international exhibitions and conferences.

ITE Group's strategic vision is to create the world's leading portfolio of content-driven, must-attend events delivering an outstanding experience and ROI for our customers. In May 2017 the Group launched its Transformation & Growth (TAG) programme, which is designed to transform the Company from a geographic-led business to a product-led business that focuses on market-leading events, wherever they are in the world. ITE strives to run the best shows and offer the best service to its customers throughout the world regardless of location. By putting exhibitors and visitors at the heart of everything we do, we plan to drive sustainable growth for our shareholders.

ITE Group is a public limited company and has been listed on the main market of the London Stock Exchange since 1998.

Executive summary

ITE has delivered a strong overall trading performance as we start to see the benefits of our early TAG programme initiatives coming through. This was the first period of like-for-like growth in both yield and volume since 2014 and these results reflect revenue growth in the majority of our markets as a result of our early TAG initiatives and focus on our Core events.

Revenues of £75.4m (2017: £69.6m) for the first six months are 8% higher than the same period last year on a like-for-like basis. This was as a result of improved like-for-like trading (£6.2m), driven by strong performances across several markets with volume growth achieved in Russia, Asia, Central Asia and Eastern & Southern Europe. Revenue growth was also supported by the benefit of biennials and event timing differences (£4.3m) and a small positive impact from the acquisition of the Gehua portfolio of events in China, which completed during the previous year (£0.5m, net of other event disposals). This was offset by the adverse impact from foreign exchange (£3.5m) and the cancellation of 22 of our less profitable events in line with our strategy (£1.6m, net of launches).

Despite the revenue impact of the net cancellations and costs associated with the TAG programme, headline profits before tax of £16.0m are 4% higher than the same period last year. The increase is due to the positive impact of biennial events and timing differences (£2.4m), net acquisitions (£0.4m) and foreign exchange (£0.2m). This was offset by the impact of ongoing investment in the TAG programme (£2.7m). Because of the positive top line performance and continued growth at Sinostar (our Chinese joint venture), we have been able to make additional investments into future events, spending £1.5m more than at this stage in the comparative period. Despite these reinvestments, headline profit before tax grew by 2% on a like-for-like basis.

Reported profits before tax were £1.3m (2017: £3.1m). This is after including £2.3m of one-off costs relating to the TAG Programme (2017: £nil). This takes our total spend, recognised in the income statement, on one-off TAG costs to £6.9m since the launch of the programme, which is slightly less than previously indicated, due to timing.

Russia, a significant part of our business, has delivered a strong performance, ahead of market growth following the decision to allocate the largest proportion of TAG investment into the region. Like-for-like volumes were 6% higher than this time last year, following a strong performance across the Core Moscow portfolio and at the Core agriculture event in Krasnodar, Yugagro.

Whilst there has been an increase in political tensions between Russia and the West, there has been a negligible effect on both results to date and forward bookings. It is important to note that the effects of the sanctions in 2014 have meant that exposure to US/UK companies attending our Russian events is very small, accounting for just £0.4m (0.3%) of Group revenues in 2017. Through our strong sales operations in certain international markets we are experiencing growth in particular from Chinese and Turkish exhibitors.

In other regions, we delivered like-for-like revenue growth across all regions in Asia and our Chinese joint venture Sinostar performed well, contributing £6.7m to profitability. On a like-for-like revenue basis both Turkey and Ukraine experienced double-digit growth. In Turkey this represents just one event - the EMITT travel show - which returned to growth this year, following management attention and operational improvements delivered as part of the TAG programme.

We have recently rolled out improved content at our Core shows in Moscow, Istanbul and across the Brands portfolio, and exhibitor NPS scores are on average up by 10 points. Core buying groups and revisits (which is a key indicator of quality audiences returning throughout the show and staying longer) are both up.

This has led to increased levels of rebooking for 2019 where we are 31% ahead of this time last year on a like-for-like volume basis, with bookings at £31m (2017: £27m).

As at 11 May 2018, the Group has contracted £144m of revenue for the current financial year which is 13% ahead of last year on a like-for-like basis. This is partly due to bookings being made earlier as a result of a focused sales effort on Core events, and gives the Group much improved visibility, which represents 89% of consensus.

Strategic Update - TAG programme

Our vision is "To create the world's leading portfolio of content-driven, must-attend events delivering an outstanding experience and ROI for our customers".

By putting exhibitors and visitors at the heart of everything we do, we plan to drive sustainable growth for our shareholders. ITE strives to run the best shows and offer the best service to its customers throughout the world, regardless of location. The Group's focus on a product-led strategy will see ITE focus on events that are market leading or have a clear path to become number one in their sector.

Following the announcement of our TAG programme a year ago, our early TAG initiatives are progressing according to plan, within budget and already driving strong organic revenue growth. 2018 is about rigorous attention to detail and execution of our plan.

The TAG Programme comprises of three pillars of strategic activity to drive revenue and accelerate growth.

· Create a scalable platform to generate real organic growth;

· Actively manage our portfolio; and

· Make selective product-led acquisitions.

Create a scalable platform

Organic revenue growth is being delivered by directing TAG investment towards five transformational levers by creating best practice functions and teams, investing in show operations, building capability and talent, driving a performance culture and building and maintaining a fit for purpose IT infrastructure and systems.

Creating a strong operational Head Quarters in order to instil best practice across each area of our business is imperative to our transformation. Having recruited the Heads of Best Practice we now have the team in place to deliver our transformation. To ensure that our shows are consistently run at the same level of excellence anywhere in the world we have implemented the 'ITE way' and rolled out multiple best practice initiatives following the launch of our 'Events Best Practice' blueprints. We are committed to rolling out blue prints for every activity associated with running a successful events business.

Our main focus for TAG in 2018 is on content, lead generation and customer service. During the period, ITE has started to deliver events with much richer content in order to attract new visitors and drive retention. Initiatives have had an immediate impact. For example, EMITT, the East Mediterranean International Tourism and Travel Exhibition show grew double digit revenues on like-for-like basis and rebooked 45% of 2018 revenues for the 2019 event onsite. This is a significant achievement as many of the customers are national tourist boards whose budgets are typically only set later in the calendar year. Our focus on onsite rebooking at a number of Core events continues to strengthen our sales visibility.

To ensure the Group becomes more efficient, work is underway to put in place common systems to deliver a better service across the world to ITE's customers. A new CRM and HR system is set to be launched this year with a new marketing system to be rolled out over the next 18 months, while we are in the early stages of designing our new global finance system.

Clear progress has been made during the first half of the year across the five levers and the Group is on track with its 2018 milestones:

Actively manage the portfolio

The Group continues to manage its portfolio by implementing a more rigorous approach to the allocation of capital. Under current management, since October 2016, in line with the aims of the TAG programme, we have discontinued 59 less profitable events as we continue to focus on our Core events. Despite these closures, revenues have grown.

Post period end, the Group recognised a profit on disposal, having sold TradeLink, the owner of Metaltech, the metalworking exhibition in Malaysia, to UBMMG Holdings Sdn. Bhd., a subsidiary of UBM plc for a total cash consideration of MYR 23m (£4.2m). This transaction marks a further step towards this second element of TAG to manage our portfolio of events and the proceeds will be reinvested into the Group.

Having deliberately segmented our business into Core and Non-Core, management is able to increase its focus on events that present the greatest opportunities whilst reducing distraction from smaller events. The Group continues to apply the transformational levers to its Core events to realise their full potential and each segment of the portfolio requires a different degree of focus and different transformational levers to maximise its growth.

In line with its product-led strategy, the Group will continue to pro-actively review its portfolio on an ongoing basis and will review its options if too much time or investment is involved to deliver expected target growth.

Product-led acquisitions

The third TAG pillar is for the Group to make selective product-led acquisitions to accelerate growth in line with its strict M&A criteria. Each opportunity will be carefully reviewed, but will not be limited to any particular geography as the Group aims to run the best shows in the best industries anywhere in the world. These product led acquisitions would also benefit from the best practice teams that are now in place so that standardisation of processes would drive further organic growth post acquisition.

A pipeline of product-led opportunities is building, but the Group will only proceed if such opportunities meet most of the following criteria:

· Scalability - in sectors with high growth potential

· A distinct customer value proposition - serving a clear part of an industry sector

· Position in attractive markets for events - serving a high growth underlying market

· Evidence of strong organic revenue growth and profit margins

· Potential to roll out internationally - dependent on the product

· Earnings accretive - offering a good return on invested capital

The Directors believe that the Ascential Exhibitions Business is an attractive, high-quality portfolio of 'must-attend' exhibitions. The Acquisition aligns with ITE's continuing TAG Programme and specifically its strategy of making product-led acquisitions of scalable events brands which are seen as offering strong growth potential under ITE's ownership.

The proposed acquisition will diversify ITE's exposure to some end-market verticals such as education technology and coil winding, electric motor and transformer manufacturing technologies that the Directors believe are attractive and supported by structural growth drivers, creating a more balanced portfolio of events.

The proposed acquisition will also diversify ITE's geographic footprint, giving rise to further opportunities for growth. In particular, the Directors believe that following the proposed acquisition, Bett and CWIEME will benefit from the leveraging of ITE's wider geographic footprint and existing infrastructure, providing geo-cloning opportunities.

Outlook

The TAG programme is delivering early benefits with improved financial performance from our Core events delivering like-for-like volume, revenue and headline PBT growth for the first time in four years.

Cash conversion remains strong and the Group enters the second half with high visibility of revenues having contracted £144m of revenue for the current financial year as at 11 May 2018, representing circa 89% of market expectations for the full year. As a result of our focus on forward bookings, the Group has also already contracted £31m of forward bookings for FY2019, representing 19% of consensus revenue. This is up 31% on a like-for-like basis and the improved level of bookings partly reflects the Group's focused sales initiatives on Core events, in line with its strategy.

The like-for-like growth and cash conversion have allowed management to invest £1.5m more in future period events than at this stage last year.

The combination of good progress on TAG and the proposed acquisition of Ascential Events Limited - a portfolio of market leading products that the management of ITE have known for a long time and that fit well with our strategy means that ITE is taking significant steps towards realising its vision of creating the world's leading portfolio of content-driven, must-attend events that deliver an outstanding experience and ROI for our customers.

Mark Shashoua

Chief Executive Officer

Financial performance

Statutory results

Revenues for the first six months of the year were £75.4m (2017: £69.6m). Revenue is up £5.8m, 8% ahead of the comparative period. Revenue in the period has benefited from the timing impact of our Breakbulk North America event which took place in October of the current year but did not occur in the previous financial year and the impact of this being our stronger biennial year.

The impact of foreign exchange rates has had an adverse impact of £3.5m on the translation of revenue into sterling when compared to the prior period, but has had a £0.2m positive impact on profits. This is due to a natural hedging of costs in the same currencies which reduces the £3.5m revenue impact to £0.6m at a profit level, which is more than offset by higher gains recognised this year as a result of balance sheet retranslations which resulted in a foreign exchange gain of £0.6m compared to a loss of £0.2m in the comparative period.

The average exchange rates over the first six months of the year were:

Profit before tax was £1.3m (2017: £3.1m). This is after including non-underlying restructuring costs of £4.1m (2017: £2.4m) incurred primarily as part of the TAG programme (£2.3m, 2017: £nil), with the remaining £1.8m (2017: £2.4m) incurred in relation to redundancies and other costs necessary to ensure our divisions are appropriately structured to realise the benefits of TAG, and the accelerated amortisation charge relating to our previous debt facility on completion of the refinancing in November 2017 (£0.6m). One-off costs of £2.2m (2017: £nil) were also recognised on cessation of trading at our UK publishing business as we focus on our Core event portfolio.

Diluted earnings per share for the first six months were (0.7)p (2017: 0.6p). The decrease in earnings per share is largely due to the one-off costs of the TAG programme, but is also in part due to a higher proportion of profits being generated in subsidiaries that are not wholly-owned, increasing the profits attributable to non-controlling interests, and also an increase in the Group's effective tax rate, which has increased due to an anticipated increase in withholding taxes on dividends from overseas entities.

Headline results

In addition to the statutory results, headline results are presented, which are the statutory results after excluding a number of adjusting items, as the Board consider this to be the most appropriate way to measure the Group's underlying performance. In addition to providing a more comparable set of results year-on-year, this is also in line with similar adjusted measures used by our peer companies and therefore facilitates comparison across the industry. The adjusting items presented are consistent with those presented in the previous year.

Headline profit before tax for the first six months of the year was £16.0m (2017: £15.4m). Headline profit before tax was up 2% on a like-for-like basis, even after increased reinvestment in our Core events, some of the benefit of which will not be realised until future periods. The results were also positively impacted by £2.4m as a result of biennial and event timing differences and by £0.4m due to the first time impact of net acquisitions all contributing to an increase, offset by planned TAG costs of £2.7m included in headline results.

Headline diluted earnings per share for the first six months was 3.7p (2017: 3.9p), reflecting the change in profit mix between wholly-owned and not wholly-owned consolidated entities and the increase in the Group's effective tax rate.

The following table reconciles statutory profit/(loss) before tax to headline profit before tax:

Amortisation of acquired intangible assets relates to the amortisation charge in respect of intangible assets acquired through business combinations. Derecognition of goodwill on cessation of trading relates to the closure of the publishing arm of our UK fashion business. Restructuring costs are the costs incurred in designing and implementing the Group's strategy, and includes £2.3m specifically related to the TAG programme. The remaining £1.8m of restructuring costs relates primarily to redundancy costs within a number of divisions to ensure the businesses are fit for purpose going forwards under the current leadership, and accelerated amortisation of banking facility fees as part of the refinancing undertaken in November to support the Group's strategic aims under the TAG programme. Transaction costs on completed and pending acquisitions relates to costs incurred in pursuing acquisition and divestment opportunities as part of the TAG programme pillars; to actively manage our portfolio and to make selective product-led acquisitions. Tax on income from associates and joint ventures is an adjustment to ensure consistency with pre-tax operating profits.

Revaluation of liabilities on completed acquisitions include the gains from the revaluation of our equity options over non-controlling interests in our subsidiaries (credit of £0.5m), principally in relation to the remaining 30% interest in ITE Ebseek, the January 2016 acquisition of the industrial fasteners event in China, and the imputed interest charge on the unwinding of the discounting on the Group's equity option liabilities (charge of £0.9m).

Cash flows

The Group's cash flow generated from operations over the first six months was £12.1m (2017: £21.8m) which after adjusting for the non-cash foreign exchange gain of £0.6m (2017: loss of £0.2m) and net venue utilisation of £1.5m (2017: net utilisation of £0.4m) represents operating cash conversion1 of 88%. Cash conversion in the first half is lower than the full year forecast cash conversion as a result of the six month period to 31 March being the stronger half for our associate and joint venture entities, the profits of which are recognised in the period, ahead of the dividends which are received in the second half. The year on year movement in cash flow generated from operations is largely the result of working capital movements. Net debt at 31 March 2018 has reduced to £51.2m (2017: £55.2m). This has been achieved despite significant investment in the TAG programme over the last 12 months.

During the period there was a refinancing of the Group's external debt facility which was completed on 22 November 2017 and gives the Group access to a new £100m facility from a syndicate of four banks: HSBC, Barclays, Citibank and Commerzbank. The facility amortises by £10m each year and expires in November 2021.

2018 interim Dividend

The Board has announced an interim dividend of 1.5p (2017: 1.5p).

1 Defined as cash generated from operations adjusted for net venue utilisation, expressed as a percentage of Headline PBT adjusted for non-cash foreign exchange gains/losses: (Cash generated from operations (£12.1m) + net venue utilisation (£1.5m))/(Headline PBT (£16.0m) - FX gain (£0.6m)) = 88%

Trading highlights and review of operations

During the period the Group organised 99 events (2017: 122 events) which generated revenue growth of 8%. Like-for-like revenues were also 8% higher than for the same period last year.

Volume sales for the period were 353,300 sqm (2017: 325,200 sqm), reflecting the return to like-for-like volume growth (up 3%) for the first time since 2014, the stronger biennial pattern and timing changes.

A summary of the Group's revenue and gross profits for the period is set out below.

Russia

Like-for-like volume sales were 6% higher than the comparative period, driven by Moscow and the Core agriculture event in Krasnodar, Yugagro.

Moscow's largest event in the first half was the Moscow International Travel & Tourism (MITT) event, which increased volume sales to 14,100 sqm (2017: 13,700 sqm) reflecting further returns of Turkish exhibitors and an increase in other international and domestic stands.

Asia

Like-for-like volume sales for the first six months in Asia were 1% higher than the comparative period.

India has had a strong half year with the majority of the events having now taken place. Acetech Mumbai is the largest construction event in India and saw volumes increase by 4% to 28,800 sqm from 27,800 sqm. The recent acquisitions in China have seen strong revenue growth although required investment.

Central Asia

Trading in Central Asia has returned to growth with like-for-like volume sales for the first six months 10% higher than for the comparative period.

The largest part of the Group's business in the region is Kazakhstan, which reported a 15% increase in like-for-like volume sales, underpinned by the oil price which helps to drive the local economy.

Eastern & Southern Europe

The only Turkish event that took place in the first half was EMITT. Volumes were marginally down at 22,300 sqm (2017: 23,300 sqm), as anticipated following a strategic decision to focus on yield increases. This decision was vindicated by like-for-like double digit revenue growth.

Ukraine grew like-for-like volumes by 14%.

Brands

Africa Oil Week ran in October 2017 and performed in line with the previous edition, in spite of the impact of sustained low oil prices through 2017. Delegate numbers were broadly the same year on year and this led to revenues being maintained at the levels seen in the comparative period.

The Breakbulk Americas event also ran in October, but did not feature in the 2017 results as it last ran in September 2016. Compared to the previous edition the event delivered 7% volume growth to 5,500 sqm (2016: 5,200 sqm). The largest event in the portfolio, Breakbulk Europe is due to take place in the second half of the year, and forward bookings are ahead of this time last year.

Trading has been challenged at the mid-market focused fashion event, MODA, held at the NEC in Birmingham with volumes falling 17% to 12,000 sqm (2017: 14,400 sqm).

April trading

April is the largest trading month for the Group. Mosbuild has benefitted from the increased sales and marketing focus, resulting in volume improvement from 34,300 sqm last year to 35,900 sqm this year.

Set out below are the results for the Group's principal events taking place in April 2018:

Principal risks and uncertainties

The following principal risks and uncertainties disclosed in the 2017 Annual Report have not changed during the period:

· Political uncertainty and regulatory risk

· Economic instability reduces demand for exhibition space

· Financial risk - foreign currency risk

· Financial risk - liquidity risk

· Financial risk - covenant risk

· Commercial relationships

· Venue availability

· Competitor risk

· Integration and management of acquisitions

· People

· Transformation and Growth (TAG) programme

Refer to pages 50-53 of the 2017 Annual Report for details of the potential impact and mitigating actions in place for each of these risks.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Interim Management Report. The financial position of the Group, its cash flows and liquidity position are described in the financial statements and notes. The Group has the financial resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. The Group operates in territories that can be unpredictable and unexpected geopolitical and economic events such as terrorism, sanctions, currency controls and exchange rate movements can have an impact on the Group's reported trading performance. A significant deterioration in trading from the major markets (notably Russia and Turkey) could adversely impact the Group's results, but following the refinancing completed during the period, headroom on the Group's banking covenants has significantly increased. The Directors also have a range of mitigating actions available and within their control. As a consequence, the directors believe that the Group is well placed to manage its business risks successfully. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Group continues to adopt the going concern basis in preparing the interim report and financial statements.

Responsibility statement

We confirm that to the best of our knowledge:

(a) the condensed set of interim financial statements, which have been prepared in accordance with IAS 34 "Interim Financial Reporting" give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the consolidation as a whole as required by DTR 4.2.4R;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact, and description of principal risks and uncertainties for the remaining six months of the financial year); and

(c) the interim management report includes a fair review of the information required regarding related party transactions (under DTR 4.2.8R).

By the order of the board

Chief Executive Officer

Mark Shashoua

15 May 2018

Condensed Consolidated Income Statement

For the six months ended 31 March 2018

The results stated above relate to continuing activities of the Group.

Notes 1 to 18 form an integral part of the condensed consolidated financial statements.

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 March 2018

All items recognised in comprehensive income may be reclassified subsequently to the income statement.

Notes 1 to 18 form an integral part of the condensed consolidated financial statements.

Condensed Consolidated Statement of Changes in Equity

31 March 2018

Notes 1 to 18 form an integral part of the condensed consolidated financial statements.

Condensed Consolidated Statement of Changes in Equity

31 March 2018

Notes 1 to 18 form an integral part of the condensed consolidated financial statements.

Condensed Consolidated Statement of Changes in Equity

31 March 2018

Notes 1 to 18 form an integral part of the condensed consolidated financial statements.

Condensed Consolidated Statement of Financial Position

31 March 2018